EXECUTIVE SUMMARY OF FIRM WIDE CONTINGENCY PLAN CLEARING FIRM FOR INTRODUCING FIRMS

InterOcean Securities and our clearing firms, firm-wide business contingency plan is to respond to a Significant Business Disruption (SBD) by securing employees’ safety and firm property, making financial and operational assessments, promptly recovering and resuming operations, protecting all of the firm’s books and records, and allowing our customers to transact business. In the event that we determine we are unable to continue our business, we will assure customers prompt access to their funds and securities.

Significant Business Disruptions (SBDs)
Our plan anticipates two kinds of SBDs, internal and external. Internal SBDs affect only our firm’s ability to communicate and do business, such as a fire or power outage in one of our facilities. External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, a city flood, or a wide-scale, regional disruption. Our response to an external SBD relies heavily on the availability of other organizations, particularly our market data providers.

Approval and Execution Authority
InterOcean and our clearing firms BCP plans are reviewed and approved by the respective senior management annually.

Plan Location and Access
Our firm will maintain copies of its and its clearing firms BCP plan and the annual reviews, and the changes that have been made to it for inspection by regulators. Members of the BCP Team have additional copies of the plan stored off-site.

Business Description
InterOcean Securities is a diversified financial services firm headquartered in Chicago, consisting of four primary service areas.

Investment Services comprised of Broker/Dealer and Investment Advisor Services, Private Client Services, and Institutional Markets conducts business in stocks, bonds, mutual funds, options, annuities, municipal and mortgage back securities, high yield corporate and convertible bonds.

Investment Management deals primarily with Hedge Fund of Funds, Private Equity, Currency Management and Equities and Fixed Income.

Insurance Services provides insurance options for both individuals and businesses

Investment Banking has a regional presence in Investment Banking and Capital Markets.

Office Locations
Our Firm has two primary offices located in downtown Chicago. Other remote locations may serve as potential back-up locations should our primary office experience a significant business disruption. Office locations and contact information has been provided below.

350 N. Clark Street
Chicago, IL 60610
Main telephone number is 312-595-6000 610 N. Central Ave.
Highland Park, IL 60035
Main telephone number is 847-681-2300 321 N. Clark Street
Chicago, IL 60610
Main telephone number is 312-595-6200 One Oakbrook Terrace
Oakbrook Terrace, IL 60181
Main telephone number is 630-705-2000 Alternative

Physical Location(s) of Employees
In the event of an SBD, we will move our staff from affected offices to the closest of our unaffected office locations. If none of our other office locations is available to receive those staff, critical employees will be instructed to work from home.

Data Back-Up and Recovery (Hard Copy and Electronic)
InterOcean and its clearing firms use weekly full-tape backups to back up its electronic records as well as nightly incremental backups. These tapes are stored off-site and retrieved on an as needed basis.

In the event of an internal or external SBD that causes the loss of our paper records, we will physically recover them from our back-up site. If our primary site is inoperable, we will continue operations from our back-up site or an alternate location. For the loss of electronic records, we will either physically recover the storage media or electronically recover data from our back-up site, or, if our primary site is inoperable, continue operations from our back-up site or an alternate location.

FINANCIAL AND OPERATIONAL ASSESSMENTS

Operational Risk
In the event of an SBD, we will immediately identify what means will permit us to communicate with our customers, employees, critical business constituents, critical banks, critical counter-parties, and regulators. Although the effects of an SBD will determine the means of alternative communication, the communications options we will employ will include our Web site, telephone voice mail, and message blasting capabilities. In addition, we will retrieve our key activity records as described in the section above, Data Back-Up and Recovery (Hard Copy and Electronic).

Financial and Credit Risk
In the event of an SBD, we will determine the value and liquidity of our investments and other assets to evaluate our ability to continue to fund our operations and remain in capital compliance. We will contact our critical banks, and investors to apprise them of our financial status. If we determine that we may be unable to meet our obligations to those counter-parties or otherwise continue to fund our operations, we will request additional financing from our bank or other credit sources to fulfill our obligations to our customers and clients. If we cannot remedy a capital deficiency, we will file appropriate notices with our regulators and immediately take appropriate action.

Mission Critical Systems
InterOcean Securities and our clearing firm’s “mission critical systems” are those that ensure prompt and accurate processing of securities and insurance transactions, including order taking, entry, execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of customer accounts, access to customer accounts, and the delivery of funds and securities. We will use our mission critical database to maintain, verify and reference mission critical applications firm wide.

We have primary responsibility for establishing and maintaining our business relationships with our customers and have shared responsibility for our mission critical functions of order taking, entry and execution. Our clearing firm provides, through contract, the execution, comparison, allocation, clearance and settlement of securities transactions, the maintenance of customer accounts, access to customer accounts, and the delivery of funds and securities.

Our service bureau and market data vendors represent that nightly backs-ups are performed and could be restored at a remote operating facility in a geographically separate area with the capability to conduct the same volume of business as its primary site. Our service bureau has also confirmed the effectiveness of its back-up arrangements to recover from a wide scale disruption by testing twice a year.

Recovery-time objectives provide concrete goals to plan for and test against. They are not, however, hard and fast deadlines that must be met in every emergency situation, and various external factors surrounding a disruption, such as time of day, scope of disruption, and status of critical infrastructure—particularly telecommunications—can affect actual recovery times. Recovery refers to the restoration of clearing and settlement activities after a wide-scale disruption; resumption refers to the capacity to accept and process new transactions and payments after a wide-scale disruption. Our clearing firm has the following SBD recovery time and resumption objectives: recovery time period within 4 hours; and resumption time of 48 hours.

Alternate Communications Between the Firm and its Customers and Employees

Customers
We currently communicate with our customers using the telephone, e-mail, our Web site, fax, U.S. mail, and in person visits at our firm or at the other’s location. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. We would also establish a Hotline number. Options would be available to check on the status of systems and facility access, speak with a Command Center Analyst, or to leave a message with a member of the I.T. Department or Disaster Recovery Office.

Employees
We currently communicate with our employees using the telephone, e-mail, and in person. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. We will also employ a call tree so that senior management can reach all employees quickly during an SBD. The call tree includes all staff home, office, pager and cell phone numbers. InterOcean Securities and our clearing firms would also establish a Hotline number. Options would be available to check on the status of systems and facility access, speak with a Command Center Analyst, or to leave a message with a member of the I.T. Department or Disaster Recovery Office. We are also exploring the capability of an emergency notification system that would blast messages to all the devices listed above.