Midwest Financial Associates Inc

Item 5:         Fees and Compensation

MFA earns its compensation from clients based on the total assets under management.
Typically, the fee charged by MFA covers all portfolio management and financial planning
services provided by MFA.

The Firm’s current fee schedule for individual accounts utilizing MFA’s portfolio
management services is as follows:

                 Assets Under Management                          Annual Fee
                      $0 - $3,000,000                                0.90%
                $3,000,001 - $10,000,000                             0.75%
                      $10,000,001 +                                  0.65%

This is a flat fee schedule. Fees may be negotiated. For plans such as pension plans, group
401k plans and profit sharing plans, the Firm’s fee schedule may be as low as .20% on an
annualized basis and the fees for pension plans range from .20% to 1.% on an annualized
basis.

Fees will be calculated and based on the total market value of the client’s assets under
management on the last business day of the prior quarter, as valued by the custodian. The
market value of the client’s assets under management is determined by the client’s
custodian. Fees typically are paid at the beginning of the quarter for which the firm is
providing services, i.e., in advance. Clients are billed by the Firm will receive a statement
from the custodian enumerating such fee deduction. With the client’s approval, fees will
be deducted from the client’s account by the custodian. However, clients may elect to pay
the Firm directly rather than have their fee deducted. If client elects to pay the Firm directly,
MFA will issue an invoice at the time payment is due. The method of payment may be
changed at any time by the client, provided that the client gives the Firm at least thirty (30)
days advance written notice.

As payment for services rendered, MFA receives the fees described in this Item 5.
Nevertheless, clients may incur additional fees to affect any investment opportunity
recommended by the adviser, including, but not limited to, the following: brokerage
commissions, transaction fees, managerial fees, custodian fees, and any other fee imposed
by a third party necessary to effectuate the investment transaction (i.e., transaction fees are

charged for certain no-load mutual funds, commissions are charged for individual equity
transactions, and mark-ups and mark-downs are charged for fixed income transactions).
MFA does not receive nor share in any of the foregoing fees paid to third parties.

A client has the right to terminate any contract with MFA without a penalty assessed by
MFA within five (5) business days after entering into the contract. If the client’s advisory
relationship with the Firm terminates, the client will pay the Firm only for that portion of
the quarter during which the advisory contract was in effect. If the client paid MFA in
advance at the beginning of the quarter, MFA will return to the client the portion of the
fees for the time period that the advisory contract was not in effect. If the client did not
pay MFA in advance, the client will pay MFA only for that portion of the quarter that the
advisory contract was in effect. The cancellation of any contract may be accompanied by
the payment of penalties or fees assessed by the custodian or other third party, and while
these penalties or fees should not restrict the client’s ability to terminate MFA, the client
should carefully review all account documentation before cancellation to determine any
other costs or considerations related to the client’s accounts and assets.

The Firm is an asset-based fee investment management firm. The Firm does not receive
commissions for purchasing or selling stocks, bonds, mutual funds, real estate investment
trusts, or other commissioned securities products for clients.

Certain investment adviser representatives of the Firm are also licensed as insurance
agents. These representatives will earn commission-based compensation for selling
insurance products, including insurance products they sell to you. Insurance commissions
earned by these representatives are separate and in addition to our advisory fees. This
practice presents a conflict of interest because persons providing investment advice on
behalf of the firm who are insurance agents will have an incentive to recommend insurance
products to you for the purpose of generating commissions rather than solely based on your
needs. Clients are under no obligation, contractually or otherwise, to purchase insurance
products through any person affiliated with our Firm.

Item 7:        Types of Clients

Generally MFA seeks to enter into advisory relationships with clients who have assets to
manage of at least $50,000, which minimum may be waived in MFA’s discretion. MFA
may accept clients with a smaller amount of assets particularly where they are related or
affiliated with other Firm clients. MFA provides investment advisory services to the
following types of clients:

Individuals
High Net Wealth Individuals*

Pension and Profit Sharing Plans
Charitable Organizations
Corporations or other businesses

* “High Net Wealth Individuals” are defined to include (1) individuals with at least
$1,100,000 under management by the adviser; (2) individuals whose net worth exceeds
$2,200,000 (excluding the value of their primary resident) (3) officers and employees of
the investment adviser, or (4) “qualified purchasers” as defined under Section 2(a)(51)(A)
of the Investment Company Act of 1940 (who typically have at least $5,000,000 in
investments.

