CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM INFO@CHANGOOANDASSOCIATES.

COM

CHANGOO & ASSOCIATES

Capitaux Privés
F o r w a r d T h i n k i n g

Policy and Practice

Changoo & Associates

Water Park Place
20 Bay Street, 11th Floor Toronto, Ontario,
Canada, M5J 2N8
Email: [email protected]
Web: www.changooandassociates
Contents
A Guide for Successful Practice

01 02 03 04 05 06

The Company From Our Guidelines to “Urgent” Irregularities Vendor Code of

Chief Professional Applications" Funding Conduct
Executive Standards Process
Officer

07 08 09 10 11 12

The Compliance Employment Environmental Onboarding Comprehensive

Compliance Duties of Rights Sustainability Protocol and Answers to
Regiment Vendor's Practices Process Common
Questions
 The
Company
"Our Funding Management and specialized Corporate Planning support will
enhance your success by ensuring the most vital structural pillars are
executed in a systematic and timely manner.”

Changoo & Associates – is a Project Funding and Management Advisory

Firm. We resolve our clients most significant issues and create a lasting
competitive advantage by delivering new insights that mobilize
organizations, drive tangible results, and make companies more
capable.

Why Use Us:

• Our primary “core” service makes it
easier to consistently deliver with optimal
reliability
• Financial Services contract gives flexibility to
change strategies without extra costs
• Success Fees, Assets and Closing costs
added to funding deal, providing 100% net
capital
• Success Fees paid from the “Banking Side” with
no need to burden a client with a payment
• Versions of service are applied to specific client
needs, giving custom-tailored flexibility
• Tangible deliverable work, helps to
fully experience milestone events of
becoming bankable

CHANGOO & ASSOCIATES CHAPTER N.1 PAGE 01

How We Work
Harnessing an industry focused approach, we
provide our clients with investment professionals
who understand their markets and business style.
Our networks of corporate finance professionals
have a strong understanding of current capital
market dynamics and their impact on corporate
finance decisions. We employ sound financial
management for immediate and long term strategic
growth.

GLOBAL PARTNER
We accommodate senior decision makers from the
public and private-sector to share ideas on
operations, strategies, learn about next best
practices, and explore practical solutions that meet
specific challenges faced by their organization.

Funding Management
Our Risk Profile Assessment (RPA) measures your CORE COMPETENCIES:
organization’s management practices and processes •Domestic/International Project Funding
to determine their capabilities, strengths and •Intake Co-Ordinator and Pre-Underwriting
weaknesses as compared with similar organizations. • Due Diligence and Compliance
Most importantly, the Risk Profile Assessment • Governance and Auditing
identifies areas for improvement in your current
operational plans –so your company can improve
profitability, maximize value and achieve greater
success right from initiation of the project.

Restructuring
We deliver our service with hands on knowledge of ALTERNATIVE SERVICES
funding integration, transaction requirements and • Joint Venture
corporate restructuring. On balance, combined skills • Credit Instrument Facilitation
and through leadership of C&A’s Consultants. • Fiduciary Mandate
• FinTech

CHANGOO & ASSOCIATES CHAPTER N.1 PAGE 02

Our Core Values
Code of Ethics
Great companies are built on a foundation of integrity and respect. Changoo & Associates
has proudly built strong relationships with clients, customers, shareholders, employees and
local communities. Our clients consistently tell us that our corporate culture is a
differentiator in the marketplace. We know from our global surveys that this is also one of
the most important reasons that the best people want to work with us. To maintain these
critical relationships, we must maintain the highest standards of ethical behavior in our day-
to-day activities.

Our "Guidelines to Professional Standards" contains the ethics policies that everyone who
does business on behalf of our firm must understand and follow.

Our Code cannot cover every possible ethical issue that may arise. But it does describe the
basic principles that should guide our conduct. As a general rule, applying common sense,
good judgment and integrity to the business issues you face will help ensure that your
decisions are consistent with our values and our Code. If you have any doubt about what to
do in a given situation, seek guidance. Be sensitive to situations that could result in illegal or
improper action.

We stand for real value in a changing world, our outlook for the future has never been more
promising. Our continued success and good reputation absolutely depend on the conduct of
every person at the firm. Being a conscientious global citizen is not just good policy, it is
good business. Each one of us must adhere to both the letter and spirit of our Code -- Every
day.
EMPLOYEE MARKETPLACE CLIENT
RESPONSIBILITY RESPONSIBILITY RESPONSIBILITY
Respect all individuals Never pay or take bribes Comply with our
Do not tolerate abusive, Do not compete with the professional standards
harassing or offensive firm for your personal Protect confidential client
conduct benefit information
Establish and maintain a Carefully choose business Beware of potential
safe workplace partners, clients and conflicts of interest
Comply with privacy rules vendors Comply with legal
Think first, email second Comply with competition obligations
Do not use communication and antitrust laws Entertain appropriately
systems for inappropriate Comply with all anti-money Use good judgment with
or offensive content laundering and other laws giving and receiving gifts
corrupt payments relating Maintain appropriate
to corrupt payments licenses
Engage in accurate and
truthful disclosure

CHANGOO & ASSOCIATES CHAPTER N.2 PAGE 03

CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM [email protected]

CHAPTER N.3

Guide to
Professional
Standards

Changoo & Associates

Water Park Place
20 Bay Street, 11th Floor Toronto, Ontario,
Canada, M5J 2N8
Email: [email protected]
Web: www.changooandassociates.com
Purpose of this Guide
As a professional services firm, Changoo & Associates (“C&A”) relies on its global network,
which constitute its principal assets, to deliver services to its clients that:

1. Comply with all applicable laws and regulations, including for example all licensing
requirements that apply to brokers, architects and those giving investment advice;

2. Comply with the C&A Code of Business Ethics, including for example its provisions
regarding the identification and resolution of potential conflicts of interest;

3. Comply with the specific contractual requirements applicable to each client and thereby
meet or exceed client expectations

4. Meet or exceed commonly understood levels of professional standards for the type of
service provided and in the geography where delivered; and are designed to minimize
human error and negligence and therefore also to minimize potential liability to C&A, as
well as to protect C&A’s high-quality brand and image in the marketplace.

Professional Standards
In this Guide, all of the above objectives for the delivery of C&A’s services are called our
“Professional Standards.”

Given the importance of meeting our Professional Standards as a regular part of our
business operations, this Guide seeks to provide practical actions that everyone should
consider taking—regardless of the type of services being provided to clients— to satisfy our
Professional Standards objectives.

Every action this Guide suggests may not be necessary or appropriate in every situation, nor
can any guide anticipate every action that will promote Professional Standards across the
wide spectrum of client services provided by a diverse and geographically dispersed firm
such as C&A. But in all events this Guide serves to provide the overall principles that each of
our colleagues should generally consider when determining how he or she will help serve
our clients in a way reflecting good judgment and in which we can all take pride.

CHANGOO & ASSOCIATES CHAPTER N.3 PAGE 01

Specific Actions to Promote
Professional Standards
In order to promote the firm’s Professional Standards in your work, you should consider
implementing the following actions, separated according to the different categories above
that comprise our definition of Professional Standards at C&A:

Specific Actions to Promote Professional Standards

Because we are fundamentally a people-based business, maintaining the highest levels of
Professional Standards must remain at the core of C&A’s operations. Accordingly, we
should be vigilant about continuing those activities that will promote the world-class
professional standards that are the foundation of our services and our brand.

