Ramirez Asset Management Inc

Item 5: Fees and Compensation

Fee Schedule
RAM is compensated for its investment advisory services provided to separately managed
accounts based on client assets under management and the type of investment management
strategy that is employed. RAM offers both Fixed Income Strategies and Equities Strategies.

The following fee schedules are the standard published annual fees for RAM’s institutional fixed
income strategies:

                      Ramirez Cash Strategy
                      15 basis points on the first $50 million
                      10 basis points on the next $100 million
                      8 basis points on the balance

                      Ramirez Short Duration Strategy (0 – 5 Yrs)
                      20 basis points on the first $50 million
                      15 basis points on the next $100 million
                      10 basis points on the balance

                     Ramirez Intermediate Strategy
                     25 basis points on the first $50 million
                     20 basis points on the next $100 million
                     15 basis points on the balance

                     Ramirez Intermediate Core Strategy
                     25 basis points on the first $50 million
                     20 basis points on the next $100 million
                     15 basis points on the balance

                     Ramirez Core Strategy
                     25 basis points on the first $50 million
                     20 basis points on the next $100 million
                     15 basis points on the balance

                     Ramirez Strategic Core Strategy
                     30 basis points on the first $50 million
                     25 basis points on the next $100 million
                     20 basis points on the balance

                     Ramirez Long Duration Strategy
                     30 basis points on the first $50 million
                     25 basis points on the next $100 million
                     20 basis points on the balance

RAM does not maintain a standard minimum fee for its fixed income strategies. The Firm’s
standard fee schedule for its fixed income strategies is negotiable under certain circumstances,
and under certain circumstances, the Firm may negotiate a baseline minimum fee.
The below fee schedules are the standard published annual fees for RAM’s primary equity
strategies:
                     Ramirez US Large Cap and US Mid Cap Equity
                     70 basis points on the first $25 million
                     60 basis points on the next $25 million
                     50 basis points on the balance

                       Ramirez International/Global/Global
                       Dividend/Emerging Markets Equity
                       75 basis points on the first $25 million
                       65 basis points on the next $25 million
                       55 basis points on the balance

A minimum of $10,000,000 of assets under management is generally required to open an
institutional account in one of the RAM primary equity strategies. Under certain sub-advisory
and/or wrap relationships, RAM often reduces its minimum account size to $100,000 or less. These
minimum account sizes are typically negotiated on a case-by-case basis.

Client Billing
The fees for investment advisory services are typically invoiced quarterly and are based on the
average market value of the assets under management. A pro rata portion of the annual fee (1/4)
is billed in arrears at the end of every quarter based on the average market value of the portfolio.
The total value of the account shall include market value of securities, accrued interest, and cash
or cash equivalents. The average quarterly market value is calculated by averaging the ending
market value of portfolio holdings reported for each month during the calendar quarter. This
billing method is standard for all clients unless an alternative billing method and timeframe is
requested and documented in writing.

For accounts utilizing a primary equity strategy, RAM collects advisory fees on a quarterly basis
for the majority of clients, although we do have clients that pay advisory fees on a monthly basis.
RAM collects these fees both in advance and in arrears. With the written permission of the client
and the client’s custodian, RAM debits the advisory fee directly from the client account. Clients
may choose whether RAM deducts advisory fees directly from the client’s assets or if RAM bills
the client for advisory fees. Upon termination of any account, billed in advance, any prepaid,
unearned fees will be promptly refunded. In calculating a client’s reimbursement of fees, we will
pro rate the reimbursement according to the number of days remaining in the billing period.

Retail Investors
Investment advisory services for individuals, including high-net worth individuals and retail
investors, are available on a separately managed account (“SMA”) basis and may include fixed
income or equity securities, or a blend of each. There is a fee range of 0.25% to 0.50% (25 to 50
basis points) for a fixed income strategy and 0.75% to 1.00% for an equities strategy. The fee for
individual retail investors for a balanced portfolio, which includes allocations to both fixed income
and equity asset classes and is tailored to a client’s investment goals, ranges from 0.50% to 1.00%
(50 to 100 basis points), and is based on various factors, including investment objectives and time
horizon for investing, the allocation size to each asset class, and any desired client customization.
All fee rates are detailed on the Investment Management Agreement and on a retail client’s
Investment Policy Statement. Fee billing for individual investors is handled in the same manner
as described above for institutional investors.

