CornerStone Advisory

Fees and Compensation
    Comprehensive Plan Construction:

Cornerstone Advisory (CA) provides advisory services to a client by entering into
an advisory services agreement. The advisory services may include but are not
limited to, providing the client with specific recommendations on such financial
areas as tax planning, risk management, investments, insurance, educational
funding, retirement planning, employee benefits, estate planning, corporate or
business coordination with personal situation, cash flow analysis, financing
options, and charitable donations.

At the time the written advisory agreement for advisory services between CA and
the client is established, an advisory fee is assessed, which may be a fixed fee,
typically$3,000 - $7,500 or, when the client prefers, an hourly fee of $50 - $250 per
hour may be charged. 100 % of the fee is payable at the beginning of the process
and exceptions are considered for temporary poor cash flow situations. The
advisory fee assessed is negotiable by the advisor and the client on a case-by-
case basis. Termination of the advisory service relationship may be initiated by
either the advisor or the client and the fee is non-refundable, either in full or in part.

Investment Fees:
CA receives compensation through the investment fees paid by a client, hourly
charges, and commissions from issuers of specified securities and insurance
products when CA’s clients purchase those products. All recommendations by CA
to the client of specific securities or insurance products are based upon the client’s
specific financial goals and plan.

Investment Management fees are based on the value of assets managed and fees
are calculated as a percentage of assets under management. The total fees are
typically:

Assets Under Management                      Annual Fee
0-$250,000                                   1.95%
$250,001-$500,000                            1.75%
$500,001-$1,000,000                          1.50%
$1,000,001-and up                            1.25%

We may negotiate fees on a client-to-client basis depending on the size,
complexity, and nature of the portfolio managed. Cornerstone Advisory, in its sole
discretion, may charge a lesser management fee based upon certain criteria
(minor children of current clients, individual and joint accounts for a spouse, and
other types of related accounts.) Cornerstone Advisory may also, in its exclusive
discretion, aggregate assets for household totals and other circumstances. While
we believe that our fees are competitive, you may obtain lower fees from
comparable services from other services.

If negotiated, fees are usually :    1%              of the total fee billing:

      You are billed either monthly or quarterly in advance, depending on who your
      accounts custodian is and what their requirements are.

      CA fees do not include brokerage commissions, transaction fees, and other related
      costs or expenses which may be incurred by the client. Clients may incur some
      charges imposed by custodians, brokers, and other third parties such as custodial
      fees, deferred sales charges, wire transfer and electronic fund transfer fees, and
      other fees on brokerage accounts and securities transactions. Mutual funds
      typically charge internal management fees, which are disclosed in a fund’s
      prospectus. The aforementioned fees incurred by the client are exclusive of and
      in addition to CA’s fee, and CA does not receive any portion of these fees and
      costs.

      Mutual Funds Disclosure
      Mutual funds are one type of an investment vehicle and the investment strategies
      and objectives of such funds vary widely. In addition to any advisory fee paid by

      the client to Cornerstone Advisory (CA), clients indirectly pay for the expenses and
      advisory fees charged by the funds in which their assets are invested, transaction
      fees, which vary among different funds, may be charged to the
      investor/shareholder, therefore, even with no-load mutual funds, clients will still
      pay management fees.

      Management or operating expenses may be passed on to the investor or
      shareholder by the investment fund and vary from fund to fund. Further, sales load
      charge or and other “indirect” fees and expenses charged by the fund or funds in
      which they are invested. At the time the client invests into a mutual fund(s), a
      prospectus for the fund, published and provided by the investment custodian, is
      given to the client. The prospectus contains the fund’s disclosure of its
      management and fee structure.

Types of Clients

Cornerstone Advisory provides advisory services and investment advice, as well as
advice unrelated to securities, to individuals, participants of pensions and profit sharing
plans, trusts, estates, charitable organizations, corporations and business entities.

