SUMMARY OF BUSINESS CONTINUITY PLAN

Lemley Yarling & Co. (the “firm”) maintains this Business Continuity Plan, describing our policy used in responding to a Significant Business Disruption (“SBD”). Our response is directed to safeguarding employees’ lives and firm property, making a financial and operational assessment, quickly 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. Our plan anticipates two kinds of SBDs, internal and external. Internal SBDs affect our firm’s ability to communicate and do business, such as a fire in our building. 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 more heavily on other organizations and systems, especially on the capabilities of our clearing firm.

1. Emergency Contact Persons

   Our firm’s two emergency contact persons are:

   Ralph J. Lemley Budlemley@aol.com (800) 253-6539

   Kathleen Pinto KCannova@aol.com (800) 793-3665

   Customers should direct their emergency contacts to the above persons.

2. Business Description

   Our clearing firm is:

   Mesirow Financial Inc.
   350 N. Clark St.
   Chicago, Illinois           60610
   (312) 595-6000
   mesirowfinancial.com

   and our contact person at that clearing firm is:

   Krissa McIntyre
   Mesirow Financial Inc.
   350 N. Clark St.
   Chicago, Illinois           60610
   (312) 595-6083
   kmcintyre@mesirowfinancial.com

   Our clearing firm has also given us the following alternative contact in the event it cannot be reached:

   __________
   One Oakbrook Terrace
   Suite 300
   Oakbrook Terrace, Illinois           60181
   (630)705-____
   ________@mesirowfinancial.com.

3. Office Locations
   1. Office Location #1

      Our Location #1 Office is at 42 South Washington Street #3, Hinsdale, Illinois 60521. (800) 793-3665.

   2. Office Location #2

      Our Location #2 Office is at 15624 Lemley Drive, Soldiers Grove, Wisconsin 54655. (800) 253-6539.

4. Alternative Physical Location of Employees

   In the event of an SBD, we will move our staff from the affected office to our unaffected office location.

5. Customers’ Access to Funds and Securities

   Our firm does not maintain custody of customers’ funds or securities, which are maintained at our clearing firm, Mesirow Financial Inc. In the event of an internal or external SBD, if telephone service is available, our registered persons will take customer orders or instructions and contact our clearing firm on their behalf, and if our Web access is available, our firm will post on our Web site that customers may access their funds and securities by contacting Budlemley@aol.com or kmcintyre@mesirowfinancial.com. The firm will make this information available to customers through its disclosure policy.

6. Financial and Operational Assessments
   1. 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 and telephone voice mail.

   2. 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 clearing firm, critical banks, and investors to apprise them of our financial status.

7. Mission Critical Systems

   Our firm’s “mission critical systems” are those that ensure prompt and accurate processing of securities transactions, including order taking, order 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. Regarding, order taking and entry, See Section A1 below.

   We have primary responsibility for establishing and maintaining our business relationships with our customers and have sole responsibility for our mission critical functions of order taking and entry. 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 clearing firm represents that it backs up our records at a remote site. Our clearing firm represents that it operates a back-up operating facility in a geographically separate area with the capability to conduct the same volume of business as its primary site. Our clearing firm has also confirmed the effectiveness of its back-up arrangements to recover from a wide scale disruption by testing.

   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 of 4 hours; and resumption time of 48 hours.

   1. Our Firm’s Mission Critical Systems
      1. Order Taking

         Our firm receives orders only from Lemley Yarling Management Co., and its President, Ralph J. Lemley. All orders are discretionary orders where Lemley Yarling Management & Co. is vested with discretion by customers. Customers are not allowed to transmit orders directly to Lemley Yarling & Co.

      2. Order Entry

         Currently, our firm enters orders by recording them on paper and sending them to our clearing firm telephonically. Orders are transmitted by telephone to Mesirow. Our contact for executing orders is Mark Lis (312) 595-6723, (312) 595-6625.

         Our client service contact at Mesirow is Ruth Hannenberg (312)595-6000.

8. Alternate Communications Between the Firm and Customers

   We now 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. For example, if we have communicated with a party by e-mail but the Internet is unavailable, we will call them on the telephone and follow up where a record is needed with paper copy in the U.S. mail.

9. Disclosure of Business Continuity Plan

   This BCP disclosure statement is provided to customers at account opening, posted on our Web site and mailed to customers upon request.

Resource Group 
       
Business Continuity Plan Update
       

Date:   July 14, 2010                   Number: 10-53  

Route to:  Administration, Compliance and Operations

In response to recent FINRA examinations conducted with our correspondents, questions were raised regarding the Mesirow Financial response to the FINRA Business Continuity Plan template. To assist you, below are Mesirow Financial responses to Section III  ‘Business Description’ and Section  XI ‘Mission Critical Systems.’

The Business Continuity Plan template was created by FINRA to assist introducing firms in fulfilling the Business Continuity Plan requirements. Attached is the Business Continuity Plan Template that can be obtained thorough the FINRA website at: http://www.finra.org/ .

III.  Business Description

Question: “Our clearing firm has also given us the following alternative contact in the event it cannot be reached.”

Mesirow Financial response:
Alternate Contact Information: 866-401-6200

This number is Mesirow Financial dedicated Emergency Line which is answered by a third-party answering service. The number is available 24x7 and is independent from our phone switch and telecommunication infrastructure. The answering service has all necessary information for key individuals within the firm, as well as Correspondent specific escalations to the Clearing Services group.

IX. Mission Critical Systems

Question: “Our clearing firm has also confirmed the effectiveness of its
back-up arrangements to recover from a wide scale disruption by testing,
[and it has confirmed that it tests its back-up arrangements every time
period].

Mesirow Financial response:

In addition to performing testing with our service bureau twice a year, we also participate in an annual test sponsored by the Security Industries and Financial Markets Association (SIFMA). This test exercise allows firms to connect simultaneously from alternate facilities and technology sites to markets to place test orders, receive simulated executions and conduct settlement transactions, thus highlighting the ability to operate through a SBD.

Question:  “Our clearing firm has the following SBD recovery time and    
resumption objectives: recovery time period of [e.g., within 4 hours]; and    
resumption time of [e.g., within the same business day].

Mesirow Financial response:

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.

Question: “Under order entry, we need to know from Thomson (since that is how we enter orders) how, under its BCP, we can expect to resume order entry within (what time frame.)

     Mesirow Financial response:

Thomson Reuters BETA Systems (BETA) maintains a comprehensive Disaster Recovery and Business Continuity Program that is designed to protect and restore processing services under all circumstances. In the event of a disaster, this program covers the restoration of all vital business functions, communications, and services to internal and external clients within 2 hours of the disaster declaration.

Who to call with questions:

Please contact Client Services at 1-800-552-2491 ext. 7007 or clientservices@mesirowfinancial.com.                 

<<BCPTemplate.doc>>

Jordan Rummel
Product Coordinator
Clearing Services

Mesirow Financial
353 N. Clark St.
Chicago, IL, 60654
v 312-595-6758
f 312-595-7202
e jrummel@mesirowfinancial.com