Wrap Fee Programs and Separately Managed Account Fees
Clients participating in separately managed account programs that offer the RAM primary equity
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Item 7: Types of Clients

As a provider of fixed income and equity investment management services, RAM’s client base
largely consists of institutional accounts, including pension and profit sharing plans, state and
municipal government entities, unions, charitable organizations, endowments, and corporations,
as well as high net worth individual accounts. RAM also provides services to other pooled
investment vehicles, which include the RCOF (as discussed below). RAM may negotiate minimum

asset requirements for its fixed income investment management services based on a prospective
client’s goals, objectives, and desired strategy and/or desired level of strategy customization.
Currently, RAM’s clients for Asset Based Financing are commercial banks, but the program is
marketed to other institutional investors.

RAM’s clients include the RCOF. The Firm’s investment advice to the RCOF is provided directly to
the funds and not individually to each of the funds’ limited partners. This brochure may be
provided to current or eligible prospective investors in the RCOF, together with the relevant
private placement memorandum (“PPM”), organizational documents and other related
documents, prior to or in connection with such person’s consideration or execution of an
investment in one of the RCOF, and may subsequently be provided in RAM’s discretion or,
annually, at the request of an investor in a fund. Investors and other recipients should be aware
that while the brochure may include information about the RCOF, as necessary or appropriate, it
should not be considered to represent a complete discussion of the features, risks or conflicts
associated with the funds. More complete information about the RCOF is included in each fund’s
PPM, which may be provided to current and eligible prospective investors only by RAM or
another authorized party.

In no event should this brochure be considered to be an offer of interests in one of the RCOF or
relied upon in determining whether to invest. It is also not an offer of, or agreement to provide,
advisory services directly to any recipient. Rather, this brochure is designed solely to provide
information about RAM for the purpose of compliance with certain obligations under the
Advisers Act and, as such, responds to relevant regulatory requirements under the Advisers Act,
which may differ from the information provided in a PPM. To the extent that there is any conflict
between discussions herein and similar or related discussions in a PPM, the PPM shall govern.

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

1. Fixed Income Strategies

Methods of Analysis and Investment Strategies – Fixed Income Strategies
RAM is seeking active relative value credit opportunities to add incremental yield and total
return. We allow experienced portfolio managers to make meaningful allocations to relative
value anomalies that they identify. We are disciplined in adhering to overall benchmark duration,
term and credit quality risk framework. However, we are not risk constrained by credit
segmentation within the benchmark. We believe utilizing credit expertise in sector rotation and
security selection, in a risk-controlled framework will produce consistent risk-adjusted returns
over time. This philosophy is the foundation of each of our investment strategies and has
remained unchanged since the Firm’s inception. The Firm’s investment approach seeks to add
value by:

  •   Taking a longer term view on investing; less dependent on a few top-down decisions

  •   Closely regulating relative duration and term structure positioning
  •   Combining quantitative and qualitative factors into a bottom-up/ top-down processes
  •   Emphasizing domestic high grade sectors/ securities held in the index
  •   Embedding risk management throughout the process, with a focus on limiting downside
      risk

RAM portfolios are actively managed with an equal blend of top-down macroeconomic analysis
and bottom-up issuer level research. When forming the Firm’s macro and microeconomic
opinions the Investment Committee assess both qualitative and quantitative factors. This ensures
that the Firm includes the extensive experience of RAM’s investment professionals as well as
quantitative market indicators and metrics to determine optimal sector positioning and security
selection.

The Firm generates forward-looking views on the potential levels of key interest rates, the future
shape of the yield curve, and inflation forecasts, along with other metrics during the monthly
RAM Investment Committee meeting. Key elements under review include monetary policy, the
global flow of funds, unemployment, economic growth, geopolitical risks, volatility, and fiscal
policy. Each data element is assigned a positive, neutral or negative outlook.

The RAM Investment Committee’s views on inflation, interest rate direction, and term structure
movements determine the overall effective duration positioning, individual key rate durations,
and relative sector and subsector weighting in the client portfolios, all within an internal risk
management budget expressed relative to the benchmark. In such a manner, systemic market
risk is managed and kept within specified boundaries, which limits volatile swings in relative
performance. The Committee formulates an overall outlook for domestic economic growth and
inflation, monetary policy, and capital market conditions as primary factors in developing
portfolio strategy. The Committee also incorporates global factors and their impact on the
domestic capital markets. These include global growth, currency movements, and the overall
level of interest rates in developed and emerging economies. These various inputs are compiled
and form the basis for determining where the domestic economy is in the economic cycle which
is a main determinant of top down macro level relative portfolio positioning.
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