ASSET BASED CAPITAL, INC. Securities Based Lending

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1 ASSET BASED CAPITAL, INC Securities Based Lending Securities based lines of credit(sbloc) offer competitive interest rates, lower then unsecured bank loans and sometimes lower than home equity loans and lines of credit. As long as you have eligible securities to pledge, the loans can be quicker and easier to obtain than other types of financing. Strictly speaking, securities loans are different from margin loans which are for stock purchase. Securities-based loans allow you to borrow more money, up to 70 percent of the value of pledged securities compared to 50 percent for margin loans. Under government regulations, securities loans cannot be used to purchase, carry or trade margin securities. Instead, they can only be used for nonpurpose uses. For example: 1. Securities loans can be used for financing real estate. 2. Securities-based loans can be used for paying taxes. 3. Securities loans can be used for refinancing nonpurpose debt. 4. Securities-based loans can be used for financing business opportunities. 5. Securities loans can be used for higher education. 7. Securities-based loans can be used for buying luxury items. The Securities-Based Line of Credit (SBLOC) program allows the borrower to pledge their securities portfolio (stocks, mutual funds, bonds and other securities) to obtain a Revolving Line Of Credit for personal or business use. The borrower's securities remain in their name and are transferred into the borrower's SIPCinsured account at a top-tier U.S. Bank/Investment firm. There is no liquidation of the assets. The borrower receives the benefits of the securities such as dividends (if applicable) and market value. The borrower may trade and/or sell their securities. (Some restrictions may apply as the securities are the collateral for the loan.) The SBLOC program allows flexibility to draw funds up to the credit line limit and to repay any amount at any time without penalty. The funds may be used for any purpose except to purchase other securities. Interest rates as low as 2.50% with no yearly maintenance fee and low interest-only monthly payments. (Payments are not required if there is room on the line to cover the interest due for that month.) There is no credit or income requirements or verification and the only collateral for the loan are the securities that are pledged. Loans available for up to 70% of the securities value and up to 99% for certain other types of securities.

2 Securities that qualify for SBLOC are stocks, mutual funds, bonds, (corporate and municipal), US Treasuries, CD's and certain annuities. The Securities-Based Line of Credit program allows the borrower to pledge their securities portfolio (stocks, mutual funds, bonds and other securities) to obtain a Revolving Line Of Credit for personal or business use. The borrower maintains their portfolio in an SIPC-insured account at a top-tier US Bank/Investment firm. There is no liquidation of the assets and the borrower may still trade or sell their securities. (Some restrictions may apply.) Overview Type of Loan: Revolving Line of Credit Interest Rates: See chart below Loan to Value: See chart below Loan Terms Payment Structure: Loans are perpetual. Fixed rate loans are where the RATE is fixed for the term chosen by the borrower. 6 months to 7 years are available. Interest-Only monthly loan payment. payment is due if the borrowers credit line exceeds the amount of the funds drawn on the account. Minimum Loan Amount: $100,000. Maximum Loan Amount: Based on the securities pledged. te - We will not consider more securities to be pledged than the total of 3 day average volume. Minimum Trading Volume: $50,000 average daily trading volume. Credit Check: Income Verification: Pre-Payment Penalty: ARM's,. Fixed Rate, *

3 Lock Out Period: Recourse: ARM Conversion: Limited recourse. Assets pledged may be liquidated to payoff the credit line. Credit lines may be converted to a fixed rate at any time with no cost. Loan Origination Fee: 1.50% Asset Based Capital, Inc Origination Fee: TBD YSP: N/A Processing Fee: Upfront Fees: Yearly Maintenance Fee: Insured Account: - SIPC-insured Call Point: Borrower must maintain at 25% equity in the account at all times. *The Fixed Rate Lines of Credit and Loans carry a breakage fee. Please call for calculation and example as this is a sliding scale. Loan To Values Collateral Loan-To-Value Available US Stocks ($10 a share minimum) up to 70% Mutual Funds ($5 as share minimum) up to 70% US Treasuries up to 99% Foreign Stocks up to 70% Restricted Stock up to 60% MTN's (Investment Grade) up to 95%

4 Corporate Bonds (Investment Grade) up to 90% Municipal Bonds up to 90% US Restricted Stock up to 60% CD's up to 85% Interest Rates Adjustable Rates Loan Amount Estimated Interest Rate 100k to 250K 4.50% 250k and 500K 4.25% 500K and 1M 4.00% 1M+ call Fixed Rates* Loan Amount Margin Est. Rate 2yr Est. Rate 3yr Est. Rate 5yr 100k to 250K 5.00% 5.875% 6.25% 7.25% 250k and 500K 4.00% 4.875% 5.25% 6.25% 500K and 1M 3.00% 3.875% 4.25% 5.25% 1M+ call call call call * Rates are based upon a margin over the corresponding term of the LIBOR Swaps index. Lines of Credit may be converted to a fixed rate at any time at no cost. Acceptable Collateral Stocks, ETF(s) and Mutual Funds US Treasuries Medium Term tes (AAA+ - AA-) Foreign Sovereign Debt (AAA+ - AA-) Investment Grade Bonds Municipal Bonds Control or Restricted Stock

5 Unacceptable Collateral 401(k)'s, IRA's or any type of retirement fund Real Estate Annuities Gold or silver mines Mines or Mining Projects Oil or Gas Leases Commodities Private notes or private bonds Bonds that are past maturity Bonds that are backed by gold Bearer Bonds Variable Structure tes Surety Bonds or any type of insurance instruments Gems Private tes Art SKR's Leased Instruments BG's SBLC's Stocks or Bonds originating in the following countries: Africa, Bolivia, Greece, India, Iran, Iraq, N. Korea, S. Korea, Mainland China, Malaysia, Nigeria, Pakistan, Peru, Portugal, Romania, Russia, Spain, Sri Lanka, Taiwan, Thailand, Venezuela. Securities Based Loan vs. Line of credit comparison Benefits SBL Securities-Based Loan SBLOC Securities-Based Line of Credit

6 Type of Loan Loan Payment Structure Loan with Fixed Term Interest-Only payments Revolving Line of Credit Interest-Only payments Interest Rates Fixed 2.5% to 4.5% ARM 2.50% + Fixed 3.75% + Loan Payment Frequency Quarterly Monthly Taxable Event Pre-Payment Penalty Lock-Out Period Assets Must Be Moved Pre-Payment not allowed -term of the loan -transferred to lenders name ARM - Fixed Rate - -but they stay in clients name Assets Stay in Clients Name and Control Client May Trade or Sell Securities in the account Borrower Receives Credit For Dividends on Securities Current Liens on Portfolio May Be Paid With Proceeds of New Loan. Borrower Receives Upside Appreciation - At loan payoff SIPC Insured Account Credit Check Income Verification

7 Personal Recourse Loan Minimum Asset Value Penney Stocks OK* $5.00 per share* Broker Origination Fee Allowed Allowed Funding Fee 0% 1.5% YSP N/A N/A Other Fees Yearly Maintenance Fee Minimum Loan Amount $100,000 $100,000 Maximum Loan Amount Limit Limitations Quick Funding *Minimum trading volume of $50,000 day is required. For more information on this loan program, please call 855-CLR-PATH( )x401