Daiwa Asset Management America Ltd

Item 5         Fees and Compensation

Our fees are paid directly by DAM, which collects fees from the Investment Funds.

Our fees are computed at an annualized percentage of the value of the assets we manage and consist
of (1) a flat rate ranging between 2.2275 and 56 basis points, and (2) 56 basis points on assets up
to a specified level with fees ranging as low as 46 basis points on assets above a specified level.
Our fees are for investment management only and include neither custodial fees, which are charged
by the custodian selected by the Investment Fund, nor transaction fees or commissions incurred in
connection with purchases and sales of securities for an Investment Fund. DAM generally pays
our fees semiannually in arrears, but a different payment schedule may be negotiated. If
termination occurs prior to the end of a calendar quarter, a final fee is normally payable on a pro-
rata basis. Our fees are paid directly by DAM, which collects fees from its client funds.

Our practices relating to the selection of brokers and dealers and related fees are described below
in Item 12 under “Brokerage Practices.”

Item 7    Types of Clients

As described above in Item 4, DAMA provides investment advice to DAM, which in turn provides
investment advice to the Investment Funds.