Broadpoint Capital is responsible for creating and maintaining business continuity plans to support services to its customers. In the event of a business disruption, we have plans designed to continue operations of critical business functions, including the execution of institutional and retail orders, the processing of retail orders to our clearing firm, First Clearing, LLC, and the execution, clearance and settlement of institutional trades.

Our business continuity plan encompasses business disruptions that may be internal to Broadpoint, and larger wide-spread disruptions that effect entire regions. Business disruptions affecting a single branch or office will likely result in the closure of the office for the duration of the interruption and all communications being re-routed to one of Broadpoint's other offices as quickly as possible. Regional interruptions would also involve the closure of affected offices and the re-routing of communications to one or more of Broadpoint's primary office locations. A large scale disruption would also involve the relocation of staff to assist in restoring operations. Should there be a significant business disruption, customers are encouraged to visit Broadpoint's Web site (www.broadpointsecurities.com) for additional information.

Our plan is designed to address key areas of concern, including but not limited to the following:

• Data (electronic and hard-copy) back-up and recovery;
• Alternate communication between the firm and customers;
• Alternate communication between the firm and employees;
• Alternate locations for employees;
• Identification of mission critical systems;
• Regulatory reporting and communications;
• Identification of critical business constituent, bank and counter-party relationships;
• Financial and operational risk assessments;
• Ensuring customers access to cash and securities in the event Broadpoint is unable to continue business.

With regard to client assets, all retail customer cash and securities are held with our clearing firm. Broadpoint has been supplied with a summary of our clearing firms business continuity plans. Funds and securities of institutional clients are not held by Broadpoint. All institutional transactions are processed deliver versus payment and receipt versus payment.

Although Broadpoint has taken steps to develop and implement business recovery plans, we cannot guarantee that systems will always be available or recoverable after a disaster or significant business disruption. However, we believe that our planning and continued training and testing will provide an effective response and recovery effort in the event of a business disruption.

Our business continuity plan will be reviewed, updated and tested on an annual basis. Additionally, we will continue to test our critical business systems and services provided by outside service agents.

Any material changes to the above information will be available on our web-site www.broadpointsecurities.com or upon request.