In order to promote the firm’s Professional Standards in your work, you should consider
implementing the following actions, separated according to the different categories above
that comprise our definition of Professional Standards at C&A:

CHANGOO & ASSOCIATES CHAPTER N.3 PAGE 02

Integrity and Compliance
It is essential that the global network and associates of Changoo & Associates” C&A”
conduct themselves at all times with integrity and in full compliance with the laws and
regulations that govern our global business activities. To that end, C&A has established a
set of company standards of business practices and regulatory compliance that is set out in
the Code of Business Ethics, which applies to all C&A associates, agents, employees,
directors and officers. The Code of Business Ethics is an extension of our values and reflects
our commitment to ethical business practices and regulatory compliance.

1. Compliance with Laws Generally

Another core tenet of C&A’s Professional Standards is compliance with all of the laws and
regulations applicable to one’s activities. Even though a license may not be required for an
HR professional, for example, there are significant employment laws in every jurisdiction
that an HR professional would typically know in order to meet C&A’s standards for such a
position. Similarly, while someone performing a financial analysis may not need a license,
there are accounting and disclosure regulations that the firm must comply with, and our
people must therefore make sure that our work product conforms to those regulations.

2. Compliance with the C&A Code of Business Ethics

Another core tenet of C&A’s Professional Standards is compliance with all of the laws and
regulations applicable to one’s activities. Even though a license may not be required for an
HR professional, for example, there are significant employment laws in every jurisdiction
that an HR professional would typically know in order to meet C&A’s standards for such a
position. Similarly, while someone performing a financial analysis may not need a license,
there are accounting and disclosure regulations that the firm must comply with, and our
people must therefore make sure that our work product conforms to those regulations.

TIP:
Another core tenet of C&A’s Professional Standards is compliance with all
of the laws and regulations applicable to one’s activities. Even though a
license may not be required for an HR professional, for example, there
are significant employment laws in every jurisdiction that an HR
professional would typically know in order to meet C&A’s standards for
such a position. Similarly, while someone performing a financial analysis
may not need a license, there are accounting and disclosure regulations
that the firm must comply with, and our people must therefore make sure
that our work product conforms to those regulations.

CHANGOO & ASSOCIATES CHAPTER N.3 PAGE 03

 Lower Risk Maximize Impact
3. Compliance with Specific Requirements in Client Contracts
Satisfying our professional obligations also means remaining aware of, and complying with,
the contractual obligations we have made with our clients, suppliers and any other third
parties with whom we do business. It is always a good idea to read— and understand--the
contracts with your clients, and to clear up any ambiguities you see before there is a dispute.
In a longer- term client situation, it is a good practice to periodically review the contract and
protect against “scope creep,” where we are providing services that are not covered by the
contract and for which we are not being compensated.

4. Meeting Commonly Understood Levels of Professional

Standards
For various professions, different communities develop, in a typically informal but generally
acknowledged way, certain standards and expectations of behavior. This can manifest itself
in different ways, such as minimum levels of client service and responsiveness, expected
competencies and professional knowledge and continuing education. You can generally
come to understand these standards and expectations by interacting with fellow colleagues
locally and by attending continuing education seminars and courses (even if they are not
legally required for licensing purposes)

Failure to understand or abide by such professional standards can result in exposure to

significant liabilities. In litigation over whether someone has committed professional
negligence, there will often be expert testimony as to what constitutes generally accepted
professional standards within the particular community, and this can have a significant
impact on the outcome of the case. It is therefore important for each of our people to
develop a sense of what these standards are in his or her particular geography and then act
accordingly.

TIP
C&A expects that its vendors will share and embrace the letter and spirit of our commitment
to integrity. By “vendor” we mean any firm or individual that provides a product or service to
C&A or indirectly to any of its clients. We understand that vendors are independent entities,
but the business practices and actions of a vendor may significantly impact and/or reflect
upon us, our reputation and our brand, which is one of our most important assets. Because of
this, C&A expects all vendors and their employees, agents and subcontractors (their
representatives) to adhere to the Company’s Code of Business Ethics while they are
conducting business with and/or on behalf of C&A. All vendors should educate their
representatives to ensure they understand and comply with the Code.

CHANGOO & ASSOCIATES CHAPTER N.3 PAGE 04

Maintain Administrative Procedures
5. Minimize Mistakes
In a business as large and complicated as ours, and with a global network providing services
daily, it is inevitable that our professionals may inadvertently make mistakes that cause
financial damage to our clients or others for which C&A could be liable. In the context of our
firm, one example would be making a mistake on a lease-break date for a lease
administration client, as a result of which the client is unable to terminate the lease early and
therefore incurs unwanted costs. Another example is using incorrect property tax rates as
the basis of a property valuation.

Since a seemingly small math or data-entry error can lead to potentially significant financial
liability, it is important that we implement appropriate procedures designed to minimize
such errors. There are many simple and inexpensive steps that can significantly reduce
mistakes. While these will vary greatly according to our different businesses, they all have
the common theme of quality assurance. It is a basic tenet of satisfying Professional
Standards that we consider selecting those actions from the following list (and/or develop
others) that will best serve that goal, and then cause them to be carried out in the ordinary
course of our business activities:

Standard Checklists
Research indicates that using checklists of required steps can significantly reduce human
error. For that reason, they are routinely used in the commercial aviation industry, even by
experienced pilots. Corporate lawyers also routinely use them to make sure they have taken
all the necessary steps when closing transactions of all kinds. Checklists are easy to create
and simple to use.

Standard Templates
Developing and using standard templates for all aspects of the professional services
engagement, particularly for commonly used documents such as confidentiality agreements
and letters of intent, can also help avoid errors and miscommunications. Templates help
assure that you have thought of all of the important provisions and lessen the chance of
forgetting something significant when inevitably you may be hurrying to establish a new
relationship for a client that needs work done quickly and the speed itself can be the cause
of an important omission. Make sure that the templates you use are cleared with Legal
Services and updated periodically so that they always reflect current best practices and
current laws and regulations.

CHANGOO & ASSOCIATES CHAPTER N.3 PAGE 05

Use The Right Technology
Professionalism in Communications

When representing the firm, all of your written and verbal communications to any of the
firm’s stakeholders (including clients, employees, investors and suppliers) and regulators
must always be professional. This is true all forms of electronic communications, such as
emails, texts, instant messages and social media communications such as Tweets. There is
no place in professional communications for profanity, sarcasm, insults or disparagements
of any kind. You have no control over what happens to your written communications after
you send them, so assume everything you write will appear in the media or be shown to your
manager, your client, or a family member. If any of these disclosures would embarrass you
or the firm, then it most likely is not an appropriate communication. We have all seen the
significant financial and reputational damage that other companies have experienced
because of inappropriate communications that were publicly disclosed, so we must be
vigilant this does not happen to us. In summary, 1)do not do anything that may embarrass
you or the firm in the first place 2) always remember to “think first; email second.”

Civility

You should consider civility to be part of your Professional Standards obligations. This
means acting professionally when interacting with any of the firm’s stakeholders or
regulators. Your personal behavior reflects directly on the firm, all of your colleagues and
the C&A brand. Accordingly, there is no place for yelling, berating or insults of any kind,
including by references of a sexual or discriminatory nature. What you see as humorous may
be offensive to someone else so think twice before making any comments that could be
perceived negatively. Words can be highly toxic, and once made they cannot be taken back.