MFA provides services to employer sponsored benefit plans, such as 401K plans.

Item 8:       Method of Analysis, Investment Strategy and Risk of Loss

A. Methods of Analysis

The Firm may use the following methods when considering investment strategies and
recommendations.

       Fundamental Review

       A fundamental analysis is a method of evaluating a company or security by
       attempting to measure its intrinsic value. Fundamental analysis attempts to
       determine the true value of a company or security by looking at all aspects of the
       company or security, including both tangible factors (e.g., machinery, buildings,
       land, etc.) and intangible factors (e.g., patents, trademarks, “brand” names, etc.).
       Fundamental analysis also involves examining related economic factors (e.g.,
       overall economy and industry conditions, etc.), financial factors (e.g., company
       debt, interest rates, management salaries and bonuses, etc.), qualitative factors
       (e.g., management expertise, industry cycles, labor relations, etc.), and
       quantitative factors (e.g., debt-to-equity and price-to-equity ratios).

       The end goal of performing fundamental analysis is to produce a value that an
       investor can compare with the security's current price with the aim of determining
       what sort of position to take with that security (e.g., if underpriced, the security
       should be bought; if overpriced the security should sold). Fundamental analysis
       uses real data to evaluate a security's value. Although most analysts use
       fundamental analysis to value stocks, this method of valuation can be used for
       many types of securities.

       Cyclical Review

       A cyclical analysis assumes the market reacts in reoccurring patterns that can be
       identified and leveraged to provide performance. Cyclical analysis of economic
       cycles is used to determine how these reoccurring patterns, or cycles, affect the

       returns of a given investment, asset, or company. Cyclical analysis is a time-based
       assessment which incorporates past and present performance to determine future
       value. Cyclical analyses exist because the broad economy has been shown to
       move in cycles, from periods of peak performance to periods of low performance.
       The risks of this strategy are two-fold: (1) the markets do not always repeat
       cyclical patterns; and (2) if too many investors begin to implement this strategy, it
       changes the very cycles of which they are trying to take advantage.

       Economic Review

       An economic analysis determines the economic environment over a certain time
       horizon. This involves following and updating historic economic data such as
       U.S. gross domestic product and consumer price index as well as monitoring key
       economic drivers such as employment, inflation, and money supply for the
       world’s major economies.

B. Investment Strategies

When implementing investment advice to clients, the Firm may employ a variety of
strategies to best pursue the objects of clients. Depending on market trends and
conditions, The Firm will employee any technique or strategy herein described, at the
Firm’s discretion and in the best interests of the client. The Firm does not recommend
any particular security or type of security. Instead, the Firm makes recommendations to
meet a particular client’s financial objectives. There is inherent risk to any investment
and clients may suffer loss of ALL OR PART of a principal investment.

       Long-Term Purchases

       Long-term purchases are securities that are purchased with the expectation that
       the value of those securities will grow over a relatively long period, generally
       greater than one year. Long-term purchases may be affected by unforeseen
       changes in the company in which a client is invested or in the overall market.
       Long term trading is designed to capture market rates of both return and risk.
       Frequent trading can affect investment performance, particularly through
       increased brokerage and other transaction costs and taxes. Due to its nature, the
       long-term strategy can expose clients to various other types of risk that will
       typically surface at various intervals during the time the client owns the
       investments. These risks include, but are not limited to, inflation (purchasing
       power) risk, interest rate risk, economic risk, and political/regulatory risk.

       Short-Term Purchases

       Short-term purchases are securities that are purchased with the expectation that
       they will be sold within a relatively short period of time, generally less than one
       year, to take advantage of the securities’ short-term price fluctuations. Short-term
       trading generally holds greater risk. Frequent trading can affect investment
...