James Reed Financial Services Inc

Item 5 Fees and Compensation
Prior to engaging RFS, the client will be required to enter into a written Agreement with RFS setting
forth the terms and conditions of the engagement and describing the scope of the services to be
provided.

IM Program Fees & Expenses
Maximum Rates for IM Program Management Fees

        Maximum Management Fee Rates for the IM Program
Account Value From      Account Value To     Annualized Fee Rate
$1                      $500,000                     1.25%
$500,001                $2,000,000                   1.00%
$2,000,001              over                          .85%

Tiered Basis Investment Management Fees

Investment Management Fees will be calculated on a "tiered basis" whereby the Investment
Management Fees are calculated starting from the first $1 of Managed Account Value, and
calculated through each Asset Tier by value, then proceeding to the next Asset Tier for which there is
sufficient Managed Account Value until the Investment Management Fees have been calculated with
respect to all of the Managed Assets. For example, a Managed Account with a Managed Account
Value of $2,400,000 will have Investment Management Fees calculated starting with the first
$500,000 of Managed Account Value charged at a rate of 1.25% (first Asset Tier), Investment
Management Fees on the next $1,500,000 of Managed Account Value charged at a rate of 1.00%
(second Asset Tier), and the remaining $400,000 of Managed Account value charged at a rate of
0.85%.

Billing is quarterly in advance based upon the market value of the Managed Assets. Generally assets
added during the quarter will be included in the next quarterly billing. See Item 7 for minimum account
size for Investment Management services. RFS shall adopt and maintain reasonable and consistent
valuation policies with respect to the accrual of dividends and interest. Fees are calculated on the
basis of even 90-day quarters and a 360-day year, except the first and last quarters, which will be
prorated based on the actual number of days in such calendar quarters the management agreement is
in effect, beginning as of the effective date of the agreement, and ending on the date the agreement
terminates; refunds are calculated on the basis of the actual number of calendar days for which
services are rendered during the last calendar quarter the agreement is in effect.

Clients are encouraged to review their custodial statement for any discrepancies and to inform RFS or
the Custodian of any discrepancies.

Additional Fees & Expenses

The Investment Management Fees are separate and distinct from a number of other expenses
(collectively referred to as the "Additional Fees and Expenses") that Accounts will incur, including:

    • Brokerage Expenses
    • Custodial Expenses
    • Investment Company Expenses

Whenever possible we try to utilize no load products or transfer existing holding(s) to the
Custodian where we can convert existing investments to a no-load or institutional share class. Our
current arrangement with PAS provides that Clients not incur trading costs for assets available
through the PAS institutional custodial platform; provided, PAS may terminate or change such
agreement at any time, and Client will be responsible for all Custodial expenses, as described in this
Brochure. Refer to the information under the heading Fee Waiver on Certain Assets for a situation where
we recommend a commission-based product that will be part of the Managed Assets.

Pursuant to RFS's current arrangement with PAS (the "PAS Arrangement"), PAS charges Clients an
annual fee of $75 per registration, payable quarterly, for transaction and custodial costs; provided, PAS
may terminate or change such agreement at any time, and Client will be responsible for Brokerage
Expenses and Custodial Expenses, as described in this Brochure. Pershing also charges for paper
statements, paper trade confirmations and paper tax documents. Upon termination of an account,
Client will also be charged a termination fee by PAS. RFS receives no compensation from PAS on any
fees charged by PAS.

Brokerage Expenses

As used in this Brochure, the term "Brokerage Expenses" refers to the following:

    • commissions, ticket charges, and other fees charged by brokers who execute securities transactions for
       the Account on an agency basis (see, Investment Company Expenses for asset-based sales charge [i.e.,
       front-end load and back-end load] for mutual fund and variable annuity sales);

    • mark-ups, mark-downs, or other spreads included in the amount charged by or paid to a dealer for
       securities bought or sold on a principal basis (provided, RFS purchases bonds on an agency basis for a
       commission), and underwriting fees, dealer concessions, or related compensation in connection with
       securities acquired in underwritten offerings;

    • odd lot differentials, transfer or other taxes, floor brokerage fees, exchange fees, service and handling
       fees, electronic fund or wire transfer fees, costs of exchanging currencies, and postage and delivery
       expenses; and

    • cost of cash management services (including for "sweep" arrangements of idle cash into bank deposit
       accounts), and direct and indirect fees for other financial or investment services provided by Custodian or
       other brokers.

Custodial Expenses

As used in this Brochure, the term "Custodial Expenses" refers to the costs clients must pay for
services provided by the Custodian for: (1) arranging for the receipt and delivery of securities
purchased, sold, borrowed or loaned for their Managed Account; (2) making and receiving payments
with respect to Managed Account transactions and securities; (3) maintaining custody of Managed
Account securities; and (4) maintaining custody of cash, receiving dividends, and processing
exchanges, distributions, and rights accruing to the client's Managed Account.
...

Item 7 Types of Clients
RFS provides investment advisory services to the following types of clients:

    •   Individuals, including high net worth individuals;
    •   Pension and profit sharing plans;
    •   Trusts, estates, and charitable organizations; and
    •   Corporations and other businesses entities.

In general, we require a minimum of $500,000 to open and maintain an advisory account. However,
in our discretion, we may waive this minimum account size, and agree to combining account values for
certain client and minor children, joint accounts with spouse, and other types of related accounts to
meet the stated minimum, or other terms, all as we determine in our sole discretion.