Timeliness and Responsiveness

An important element in demonstrating professionalism to our clients and other

stakeholders is timeliness in delivering work product and general responsiveness, whether to
emails or phone calls. That may also mean managing expectations about when you can
reasonably deliver your work product, since creating frustration regarding perceived timing
issues can undermine an otherwise positive reaction to your work.

CHANGOO & ASSOCIATES CHAPTER N.3 PAGE 06

Damage Control & Early Disclosure of Problems

In a sophisticated and complex professional services business such as ours, human error,
and mistakes are inevitable. When these situations do occur, it is of the utmost importance
to disclose them promptly so that we can marshal the resources of the firm to take proactive
measures to resolve them quickly and with as little financial and reputational damage as
possible. It is never a good idea to try to hide these situations or to work them out yourself
since they will not improve with the passage of time.

Records Management

Demonstrating the high quality of your work through proper records management is an important
part of our Professional Standards. This includes (1) keeping sufficient and accurate back-up for
the work product you issue (2) maintaining all of your professional information on the C&A
network so that it can be easily retrieved, especially after you have left the firm (3) maintaining
your records according to C&A policies. It is important that you do not keep the only version of
any document only on the hard-drive of your laptop or any other mobile device, since it will be
permanently lost in case your device is itself lost or stolen.

Due Diligence and Oversight of Contractors

In the event you hire a third party, such as a consultant, to assist you in any kind of project,
professionalism dictates that you supervise them to make sure that quality of their work
product is at least as good as yours would be. You will likely be responsible to your client for
the contractor and their work so make sure that contractor’s work enhances your client
relationship, rather than detracts from it. It is also important to do sufficient due diligence
on contractors, to the extent appropriate in the circumstances, to confirm that they have the
necessary expertise and integrity. You should have a clear engagement letter with the
contractor setting forth all aspects of the relationship, including deliverables, quality and
schedules.

In addition, your group should consider whether it has sufficient procedures in place to
mitigate fraud risk associated with payments to vendors, such as multiple approval/signature
requirements. Given the large volume of payments we make to vendors on behalf of clients,
we face significant potential risk from corruption involving vendors, so we must be vigilant
about preventing it. Our Global Internal Audit group can help you identify best practices in
this regard.

CHANGOO & ASSOCIATES CHAPTER N.3 PAGE 07

CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM [email protected]

CHAPTER N.4

“Urgent”
Applications having
Deadlines

Changoo & Associates

Water Park Place
20 Bay Street, 11th Floor Toronto, Ontario,
Canada, M5J 2N8
Email: [email protected]
Web: www.changooandassociates.com
Finance Industry
“Urgent” applications are a frequent issue in the financing industry. It can be difficult to
professionally address this widespread request in a “diplomatic” way that the applicant can
understand and appreciate. "Time frame" is the one thing financial corporations and
institutions are strictly prohibited from promising or committing to.

There are many variable factors, all outside the control of underwriters, collateral providers
and facilitating or managing banking institutions. Under many laws and regulations common
to all countries, meeting any “deadlines” of funding applicants are clearly "outside the
scope" of any legal services.

For many compelling reasons (detailed below), it is essential that when any broker,
underwriter or services provider receives any “urgent” inquiry or application stating,
requesting, or even implying any “deadline,” they should respond immediately. It is strongly
recommended to avoid engaging in any “damage control” services.

The most prudent and appropriate response is promptly informing the applicant or potential
client that the project or transaction application is declined. This is necessary to avoid and
prevent the applicant company from accusing or blaming them for wasting their last-minute
"damage control" time left before their deadline.

Institutional Reasons for Disqualifying “Urgent” Applications

Members are advised to understand and always consider the following details on
why demands for concise “funding dates” are a “Red Flag,” an objective problem,
and a mandatory "deal killer" issue in all dealings with potential applicants or
clients:

CHANGOO & ASSOCIATES CHAPTER N.4 PAGE 01

Red Flag Details
Regulatory Violation
It is illegal, and a license and regulatory violation, for any institutional provider to agree to
perform services under implication of appearing to agree to any "funding date.” By law, the
lending decision can only be made once, and when the project has been completed,
bankable, and collateral put in place. Appearing to agree to or target any specific date
strongly implies already having a final lending decision that cannot legally be made at this
stage, and allowing it to appear to be potentially perceived as specific funding date" is even
much worse of a violation.

Liability Problem Undermines Obligations

No institutional provider or funding source
All authentic funding sources are
can allow itself to be perceived or implied to
prejudiced against projects presented as
have agreed to any "deadline,”, especially
"on fire.” Licensed financial services and
about any "consequences" or impending
funding decisions are required by law to
"damages.” While a provider is technically
be made with "due diligence.” Similarly,
not "liable" for anything it has not agreed to
all funding transactions must be
and signed, any email correspondence that
prepared, arranged, and provided with
can be misconstrued or taken out of context
careful, deliberate, methodical, and
can create that liability. There is also the
technical precision. Funding sources tend
more common "reputational risk" liability of
to (rightfully), strongly resent being
frivolous lawsuits or false, defamatory claims
treated as a “Chinese fire brigade" and
by an angry potential applicant or client who
will discredit, disfavor or even disqualify
is not entitled to nor owed any such
any client, broker or institutional
obligation of a deadline.
facilitator who asks the source to engage
in a blind "mad rush" toward "urgent"
funding.

CHANGOO & ASSOCIATES CHAPTER N.5 PAGE 02

"On-fire" Projects
Disqualifying Issue
Funding sources (and even primary underwriters) view "on-fire" projects as "evidence" of a
significant disqualifying factor that they typically call "poor management practices" or
"reckless mismanagement.” Rightly or wrongly (but reasonably and justifiably), they assume
the following presumptions:

(1) Reckless "rushing" into signing agreements that the company probably knew it was not in
a position to deliver on, as "gambling" on the hopes of pressuring a funding source later, is
most likely what caused the "on fire" deadline to begin with;

(2) Mismanagement or incompetence is most likely what prevented the company from
seeking licensed support or solutions much earlier when they should have known they
needed to prepare to meet their often-imposed deadline when there was still sufficient time
to prepare or obtain outside expert answers. Therefore, an applicant company’s failure to
seek licensed help at a much earlier stage is universally considered an objective disqualifying
factor.

Independence of Sources Client Responsibility

By force of law, all underwriting firms for How "fast" any funding transaction can be
preliminary “approval” or certification of prepared, structured, arranged and
applications or banking compliance packages, completed depends heavily upon the
institutional financial services providers, and client's cooperation and responsiveness.
funding sources must remain strictly and fully Service providers can only target specific
independent. They must maintain freedom of dates if they know how responsive the
neutral and objective expert, professional and client is to allow the necessary licensed
licensed judgment at their sole discretion. It is preparation work to be completed. That
unlawful to pressure such sources into can never be known until it is “too late.”
promises, commitments or obligations
targeting deadlines. It is a regulatory “conflict
of interest” violation for sources to accept or
agree to such pressure. In the worst cases, any
client statement indicating “consequences” of
failure to meet a deadline that could become a
legal “liability” for the provider or source,
where such “consequences” create pressure or
the Mandate implied unlawful “guarantees” of
success under threat of liability, technically
meet the legal definitions of “criminal
extortion” (USA) or “criminal blackmail” (UK).

