Structured Products with HarborLight Capital

INVESTOR

PRESENTATION

2010

STRUCTURED PRODUCTS

Principal Protection

Capital Growth

Alternative Investing

Asset Diversification

HARBORLIGHTCapital Markets

Securities are offered through DeWaay Financial Network, LLC, Member FINRA/MSRB/SIPC

HarborLight Capital Markets is not affiliated with DeWaay Financial Network.

TABLE OF CONTENTS

Page

Disclosure ….……………………………………………………………………………………… 3

Value Proposition .………………………………………………………………………………… 4

Structured Product Basics ….…….…….………………………………………………………… 5

Portfolio Placement …...…..………...………………………….….……………..….…………… 7

Platform Overview ………………………………………………………………………………… 9

Structured Products Examples ……………………………………..…………………………….. 10

Liquidity ….……………………………………………………………..………………………… 14

Summary ….………………………………………………………………………….…………… 15

Firm Overview ….…….……………………………………………………………………….….. 16

Contact Information .……………………………………………………………………………… 17

2HarborLight Capital Markets, LLC

This is neither an offer to sell nor a solicitation to buy any security; all securities have risk. This material

has been prepared for informational purposes only; it is not intended to provide and should not be relied

upon for accounting, legal or tax advice.

Structured Products are hybrid investments that combine the structure of a fixed income investment with

the return potential of an equity investment. The strategies are formulated to address a variety of

investment objectives such as principal protection and exposure to assets classes such as domestic equities,

foreign equities, commodities and currencies.

Although the performance of Structured Products is directly linked to the underlying asset, ownership of

the Structured Product does not constitute ownership of the underlying assets. Past performance is not

indicative of future results.

Certain products offer principal protection. As such, products that do not offer at least 100% principal

protection expose the investor to the potential for investment loss. Any principal protection guarantee

only applies upon maturity. If the holder of a Structured Product sells before maturity, they may not

receive par value for the security. Please note that not all products feature full principal protection.

No products are guaranteed and/or protected by DCM or any of its affiliate companies and there is no

assurance the investment objectives described herein will be achieved. Investors are encouraged to read the

offering documents carefully, including the “Risk Factors” described therein.

Please know that this information does not constitute an offer buy or sell any security. All securities, once

offered, are offered through DeWaay Financial Network, LLC Member FINRA/MSRB/SIPC.

DISCLOSURE


VALUE PROPOSITION


Structured Products are financial instruments that combine principal protection

with the potential for market-based returns. These products can provide

customized risk-return to meet a variety of investment objectives.

Please note, not all structured products feature full principal protection.

WHAT IS A STRUCTURED PRODUCT?

+ =Backed by a zero-coupon bond

Purchased at a discount to

PAR (initial investment) value.

The zero-coupon bond matures

at PAR value, providing the

investor with principal

protection.

PRINCIPAL

PROTECTION

CAPITAL APPRECIATION

or

INCOME POTENTIAL

The spread between the cost of

the zero-coupon bond and PAR

value is used to purchase the

derivatives that provide the

capital appreciation or income

potential.

STRUCTURED

PRODUCT

Par = $1,000

Purchase Price

Day 1 Maturity

Discount to Par


Please note: Certain Structured Products may feature principal protection as less than or more than PAR.

HarborLight will provide offerings linked to major market indices,

as well as more sophisticated asset classes.

Major IndicesS&P 500

NASDAQ 100

Dow Jones Industrial Average

Russell 1000, 2000, 3000

S&P 400 Mid-Cap

Sector IndicesTechnology

Industrials

Real Estate

Cyclical

Utilities

Materials

Global IndicesFTSE 100

DJ Euro Stoxx 50

Nikkei 225

Hang Seng Index

MSCI Taiwan Index

CommoditiesGold

Crude Oil

Natural Gas

Energy

Basic Materials

Alternative InvestmentsCurrencies

Interest Rates

Inflation

Asset Class Diversification


Please note: ownership of a structured product does not constitute ownership of the underlying asset.

Stocks

ETF’s &

Mutual FundsVariable

Annuities

Government

Bonds

Structured

Products

Ret

urn

Risk

Structured Products feature the principal protection of fixed income instruments combined with the

potential for market-based returns.

RISK-RETURN PLACEMENT IN MODERN PORTFOLIO THEORY

Cash

NOTE: Not all Structured Products are created the same. This example shows the risk characteristics of targeted product offerings.


CALPERS ASSET ALLOCATION MODEL

Allocations taken from CALPERS Statement of Investment Policy for Asset Allocation Strategy as of December 14, 2009. Copyright © 2009 by CalPERS

Global Equity

49%

Alternative

Investments

14%Global Fixed

Income

20%

Real Estate

10%

Inflation-Linked

Assets

5%Cash

2%

Asset allocators are looking to capture potentially higher yield products while protecting against downside moves.

Similar to CalPERS, institutional investors invest capital into Structured Products as a hedge to long-term

investment themes as well as a protection mechanism.

