Exhibit 10.1
MANAGEMENT AND ADVISORY SERVICES AGREEMENT
     This Management and Advisory Services Agreement (this “Agreement”) is
entered into as of March 1, 2010, by and between Harbinger Capital Partners LLC,
a Delaware limited liability company (“HCP”), and Harbinger Group Inc., a
Delaware corporation (the “Company”).
     HCP and the Company are referred to jointly as the “Parties”. The term
“Subsidiary” refers to any entity a majority of the voting securities of which
are owned directly or indirectly by, or which is otherwise controlled by, the
applicable Party. Each of HCP and its direct or indirect Subsidiaries or
affiliates which provides Services (as defined below) is referred to as a
“Service Provider”. Each of the Company and its direct or indirect Subsidiaries
or affiliates which receive the Services is referred to as a “Client”.
RECITALS
     A. The Service Providers have employees and consultants skilled in
providing the Services set forth on Schedule A (as such Schedule A may be
amended from time to time pursuant to Section 1.5, the “Services”).
     B. The Service Providers are and have been rendering the Services to the
Clients and the Company acknowledges and agrees that the Services are
substantial and valuable to the Company and its stockholders.
     C. The Company wishes to avoid the need to duplicate the infrastructure and
skill set available to it through the Service Providers and wishes to continue
to receive the Services, and HCP is willing to continue to provide, or cause to
be provided, the Services to the Clients on the terms and conditions set forth
in this Agreement.
     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises set forth in this Agreement, HCP and the Company hereby agree as
follows:
     1. Engagement of Service Provider.
          1.1 The Company, on behalf of itself and the other Clients, hereby
engages the Service Providers for the Term (as defined below) and upon the terms
and conditions set forth herein to provide the Services to the Clients, as HCP
and the Company shall mutually agree from time to time. In consideration of the
compensation to HCP herein specified, HCP accepts such engagement and agrees to
perform, or cause the other Service Providers to provide, the Services.
          1.2 In furtherance of performing the Services, the Service Providers
shall be authorized (but not obligated) to conduct each of the activities set
forth on Schedule A.
          1.3 HCP shall devote, or cause the other Service Providers to devote,
reasonable time and efforts to the performance of the Services. However, no
precise number of hours is to be devoted by any Service Provider on a weekly or
monthly basis.
          1.4 The Parties agree that HCP may conduct, or cause to be conducted,
the Services through HCP’s Subsidiaries and affiliates (other than the Company
and its Subsidiaries), officers, directors, partners, employees, consultants or
agents. The Parties agree that the Services may be performed for the benefit of
the Company and any of the other Clients.
          1.5 Either HCP or the Company may elect, by not less than 30 days’
prior notice to the other, to remove any activity from Schedule A. At the
Company’s request and with the consent of the audit committee of the board of
directors of the Company (the “Audit Committee”), HCP may, in its discretion,
add any activity to Schedule A.
          1.6 No Service Provider shall have any liability hereunder for any
losses incurred by the Clients except to the extent arising from such Service
Provider’s gross negligence or willful misconduct (and in any case subject to
the limitations set forth in Section 6.2). Except as expressly set forth herein,
the Parties acknowledge and agree that the