CHANGOO & ASSOCIATES CHAPTER N.5 PAGE 03

CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM [email protected]

CHAPTER N.6

Code of Ethics
Market Place
Conduct

Changoo & Associates

Water Park Place
20 Bay Street, 11th Floor Toronto, Ontario,
Canada, M5J 2N8
Email: [email protected]
Web: www.changooandassociates.com
We Value Ethical Business
It is essential that the global network and associates of
Changoo & Associates” C&A” conduct themselves at all
times with integrity and in full compliance with the laws
and regulations that govern our global business
activities. To that end, C&A has established a set of
company standards of business practices and
regulatory compliance that is set out in the Code of
Business Ethics, which applies to all C&A associates,
agents, employees, directors and officers. The Code of
Business Ethics is an extension of our values and
reflects our commitment to ethical business practices
and regulatory compliance.

We Make It Work
C&A expects that its vendors will share and Because of this, C&A expects all vendors
embrace the letter and spirit of our and their employees, agents and
commitment to integrity. By “vendor” we subcontractors (their representatives) to
mean any firm or individual that provides a adhere to the Company’s Code of Business
product or service to C&A or indirectly to any Ethics while they are conducting business
of its clients. We understand that vendors are with and/or on behalf of C&A. All vendors
independent entities, but the business should educate their representatives to
practices and actions of a vendor may ensure they understand and comply with
significantly impact and/or reflect upon us, the Code.
our reputation and our brand, which is one of
our most important assets.

CHANGOO & ASSOCIATES CHAPTER N.6 PAGE 01

CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM [email protected]

CHAPTER N.7

The Compliance
Regime

Changoo & Associates

Water Park Place
20 Bay Street, 11th Floor Toronto, Ontario,
Canada, M5J 2N8
Email: [email protected]
Web: www.changooandassociates.com
Legal and Regulatory Compliance
Practice
All C&A vendors and their representatives shall conduct their business activities in full
compliance with the applicable laws and regulations of their respective countries while
conducting business with and/or on behalf of the Company. In addition to any specific
obligations under the vendor’s agreement with the Company, all vendors shall, without
limitation:
Comply with the anti-corruption laws of the countries in which it does
business, including the U.S. Foreign Corrupt Practices Act and the U.K.
Bribery Act, and not make any illegal direct or indirect payments or
promises of payments to any government officials (including employees
of state-owned enterprises) for the purpose of inducing the individual to
misuse his or her position to obtain or retain business. Our policy is not
to make “facilitating payments” in any amounts.

Conduct business in full compliance with antitrust and fair competition

laws that govern the jurisdictions in which they conduct business.

Comply with all applicable environmental laws and regulations regarding

hazardous materials, air emissions, waste and wastewater discharges,
including the manufacture, transportation, storage, disposal and release
to the environment of such materials.

Comply with all laws and regulations regarding the privacy of

information, data protection and cross- border data flows.

Be honest, direct and truthful in discussions with regulatory agency

representatives and government officials.

Obtain all necessary licenses or permits to conduct the activities for

which they have been hired by C&A.

Comply with the anti-corruption laws of the countries in which it does

business, including the U.S. Foreign Corrupt Practices Act and the U.K.
Bribery Act, and not make any illegal direct or indirect payments or
promises of payments to any government officials (including employees
of state-owned enterprises) for the purpose of inducing the individual to
misuse his or her position to obtain or retain business. Our policy is not
to make “facilitating payments” in any amounts.

CHANGOO & ASSOCIATES CHAPTER N.7 PAGE 01

Government Cooperation
Website: Understanding the Canadian Environmental Protection Act
Conduct business in full compliance with antitrust and fair competition laws that govern
the jurisdictions in which they conduct business.

Comply with all applicable environmental laws and regulations regarding hazardous
materials, air emissions, waste and wastewater discharges, including the manufacture,
transportation, storage, disposal and release to the environment of such materials.

Comply with all laws and regulations regarding the privacy of information, data
protection and cross- border data flows.

Be honest, direct and truthful in discussions with regulatory agency representatives and
government officials.

Obtain all necessary licenses or permits to conduct the activities for which they have
been hired by C&A.

CHANGOO & ASSOCIATES CHAPTER N.7 PAGE 02

CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM [email protected]

CHAPTER N.8

Compliance Duties
of Vendor's

Changoo & Associates

Water Park Place
20 Bay Street, 11th Floor Toronto, Ontario,
Canada, M5J 2N8
Email: [email protected]
Web: www.changooandassociates.com
Business Practices
1. Vendor Requirements and Client Contracts
It is essential that the global network and associates of Changoo & Associates” C&A”
conduct themselves at all times with integrity and in full compliance with the laws and
regulations that govern our global business activities. To that end, C&A has established a
set of company standards of business practices and regulatory compliance that is set out in
the Code of Business Ethics, which applies to all C&A associates, agents, employees,
directors and officers. The Code of Business Ethics is an extension of our values and reflects
our commitment to ethical business practices and regulatory compliance.

C&A expects that its vendors will share and embrace the letter and spirit of our commitment
to integrity. By “vendor” we mean any firm or individual that provides a product or service
to C&A or indirectly to any of its clients. We understand that vendors are independent
entities, but the business practices and actions of a vendor may significantly impact and/or
reflect upon us, our reputation and our brand, which is one of our most important assets.
Because of this, C&A expects all vendors and their employees, agents and subcontractors
(their representatives) to adhere to the Company’s Code of Business Ethics while they are
conducting business with and/or on behalf of C&A. All vendors should educate their
representatives to ensure they understand and comply with the Code.

CHANGOO & ASSOCIATES CHAPTER N.8 PAGE 01

Operating Practice
2. Vendor Code of Conduct

Provide their services in compliance with their own applicable professional standards,
including requirements established by any organizations that regulate their activities.

Honestly and accurately record and report all business information and comply with all
applicable laws regarding their completion and accuracy.

Create, retain and dispose of business records in full compliance with all applicable legal
and regulatory requirements.

Protect and responsibly use both the physical and intellectual assets of C&A, including
its property, supplies and equipment, when authorized by the Company to use such
assets.

Use information technology and systems provided by C&A (including email and any
social media platforms) only for authorized Company business-related purposes. C&A
strictly prohibits vendors and their representatives from using Company-provided
technology and systems to create, access, store, print, solicit or send any material that
is intimidating, harassing, threatening, abusive, sexually explicit or otherwise offensive
or inappropriate and/or send any false, derogatory or malicious communications using
Company-provided information assets and systems.

Comply with all C&A requirements for maintenance of passwords, confidentiality,

security and privacy procedures as a condition of receiving access to the C&A internal
corporate network, all systems and all buildings. All data stored or transmitted on
Company owned or leased equipment is to be considered private and is the property of
C&A. C&A may monitor all uses of its corporate networks and all systems (including
email and other social media platforms) and/or access all data stored or transmitted
using the Company network.

Comply with the intellectual property ownership rights of C&A and others including but
not limited to copyrights, patents, trademarks and trade secrets. Use software,
hardware and content only in accordance with their associated license or terms of use.