Methods of Analysis, Investment Strategies and Risk of Loss
Cornerstone Advisory (CA) utilizes a fundamental method of security analysis by
researching financial newspapers and magazines, research materials prepared by
knowledgeable and reputable investment analyzers, corporate rating services, such as
Morningstar, annual reports, prospectuses as filed with the Securities and Exchange
Commission, company releases, and timing services. Investing in securities involves risk
of loss that clients should be prepared to bear and recommended types of investments
includes mutual funds and variable annuities.

Risks involved for strategies recommended are as follows, from least to greatest risk:
money market, bonds, stocks, and commodities.

There are several principal risks associated with investing in a money market and
certificates of deposit as an investment strategy. The investment company seeks to
preserve the value of the investor’s money, yet it is possible to lose money in a money
market fund. The principal risks are:

       Investing in money market securities and certificates of deposit – The value
       and liquidity of the securities held by a money market fund may be affected
       by changing interest rates, changes in the credit quality of the issuers,
       changes in credit ratings of the securities, and general market conditions.
       For example, the values of these securities may decline when interest rates
       rise and increase when interest rates fall.

       Credit and liquidity support – changes in the credit quality of banks and
       financial institutions providing credit and liquidity support features with
       respect to securities held by a money market fund could cause the values
       of these securities to decline.

       Investing outside the United States – Securities of issuers domiciled outside
       the United States, or with significant operations outside the United States,
       may lose value because of political, social, or economic developments in
       the country or region in which the issuer operates.

       Management – The investment adviser to the money market fund actively
       manages the fund’s investments. Consequently, the fund is subject to the

       risk that the techniques and risk analyses employed by the investment
       adviser in this process may not produce the desired results.

Investment in the money market fund or certificate of deposit are not a bank deposit and
is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or
other governmental agency, entity, or person. The investor should consider how this fund
fits into their overall investment program.

There are also principal risks involved with investing into bond funds. It is possible to lose
money on an investment in a bond fund and the risks of investing in bond funds could
adversely affect its net asset, yield, and total return. Those risks are:

       Interest Rate Risk – the risk that fixed income securities will decline in value
       because of an increase in interest rates; a bond fund with a longer averaged
       portfolio duration will be more sensitive to changes in interest rates than a
       fund with a shorter average portfolio duration.

       Credit Risk – the risk that the bond fund could lose money if the issuer, or
       guarantor of a fixed income security, or the counterparty to a derivative
       contract, is unable or unwilling to meet its financial obligations.

       High Yield Risk – the risk that high yield securities and unrated securities of
       similar credit quality (commonly known as “junk bonds”) are subject to
       greater levels of credit and liquidity risks. High yield securities are
       considered primarily speculative with respect to the issuer’s continuing
       ability to make principal and interest payments.

       Market Risk – the risk that the value of securities owned by the bond fund
       may go up or down, sometimes rapidly or unpredictably, due to factors
       affecting securities markets generally or industries.

       Issuer Risk – the risk that the value of a security may decline for a reason
       directly related to the issuer, such as management performance, financial
       leverage, and reduced demand for the issuer’s goods or services.
       Liquidity Risk – the risk that a particular investment may be difficult to
       purchase or sell and that the bond fund may be unable to sell illiquid
       securities at an advantageous time or price or achieve its desired level of
       exposure to a certain sector.

       Derivatives Risk – the risk of investing in derivative instruments, including
       liquidity, interest rate, market, credit and management risks, mispricing, or
       improper valuation. Changes in the value of the derivative may not correlate
       perfectly with the underlying asset, rate, or index, and the bond fund could
       lose more than the principal amount invested.

Equity Risk – the risk that the value of equity or equity-related securities
may decline due to general market conditions which are not specifically
related to a particular company or to factors affecting a particular industry
or industries. Equity or equity-related securities generally have greater
price volatility than fixed income securities.

Mortgage-Related and Other Asset-Backed Risk – the risk of investing in
mortgage-related and other asset-backed securities, including interest rate
risk, extension risk, and prepayment risk.

Foreign (non-U.S.) Investment Risk – risk that investing in foreign (non-
U.S.) securities may result in the bond fund experiencing more rapid and
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