PROCEDURE: LEASE A FINANCIAL INSTRUMENT

                                                                                                                                           

1. Specifications: In view of the difficulties that Borrowers meet to follow Lender procedure for the leasing of  financial instruments (especially for trading or collateral for their credit lines purposes), Lender    pointed  out    the  following  proposal  which  give  to  the  Borrower  the  possibility  to  lease  a BOND or MTN and receive a proof of funds (POF/CD). Lender decided to work with cash backed CD because it is the only way granting traders that the funds are blocked with a CD having maturity date of   one   year   from   the   issuing   date.   Application   form   will   bear   option   (4)   to   borrow   financial  instruments (i.e. BOND or MTN) with option to receive Proof  of Funds in the form of Certificate of Deposit (CD). 

2. G.M.S.L.A.   (Global   Master   Security   Lending   And   Borrowing   Agreement):   All   terms   and conditions of G.M.S.L.A. (Global Master Security Lending And Borrowing Agreement) are governed by Lender standard “Guideline and Procedure” to lease BOND/MTN which remains unchanged, with the exception  of    terms  concerning  service/leasing  fees  payment  (refer  to  point  a.)  and  return  of  the leased instrument (refer to point b.). Main features of POF/CD transactions are below:

a. Payment of Service Fees must be done only by bank backed promissory notes (endorsed per aval by a reputable bank approved by Lender) or by unconditional swift MT103 (attachments 1 and 2).

b. Borrower  bank  will  not  be  requested  to  take  engagement  to  return  financial  instrument  to Lender’s bank as instrument  is not sent to borrower bank but to the Funder’s Company (as a  third party)  

c. FUNDER  (the  third  party  of  this  process)  will  supply  to  the  HOLDER  (the  borrower)  a  POF using  cash  backed  certificate  of  deposit  (attachment  3):  two  different  agreements  will    be therefore issued i.e.:                                         

               -    Lending Agreement (between the LENDER and the BORROWER)

 -    Discounting  Bank  Instrument  Agreement  (between  the  FUNDER  and  the  HOLDER  (the Borrower),  bearing references of leasing agreement.   

d. To  comply  with  lending  agreement  terms  and  conditions,  the  LENDER  will  authorize  the receiving bank (i.e. FUNDER bank), to encumber or pledge the instrument against an official letter,  undertaking  the  obligation  to  return    instrument  to  the  Lender  15  days  before  his maturity date unencumbered and free of liens.  

e. The HOLDER (the Borrower),  by signing Discounting Bank Instrument Agreement,  agree and confirm that  certificate of deposit  remains on deposit and cannot  be collected.  

3. Discount  of  leased   Bank  Instrument:  An  agreement  will  be  signed  between  the FUNDER company  (third  party)    -    willing  and  capable  to  exchange  leased  financial  instrument  against  a “PROOF OF FUNDS / CD”  -  and the HOLDER company (the Borrower).  The POF/CD  will be issued for the amount  equal to 90%  of leased instrument face value. 

4. Proof  of  Funds  (POF/CD):  POF/CD    can  be  utilized  to  enter  in  a  Trading  Program  (through Borrower traders only because Lender don’t  offer nor suggest trading service/source), as collateral of a  credit line,  etc.  

6. Delivery of POF/CD:  CD (attachment 3 at page 7) is issued within 8 working days from discount of the  instrument  and  will  be  uploaded  on  Bloomberg  Financial  Platform  with  unique  reference  code which can be checked by Borrower designated bank. Safe keeping receipt (attachment 4 page 8) will be issued together with Certificate of Deposit.  

7.  Internet  banking:    Lender  will  provide  to  Borrower  instructions  to  check  their  own  account  by internet  banking,  where  the  payments  and  CD  will  be  entered.    When  account  is  already    opened, password and code are sent to the client directly by e-mail.

