(SAMPLE) To formulate a workable and flexible corporate structure under which direct capital investment can be syndicated and uti lised to invest in equipment in this very profitable business and expand ahead of the competition and remain the leader in this field.

(SAMPLE) A new intermediate Holding company is to be established in Gibraltar which is acceptable to our Investment Group. There are several other good jurisdictions for such a company and Mancala Group would be happy to give advice on individual cases.

On the basis of such a corporation being established, the preferred structure would be as follows:

Form of Corporation - An IBC structured as a Holding Company •

Capital Structure - minimum $100,000 Authorised and Paid-Up •

Shares - Split into two categories - Ordinary and Preference. Ordinary shares should represent no more than 10% of the total capital structure •

Although the shares will initially be subscribed by the founding partners, the preference shares will ultimately be

subscribed at a premium by syndicated investors. To facilitate this, it is recommended that the ordinary share capital be in the form of 10,000 ordinary shares which will be subscribed upon incorporation at $10 per share. The company can then authorise the issue of 90,000 preference shares and issue those shares upon capital syndication.

The Capital Syndication

Under the terms of a capital syndication agreement, investors will be able to subscribe to the preference shares of the company, which will essentially have the following attributes

• Issued for a maximum term of 7 years

• have a preferred, cumulative, dividend of 7% per annum (payable quarterly)

• redeemable at 105% of face value

• Convertible into ordinary shares at value in the event of an IPO during the issue term.

• If not converted prior to the redemp on date, and not redeemed at redemp on date, the shares will be converted into 51% of the company’s ordinary shares.

Syndication will be undertaken on the basis that the company will introduce one or more initial subscribers who will collectively have the capability of subscribing to the first 20% of the share placement. This will provide sufficient assurances to the syndicate that a secondary market in the shares can be created whilst, at the same time, minimising the syndicate risks to 80% of the total project value.

The Syndication Procedure

Capital syndication, by its very nature, involves costs that must be incurred by the Capital Syndica on Group. Clearly, before those significant cost can be incurred, the syndica on group must receive sufficient assurances concerning the viability of the underlying project, as well as some assurances that some of those costs can be recovered in the event that the company doesn’t proceed with syndication after the process has begun. To this end, the client company must provide a full project proposal (business plan/feasibility) plus opera ng projec ons for the proposed term of investment. Once such a proposal is received and subsequently approved by the syndication group, a confirmed letter of intent will be issued that will set out the exact terms of syndication and precise details of the preference shares that must be issued.

Upon acceptance of the letter of intent, the company will be responsible for the payment of a REFUNDABLE CAPITAL SYNDICATION DEPOSIT. This will be applied as a deposit for the ini al 20% shares subscription to be subscribed by the company introduced investors and is calculated at 2% of the subscribed share value (subject to a ceiling of $150,000). This deposit will be refundable in full in the event that the syndication group is unable to issue its formal capital syndication agreement. However, should the company enter into a formal agreement and then subsequently decline syndicated funds, or fail to fulfil their contracted obligations under the terms of the syndication agreement, the Syndication group reserves the right to utilise the syndication deposit to offset some of their costs.

Important Observations

Companies wishing to utilise capital syndication must understand that the whole process operates to very strict  timescales, and the undertakings given by each side are serious commitments. As such, companies applying for Capital Syndication should observe the following.

• Projects should not be submitted until such time as a full project plan/feasibility study has been prepared.

• On no account can the capital syndica on group enter into any negotiations or due diligence discussions until such time a capital syndication agreement is in place

• Neither a letter of intent, nor a formal syndication agreement will be issued until such time as an initial subscriber can be introduced to the project. Furthermore, that initial subscriber will be responsible for providing evidence of the availability of the refundable syndication deposit.

• As part of fulfilling the capital syndica on agreement, the initial company-introduced investor will be responsible for providing assurance that the ini al 20% investment (less deposit already paid) will be paid within 15 days a er syndication.

• The Syndication group will disclose all relevant informa on and its terms and condi ons within its le er of intent. Such a le er of intent will reject the ONLY terms and condi ons upon which capital syndication can take place. As such, this document will not be a NEGOTIABLE set of condi ons - it will be either accepted or declined by the company.

Business Development Assistance

Although the syndica on group itself cannot assist directly in the prepara on of proposals or business plans, they do allow their approved consul ng groups ((Mancala Group is one) to assist client companies on normal commercial terms. Our approved consultants can assist with the structuring and incorpora on of any required corporations, prepara on of business plans and the development of final propositions to the syndicate. Services provided by our approved consultants are independently chargeable services which cannot be linked directly to the success of an ultimate syndication application.

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