Magnolia Capital Management Ltd

Item 5    Fees and Compensation

                         INVESTMENT SUPERVISORY SERVICES ("ISS")
                          INDIVIDUAL PORTFOLIO MANAGEMENT FEES

Our annual fees for Investment Supervisory Services are based upon the size of the account
relationship and the composition of assets and are calculated as a percentage of assets
under management and generally range from .5% to 1.5% per annum.

The annualized fee for Investment Supervisory Services are charged quarterly in arrears as a
percentage of the market value of assets under management at the end of the quarter,
according to the following schedule:

                     Assets Under Management                Annual Fee

Fee Schedule:

Accounts less than $500,000

Fully discretionary and simple (minimum 1.00% per annum) to non-discretionary and/or
complex (maximum 1.5% per annum). Minimum annual account fee is $500.

Accounts $500,000 to $1,000,000

Fully discretionary and simple (minimum .875% per annum) to non-discretionary and/or
complex (maximum 1.375% per annum).

Accounts $1,000,001 to $5,000,000

Fully discretionary and simple (minimum .75% per annum) to non-discretionary and/or
complex (maximum 1.25% per annum).

Accounts over $5,000,000

Fully discretionary and simple (minimum .625% per annum) to non-discretionary and/or
complex (maximum 1.00% per annum).

Accounts over $10,000,000

Fully discretionary and simple (minimum .50% per annum) to non-discretionary and/or
complex (maximum .75% per annum).

Accounts over $25,000,000

Per individual agreement.

ACCOUNTS INVESTED IN FIXED INCOME SECURITIES ONLY

Less than $500,000

Fully discretionary and simple (minimum .75% per annum) to non-discretionary and/or
complex (maximum 1.00% per annum). Minimum account fee is $500.

$500,000 to $5,000,000

Fully discretionary and simple (minimum .50% per annum) to non-discretionary and/or
complex (maximum .75% per annum).

Over $5,000,000

Per individual agreement.

ACCOMMODATION ACCOUNTS

These accounts are generally only available to direct family descendants of clients whose
account balances with Magnolia Capital Management total over $500,000. Regardless of the
balance in the account, they incur a flat rate of $100 per quarter during the period until they
reach the age of 21. Unless otherwise agreed they are invested only into portfolios which are
diversified between leading publicly listed pooled funds of equities, fixed income and money
market holdings. Discretionary accounts are not available under this special fee structure.
After reaching the age of 21, the account is assessed a fee based on its size in accordance
to the company’s official fee schedule or $100 a quarter, whichever is higher.

Investment Supervisory Services: Our fees are charged in arrears shortly after the end of
each calendar quarter based upon the value (market value or fair market value in the
absence of market value), of the client's account at the end of that quarter. Fees are debited
from the account in accordance with the client authorization in the Investment Advisory
Agreement. Accounts opened mid-quarter or closed mid-quarter will have their quarterly fee
pro-rated for the number of whole months for which it was active.

A minimum of $500,000 of assets under management is required for investment supervisory
services and accounts under $100,000 are not accepted unless related accounts total over
$1,000,000. This account size may be negotiable under certain circumstances. Magnolia
Capital Management, Ltd. may group certain related client accounts for the purposes of
achieving the minimum account size and determining the annualized fee.

Limited Negotiability of Advisory Fees: Although Magnolia Capital Management, Ltd. has
established the above fee schedule(s), we retain the discretion to negotiate alternative fees
on a client-by-client basis. Client facts, circumstances and needs are considered in
determining the fee schedule. These include the complexity of the client's needs, assets to be
placed under management, anticipated future additional assets; related accounts; portfolio
style, account composition, reporting requirements, among other factors. The specific annual

fee schedule is identified in the contract between the adviser and each client.

We may group certain related client accounts for the purposes of achieving the minimum
account size requirements and determining the annualized fee.

Discounts, not generally available to our advisory clients, are offered to associated persons of
our firm and to their direct family members.

                                   OTHER SERVICES FEES

When the client wishes Magnolia Capital Management, Ltd. to evaluate and advise them on
the performance of other managers the client may utilize, the charge is set annually by
negotiation and is usually based on the number of managers to be evaluated, the frequency
of the evaluation, and the size and complexity of the accounts. In general, the periodic fee
would be .25% of the assets in the managed account at the beginning of the assignment with
a minimum fee of $500 per account and a maximum fee of $2,500 per account.

When the client wishes Magnolia Capital Management, Ltd. to undertake a comprehensive
financial plan for the client (which may entail working with the client's tax and legal advisors),
fees are usually assessed on a per hour basis, depending on the complexity of the
assignment, plus out-of-pocket expenses (generally $250 per hour).

When the client wishes Magnolia Capital Management, Ltd. to undertake a project specific
consulting service (such as advice on business investment or disinvestment, investments in
real property, etc.), fees are usually agreed in advance of the assignment on a flat fee basis,
although hourly fees can also be arranged.

The company does not work on a contingency fee basis or charge success fees. The agreed
fees for any of the above related services are not due or payable until completion of the
assignment.
...

Item 7     Types of Clients
Magnolia Capital Management, Ltd. provides advisory services to the following types of
clients:

 Individuals (other than high net worth individuals), including the trusts, estates, 401(k)
  plans and IRAs of individuals and their family members

 High net worth individuals

 Charitable organizations

 Corporations or other businesses not listed above

As previously disclosed in Item 5, our firm has established certain initial minimum account
requirements, based on the nature of the service(s) being provided. For a more detailed
understanding of those requirements, please review the disclosures provided in each
applicable service.