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Services are provided as-is, that the Clients assume all risks and liabilities
arising from or relating to its use of and reliance upon the Services and no
Service Provider makes any representation or warranty with respect thereto.
EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE SERVICE PROVIDERS HEREBY EXPRESSLY
DISCLAIM ALL REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICES, WHETHER
EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY IN REGARD TO
QUALITY, PERFORMANCE, NONINFRINGEMENT, COMMERCIAL UTILITY, MERCHANTABILITY OR
FITNESS OF THE SERVICES FOR A PARTICULAR PURPOSE.
     2. Term. This Agreement shall be for a term commencing on the date hereof
and expiring on the third anniversary (the “Initial Term”). Upon expiration of
the Initial Term, this Agreement shall automatically extend for successive
periods of one year each unless HCP or the Company gives notice to the other at
least 90 days prior to the end of the Initial Term (or any annual extension
thereof) indicating that it does not intend to extend the term of this
Agreement. The Initial Term, together with all such annual extensions of the
Initial Term, is referred to herein as the “Term.”
     3. Services Not Exclusive. Each Client acknowledges that the Services
rendered for them will not be exclusive, and that any Service Provider may
render similar Services to other persons.
     4. Information, Confidentiality, Disclosure.
          4.1 Information. The Clients shall furnish the Service Providers with
such information as such Service Provider reasonably believes appropriate to its
engagement hereunder (all such information so furnished being referred to herein
as the “Information”). The Clients recognize and confirm that (a) the Service
Providers will use and rely primarily on Information provided by the Clients and
on information available from generally recognized public sources in performing
the Services to be performed hereunder and (b) the Clients do not assume
responsibility for the accuracy or completeness of any such Information.
          4.2 Confidentiality. HCP shall hold, and cause the Service Providers
to hold, in confidence all proprietary and confidential information of the
Clients which may come into such Service Provider’s possession as a result of
its performance of Services hereunder, exercising a degree of care in
maintaining such confidence as is used by such Service Provider to protect its
own proprietary or confidential information of similar importance that it does
not wish to disclose, it being understood that such Service Provider may share
such information with its legal advisors and others who are subject to a duty of
confidentiality.
          4.3 No Disclosure of Advice. Except as required by applicable law or
legal process, no advice rendered by any Service Provider pursuant to this
Agreement, whether formal or informal, may be disclosed, in whole or in part, or
summarized, excerpted from or otherwise referred to without such Service
Provider’s prior written consent. In addition, except as required by applicable
law or legal process, such Service Provider’s role under this Agreement may not
be otherwise disclosed or referred to without its prior written consent.
          4.4 Legal Services; Common Interest. Notwithstanding any other
provisions hereof, legal services shall be provided by the Service Providers
only as and when requested specifically by the Clients and when the Service
Providers and the Clients are each satisfied that there is no conflict of
interest between them with respect to the subject matter of the services to be
provided or independently decide to waive any such conflict. None of the Service
Providers and their respective employees or agents shall be responsible for
supervising the Client’s legal, regulatory or compliance functions. The Clients
and Service Providers agree that they share a common interest in the subject
matter of the Client’s communications, information and materials, including, but
not limited to, attorney-client communications, attorney work-product and other
privileged or protected information. Subject to the confidentiality restrictions
set forth in Section 4.2 of this Agreement, the Clients and Service Providers
are hereby entering into a voluntary sharing of confidential communication,
information and materials, including, but not limited to, attorney-client
communications, attorney work-product and other privileged or protected
information of the Clients. The Service Providers lawyers providing legal
services to the Clients shall have an attorney-client relationship with the
Clients and it is intended by the parties that communication among the Clients
and those Service Providers lawyers and the work product of those Service
Providers lawyers shall enjoy the benefits of the attorney-client privilege, the
attorney-work product immunity, joint defense and/or any other applicable
privilege, immunity or protection. The protection of the attorney-client
privilege, the attorney work-product immunity, joint

