Annaly Management Company LLC

Item 5 – Fees and Compensation

FEE SCHEDULE

All fees are subject to negotiation.

The specific manner in which fees are charged, is established in the client’s IMA. We bill our
fees on a monthly basis. The client may also elect to be billed directly for fees or to authorize
us to debit fees directly from the client’s account. Fees may be prorated for each capital
contribution and withdrawal made during the applicable calendar month.                  Accounts
initiated or terminated during a calendar quarter are charged a prorated fee.

Upon termination of any account, any prepaid, unearned fees will be promptly refunded, and
any earned, unpaid fees will be due and payable. The client has the right to terminate an
agreement without penalty within five (5) business days after entering into the agreement.

Our fees are exclusive of brokerage commissions, transaction fees, and other management
related costs and expenses which shall be incurred by the client. The client may incur certain
charges imposed by custodians, broker-dealers, and other third parties, such as deferred
sales charges, odd-lot differential fees, transfer taxes, wire transfer and electronic fund fees,
and other fees and taxes on brokerage accounts and securities transactions. Such charges,
fees and commissions are exclusive of and in addition to our fee, and we do not receive any
portion of these commissions, fees, and costs. The client is permitted to engage in any
recommended transaction with the broker-dealer of its choosing, including broker-dealers
or agents that are not affiliated with us.

Item 7 – Types of Clients

We have entered into an IMA to be the external manager for Annaly. We currently provide
portfolio management services to this single client, which is comprised of a pooled
investment vehicle. We do not manage accounts for individuals.