Seaway Advisors Ltd

Item 5: Fees and Compensation
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                 Performance-Based Fees and Side-by-Side Management

    Seaway Advisors. Ltd. does not accept performance-based fees. We are compensated
    on a flat fee based on size of the assets managed. Over time as the size of the account
    increases, our fee would also increase.

Item 7: Types of Clients

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           Methods of Analysis, Investment Strategies, and Risk of Loss

    Clients of Seaway Advisors fall into three broad categories: those seeking long-
    term growth and capital appreciation, those seeking income and protection of
    principal, and those seeking a balance of the two. Investment risk and the type of
    investment risk will vary among these objectives with income needs representing
    the lowest risk (although there is a risk from inflation,) to capital appreciation
    representing the greatest risk.

    Seaway Advisors follows a long-term investment strategy. We purchase stocks for
    capital appreciation with the intention of holding them for five years or longer.
    While stocks offer capital appreciation, there is a risk of material loss. We limit the
    size of any particular stock investment to less than 4% of portfolio value at time of
    purchase. This reduces the risk to the portfolio of investment in any one stock. We
    also seek to diversify portfolios across industries unless a sector represents a very
    compelling value.

    Our method of analysis is called fundamental research as it focuses on the business
    and the financial results of the company whose stock we will own. We first look
    for companies with strong balance sheets. Companies with strong past business
    operating results should have strong balance sheets. Next, we look at current stock
    valuations and how expectations of future results are reflected in the current stock
    valuation. Typical measures of stock valuation are: stock price measured against
    earnings, sales, retained earnings (book value or owners’ equity) and cash flow. It
    is our belief that those companies with the highest expectations in relation to
    valuation are those with the greatest potential risk of loss. Those with low
    expectations and lower valuation are those out of favor due to industry outlook, a
    temporary setback in earnings, or general stock market conditions. We will
    purchase those stocks where we feel the value is compelling. However, there could
    be a length of time before this value is realized. We will monitor operating results,
    including cash flow and profit margins, in evaluating whether to maintain an
    investment in a stock. Since our investing is based on stock valuations, there could
    be periods when portfolios may have substantial amounts of cash.

    Stocks, preferred stocks, CDs, corporate bonds, and U.S. government or agency
    notes and bonds are purchased for income. Investments are made based on the
    ability of the company to generate cash flow to support the dividend or interest
    payment. We will not own bonds which have less than an investment grade rating
    by a recognized rating agency.

    Seaway Advisors does not use options, derivatives, or engage in short selling. Nor
    do we invest in initial public offerings (IPO’s) or speculative or “penny” stocks
    with an unproven financial record.