Securities Finance The HedgeLoanŽ Way:
The History and Development Our Business Philosophy

HedgeLender was founded by Daniel W. Stafford in 1997 while working for the U.S. Department of Commerce, International Trade Administration. It opened its doors first as as an ethics-in-business membership organization for the private placement funding industry on the newly emerging Internet, SAS, named after his father, Samuel A. Stafford, award-winning journalist in Washington D.C. who had passed away in 1995. It soon became HedgeLender Corporation, with an office at Two World Trade Center, New York, until the terrorist attacks of 9/11. A secretary, Tatiana Ryjova, died in the attacks

After moving to Reston, Va., HedgeLender, having already coined the term "hedge loan" now in use throughout the financial world, was granted the trademark for its distinctive brand HedgeLoan®. At this time the company focused entirely on building innovative, secure, flexible hedged portfolio stock loans that put regulatory compliance and personalized customer attention first - the values Samuel Stafford espoused. We added the services of two new funds management partners, and in January of 2006 the company became HedgeLender LLC, with Daniel W. Stafford as president and Fred R. Wahler as vice president and chief of sales. Company ownership was divided evenly between Stafford and Wahler in early 2007. HedgeLender's original offices in Reston, Virginia were quickly transferred to the financial district of Philadelphia, Pennsylvania on Market St., and then finally to Two Penn Center Plaza in the famous "clothespin" building.

HedgeLender LLC continues to focus on its clients, listening and developing products in conjunction with established funding partners who meet our rigorous standards. With the addition of our Premier HedgeLoan product in conjunction with a leading (top five) U.S. brokerage and banking institution, HedgeLender now offers the most secure loan products in the nation bar none. And all five of our loan products are what we today call "HedgeLoan-Certified" stock loan and securities finance structures meeting several key standards of excellence that must be maintained if a loan service is to be allowed to continue being offered to our clients. Today, stock loan finance from HedgeLender covers all types of stocks, including those traditionally not eligible for stock-secured loans.

Stock loan financing during all conditions. During the recent financial crisis on Wall Street, HedgeLender's funding programs remained healthy and attractive, since they are untied to movements in the market and are not a credit facility tied to credit markets or credit considerations in the traditional sense. .

Our Stock Loan Securities Finance Objectives:

HedgeLender coined the term "hedge loan" and created the registered trademark "HedgeLoan" as noted above. In our application, a HedgeLoan is described as a hedged portfolio stock loan or related securities finance product which is both nonrecourse and comes with a loan-to-value over 60% (most are 85%). In our filing we further note to the U.S. Patent and Trademark Office (PTO) that it "is a loan product that uses one of several methods to "hedge" or reduce risk of potential loss by lender who holds the portfolio of stocks or securities, and the borrower remains contractually and/or beneficially the owner for the duration of the loan term. (Note that in 2009, we added our Premier HedgeLoan, in which not only does the borrower remain the contractual/beneficial owner of the shares throughout the loan term, but he remains the actual owner of the shares, as they reside in the client's own account, unsold, untraded, with no change of title or possession in any way. A simple lien is placed on the client's account - nothing more). We have held this registration since 2001.

Early on, Hedgelender created its HedgeLoan-Certification system to define the kind of stock loan and securities financing products we wanted to bring to our customers. These stock-secured loan products had to meet several standards for performance, security, management, and borrower benefit. A HedgeLoan-certified loan product has come to mean one that has been tested over time, researched, and examined until we have been satisfied that it is a form of securities finance that we can deliver to our clients with confidence. It is constantly evaluated: A HedgeLoan-certified loan product doesn't earn this status in perpetuity. We continually evaluate performance, safety, and compliance issues, and if for any reason it does not live up to these standards, that loan program can no longer offered by HedgeLender.

The Ready Advantage of HedgeLender Stock Loans and Securities Finance Concepts:

HedgeLender in this way provides a "One-Stop Stock Loan Shop" approach that brings together the very best securities financing structures in the industry, featuring the most competitive securities finance proposals and quotes. We monitor the performance, compliance status, and value of every program we offer, and we ensure that all types of stock owner's preferences and priorities can be met. HedgeLender has a stock loan or securities finance program for:

• Borrowers who need a low-interest loan with quarterly interest payments only.
  
• "Insider" share owners who are under DRIP and/or other restrictions
  
• Owners of shares trading on UK, Australia, Israel, Japan, India, Canada, or Korea exchanges.
  
• Investors who believe their shares will rise in value during the term
  
• Investors who require maximum loan-to-value and maximum cash
  
• Margin account holders who are facing a possible margin call
  
• Employee stock options holders who would like to flip them into stocks and HedgeLoan stock loan securities finance
  
• Those who need to restructure their debt using our stock loan cash
  
• Companies looking for a way to bind shareholder loyalty while using an alternative to PIPE financing
• Investors who want a stock loan where the shares stay in their own account at a top brokerage firm for the duration.

HedgeLender will continue to bring the best private placement stock-secured loan products to market and will stay on top of those products to ensure they meet our founding standards. In the rare case that they fail to meet those standards due to forces beyond our control, they are and will not be offered. In this way we can continue to be an active partner in our clients' securities finance planning through maintenance of the highest possible standards and greatest possible responsiveness to our valued clients.

Want more information? Please visit our HedgeLender home page for more information on our HedgeLoan stock loan program.

Get a stock loan quote today to see what your stocks qualify for. (There's no obligation and your information is held in the strictest confidence).

We sincerely look forward to introducing you to the Hedgelender way.

HedgeLender LLC Securities Finance Services

Stock Loan Answers - Answers to Common Questions About Our HedgeLoan Program

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