CHANGOO & ASSOCIATES CHAPTER N.8 PAGE 02

Client Interaction
3. Managing Public Communications
In the situation where a vendor is hired by C&A on behalf of a client, we also expect that the
vendor will comply with all applicable rules, policies, procedures or codes of conduct
maintained by the client, including in the event they are more restrictive than the provisions
of this Vendor Code of Conduct. If you believe that a client rule conflicts with anything in
this Vendor Code of Conduct and you are unsure of what to do as a result, you are expected
to work with your primary Company contact and the client in order to resolve the situation
in a mutually satisfactory manner:

Subject to the terms of any specific contractual provisions that apply, we expect that
each vendor C&A hires will have adequate business continuity plans in place to continue
to provide its services to a reasonable degree in the aftermath of any kind of operational
crisis, whether caused by a natural disaster, equipment malfunction, power failure,
terrorist act or so forth. Upon request by C&A, the vendor will disclose in reasonable
detail and discuss the elements of its business continuity plans.

Speak to the press on C&A’s behalf only if the vendor and/or representative is expressly
authorized in writing to do so by one of the Company communications professionals.

Use good judgment, discretion and moderation when offering gifts or entertainment to
C&A employees. In doing so, the vendor and or its representatives will refrain from
giving Company employees an individual gift or a combination of gifts, or providing any
entertainment, that would violate the C&A Code of Business Ethics. In any event, no
vendor may ever offer a bribe, kickback, bartering arrangement for goods or services
and/or any other incentive to a Company employee in order to obtain or retain C&A
business.

Avoid the appearance of or actual improprieties or conflicts of interests. Vendors or

their representatives shall not deal directly with any C&A employee whose spouse,
domestic partner or other family member or relative holds a significant financial interest
in the vendor. Dealing directly in the course of negotiating the vendor agreement or
performing the vendor’s obligations with a spouse, domestic partner or other family
member of relative who is employed by C&A is also prohibited.

Avoid insider trading by buying or selling C&A or another company’s stock when in
possession of material information about C&A or another company that is not available
to the investing public and that could influence an investor’s decision to buy or sell
stock.

CHANGOO & ASSOCIATES CHAPTER N.8 PAGE 03

Resolving Compliance Concerns
4. Audit Controls and Operating Effectiveness
Subject to the terms of any specific contractual provisions that apply, we expect that each
vendor C&A hires will make available to us, upon request, a copy of any audit that has been
performed of the controls and/or operating effectiveness of the vendor as a service
organization (such as a SSAE 16/ISAE 3402, formerly known as SAS 70/FRAG 21/94, or
similar report). In general, we also expect each vendor to provide us with responses to our
reasonable requests for information about compliance with this Vendor Code of Conduct.

Cooperation with Investigations

We expect that each vendor C&A hires will cooperate with us in any investigation we or
the vendor may be conducting into an allegation of inappropriate or unethical behavior
involving either a C&A employee or an employee of the vendor where the allegation
involves C&A.

No Creation of Third-Party Rights

This Vendor Code of Conduct does not confer, nor shall it be deemed to confer, any
rights on the part of third- parties, including any third-party beneficiary rights. For
example, no employees of any vendor shall have any rights against the Company by
virtue of this Vendor Code of Conduct, nor shall such employees have any rights to
cause the Company to enforce any provisions of this Vendor Code of Conduct, the
decision with respect to any such actions being reserved by the Company in its sole
discretion.

Reporting of Questionable Behavior or Possible Violations

If you wish to report a questionable behavior or possible violation of this Vendor Code
of Conduct, C&A has a variety of resources available to assist you. You are encouraged
to work with your primary Company contact in resolving a business practice or
compliance concern.

However, C&A recognizes that there may be times when this is not possible or
appropriate. In such instances, please contact any of the following:

You may contact the C&A Ethics Officer at:

[email protected]

Changoo & Associates,

WaterPark Place, 20 Bay Street, 11th Floor
Toronto, Ontario, Canada,
M5J 2N8

CHANGOO & ASSOCIATES CHAPTER N.8 PAGE 04

CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM [email protected]

CHAPTER N.9

Employment Rights

Changoo & Associates

Water Park Place
20 Bay Street, 11th Floor Toronto, Ontario,
Canada, M5J 2N8
Email: [email protected]
Web: www.changooandassociates.com
Work Environment
C&A expects its vendors to share its commitment to human rights and equal opportunity in
the workplace. C&A vendors shall conduct their employment practices in full compliance
with all applicable laws and regulations, and shall, without limitation:

Cooperate with C&A’s commitment to a workforce free of harassment and unlawful

discrimination. While we recognize and respect cultural differences, we believe that
vendor companies should not engage in discrimination in hiring, compensation, access
to training, promotion, termination or retirement based on race, caste, national origin,
religion, age, disability, gender, marital status, sexual orientation, union membership or
political affiliation.

Provide a safe and healthy work environment and fully comply with all applicable safety
and health laws, regulations and practices. Adequate steps shall be taken to minimize
the causes of hazards inherent in the working environment. While on a C&A owned,
leased or managed property, vendors shall comply with all rules and regulations
concerning the operation of the property and the interaction with other individuals with
access to the property, whether C&A, its clients, or other vendors, employees or
guests.

Labour Laws
Prohibit the use, possession, distribution and sale of illegal drugs while on C&A owned,
leased or managed property.

Use only voluntary labor. The use of forced labor whether in the form of indentured
labor, bonded labor, or prison labor by a Company vendor or its subcontractors is
prohibited.

Not require workers to lodge “deposits” or their identity papers with their employer and
keep them free to leave their employer after reasonable notice without penalty.

Comply with all local minimum working age laws and requirements and not utilize child
labor. Employees shall not be under the legal minimum working age of the respective
region or shall not be less than 16 years of age (whichever is higher). We only support
the development of legitimate workplace apprenticeship programs for the educational
benefit of younger people and will not do business with those who abuse such systems.

Not engage in physical discipline or abuse. Physical abuse or discipline, the threat of
physical abuse, sexual or other harassment and verbal abuse or other forms of
intimidation is prohibited.

CHANGOO & ASSOCIATES CHAPTER N.9 PAGE 01

Pay Rate
Pay living wages under humane conditions. All workers shall be provided with clear,
written information about their employment conditions with respect to wages before
they enter employment and as needed throughout their term of employment.
Deductions from wages as a disciplinary measure shall not be permitted nor shall any
deductions from wages not provided for by national law be permitted without the
express permission of the worker concerned.

Not require workers to work more than the maximum hours of daily labor set by local
laws; ensure that overtime is voluntary and paid in accordance with local laws and
regulations.

All disciplinary measures should be recorded. Wages and benefits paid for a standard
working week must meet, a minimum, national legal standard.

Employee Retention
All disciplinary measures should be recorded. Wages and benefits paid for a standard
working week must meet, a minimum, national legal standard.

Keep employee records in accordance with local and national regulations.

Not retaliate against any employee (or any C&A employee) who reports in good faith
any potential violation of this Vendor Code of Conduct.

CHANGOO & ASSOCIATES CHAPTER N.9 PAGE 02

CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM [email protected]

CHAPTER N.10

Environmental
Sustainability
Practices

Changoo & Associates

Water Park Place

20 Bay Street, 11th Floor Toronto, Ontario,

Canada, M5J 2N8
Phone: 416-216-4620
Email: [email protected]
Web: www.changooandassociates.com
Long Term Growth
Sustainability, climate and equality many companies are wondering what these concepts of a
better future mean for their company today. Actions leaders take in the near future can
have ramifications for years to come, but it's hard to know where to start. But good things
can happen when an organization does all three: for our planet and our people, and for the
future sustainability and well-being of the organization.

