What Each Party Gets

No party to the transaction holds shares in the Vehicle. Both participations are capped contractual rights with no votes, no liquidation rights and no right to acquire shares. The investor holds no participation: its return is the Note, the coupons and the Warrant. Both are extinguished on a maturity default.

The Structuring Company is not a registered broker-dealer, is not a registered placement agent, and is not registered in any capacity under the Securities Exchange Act of 1934 or with FINRA or any state. It has given no undertaking to become registered and may never do so. Its role is confined by written agreement with each Project to issuer-side services — designing the instrument and the collateral mechanics, documentation, procuring the independent appraisal, the technology platform, Project diligence, administration and reporting. That agreement expressly excludes every investor-facing function: identifying, contacting, soliciting or negotiating with any investor or prospective investor, preparing or transmitting subscription documents, confirming accreditation, and allocating capacity among investors. It receives no compensation, in any form, for finding or introducing an investor. The Project offers and sells its own Note, through its own officers, who are salaried and are not paid any commission or other remuneration based directly or indirectly on transactions in securities. That is so whether an Investor comes on its own or through an investment adviser: the adviser advises its client and the client subscribes directly from the Project, on a non-discretionary, client-directed basis. An adviser does not offer or sell the Note and holds no selling agreement; the advisory firm receives nothing from the Project, the Vehicle or the Structuring Company and is paid by its own client. One case would be different, and it does not yet exist. A member of the Structuring Company intends to become a representative of an independent RIA and is not one today. If he does, and the adviser is that firm, that representative may also be advising the Project in the same transaction, and he is paid by the Structuring Company for that work. The advisory firm would still be on the Investor's side and would still sell nothing; the person may be on both sides, which is why the four conditions above govern that case — consent from both, no term negotiated by him, no part in the appraisal, no introduction either way. Until then he advises no investor at all. Only one case puts the selling function anywhere other than the Project. Where a Project instead requires a placement agent, an unaffiliated registered broker-dealer is engaged for that Project. Its fee is a multiple of the growth capital, not a percentage of what is raised — 10% of the first $10,000,000 of growth capital, 7.5% of the next $15,000,000 and 5% above that, capped at $3,500,000 per Project — so no fee in this structure is a percentage of face, and the fee is the same number in both investor classes. Nothing is payable to the agent before closing: no retainer, no work fee and no expense advance — a condition of engagement rather than a negotiating position, and one the program expects will leave an agent unavailable for most Projects. The fee is paid at closing out of the proceeds, which enlarges the face; the Project's cost of capital is unchanged at 10.0% a year after tax and the growth capital it receives is unchanged, because the Structuring Company's entitlement is denominated in dollars on the growth capital rather than as a share of the collateral. The cost falls on the Investor, through a larger face for the same Warrant. Whether a placement agent has been engaged for a Project, and on what terms, is stated before subscription.

Service fees across the whole structure are $555,000 — 1.57 cents of every $100 advanced. Of those the Administrator and Custodian takes 27.0% and the Structuring Company 18.0%: the administrator is paid more than the sponsor for services. The Structuring Company's $8,863,987 is not a service fee at all — it is the Project's cost of capital, 10.000% a year after tax, and it is paid only if the Project repays.

Those figures are for a Project that sells its own Note. Where a placement agent is engaged its fee is also paid at closing out of the raise, so what leaves the raise becomes $1,055,000: the agent 47.4%, the Vehicle 28.4%, the Administrator and Custodian 14.2% and the Structuring Company 9.5%. The sponsor's share of what comes out of the raise falls when an agent is engaged, because the agent's fee is additive and nothing else moves.

Neither figure includes what an Investor pays its own adviser. That is set by the adviser's own agreement, is paid by the client directly, and comes out of neither the raise nor the structure; an Investor that holds the Note without an adviser pays none of it. Nor does the Representative appear as a line of his own. Whatever the Structuring Company pays its own people comes out of what the Structuring Company is paid, and adds nothing to what leaves the raise.

If the Treasury accretion inside the Vehicle were ever taxed, the two participations would be reduced pro rata, and the Structuring Company separately indemnifies the Project for the Project's share, from outside the Vehicle and secured on its own participation in it. The indemnity is payable only where the Project has discharged the Note in full, so it is never payable on a Project failure.

Four parties in this list hold the structure together and none of them is paid contingently: the purpose trustee, the Vehicle's two independent directors, the collateral agent and the independent appraiser. Each is paid a fixed amount whatever happens, which is what lets them do the job they are there to do.