PROCEDURE TO LEASE A FINANCIAL INSTRUMENT AGAINST POF/CD TERMS AND CONDITIONS STEP-BY-STEP  SUMMARY   

1.    CLIENTS SUBMIT APPLICATION FORM CROSSING OPTION 4 TO BORROW A FINANCIAL  INSTRUMENT WITH OPTION TO RECEIVE PROOF  OF FUNDS IN THE FORM OF CERTIFICATE OF DEPOSIT (CD). 

2.    APPLICATION FORM MUST BE COMPLETED WITH A DETAILED DESCRIPTION OF THE PROJECT  AND THE PASSPORT COPY OF THE AUTHORIZED SIGNATORY.  

3.    CONTRACTS (above point 2c) WILL BE SENT FOR SIGNATURE AND IN THE SAME TIME   BORROWER WILL  RECEIVE  LENDER  INVOICE  FOR  THE  EXPENSES  DUE  TO  PERMIT  TO  THE    CALL  OPTION EXPENSES TO RESERVE THE BANK INSTRUMENT,  AMOUNTING   TO: 

        bank instruments with face value amount up to 500 million: EUR  30,000.00 

        bank instruments with face value amount from 501 to 999 million:  EUR  38,000.00 

        bank instruments with face value amount from 1 billion: EUR  42,500.00 

Currency must be in euro no matter what currency the instrument is in. 

NOTE:  ABOVE  MENTIONED  MONEY  WILL  BE  REFUNDED  AFTER  SUCCESSFULLY  CLOSING  THE  TRANSACTION  OR BORROWERS HAVE THE RIGHT TO DEDUCT IT  WHEN ARRANGE FOR SERVICE  FEES PAYMENT.

4. AFTER  RECEIPT  OF  SIGNED  AGREEMENTS  AND  DEPOSIT  OF  THE  SUM  ABOVE  DESCRIBED,  THE LENDER  WILL PROVIDE FOR A CORPORATE  PRE-ADVICE  INVOICE WITH ALL DETAILS  OF  THE  BANK INSTRUMENT,    EUROCLEAR  PRINTOUT,  BLOOMBERG  (IF  AVAILABLE)  AND  SECURITY  CARD  OF  THE STOCK EXCHANGE MARKET WHERE THE INSTRUMENT IS QUOTED .

      5.      AFTER   VERIFICATION   AND   NOT   LATER   THAN   20   DAYS   FROM   DATE   OF      CORPORATE INVOICE, BORROWER MUST ARRANGE FOR PAYMENT OF SERVICE FEES WHICH MUST BE DONE ONLY BY BANK BACKED PROMISSORY NOTES (ENDORSED PER AVAL BY A REPUTABLE BANK APPROVED BY LENDER) OR BY UNCONDITIONAL SWIFT MT103 (WIRE TRANSFER)  

  6.      IF  PAYMENT  IS  MADE  BY  PROMISSORY  NOTE,  WHEN  IT    IS  READY  AND  ENDORSED  PER  AVAL  BY BORROWER  BANK,  BORROWER  MUST  SEND  IT  BY  E-MAIL  TO  THE  LENDER  FOR  APPROVAL.  AFTER LENDER    APPROVAL,    BORROWER  WILL  RECEIVE  ALL  INSTRUCTION    WITH  ADDRESS  TO  WHICH ORIGINAL PROMISSORY NOTE MUST BE SENT. 

  

  7.    UPON RECEIPT OF PAYMENT COVERING SERVICE AND SUCCESSFULLY DUE DILIGENCE ARRANGED BY LENDER  COMPLIANCE  OFFICER,  THE  PROCEDURE  TO  LEASE  THE  INSTRUMENT,  DISCOUNT  IT  AND SUPPLY THE POF/CD WILL START IMMEDIATELY.

 8.     WITHIN 10 BANKING DAYS  FUNDER WILL ISSUE THE CERTIFICATE OF DEPOSIT FOR THE SUM  EQUAL TO  90%    OF  LEASED  INSTRUMENT  FACE  VALUE.  BORROWER    MUST  AGREE  AND  CONFIRM  THAT  CERTIFICATE OF DEPOSIT  REMAINS ON DEPOSIT AND CANNOT BE  TRANSFERRED  OR WITHDRAWN.