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    Frequently  Asked  Questions
    1)    Who provides the money? 
    The funds are available via Provider to this program from established, reputable investors located offshore that are motivated by the short term, no risk placement of sizable blocks of their funds. There are several Provider sources or Trusts which are ready to wire US$ into an acceptable top 150 world depository bank by the International Banking Wire System, one such mechanism is known as S.W.I.F.T., described in the Custom Presentation Package.

    2)     How do we know this is not “laundering~ money”?
      Any time funds are transferred over the above referenced “wire”, the transaction is confirmed at both ends as good, clean, cleared funds not from illegal sources. Advance documentation is lodged with the receiving bank at the appropriate time (closing) that must satisfy all prerequisites of this “bank-to-bank transfer”. The most common of which is for the receiving depository bank or Lender, “Subject to … acceptance of the money”. This is a general catch-all caveat for the Banker until they are comfortable that the funds are not tainted. No one is going to walk in with a briefcase full of cash.

    3)    Why do these trusts agree to invest their money in this type of transaction?
     This is an investment which is attractive to the Provider sources because at no time is their money at risk. Investments of this nature are very rare. Also, the Return On Investment (R.O.I.) is a minimum one point or 1% in just one day. When this is placed once a week, times fifty weeks a year, this can be 50% ROI per year, no risk! Another reason is that the Trust is whole again at the end of the day (at closing) and the deposit still remains in the Trusts new account in the closing bank, ready/willing/able (RWA) to proceed on to the next transaction or Phase II (known as a “cookie cutter’). See next FAQ for more on this question.

    4)    Why would the Investors/Trust deposit 100% and get only 54% back at closing?
     The master key to this Provider designed method is the ‘investment grade instruments’ or so-called “special CDs” which are severed and stripped of their interest income stream & pledged back to the Trust. The Future Value (fv) of these guaranteed coupons allows the pre-arranged sell off (by Provider, not the banker) at a discount to one of the many Coupon Buyers, which are available to Provider. The future value (fv) becomes Present Value (pv) or cash. This is a simultaneous transaction arranged by Provider prior to closing and is not part of the bank transaction! So, the results for the Investors/Trust are that they realize a minimum 101% for their 100% placement at the end of the same day (results of a successful closing). Provider serves as facilitator for this5 function (down the hall, so to speak) and brings this party to the surface at the appropriate time, midway in the closing.

    5)    Why would an Investor be satisfied with only 1% when the Project gets 18% and the Lender will get at least 20% over the term and neither has provided any money to the transaction? 
     Yes, this question is a FAQ. We think we have covered this enough in the above answers.

    6)     Why does the Investor NOT insist on equity participation in the project? 
     We are NOT in the “Project Business” as are Venture Capital investors. We are in the “Money Business” not the “Project Business” and this technique affords us just that, money. A cash placement into a rated bank for a minimum one point profit for less than a week, which is all handled by a seasoned veteran of over thirty years, Provider. This results in a tested closing which becomes boilerplate at your candidate bank. The Banker is now motivated to move forward with subsequent, like transactions using the same funds which are already on deposit in-house. They just have to change the date and/or name on the documents!

    7)     Banks are not paying 8% on CDs? 
     These are “Specially Structured” instruments by Provider and issuing Bank. The rate reflected in these outlines is at 8% because this is the number, which works for the fv & subsequent sell off of the interest income stream. Since the I.O. loan rate of 10% represents a profit center spread of 2% to the Lender each year, the CD rate is therefore 8%. Should the loan CD (a “special instrument”) rate be less or more, the spread would remain at the same 2% profit to the candidate bank. Therefore, the 8% CD rate requires a 54% rebate from the proceeds of the loan to extend to a return of 101% to the Trust. Another scenario would be 7 ½% with the I.O loan rate at 9 ½%, or even 7% with the I.O. loan rate at 9%. And so, the rebate would have to be slightly higher resulting in a slightly smaller net “fallout” to fund the project. On the other hand, a 9% CD rate with an 11% loan rate is still relative to the 2% profit spread to the Lender Bank. The numbers are like a balanced scale; the results must provide the 101% to the Investors/Trust or we won’t do it.
     Summary: this is all relative to two vital perquisites:
    - The bank instruments must be investment grade so the Investors will end up with their 101% at the end-of-the-day.
    - A 2% per year or a total sum of 20% to term is projected as the relative profit spread to the Bank.

    8)     Banks are not offering/trading CDs today at this high rate?
     The previous FAQ has answered this question. However, we must realize that the term CD has been used loosely in this package because this is the easiest definition for most parties to understand. These CDs are not the typical Certificates of Deposit which are so1d and traded in the banks. They have been referred to as “Specially Structured” CDs (or Bank Trust Notes or Mid Term Notes) for the purpose of discussion until there is a better level of understanding of the structure of this approach. This may be a Bank Trust Note or Mid Term Note. They basically are a Promissory Contract guaranteed by the issuing bank that the contracted income stream will be paid “as agreed” resulting in the required fv amount. This assures that these are the top graded instruments required for the salability of the “coupons” at a discount to obtain the desired present value, pv (cash now).