To become a truly sustainable organization requires changing perspectives, behaviors and

systems across the organization, and this is just the beginning. Every unit in the organization
has a role to play, from HR to manufacturing.

Real-Estate Reduce Waste

C&A is committed to being a leader in the C&A expects its vendors to share its
real estate industry in environmental commitment to sustainability by meeting or
sustainability and energy management. We exceeding the requirements of environmental
believe a healthy environment is good for laws and regulations and promoting
business and essential to the well- being of acceptable levels of energy consumption,
everyone on the planet and we recognize that water use and waste management in order to
buildings can have a significant impact on the reduce the environmental impacts of our
environment. C&A can play a meaningful role business operations and those of our clients.
in addressing environmental challenges
through the advice we give our clients about
real estate development, investment and
occupancy. We aim to develop leading
standards and improvement practices in our
own offices and then help our clients do the
same in their real estate.

CHANGOO & ASSOCIATES CHAPTER N.10 PAGE 01

CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM [email protected]

CHAPTER N.11

Onboarding
Protocol and
Process

Changoo & Associates

20 Bay Street, 11th Floor Toronto, Ontario,
Canada, M5J 2N8
Email: [email protected]
Web: www.changooandassociates.com
 6-Steps to Onboarding
This complete pack of documents is mandatory to be onboarded and start the assessment.
The papers shall fully comply with the C&A draft. Only the entire load will be accepted.

After receiving all these documents, C&A will take an average of 7 (seven) working days to
answer if the project and the company can receive the financing. If approved, C&A will send
an email informing that the project was Pre-Approved, with an FP (FUNDING PROPOSAL).
1. LETTER OF INTENT(LOI)
LETTER OF INTENT(LOI) - Issued on CLIENT letterhead, requesting financing, duly completed
and signed. This document is required to ensure that there is non-solicitation by C&A.
2. BUSINESS PLAN
BUSINESS PLAN - This is a formal written document containing the project’s goals, methods,
and time frame for achieving these goals. It is essential to demonstrate the roadmap for the
project from marketing, operational and financial standpoints. The roadmap of funds
required for the project shall be apparent.
3. PROJECT SUMMARY
It is exactly the summary of the project, with the company's financial planning, where it
should have a presentation of the company, who it is and who the company's management
and shareholders are, the financial statements of the current company and the projection for
some years of the business to be carried out that justify the request for such financing and
that prove the ability to pay it back. This document highlights the project’s purpose to give
financial institutions involved in the transaction a quick overview of the project business plan.
4. FINANCIAL STATEMENTS
The CLIENT shall include the official Financials Statements of the Company for the last three
years before the submission date. The Financial statements shall consist of: Balance sheet,
income statement, and Cash flow statement.

5. STATEMENT OF CONFIDENTIALITY
This is a letter from the CLIENT stating that he understands and agrees with C&A
procedures. They will not disclose any information and C&A authorization.

6. PROOF OF FUND (POF), a BANK STATEMENT or a SOLVENCY CERTIFICATE

In all options, this is a document from the CLIENT's Bank, in any format, addressed to the
CLIENT (not to C&A), confirming that the CLIENT has the liquidity capacity for the intended
financing in the amount of XX million USD/CAD This document does not have a C&A
format; it shall use the standard model of the bank to issue this type of document. Due to
banking rules, this document cannot refer to C&A or the financing transaction. C&A reserves
the right to request an ATV (Authorization to Verify) to verify the POF delivered in some
instances. PLEASE NOTE THAT C&A RESERVES THE RIGHT TO REQUEST POF AT ANY
TIME DURING THE ENTIRE ONBOARDING PROCESS. STATEMENT OF
CONFIDENTIALITY. This is a letter from the CLIENT stating that he understands and agrees
with C&A procedures. They will not disclose any information and C&A authorization.

CHANGOO & ASSOCIATES CHAPTER N.11 PAGE 01

CHANGOO & ASSOCIATES WWW.CHANGOOANDASSOCIATES.COM [email protected]

CHAPTER N.12

Umbrella
Answers to
Common
Questions
Changoo & Associates
Water Park Place
20 Bay Street, 11th Floor Toronto, Ontario,
Canada, M5J 2N8
Email: [email protected]
Web: www.changooandassociates.com
Frequently Asked Questions(FAQ)
What is C&A’s source of funds?
Changoo & Associates (C&A) leverages several bank and trust relationships, lending our
private capital and lines of credit under the terms issued to clients. C&A lends on debt,
Joint Ventures, and Lines of Credit.

C&A is not part of any banks directly. The capital is the monetization of cash assets held
by a Family Trust.

The monetization will come from one or more Tier 1 banks, plus in a line of credit or
syndication, but it has ended up being a line of credit with one bank or each bank taking
a portion over the years.

The Banks and trusts are lenders to C&A, and C&A funds their projects and originates
from private capital.

The credit lines are routine as they are based on cash, performing commercial debt held
and guaranteed by C&A private capital throughout construction. When rolling into
permanent financing, usually years 2-3, the bank security becomes the completed
project, and the line replenishes.

How can C&A offer such attractive terms and conditions?

There are three critical reasons to understand why C&A has conditions more competitive
than the market.

The source of capital (1.) and the merging of cash monetization with Project Financing (2.).
C&A seeks long-term investments with fixed returns. C&A can offer unique investment
conditions, such as an attractive interest rate, because C&A defines the interest rate as a
product of the risk of the project and mainly to fix the price that hedges the asset allocation
in monetization. The interest rate gives C&A the guarantee that if the asset value goes down,
C&A private capital’s portfolio of assets stays within the green line.

When investing in debt, C&A needs and wants the client's project to occur and be successful
because C&A prefers to receive a certain fixed income rather than an uncertain one, as this
guarantees the stability of the portfolio. C&A’s interest rate is not based on the opportunity
cost of capital of the market, such as depositors or investors, because C&A does not raise
capital from the market. The interest rate is modelled via its equation that analyses
macroeconomic, sectorial and financial risk and the exogenous variable is the risk of its asset
allocation in monetization.

The collateral structure (3.). The cash collateral that C&A requests secures C&A’s
investment and triggers returns at the same time. The fact that the collateral is used to
secure a credit line increases the project’s Internal Rate of Return (IRR) while reducing the
payback period.
CHANGOO & ASSOCIATES CHAPTER N.12 PAGE 01
Frequently Asked Questions(FAQ)
Is C&A a bank or a fund?
C&A is not a Fund or a Bank and does not manage the assets of third parties. C&A is a
private capital company that invests with its funds. C&A generates profits in the form of
debt in real economic projects. This is the reason why C&A is not regulated as a
financial institution.

Does C&A have a financial license?

C&A is a private entity and does not have investors or depositors. Financial licenses are
required when entities receive funds from third parties and invest those funds. This
means C&A does not need a license since C&A is a private entity.

How many investors does C&A have?

C&A does not have investors or depositors. The source of capital for C&A is a private
capital family trust.

Is C&A a mezzanine structure company, and has C&A concluded

any transactions in this structure?
C&A is not a mezzanine structure company nor a private equity company. C&A is a
private debt investor. For such debt structures, approval depends on multiple risk
components and considerations.