This exposure provides access to many mainstream asset classes as well as potential upside returns provided by

exposure to Alternative Investments.


PLATFORM OVERVIEW

TERMS Market-Linked Products

•Typically 3-to-6-years

•Principal Protection

•Upside Participation

Rate-Linked Products

•Typically 10-to-15-years

•Principal Protection

•Pays Quarterly or Semi-Annually

•Callable

STRUCTURE Principal Protection

•Zero-Coupon Bond

•FDIC-Insurance for certain products

Upside Potential

•European-Style Options

•Interest Rate Derivatives

FREQUENCY On a monthly-basis, HarborLight will provide a variety of investment ideas from the top.

OBJECTIVES The strategies are formulated to address a variety of investment objectives such as principal protection and

asset diversification. We can provide exposure to a variety of assets such as individual stocks, indices (domestic

and foreign), currencies, commodities, interest rates, and so on.

MATURITY The products are typically 3-to-6-years in length for Equity-Linked Products and 5-to-15 years for Rate-Linked Products.

CUSTOMIZED HarborLight can provide a customized offering for institutional and high-net worth customers.

For a minimum of a $2mm investment, we can structure an offering to meet the clients specific objectives.



STRUCTURED PRODUCT EXAMPLE: World Basket Note

MATURITY: 6-years

PRINCIPAL PROTECTION: 100% (not-FDIC Insured)

UNDERLYING: World Basket (S&P 500 / DJ EuroStoxx 50 / Nikkei 225)

MAXIMUM RETURN 60%

VALUATION: Upon maturity, Note pays back principal investment plus any appreciation in the World Basket.

Maximum return is 60%.

BEST CASE SCENARIO: Basket is up 60% or more. Note pays back 160% of principal.

WORST CASE SCENARIO: Basket depreciates. Note pays back 100% of principal.

Investment: $100,000

Basket Change: +10%

Note Payment: $110,000


Basket Change: +100%



Basket Change: -25%



This example is illustrative in nature for demonstrative purposes only. Results may vary.

Principal protection and scenarios indicated only apply if product is held to maturity.

For example:

Assume the initial spot price of Gold = $1100/oz

The knock-out barrier is 100% or $2200/ox.

If Gold never trades above $2200/oz, this CD

pays the appreciation of Gold at the point of

maturity, with a minimum of 10%

If Gold trades above $2200/oz at any point

during the 5-years, the CD pays 110% of

principal upon maturity

STRUCTURED PRODUCT EXAMPLE: GOLD CD

MATURITY: 5-years

PRINCIPAL PROTECTION: 100% (FDIC Insured)

UNDERLYING: Gold (spot)

MINIMUM RETURN: 10%, paid upon maturity

KNOCK-OUT BARRIER: 100% Gold Spot (from the Initial Price Point)

VALUATION: Upon maturity, CD pays the appreciation of Gold as long as the knock-out barrier is never breached.

If the knock-out barrier is breached, then only the minimum return (10%) is paid.

BEST CASE SCENARIO: Gold spot rises 99%. The investor receives 199% return of principal.

WORST CASE SCENARIO: Gold spot depreciates or trades above barrier level. The investor receives 110% return of principal.

$1100/oz

$2200/oz

Day 1 Maturity

KNOCK-OUT BARRIER


Gold Spot Change: 100%

Note Payment : $110,000


Gold Spot Change: 50%



Gold Spot Change: -25%

Note Payment : $110,000


This example is illustrative in nature for demonstrative purposes only. Results may vary.

Principal protection and scenarios indicated only apply if product is held to maturity.

STRUCTURED PRODUCT EXAMPLE: LEVERAGED STEEPENER CD

The yield utilized is CMS (Constant Maturity Swap) which is a proxy for treasuries.

For example, using the following yields, the variable rate calculation would be as follows:

• 30 year CMS = 4.54%

• 2 year CMS = 0.95%

• 4 x (4.74% - 0.95%) = 15.16% yield (or 15% due to the cap)

Risks

• No minimum yield after the fixed rate is paid.

• CD will typically trade at a discount to PAR in the secondary market due to the call option.

» No potential for capital appreciation.

• If the yield curve flattens, the spread would decrease, thus decreasing the coupon.

• If the yield curve inverts, no coupon would be paid for that period.

MATURITY: 15-years

PRINCIPAL PROTECTION: 100% (FDIC Insured)

INCOME FREQUENCY: Quarterly

CALL FEATURE: After 2-years, quarterly at Par

RATE: Year-1: Fixed Rate = 11% per annum

Year-2 thru Year-15: Variable Rate = 4 × (30-Year CMS less 2-year CMS)

CAP (MAX RATE): Annual rate is capped at 15%


This example is illustrative in nature for demonstrative purposes only. Results may vary. Principal protection and scenarios indicated only apply if product is held to maturity.

