C R E D I T   E N H A N C E M E N T

FOUR FORMS OF CREDIT ENHANCEMENT ARE READILY AVAILABLE

(1)

BANK GUARANTEE
 

The Guarantee is written with you  as the beneficiary. The minimum terms is 12 months.

The guarantee is unequivocal in its wording and is cash backed by a European bank within the EU.  The guarantee must be surrendered, unencumbered and clear at the end of the term. Meanwhile, it can be used for a variety of purposes but care must be taken to ensure that it is not abused nor misrepresented to third parties.

General Outline Terms and Conditions:

Capital Sum Limits:      From €5 million upwards. No stated maximum amount.

Delivery:     Hard copy with confirmation by SWIFT.

Term and Renewals:    Typically three years.  1 year is available but is disproportionately expensive.

Fee:    3 years: 18% - 20%.  1 year: 16%

Fee Payment:    Instalments are not available for this facility. Payment may be made after delivery by way of MT103 but a non-usance fee (2%-4%) must be held in escrow if this option is taken.

Introducer Commissions:    To be agreed in advance.

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(2)

 INSURANCE GUARANTEE / PERFORMANCE BOND
UNDERWRITTEN BY A MAJOR SOVEREIGN BANK BY WAY OF A STANDBY LETTER OF CREDIT.

The Guarantee is written with your lender or trading partner as the beneficiary. The minimum terms is 6 months. Due to the many variations of this type of facility as a result of many types of use and the fact that the terms and conditions are to large extent dependent upon your banking and lender/trading partner relationships, terms and conditions will be quoted upon our full understanding of your precise requirements.

The facility appears to be most attractive to financial institutions with limited liquidity. Various financial trading arrangements also appear to be able to benefit from the use of the guarantee/performance bond.

General Outline Terms and Conditions:

Capital Sum Limits:    From $25 million upwards. No stated maximum amount. Euros or Dollars.

Term and Renewals:    Typically one year or more but applications for 3 or 6 months will be considered.

Setting-up and Renewal Fees:    Negotiable depending upon amount. Very large amounts attract higher fees due to the expenses involved in syndication.

Instalment Fees:    Not available for this facility.

Introducer Commissions:    To be agreed in advance.

   __________________________________________________________________ 

(3)

CORPORATE GUARANTEE
AVALED BY A EUROPEAN BANK RATED "AA+"

The Corporate Guarantee is written with you as beneficiary. The Corporate Guarantee is avalized ("wrapped") by the European Bank to give it the full force of a "AA+" rated instrument.

General Outline Terms and Conditions:

Capital Sum Limits:    Euros 50 million and above, No stated maximum amount. US Dollars are also available.

Term and Renewals:    Initial term of 1 (one) or 3 (three) years.

Setting-up and Renewal Fees:    Initial setting-up fee must be placed into an acceptable escrow position against undertakings to release upon the bank confirmation of issue of the avalized guarantee  Negotiable depending upon amount. Very large amounts attract higher fees due to the expenses involved in syndication. See Facility (8) in the "Short Summary" for the current fee structure. Renewal fees are identical.

Introducer Commissions: To be agreed in advance.

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(4)

 LEASED TREASURY BILLS, CERTIFICATES OF DEPOSIT, ETC.

A simple leasing position generally set for one year. During the leasing period all interest or coupon payments are retained by the funder/lessor. There may be a requirement for the receiving bank to be domiciled in Canada which in turn requires you to have a corporate or personal presence there. This can be arranged if required. the receiving bank will be required to give an undertaking to pay the fees within 10 days of receipt (subject to verification thereof) and to return the unencumbered securities 15 days prior to expiry of the facility unless renewed.

General Outline Terms and Conditions:

Capital Sum Limits:    From $25 million upwards but with a marked preference for amounts of $100 million and above.. Very large amounts are available.

Term and Renewals:    Fixed term usually of 1 year with built-in renewal options. Shorter terms attract proportionately higher fees. See Facility (9) in the "Short Summary" for the current fees.

Setting-up Deposit and Leasing Fee:    An initial setting-up deposit (non-usance fee) of $100,000 is required to be placed in escrow upon agreement of the terms and conditions by both lessor and lessee. This is returnable in full if the securities are not made available within 10 working days. Delivery will be subject to your receiving bank's undertaking to return the unencumbered securities not less than 15 (fifteen) days prior to maturity of the lease term. If your bank fails to give this undertaking then the setting-up Deposit is forfeit. Similarly you bank will be required to give an undertaking to pay the Leasing Fee upon its receipt and verification of the the securities within not more than 10 (ten) days of it receipt thereof. It is essential that your bank agrees (in writing) to this protocol before you commence the transaction by placing the Setting-up Deposit into escrow. Renewal fees are by negotiation.

Instalments:    Not are not available for this facility, all fees must be paid within 10 days of delivery of the securities . Renewal fees to be paid not less than 30  working days prior to the renewal date.