    9)  Why must the coupons be non-redeemable, irretractable, non-callable, inextinguishable, and all of those other official bank terms?
    The Loan Principal Guarantee required by your Lender to set up the Loan transaction must provide the bank with the secured collateral, their own paper, of which they have total control. This means that the corpus of the CDs are pledged and impounded to the custody of the Lending Bank. The Investor/Trust contracts with the Lender that at term maturity, in ten years, the Lending Bank then repatriates the CDs. The Investors/Trusts guarantees that they will not arrive to redeem the CDs, at any time in the future! This results in the bank being in a position of not having to pay out the award at maturity. So the security of this ‘no-obligation” position is “a no lose” for the lending bank.

    10)    How can the Bank be expected to issue instruments, which are non-callable?
     As in the explanation above, the coupons must remain non-callable during the term for the future value (ft,) to equal an amount that attracts Provider’s Coupon Buyers. Your candidate lender controls the income generating, portfolio hedge account, so the Borrower have nothing to do with this operation.

    11)    What is the collateral to the Lender?
     The risk to the Lender is minimized because they are holding all of the collateral which is their own paper or, (if in a two bank transaction) that of their up line bank. In either case, this very strong security and in the first place, is the Principal Guarantee. Since the Lender uses the funds on deposit from the Trust, the Lending Bank puts up no money in order to facilitate a so-called Deposit Matching Funds - Loan Back or Back-to-Back transaction. Additional collateral is covered later in the package for the debt service hedge.

    12)    What is the motivation for the Bank(s) to consider such a transaction?
     The of the design of these techniques is focused from both our sides, the Investors & the Project, to give your candidate Lending Banker a comfort level where they will step up to the plate and participate in putting this type of transaction together, thereby causing all parties at the table to Win. The lenders will not accept your project or your statement as collateral in order to risk a conventional lending of the bank’s funds. Therefore, you are bringing in these alternatives for consideration. Once they understand that this offer is designed to cover and minimize the bank’s exposure from A to Z using our new money “Other People’s Money” (OPM), then we expect this will get their attention strongly enough to indicate that they are at least interested. The evolution of these programs has come through many versions and adjustments due to the different requirements of banks. This offer is the result of what has been gleaned over the years of observing what they NEED. Now we are looking to determine what it is that they really WANT.

    13)  Why is it that the Project has the responsibility of procuring candidate bankers? 
     Many potential clients have asked this question. We offer these financing techniques into the marketplace to multiply ourselves (increase our exposure). The offer is financial assistance. We have been in this arena for many years & we have learned of myriad projects which have serious needs for an opportunity to use this type of collateral. For our assistance & services, they will work to procure these candidate banker contacts. With this technique, the project will have a very strong vehicle to present to prospective bankers. When you pursue lenders with this Custom Presentation package, you have a unique financing technique available which provides 100% cash collateral. With this added clout, you have greater opportunities to develop & motivate candidate bankers than you had earlier with your conventional methods. In reality, you have an opportunity to realize a net-net fallout of funds from the proceeds of this sizable loan transaction where both sides of the loan, principal & interest, is collateralized with vehicles acceptable to the Lender. Your project can be funded & capitalized AND you will not have the burden of debt service! That’s why this is called a ‘walk-away”. When YOUR banker wants to do additional deals with Provider using this same method, a finder’s fee will be paid to you for initial efforts. Nobody said this was easy, but it’s well worth it. So, we will continue to work with additional banks & bankers that you bring to the table through your efforts. For this, the benefits are, to avail to you funding for your project & an on going finder’s fee when this banker want to continue with multiple transactions. When we develop a banker & we continue to do so, we don’t split it with anyone. If you can get your loan with conventional bankers, then great!

    14)    Have you really done one of these?
     I have personally been in this type of business since 1967 & I learned long ago that about 99% of the information I possess is either discretionary or proprietary. That means this a secret or private intellectual data. I have also learned by experience that well over 50% of the types that become involved in this type of business do not have the ethics or staying power required. Also, I have found that most “players” eventually will, directly or indirectly, circumvent to some degree. The short answer is simple to describe with the following example. Hypothetically, we successfully closed your transaction yesterday through your banker and all is well. Everyone happily rode off into the sunset. Now, can any of us give out sensitive information regarding this transaction, especially names or phone numbers? NO. All parties will be a part to a very strong, air tight Non-circumvention, Non-divulge, Non-disclosure contract, if this were not the case, I could advertise bankers’ phone numbers and make my life very simple. There are a myriad of reasons why we are prevented from discussing previous business & we must continue to protect this proprietary information. We will all be silent after you close too.