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defense and/or any other applicable privilege, immunity or protection are not
waived for any communication, information or materials of any Clients that may
be exchanged among the Clients and the Service Providers and their respective
counsel, whether or not such counsel is an employee of any Service Provider.
This Agreement does not affect the independent and separate relationship of the
Service Providers and their respective attorneys, nor shall it require
disclosure by the Service Providers’ counsel of their information to the
Clients. Notwithstanding any other provision hereof, the limitations on
liability included in this Agreement shall not apply to legal Services to the
extent that such limitation on liability would contravene any applicable ethical
code, code of responsibility or other legal, administrative or regulatory
requirement.
     5. Reimbursement.
          5.1 Reimbursement. In consideration of the Services, unless otherwise
agreed by HCP and the Company (and such other agreement is approved by the Audit
Committee pursuant to the Company’s Statement of Policy with respect to Related
Party Transactions), HCP shall be reimbursed for (a) all out-of pocket expenses
incurred by each Service Provider and the Service Provider’s fully-loaded cost
(based on budgeted compensation and overhead) of services provided by its legal
and accounting personnel (but excluding such services as are incidental and
ordinary course activities) and (b) upon the Company’s completion of any
transaction, any out-of-pocket expenses incurred by a Service Provider and the
Service Providers’ fully-loaded cost (based on budgeted compensation and
overhead) of services provided by its legal and accounting personnel (but not
its investment personnel) relating to such transaction and not previously
invoiced to the Company (“Transaction Fees” and, together with the amounts
referred to in clause (a), the “Fees”). HCP shall deliver to the Company an
invoice promptly following the end of each calendar month setting forth its
calculation of the Fees and including in reasonable detail the components of
such Fees, provided, that an invoice for Transaction Fees shall be delivered to
the Company no later than 30 days of the completion of the transaction. A copy
of each invoice shall be delivered to the Audit Committee after review by the
Company’s management. If the Audit Committee requests that Company management
question or dispute any item in an invoice, HCP and the Company shall work
together in good faith to settle any such disputed items. The undisputed portion
of the Fees shall be paid by the Company on its next regular accounts payable
date following approval of such invoice by the Audit Committee and any disputed
amounts shall be paid by the Company promptly after the settlement of any such
dispute. The Company and its affiliates shall allocate the liability for the
Fees among themselves according to the Services received.
          5.2 Additional Services. If HCP or any Service Provider is requested
by the Company to perform Services relating to activities outside the ordinary
course of the Clients’ business and not otherwise contemplated by this
Agreement, compensation for such Services shall be mutually agreed to by the
Company and HCP and require the approval of the Audit Committee pursuant to the
Company’s Statement of Policy with respect to Related Party Transactions.
     6. Indemnification; Limitation on Liability.
          6.1 Indemnification by the Company. Subject to Section 6.2, in
addition to their agreements and obligations under this Agreement, the Company
agrees to indemnify and hold harmless HCP and its affiliates (other than the
Company and its Subsidiaries), including their respective officers, directors,
stockholders, partners, members, employees and agents (collectively, the “HCP
Indemnitees”) from and against any and all claims, liabilities, losses and
damages or actions, suits or proceedings in respect thereof (collectively, the
“Obligations”), as and when incurred by the HCP Indemnitees, in any way related
to or arising out of the performance by HCP of the Services under this
Agreement, and to reimburse the HCP Indemnitees for reasonable out-of-pocket
legal and other expenses (“Expenses”) as and when incurred by any of them in
connection with or relating to investigating, preparing to defend, or defending
any actions, claims or other proceedings (including any investigation or
inquiry) arising in any manner out of or in connection with HCP’s performance
under this Agreement (whether or not such Indemnitee is a named party in such
proceeding); provided, however, that the Company shall not be responsible under
this Section 6.1 for any Obligations or Expenses incurred by a HCP Indemnitee to
the extent that it is finally judicially determined (in an action in which such
HCP Indemnitee is a party) to result primarily from actions taken by such HCP
Indemnitee due to such HCP Indemnitee’s gross negligence or willful misconduct.
Without limiting the foregoing, in no event shall any HCP Indemnitee have any
liability, including, without limitation, liability for any Obligations or
Expenses in contract, tort or otherwise to the Company in connection with this
Agreement, their engagement hereunder or the matters contemplated hereby except
to the extent that any such liability is finally

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judicially determined (in an action in which such HCP Indemnitee is a party) to
have resulted primarily from such party’s gross negligence or willful
misconduct; nor shall any HCP Indemnitee have liability for lost profits or
other consequential, incidental, indirect, special or punitive damages or for
any amount in excess of the fees collected by it hereunder. The Company shall be
entitled to such contribution from any of its Subsidiaries that received the
benefit of Services.
          6.2 Limited Liability of a Service Provider. Notwithstanding
Section 6.1 or anything else to the contrary contained in this Agreement, no
Service Provider shall have any liability in contract, tort or otherwise for or
in connection with any Services rendered or to be rendered by any Service
Provider pursuant to this Agreement, the transactions contemplated by this
Agreement or any Service Provider’s actions or inactions in connection with any
such Services or transactions, to any Client, except to the extent that a Client
suffers a loss that results from such Service Provider’s gross negligence or
willful misconduct in connection with any such Services or transactions, actions
or inactions related thereto.
     7. Third-Party Beneficiaries. This Agreement is for the sole benefit of the
Parties and their permitted successors and assigns and nothing in this
Agreement, express or implied, is intended to confer or shall confer upon any
other person or entity any legal or equitable right, benefit or remedy of any
nature; provided, however, that all Indemnitees not signatory to this Agreement
are intended beneficiaries of Section 6 of this Agreement.
     8. Notice. Any notice or other communication required or permitted to be
given or made under this Agreement by one Party to the other shall be deemed to
have been duly given or made when delivered, if personally delivered, when
transmitted, if sent by confirmed facsimile transmission, or when actually
received, if sent by mail, to the Party at the following addresses (or at such
other address as shall be given in writing by one Party to the other):
(i) If to HCP, addressed to it at:
Harbinger Capital Partners LLC
450 Park Avenue
30th Floor
New York, NY 10022
Attention: Robin Roger, Esq.
Facsimile No.: (212) 898-1309
(ii) If to the Company, addressed to the Company at:
Harbinger Group Inc.
100 Meridian Centre, Suite 35
Rochester, NY
Attention: Chief Financial Officer
Facsimile No.: (585) 242-8677
(iii) If to either HCP or the Company, a copy shall be sent to:
Kaye Scholer LLP
425 Park Avenue
New York, New York 10022
Attention: Lynn Toby Fisher and Derek Stoldt
Facsimile No.: (212) 836-6685
     9. Modifications. This Agreement constitutes the entire agreement between
the Parties with regard to the subject matter hereof, superseding all prior
understandings and agreements, whether written or oral. This Agreement may not
be amended or revised except by a writing signed by the Parties.