$0.00

$1,000.00

$2,000.00

$3,000.00

$4,000.00

$5,000.00

$6,000.00

$7,000.00

$8,000.00

Year-1

Year-2

Year-3

Year-4

Year-5

Year-6

Year-7

Year-8

Year-9

Year-1

0

Str. Prod. 10-Year UST

$100,000.00

$110,000.00

$120,000.00

$130,000.00

$140,000.00

$150,000.00

$160,000.00

$170,000.00

$180,000.00In

vest…

Year-1

Year-2

Year-3

Year-4

Year-5

Year-6

Year-7

Year-8

Year-9

Year-10

Str. Prod. 10-Year UST

PRODUCT EXAMPLE: 10-YEAR U.S. TREASURY VS. STRUCTURED PRODUCT

In this example, the Structured Product: is a Leveraged Steepener CD.

uses Treasuries (30-Year and 2-Year) to calculate the

annual coupon payment.

* has an average yield calculation of 6.80% between

January 2007 to December 2009.

is Principal Protected backed by the FDIC.

can be called by issuer after 2 year at Par.

Annual Coupon Payment *

Cumulative Return on Investment*

The 10-Year U.S. Treasury:has a current yield of approximately 3.7%. (as of 1/1/2010)

* has an average yield of 3.86% between January 2007 to

December 2009.

is highly liquid in the secondary market.

has potential to depreciate in value below Par.


This information was derived from sources deemed reliable and is historic in nature. Past performance is not indicative of future results. This example is illustrative in nature for demonstrative purposes only. Results may vary.

Structured Products typically trade on the Over-the-counter (OTC) market providing daily liquidity.

The features proprietary to a Structured Product such as principal protection, minimum returns and asset

participation are only guaranteed if the product is held to maturity.

Structured Products that are principal protected conceptually have two components. The principal is

protected via a zero-coupon bond that expires at maturity of the product. The Structured Product is also

linked to an asset via a call-type option.

Secondary market value depends on a variety of issues. The major factors include

• Linked security performance

• Volatility

• Interest rates movements / Yield curve

• Time to maturity

LIQUIDITY

Change in factor Zero-Coupon Bond Asset-linked Value Total Product Value

Increase in Underlying Asset Level - ↑ ↑

Increase in Underlying Asset Volatility - ↑ ↑

Increase in Interest Rates ↓ ↑ ↑ or ↓

Decrease in Time to Maturity ↑ ↓ ↑ or ↓

Increase in Dividend Yield - ↓ ↓

The table is indicative of directional influences that the factors have on the value. It does not represent the magnitude of the movement nor the offsetting influence of other factors.


SUMMARY

Structured Products are financial instruments that combine principal protection with the potential for market-based returns. They provide customized risk-

return to meet a variety of investment objectives.

1. Solutions to a variety of investment objectives Principal Protection Asset Class Diversification Income Generation Capital Growth

2. Access to a wide range of asset classes across global markets Equities Rates Commodities Currencies

3. Range of liquidity options Active secondary market exists for investors that need liquidity Flexible structures We can tailor products for individual objectives and maturities.



FIRM OVERVIEW

FIRM: HarborLight Capital Markets, LLC, was formed in 2010 to provide accredited and institutional investors access to

private & public equity and debt offerings, private investment partnerships and structured product investments.

TEAM: The team brings together skills and expertise in

Institutional and Retail Portfolio Trading

Investment Banking and Capital Markets

Long-Only Asset Management

Private Partnership Investing

Risk Management

Due Diligence (both qualitative and quantitative)

Institutional and Retail Sales

Client Service and Investor Relations

BACKGROUND: Our staff has a strong history with Vanguard Group, CS First Boston, Kidder Peabody, Raymond James,

HarborLight Financial, Fidelity Investments, Morgan Stanley, State Street Bank, Loomis Sayles, and Starview

Capital (a Zurich Capital Markets Private Investment Company).

Dean G. TanellaSenior Managing Director

CAPITAL MARKETS OPERATIONS/FINANCIALINVESTMENT BANKING

Roger L. OverbyManaging Director

James J. DiCesaroManaging Director

David E. RichManaging Director

John D. DeeksManaging Director

Rafael S. WilliamsonManaging Director

Liz A. ChinowthOffice Manager

Peggy A. CrusanCapital Markets Transaction Coordinator

Jason P. SmithController


"Securities offered through DeWaay Financial Network, LLC, Member FINRA/MSRB/SIPC“"HarborLight Capital Markets is not affiliated with DeWaay Financial Network."

Michael FaraoneRegional Vice President

CONTACT INFORMATION

John D. DeeksManaging Director, Structured Products

[email protected]

(813) 443-4923

Michael FaraoneRegional Vice President, Structured Products & Alternative Investments

[email protected]

(813) 868-3591

HARBORLIGHT

Capital Markets


2502 Rocky Point Dr., Suite 560Tampa, FL 33607

2502 Rocky Point Dr., Suite 560Tampa, FL 33607

mailto:[email protected]

mailto:[email protected]

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Structured Products with HarborLight Capital