Does C&A finance Venture Capital (VC), Special Purpose Vehicle

(SPV), and NewCo?
A project or business can only be financed with a detailed business plan explaining the
company, the market and the project presentation, with all the financial ratios, forecast,
impact and management information. In other words, C&A invests in Balance sheets.
C&A does not finance net working capital or income statements. C&A does not finance
short-term activities but long-term activities.

C&A does not finance what others don’t finance. C&A finances high-level projects with
long-term sustainability. C&A looks forward to and understands the potential of a
project. The Credit and Risk Department will assess the business plan, which will be
evaluated through 30 variables and must meet the investment requirements of our
company.

CHANGOO & ASSOCIATES CHAPTER N.12 PAGE 02

Frequently Asked Questions(FAQ)
Does C&A fund the structural reorganization of a company?
C&A always welcomes SPV/NewCO/VC/Start-up projects. This type of project has quite
different conditions and requires special attention.
Of course, the project must meet our financing requirements regarding financial capacity,
maturity, and grace period and complete our Credit and Risk components and variables.
Nevertheless, SPV can be much easier to finance because they represent a regularly mature
business with mature developers. C&A is more focused on projects being developed by
mature companies.

Does C&A finance the coverage of any debt, for example, a client's
debt, to the bank?
Depending on whether the reorganization plan involves a debt restructuring or a
turnaround. (i.e., a process to restore value and business performance in a scenario of
decline and poor performance), we can give two different answers. In the case of a
complete debt replacement, C&A will not finance it. However, if it is a turnaround, we
can explore and evaluate the possibility of financing. It is also essential that all projects
must meet our criteria so that we can analyze them.

Are there any sectors C&A does not consider?

Every project meeting our investment requirements can receive our investment from all
sectors and countries. However, C&A does not invest in the following industries:

Mergers and Acquisitions

Drugs, medicines, medicinal cannabis and substances manufactured in the
pharmaceutical industry
Gambling and Gaming;
Defense
The acquisition of weapons
Psychotropic, poisonous, narcotic substances and their derivatives
The financing of terrorism;
Human trafficking;
Flipping Business, as a one-shot buy and sell the assets
Companies, entities or any party present in OFAC Sanctions List (Office of Foreign
Assets Control
Land and real estate acquisitions, which are the vast majority of funding
Projects mostly stock financing or non-strategic working capital
Debt restructuring projects without integration of productive capital and innovation from
the self-financing generated by the restructuring

CHANGOO & ASSOCIATES CHAPTER N.1 PAGE 03

Frequently Asked Questions(FAQ)
Despite the macro and political situation, is C&A interested in
financing projects in any country?
It is important to note that C&A does not finance projects in OFAC-sanctioned countries.
Thus, any project developed in a country not on this list can be evaluated (even if the
macroeconomic and political conditions are not favorable). The risk rating model used by
the Credit and Risk department includes a component (jurisdiction) with a weighting of
9% for project evaluation. Within this component are six different variables, worldwide
economic indicators highlighting control of corruption, government effectiveness,
political stability and absence of violence/terrorism, regulatory quality, the rule of law,
and voice and accountability. However, jurisdiction is relevant to define our investment
and naturally, countries considered riskier might stay out of our radar in the end.
Nevertheless, we affirm that we can evaluate any country in the world.

What are C&A minimum and maximum financing limits?

C&A has several credit lines that can be divided by size. We operate Small Caps for
values between 10M USD to 49M USD and Large Caps for values higher than 50M USD.
C&A does not establish an upper limit because everything may be studied with a worst-
case scenario of transaction syndication. On Large Cap, C&A’s past shows us a track
record with an average of 300M USD in investments.

Can Associates use the documents provided by C&A and rebrand

or partially rebrand using our data to offer to clients?
No. The documents are confidential, and the Intellectual Property belongs to C&A. They
cannot be used in any way that C&A does not authorize. All Associates have signed
Agreements and a Code of Conduct with C&A stating that they will never do this. Any
deviation from this is potentially fraudulent activity and will be referred to our Legal
Department. However, Associates can read, take ideas, and enhance their knowledge
and understanding of the C&A business model, making notes like an aide memoire. Still,
nothing that is an integral copy of C&A’ Intellectual Property data can be shared with
potential clients and intermediaries.

CHANGOO & ASSOCIATES CHAPTER N.12 PAGE 04

 Frequently Asked Questions(FAQ)
How is C&A interest rate affected by Monetary Policy and, for
example, by inflation?

C&A is indirectly affected by inflation, which is the primary reason for the significant
adjustment in interest rates that we have had since the beginning of 2022.
When inflation increases by 1%, it affects the banks’ interest rate because the Central
Bank reference will increase by more than 1%.
From C&A’s side, the multiplier effect is smaller than 1,% with interest rates increasing
by 1%. The reason is that C&A doesn’t have deposits with the Central Bank and is not
exposed to the opportunity cost of capital of investors.
C&A is affected a posteriori, usually 6 months to 1 year, after increasing the reference
interest rates. This gives C&A a timeline to adjust the operations and presence in the
market, continuing to be more competitive than the average market.

Would C&A agree to meet in person with a prospect?

C&A’s internal team can meet with potential clients when they reach the site visit stage.
C&A is happy to meet to personally sign the contract as long as its terms have been
discussed and the prospect is ready to sign. Nevertheless, as the commercial department
of C&A, the Associates are available to meet potential clients before closing.
Be aware that C&A does not gain anything by not meeting before a Funding Proposal.
The reason is that it is irrelevant to meet a potential client that C&A still needs to
onboard.

How does the Credit & Risk department evaluate a project?

C&A Credit and Risk Department are responsible for the initial project. After a detailed
analysis and compliance check of all documents, the quantitative approach is adopted,
based on a risk rating model that evaluates multiple risk components (jurisdiction,
sector, financial, collateral, management, strategic analysis, and corporate sustainability
and responsibility), including several variables.

What are the conditions for lending to an

SPV/NewCo/VC/Start-ups?
The promoter should highlight other vital points in its business plan, namely the project
development and its management team, which could be critical to the project’s success. For
this type of project, the management risk component has a greater weight than usual (10.5%
instead of 8.5%), compensating that C&A needs to have all the financial information
required to evaluate the project. The project promoter must also provide C&A with the
business plan with the calculation of all the necessary ratios for the first year of the
company’s forecast and the last year of the financing to be provided.

CHANGOO & ASSOCIATES CHAPTER N.12 PAGE 05

Frequently Asked Questions(FAQ)
What are the conditions for lending to an SPV/NewCo/VC/Start-
ups?
The promoter should highlight other vital points in its business plan, namely the project
development and its management team, which could be critical to the project’s success.
For this type of project, the management risk component has a greater weight than usual
(10.5% instead of 8.5%), compensating that C&A needs to have all the financial
information required to evaluate the project. The project promoter must also provide
C&A with the business plan with the calculation of all the necessary ratios for the first
year of the company’s forecast and the last year of the financing to be provided.

Can collateral downpayment be provided against some asset

equity of the client?
Not equity. C&A only accepts cash as collateral for transactions that must be placed in
the client or third-party guarantor account.