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     10. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns, but may not be assigned by either Party without the prior written
consent of the other Party, except that either Party may assign its rights
hereunder to its affiliates without the other Parties prior written consent.
     11. Independent Contractors. In providing the Services hereunder, the
applicable Service Provider shall act solely as an independent contractor and
nothing in this Agreement shall constitute or be construed to be or create a
partnership, joint venture, or principal/agent relationship between any Service
Provider, on the one hand, and any Client, on the other. All persons employed by
a Service Provider in the performance of its obligations under this Agreement
shall be the sole responsibility of the Service Provider.
     12. Governing Law; Jurisdiction; Service of Process. This Agreement shall
be governed by the laws of the State of New York, without regard to any
conflicts of laws principles thereof that would call for the application of the
laws of any other jurisdiction.
     13. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
     14. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and which shall together constitute one and
the same instrument.
[Remainder of Page Intentionally Blank]

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     IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
date first above written.

                HARBINGER CAPITAL PARTNERS LLC  
 
         
 
  By:   Harbinger Holdings LLC, its Managing
Member  
 
  By:  
/s/ Peter A. Jenson
 
 
  Name:   Peter A. Jenson  
 
  Title:   Vice President  
 
              HARBINGER GROUP INC.  
 
         
 
  By:  
/s/ Francis T. McCarron
 
 
  Name:   Francis T. McCarron   
 
  Title:   Executive Vice President and
Chief Financial Officer  

 

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Schedule A
Authorized Services
The following are authorized Services as of the last date that this Schedule A
has been revised or updated:
     (i) serving as the Clients’ consultant with respect to the periodic review
of the investment criteria and parameters for the Clients’ investments
(“Investments”), borrowings and operations, and other policies for approval by
the board of directors of the Company (“Board of Directors”);
     (ii) assisting the Clients in developing criteria for Investments and
making available to the Clients its knowledge and experience with respect to
Investments;
     (iii) investigation, analysis and selection of possible Investments;
     (iv) with respect to prospective Investments, conducting negotiations and
due diligence with sellers and their respective agents, representatives and
investment bankers and making recommendations to the Clients in connection with
prospective Investments;
     (v) recommending, identifying, and supervising, on behalf of the Clients
and at the Clients’ expense, firms which provide investment banking and other
financial services and such other services as may be required relating to the
identification of, and making of and negotiating Investments or Investment
opportunities;
     (vi) negotiating on behalf of the Clients for the sale or other disposition
of any assets;
     (vii) negotiating on behalf of the Clients any potential investment
(whether debt or equity) in the Company;
     (viii) coordinating operations of any portfolio company, joint venture or
co-investment interests held by the Clients;
     (ix) providing executive and administrative personnel, office space and
office services required in rendering services to the Clients;
     (x) communicating on behalf of the Clients with the holders of any equity
or debt securities of the Clients as required to satisfy the reporting and other
requirements of any governmental bodies or agencies or trading markets and to
maintain effective relations with such holders;
     (xi) counseling the Clients in connection with policy decisions to be made
by the Board of Directors;
     (xii) engaging with the Company’s counsel regarding the maintenance of its
exemption from the Investment Company Act;
     (xiii) monitoring the operating performance of the Investments and
providing periodic reports with respect thereto to the Board of Directors; and
     (xiv) advising the Clients with respect to claims, disputes or
controversies (including all litigation, arbitration, settlement or other
proceedings or negotiations) in which the Clients may be involved or to which
the Company may be subject arising out of the Clients’ current and former
operations, subject to such limitations or parameters as may be imposed from
time to time by the Board of Directors.