    15)    Why doesn’t Provider use a bank already in place to save our time & effort?
     A popular question, but I think I covered it above. In years past, in an earlier version, we split the fallout 50/50 with the project because it was a “walk-away”. The current version was revised to the present structure as of April 1998, and you will have to agree with me that this is much better. Bankers did not like over-standard fees. After all, they are always thinking about how much they make and actually they should! This is why we have designed this offer the way it is. Everyone must win or it will not work.

    16)    Why does Provider need our project and/or our bank contact(s)? 
     Actually, we don’t. We continue to seek our own banker contacts. However, as explained above, you will bring additional candidate banker(s) to the table. You will then benefit as outlined above. 

    17)    Why project does Provider need to do this transaction? 
     We require that a legal project be tied to this transaction because this keeps our placement legal. When the lender approves the project as an acceptable borrower, this means that the lender banker has completed their due diligence requirement & that makes it acceptable to us. This assures us that the project is legal. So, we do not have to review or make a judgment on your business plan. We do not get involved with your project. Remember, we are not your venture capital financial partners. They are the great white sharks; so do not compare us to them, please.

    18)   Why does Provider act like they are not interested in my project’s Business Plan, we spent a lot of time and money to prepare it?
     This has been covered above. We do not need to review your project in order to proceed. The bank performs this function. We are certainly curious about your widget/deal, but we do not review your Business Plan like all the others. I will have an opportunity to preview it prior to closing.

    19)   If Provider is representing large blocks of money, why does Provider require a fee for the form AAA? 
     Many years ago I learned that this is a professional service, not unlike lawyers, surgeons, mechanics, etc. The ultimate goal is to close this transaction(s) because this is where we all make our money. We do not know how successful your contacts and/or probes with bankers are going to be. Professional services are not free, if they are; then you should really worry about their quality. We put forth our best efforts. This is evidenced by the time and research supporting the material in these packages. If anyone thinks ill of this offer, then stop reading right here. This offer is not meant for everyone. But for some, this may be the answer to some very serious needs. We are looking forward to the mutual benefits afforded in these techniques. The Custom Presentation will be the support you have needed as credit enhancement for your loan application to bankers. The first impression is extremely important. The preparation & processing takes over 7½ hours to complete. Sometimes it takes longer, as the calculations are extensive. It must be original, current, mathematically correct and stand up to scrutiny, under a magnifying glass by experts in the bank, who are looking for something to shoot it down. Remember, they are bankers!

    20)    Is this package the same as all the others out there . . .shabby?
     Nearly all of the pages are styled with your project name. We both want this financing technique to impress the reader. This will demonstrate that you are very serious about your proposal. When this happens the door opens a little wider for you to go forward. We are trying to get to first base & ultimately score, not just up to bat. Never, ABSOLUTELY NEVER send this material to anyone by fax! Most paperwork sent via fax looks shabby. I do not tolerate abuse of this offer. A fax is abuse. I will withdraw this offer immediately if this happens!

    21)    Why the AAA form?
     This form AAA is the agreement that authorizes Provider to offer you assistance. 

    22)    What other charges will there be from Provider?
     IF you request my travel to some venue to assist you or to make the presentation to your contacts, I am available for this. This is subject to my prior commitments. I will provide my travel parameters when I know where & when you need me to go. I would like as much lead-time as possible to set up my trip, but I know very well that when a banker says they are interested (warm & furry) that we do not want them to cool off. That’s just human nature & we want to move forward just as much as you do. When you return the pre-formatted “Notification Letter” re-typed on your project letterhead, I will determine if the bank(s) are acceptable and then advise you accordingly. This may require me to travel and meet personally with your contacts at a bank. The travel parameters under which I offer to meet with the banker(s) will be prepared and sent to you immediately for consideration. This will outline an expense budget for your acceptance. The cost will depend on where in this world I am going.

    23)    What is meant by “credit back to the payer at closing”?
      Provider will account for any and all advance moneys paid to Curtis Rose, General Director (Offshore) of Provider and credit back to the payer on the project side at closing. This means that what ever amount you provide or advance to us to work on this transaction will be accounted for, totaled and a check will be cut back to you (the payer) from Provider, immediately at closing. Note - there are no commitment fee charged by Provider. There are only pre-arranged, budgeted, acceptable expenses, which have to be agreed to in advance, in writing.

    24)    What are the tax events tied to this type of transaction?
     First, l am not a tax advisor! However, there may be some view by the IRS that some taxes may be triggered down the road. Of course, the project will have to pay the capital gains taxes on the profit earned, but I am sure you would welcome that problem. Should you direct this matter offshore, then there are some definite advantages. But that is another subject. So seek your own expert tax advisors.