Can the guarantee be issued backed by cash in the third-party

guarantor's account? And can it be issued in the client's and the
guarantor's joint name account?
Yes. Or it can be a joint account. What needs to exist is the owner of the funds (the
pledgor is not the project promoter). As a result, C&A must have three important
documents, (1) the Client Information Sheet (CIS), (2) the Proof of Funds and (3) a
binding agreement between the project promoter and the third-party guarantor.
Regarding the agreement, the economic (economic benefit), financial (financial benefit),
and legal (type of relation, kind of agreement, e.g., MOU, joint venture, shareholder,
investor, loan agreement etc.) reasons and terms must be justified for the participation
of the guarantor in the project. In addition, this agreement should not be supported by
the transaction with C&A and should not be conditional to C&A financing (the investor
must believe in the project). The Agreement should explain the operational reason for
someone to support another entity in this way. It should explain the amounts invested,
expected or requested returns and when this will happen.

Suppose a client has investments that need to be mobilized to

liquid assets, i.e., shares, but doesn't want to sell the shares
ahead of pre-approval. Is it possible to commit to selling the
assets in the pre-approval while receiving the term sheet?
No. C&A does not accept shares as collateral. .

CHANGOO & ASSOCIATES CHAPTER N.12 PAGE 06

Frequently Asked Questions(FAQ)
What are the client’s rights in the event of C&A’s default?
The client has the right, per the Agreement, to invoke the default of
C&A and terminate the Agreement. With such a step, the collateral
is released, and the parties are no longer under contract with each
other.

What are the client’s rights in the event of C&A’s default?

The client has the right, per the Agreement, to invoke the default of
C&A and terminate the Agreement. With such a step, the collateral
is released, and the parties are no longer under contract with each
other.
What are the client’s rights in the event of C&A's default?
The client has the right, per the Agreement, to invoke the default of C&A and terminate the
Agreement. With such a step, the collateral is released, and the parties are no longer under
contract with each other.

What are C&A's rights in the event of a Client default?

C&A has the right to recover the total financing amount. If the amount is not repaid,
C&A will execute the collateral up to the amount in default. If the collateral does not
cover the default amount, Changoo is legally entitled under the Agreement to pursue the
company’s remaining assets, such as any other creditor.

Can a client switch from one kind of collateral to another during

the term?
Yes, C&A is ok to do this. For example, the project may start with a cash downpayment
for a few years, and then the client may replace it with a securities pledge (most likely
change) if the client considers this to be the best option for them.

Can the Guarantee be set up in any currency despite USD? If so,

what are the mechanism and indicative additional costs for
structuring a local currency option?
USD, Euro or GBP are currencies that C&A accepts for the collateral guarantee. We will
consider these if less strong currencies are necessary for some exceptional reason. The
Credit and Risk Department needs to look at the assessment, and this will probably
increase C&A's risk, which means that the collateral may increase by 1%.

CHANGOO & ASSOCIATES CHAPTER N.12 PAGE 07

Frequently Asked Questions(FAQ)
The structure to disburse in a local currency can follow two
options:
1. The client receives a direct wire from C&A USA in its local currency, and C&A is
responsible for wiring the amount in local currency at the agreed rate;
2. C&A creates an SPV in the client’s country, where C&A assigns the obligation to
disburse and receive the funds in the local currency.
Either way, the client receives the financing in local currency, despite the collateral needing
USD.

How is the Client secured in receiving the finance since the Client
is providing the Collateral 30 banking days before the first
disbursement?
All the collaterals need to be put in place before the investment happens. Changoo’s
structure of financing is the reason for the competitive pricing. No collateral can be
executed before a default, which means it is not executed in the first 30 banking days. It
is about project development and performance. Changoo can only execute the collateral
in case of default.

TIP:

A crucial part of successful strategic planning is to ensure you

seek an external, objective point of view. Most start-up
businesses don’t have the resources and expertise in-house to
guide them through the strategic planning process. Our
consultants can give you a fresh perspective on your business,
help you envision the future you want and define your long-term
goals. We can also ensure you follow a rigorous plan with clear
timelines and assigned responsibilities.

CHANGOO & ASSOCIATES CHAPTER N.12 PAGE 08

Frequently Asked Questions(FAQ)
According to the Business Plan, which accounting method would
best show the Client correctly uses the funds?
There needs to be an accounting method. The company shall follow its standard legal and
regulatory obligation of filing financials under its jurisdiction. They do not need to prepare
any different financials. C&A wants to (1) analyze the accounting history of the company,
wanting to see if it is required to do the management report on a semi-annual, monthly,
annual, or quarterly basis and; (2) C&A wants to have access to the financial movements in
the company's account, i.e. the formal and legally required records, to be able to track the
financial movements and see that the implementation plan follows the natural and financial
capital movements; (3) and C&A wants to have the project's progress report. There is no
template but a descriptive and graphical report showing the project's status.

At the same time, the client needs to answer the following

questions in an Evaluation Report to be prepared and delivered by
the client. Note that the Evaluation Report does not have a
standard format but shall include the following points and be a
proper explanation of the client’s business at the moment of the
disclosure:

What the funds were used for (if the client can point to the actual transactions in the
bank statement, that would be helpful).
What was expected to be done with these funds?
What are the next steps?
Highlight (if applicable) any impact of costs of raw materials, supplier costs, interest
rates, and asset value to assess current project viability.
Client must submit original bank statements showing the transactions and any relevant
invoices, contracts, etc., as appropriate.
The cash movements, category of expenditure and balance sheet.
Implementation chart where the client shows targets and what has been delivered per
month.

CHANGOO & ASSOCIATES CHAPTER N.12 PAGE 09

Frequently Asked Questions(FAQ)
What if, during the funding of the tranches, the Client has an
unexpected expense that needs to be itemized on the business
plan?
This is a typical situation in all real projects. The client shall be able to inform C&A , as soon
as possible, of all the changes in context and how this can impact the future of the project
and the materiality, relevance, and impact (quantification) of the unexpected change.
If the change is material, it can be reported. If it is material, it needs to be informed. If it is
material, there has to be consent to the project change: if there is an operational change in
the business, a report and a pre-approval from C&A are critical and mandatory; if it is
materially relevant, but does not mean a functional shift, being only a deviation to the actual
operation of the company, it only must be informed.

Can disbursements be received in the local currency of the

country where the project is located?
Yes, it is possible. However, C&A prefers financing in USD, Euros or GBP.

The process can be done in two ways, and both cover the client being exposed to the
exchange ratio. The first step is performing the collateral in dollars. After the collateral is in
place, the average of the three days before the date of signing the agreement or the
standard of the three days before the date of putting the collateral in place will fix the rate
of disbursement and reimbursement in local currency.

After that, we signed an amendment to fix the rate and the amounts to be disbursed and
paid back in local currency, setting the financing in such a way. This process is defined and
protected in the Financing agreement from the beginning. The reason for needing to be
done is to know what the exchange rate is to be used after the collateral is in place.

One option is later, C&A can wire directly from abroad and guarantee the rate of the
Agreement. Another option is C&A creating an SPV in the client’s jurisdiction, being
responsible for internalizing the funds in the SPV and, from there, wiring to the client. This
will be stabilized in the Financing Agreement too. Additional to the Amendment in this case,
an assignment for the SPV is signed between C&A and the SPV with the consent and
acknowledgment of the client. All this process is possible because C&A covers the exchange
rate exposure with put and call options around the value of the exchange ratio of the
moment.

CHANGOO & ASSOCIATES CHAPTER N.12 PAGE 10