Hudson Capital Advisory Inc

Item 5 - Fees And Compensation

A. Advisory Fees

Investment Management Services

The type of fee charged for Investment Management Services is determined by whether or
not the client is a “Qualified Client.” As defined in Rule 205-3 under the Investment Adviser
Act of 1940, as amended, a “Qualified Client” is an individual or company that immediately
after entering into an investment contract has at least $1,100,000 under management with
the advisory firm or an individual or a company with a net worth (or a joint net worth, in the
case of an individual, with assets held jointly with a spouse) of more than $2,200,000
immediately before entering into the investment contract. The term “net worth” means the
fair market value of total assets minus total liabilities. For purposes of calculating a natural
person’s net worth the following conditions apply:

   •   The person’s primary residence will not be included as an asset;
   •   Indebtedness that is secured by the person’s primary residence (e.g., a mortgage), up
       to the estimated fair market value of the primary residence at the time the advisory
       contract is entered into, will not be subtracted as a liability (except that if the
       amount of such indebtedness outstanding at the time of calculation exceeds the
       amount outstanding 60 days before such time, other than as a result of the

        acquisition of the primary residence, the amount of such excess will be subtracted as
        a liability); and
    •   Indebtedness that is secured by the person’s primary residence in excess of the
        estimated fair market value of the primary residence at the time the advisory
        contract is entered into will be subtracted as a liability.

Qualified Clients

For those clients that are Qualified Clients, the annual fee for Investment Management
Services is equal to (i) 1% of assets under management (the “Asset-Based Fee) and (ii) 20% of
the net profits in the account (the “Performance-Based Fee), provided, however, that the
Performance-Based Fee is subject to a quarterly high-water mark which means that no
Performance-Based Fee will be paid to Hudson Capital as to net profits in a period to the
extent they “restore” net losses in the account. The Asset-Based Fee is payable quarterly in
arrears and is based upon the market value of assets in the client’s account at the end of the
quarter. Market value will be determined by the client’s custodian. The Performance-Based
Fee accrues quarterly and is payable annually or when a client terminates their relationship
with Hudson Capital.

Non-Qualified Clients

For those clients that are not Qualified Clients, the annual fee for Investment Management
Services is charged as a percentage of assets under management and will not exceed 2.00% of
the value of the client’s account. Clients will be billed either monthly or quarterly in arrears
based upon the market value of assets in the client’s account at the end of the month or
quarter. Market value will be determined by the client’s custodian.

For the initial calendar month or quarter, fees will be adjusted pro rata based upon the
number of calendar days in the calendar month or quarter that the advisory agreement was
effective. Fees are earned as of the commencement of the investment advisory agreement
and are prorated when assets were not managed for the entire quarter. Details of the
investment management fee charged are more fully described in the investment advisory
agreement entered into with each client.

Hudson Capital Portfolio Strategies

The fee for participation in the Hudson Capital Portfolio Strategies is charged as a
percentage of assets under management as follows:

                     Portfolio Strategy                     Annual Advisory Fee
        HCA Earnings Growth Portfolio                               1.95%
        HCA Balanced Portfolio                                      1.00%

Clients will be billed either monthly or quarterly in arrears.

Because the fees for participation in the Hudson Capital Advisory Portfolio Strategies are
typically higher than the advisory fees charged for Hudson Capital’s Investment
Management Services, a conflict of interest exists if Hudson Capital recommends that a
client invest a portion of their managed assets in either one or both of Hudson Capital’s
portfolio strategies. In the event that such recommendation is made, a client will be required
to sign a separate acknowledgment and waiver of any such conflict of interest. Clients are

under no obligation to accept HCA’s recommendation that they invest a portion of their
assets in one or both of these portfolio strategies.

In addition, Hudson Capital has entered into a research agreement whereby Monetary
Management Corporation, Inc. (“MMC”), an investment adviser registered with the State of
California, provides research for the composition and rebalancing of the HCA Earnings
Growth Portfolio. Hudson Capital is required to pay MMC fifty percent (50%) of the advisory
fees received from any client assets placed in the HCA Earnings Growth Portfolio. This does
not present a conflict of interest nor does it increase the overall fee paid by a client as all fees
paid to MMC are paid out of HCA’s investment advisory fee.

Financial Planning/Consulting Services

Financial Planning/Consulting Services fees will be charged a rate of up to $350 per hour
depending on the length of time it will take to complete the Financial Planning or Consulting
service and on the nature and complexity of the individual client’s personal circumstances.
An estimate for total hours will be determined at the start of the advisory relationship.

Sub-Advisory Services

The fee for participation in investment portfolios managed by Hudson Capital on a sub-
advisory basis is charged either as a fixed-fee or as a percentage of assets under management
which will not exceed 1.95% of the value of the client’s account. Clients will be billed either
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Item 7 - Types of Clients

A. Clients

Hudson Capital provides investment management services to individuals, including high net
worth individuals and other registered investment advisory firms.

B. Engaging the Services of Hudson Capital

All clients wishing to engage Hudson Capital for advisory services must enter into the
applicable advisory agreement with Hudson Capital as well as any other document or
questionnaire provided by the firm. The advisory agreement describes the services and
responsibilities Hudson Capital to the client. It also outlines Hudson Capital’s advisory fees
in detail. In addition, clients must complete certain broker-dealer/custodial documentation.
Upon completion of these documents, Hudson Capital will be considered engaged by the
client.

Clients are responsible for ensuring that Hudson Capital is informed in a timely manner of
changes in investment objectives and risk tolerance.

C. Conditions for Managing Accounts

Hudson Capital requires new clients have a minimum account size of $100,000 for
investment management services. Hudson Capital, in its sole discretion, may accept clients
with smaller portfolios based upon certain criteria including anticipated future earning
capacity, anticipated future additional assets, dollar amount of assets to be managed, related
accounts, account composition, pre-existing client, account retention, and pro bono activities.
Hudson Capital will only accept clients with less than the minimum portfolio size if, in the
sole opinion of the firm, the smaller portfolio size will not cause a substantial increase of
investment risk beyond the client’s identified risk tolerance. Hudson Capital may aggregate
the portfolios of family members to meet the minimum portfolio size.