A J Perry & Company Inc

5.   Item 5 Fees and Compensation

         A. A.J. Perry & Company, Inc. is compensated for its advisory services based upon the market
            value of the assets managed, and the fee is charged quarterly in advance. The annual fee is 1%
            for the first $250,000, 0.5% for the next $750,000, and 0.25% for amounts in excess of
            $1,000,000. We believe these fees to be fair and reasonable, and they are not negotiable.The
            fee is based on the value of the assets under management rather than the net value of the
            account because we do not intend to allow the use of margin accounts except when assisting the
            client to exercise his options at the initial funding of the account.
         B. We bill the client for the fees incurred, but will, at the specific request of the client, deduct the fee
            from the client’s assets. One-fourth of the annual fee is billed each quarter in advance, and is
            based on the value of the account on the anniversary dates quarter times one-fourth of the rate.
         C. The fee described in A. (above) is the only fee charged by or paid to A. J. Perry & Company, Inc.
            The client, however, may incur a fee from the institutional broker for its custodial services or
            transaction costs. The client may also incur a fee from the mutual funds for the expenses of the
            mutual funds which is paid from the mutual funds’ yield.
         D. As indicated in A. (above), our quarterly fees are to be paid in advance. If the account is
            terminated during a quarter in which the fee was paid in advance, A.J. Perry & Company, Inc. will
            pro-rate the refund based on the time for which our services were actually provided.
         E. A.J. Perry & Company, Inc. does not accept compensation for the sale of securities or other
            investment products. Such a practice would present a conflict of interest, and would in itself be
            an incentive to purchase the security rather than the need or best interest of the client. Since the
            security that we purchase for our clients are mutual funds, the funds that we select are no-load
            funds. While A.J. Perry & Company, Inc. has no affiliation with brokers, and since the custodian
            institutional broker is selected and employed by the client, there is no possibility of a conflict of
            interest between A.J. Perry & Company, Inc. and the client. All of the revenues that A.J. Perry &
            Company, Inc. receives comes from the fees described in A.(above). Since we do not charge
            commissions or mark-ups, they have no impact on our advisory fees.

Item 7      Types of Clients

Most of our clients are individuals other than high net worth individuals, while a substantial portion are
high net-worth individuals. The remaining 15% or so are divided among pension and profit sharing
plans, charitable organizations and other corporations. We have no minimum fee or minimum account
size.