    25)    Can this technique be applied to project applications other than acquisitions? 
     We know that many needs can benefit with this technique, such as; company expansion, merger, new cash infusion, buy out of partner(s), startup, operating funds, inventions, R&D, bailout of a troubled company or what ever needs money to pull a deal together; as long as it is acceptable to the banker(s). This makes it legal for us.

    26)    What are the sticky points to this proposal?
    The majority of the information we have provided has been about the Interest Hedge. This is a method offered to your Lender(s) to give them an income-generating vehicle using a leveraged profit account portfolio. They can depend on vehicle instead of expecting the project to make payments. This is a 5X over-borrowing scenario. We advocate Treasuries “only” because they are safe and the historical performance since 1986 can be analyzed by the lender’s experts.

    27)    Can my banker use a ‘roll program’ they already have? 
     Definitely. If your Lender does not understand securities or will not tap one of their own experts in futures/options in the trading of a leveraged portfolio, then we adjust. As the Use of Proceeds indicates, your lender can implement any other alternative vehicle that they accept, control & operate. This can be some type 0f ‘roll program’ they operate in the investment department of the bank with proven experience of generating income on an annual basis.
    A 10 to 1 leveraged portfolio has to produce ONLY 4% in a profit account to pay all of your loan payments.

    28)    Will this amount be allocated from the proceeds of the loan & who operates it? 
     Yes. Twenty five (25%) percent of the loan amount will be pledged to the lender for the exclusive purpose of servicing your loan debt for ten years. Your banker will have a management contract let by a joint venture, pre-arranged by your project & Provider. As the earnings (net profit after operator’s commissions & margin expense) are accrued through year into a custodial account at your lending bank, the account is debited every twelve months by your banker for the loan payment.
    The project cannot control what the operators do; therefore, Projects are not responsible for the payments!

    29)   What if the operator of the portfolio (your. banker’s investment department) does not make enough money to service the payments?
     This project cannot control/audit how the portfolio is operated within the bank. It must be understood prior to closing (under contract) that the project is released from all responsibility of the annual interest only payments until all ten payments have been met & the loan is paid in full by the investment department in the bank. However, we are willing to increase this amount to accommodate the bank’s level of comfort.

    30)   What happens if the payment is not made by the hedge account, say in year number three, five or whatever? 
     The bank is in total control of the hedge account and this is operated by the bank’s investment department, so the Lender must depend on their expert’s performance for the full term. Of course, the Investors are no longer involved with your transaction after closing.

    31)    How much does the Lending Bank have to generate with the portfolio to service this large payment?
     Only 4% annual net-net!

    32)    Why is this such a sticky point with the bankers? 
     This is a innovative proposition for your bankers to digest. Since this is not found in their policy manual, it is something that must be tested to prove. We need the banker that will look at this proposal with a positive attitude and look to see how they can assist in putting this together. When they understand this technique, it will become the most secured loan they have in their files. This is why it is designed to win-win-win! Again, we can’t say it enough, if this were not a win all around the table, it would not work. Your banker must win too!

    33)    A Mega-million dollar package is TOO BIG for our banker to consider! 
     This is an over-borrowing scenario, which is 5X the number you need to do your deal. This can “blow the doors off” some banks. Also, this may be over your banker’s “cap” or beyond their “pen-power”. We suggest that the bank proceed with a “TEST” transaction, which is adjusted down to a more comfortable number for the banker. Our priority is to provide all of the precedents needed by your banker to accept the larger numbers. This may be referred to as a test, a “Precedent Closing” or traunches. When they are motivated, we can adjust the numbers to suit. We make the one percent, so we are not afraid of big numbers.

    34)   What happens to the 25% margin deposit when the debt service is paid off
     even if it takes the full ten years? 
     This amount has served the exclusive purpose it was allocated to your bank for, so at this time, your lending bank has to relinquish this amount back to Provider. 

    35)    What happens when the Principal is due at end of year ten? 
     The lending bank accepted the pledged corpus of the “Special” ‘CDs and impounded this collateral during the full term. The Investors and your Project contracted with the bank to pledge the CDs were “irretraceable and pledged irrevocably” to the Lender as collateral for the principal of the loan. When the CD CORPUS matures in year ten, the bank repatriates/redeems them. In other words, they dissolve because these “Special” CDs don’t have to be paid out like a bond.

    36)    What is the corpus of the ‘CDs called during the term when they are held as Principal Guarantee?
     These are known as zeros until the time they mature. The value only becomes actual when redeemed by the holder, which is your Lender Bank.

    37)    My banker’s up-line bank is asking why they should do this for him?
      This will depend on the already established relationship that the smaller bank has with the bigger bank (its uncle bank). However, as an incentive to the bigger bank, a share of the 2% margin or the handling and the running of the 25% portfolio account, or perhaps both, can be offered to the up-line bank.
     

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