| How It Works (see chart) 1. Submit investor questionnaire, receive a complete set of investment documents & ask questions about investment.  2. Accredited investor verification, provide third party verification as to accredited investor status. 3. Purchase convertible debenture notes (10.12% annual interest, 60 month maturity, plus 2.7% principal inflation)4. Debenture notes bear annual interest of 10.12% plus an inflation factor of 2.7% that will be paid only if investor converts principal amount of note into Class C equity interest. 5. At maturity of the debenture note, the investor can exit the investment or exercise the warrant option to convert the principal amount into Class C equity interest at a 1:1 ratio. 6. If investor exits, the principal amount is returned along with accrued interest of 10.12% x 5 years = 50.60% = $40,800 + 80,000 = $120,480. 7. If warrant option is exercised, the LLC issues Class C equity interest at $1.00 per Interest and pays the accrued interest at 10.12% x 5 years. The principal amount of note will be converted into LLC equity at a 1:1 ratio. 8. Class C interest earns 8% (simple interest) preferential return on the principal amount of the investment, which will be paid from cash flow monthly, quarterly or semi-annually, from the net income of the LLC until the Class C interest are redeemed. 9. If Class C investor wants to leave LLC in less than 2 years, Class C interest will be redeemed and investor will receive all unpaid interest. 10. If Class C interest holder remains in the LLC for more than 2 years, the investor will receive principal, any unpaid interest, and an inflation factor of 2.7% that accrued for the 5-year term of the convertible debenture note. 11. Capital appreciation example: 2.7% annual inflation factor x 5 years = 13.5% x $80,000 principal amount = $10,800 capital appreciation. 12. If the LLC calls for redemption at anytime, the Class C investor will get back the investment principal plus the 2.7% accrued inflation factor plus all unpaid interest. |