National O-Mobile Multimedia Cooperative Federation Business

AFRICA CAPITAL & BUSINESS SUPPORT SERVICE LIMITED
Developed by
O-Mobile Multimedia Limited and Africa Capital & Business Support Limited
For
O-Mobile Multimedia Cooperative Federation Limited
The Blue Capital MocroSecureInvest

and
LimitedPartnership Operations Methodology
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Based on
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National O-Mobile Multimedia Cooperative Federation Limited Business Plan
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National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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Contents
1. Executive summary 2. Introduction
2.1. Location - Place, LGA, state
3.1. 3.2. 3.3. 3.4.
Ownership Organizational structure Board & governance Products & services
5. Strategic Plan
5.1. Institutional analysis
5.1.1. Strengths 5.1.2. Weaknesses 5.1.3. Opportunities 5.1.4. Threats/Constraints
5.2. Analysis of environment

5.2.1. Place of operations 5.2.2. LGA 5.2.3. State
5.3. Competition
5.3.1. Universal banks 5.3.2. Community banks 5.3.3. NGO-MFIs 5.3.4. Cooperatives
5.4. Collaborators
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5.5. Regulatory factors
5.5.1. VAT 5.5.2. Tax 5.5.3. Rediscounting & Refinancing facility
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5.4.1. Correspondent banks 5.4.2. Cooperative societies 5.4.3. Development Associations
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4.1. 4.2. 4.3. 4.4. 4.5.
Philosophy & mission Organizational form (Unit bank, state bank) Shareholders Board Organogram & responsibilities of key management
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4. Transformation Plan
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3. Institutional History
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6. Operational plans
6.1. Markets & customers 6.2. Marketing channels 6.3. Branch expansion plan 6.4. Products and services
6.4.1. Loan Product 1: e.g. biz loan 6.4.2. Loan Product 2: e.g. leasing facility 6.4.3. Loan product 3: e.g. Agric loan 6.4.4. Loan product 4: e.g. share purchase 6.4.5. Savings product 1: e.g. current acct 6.4.6. Savings product 2: e.g. fixed deposit 6.4.7. Savings product 3: e.g. call acct 6.4.8. Savings product 4: e.g. regular savings
7. Financing strategy
7.1. Current financial situation
7.1.1. Assets 7.1.2. Liabilities 7.1.3. Equity/Shareholders funds
7.2. Fundraising/Financing strategy 7.3. Projected Financial Statements

7.3.1. Balance sheet for five years 7.3.2. Profit & loss account for five years 7.3.3. Cash flow projections
7.3.4. Assumptions underlying the projections
8. Conclusion
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Confidentiality Agreement The undersigned reader acknowledges that the information provided by _______________ in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _______________.
It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other means _______________.
and that any disclosure or use of same by reader may cause serious harm or damage to
______________________________________ Signature ______________________________________ Name (typed or printed) ______________________________________ Date:
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This is a business plan. It does not imply an offering of securities.
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Upon request, this document is to be immediately returned to _______________.
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Purpose of the Document This business plan has been prepared by O-MOBILE MULTIMEDIA LIMITED, AFRICA CAPITAL & BUSINESS SUPPORT LIMITED, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED for the purpose of assisting interested Members Cooperatives to invest in developing SOCIAL BUSINESS Divisions using Multimedia Technology and Mobile Banking Platform to development focus services Micro, Small and Medium members of the respective member Multimedia Cooperative Societies. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION
LIMITED
FEDERATION of different Cooperatives working together to operate a National
COOPERATIVE FEDERATION LIMITED will also invest is a regulated Microfinance bank possibly The Microfinance Bank will be rebranded thereafter known as MOSAIC MICROFINANCE BANK LIMITED. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will also invest exclusively for Woman MMSMEs. in the setting us of a Special Subsidiary called MOSAIC WOMEN MFB LIMITED that will bank
This plan will also assist in contacts with prospective member cooperative, investors and several our SecureInvest Methodology as a requirements of raising the needed funding for recapitalizing NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED to become a National Micro, Small and Medium Enterprise SOCIAL BUSINESS operations with between N2Billion to N10Billion Capital as soon as possible. It is also intended that this document will assist NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED in structuring her operations to meet the constitution of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. Project Summary
Proposed BUSINESS Name
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Bank Location of Company Ownership
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Principal Promoters
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Business Partners needed for structuring of the Various parties and Trusts needed to implement
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NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Starting In Lagos State NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED MEMBERS NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED PILOT MEMBERS. 45A Campbell Street, Lagos RAYSIDA STATE MULTIMEDIA COOPERATIVE SOCIETY LIMITED Dr. Chalieben Kamalu Ejiogu
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before the end of the current consolidation in the Regulated Microfinance Sector by Central Bank.
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COOPERATIVE Platform under the Open Mobile Brand. NATIONAL O-MOBILE MULTIMEDIA
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is a Cooperative O-Mobile
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+2347032224967 KEMSON CONCEPT LIMITED and NATIONAL O-MOBILE
MULTIMEDIA COOPERATIVE SOCIETY FEDERATION LIMITED

Mr. Benjamin Aduli
+234 8093374323 Or +2347087930477,
MULTIMEDIA COOPERATIVE FEDERATION LIMITED

Mr. Chinedu Achunine
+234 8034011570 Or +2348122214555,
Mr. Chuks Chukwuocha
FUTUREVIEW FINANCIAL SERVICES LIMITED

Mr. Tochukwu Kemakolam +2348036231954
W-HOLISTIC BUSINESS SERVICES LIMITED
Email
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Mrs. Lanre Oniyitan +2348037169737
P4PE LIMITED
Mr. Joel Omeike +2348035798352 vc@acbscapital.com
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+2348082061975 Or +2348092061975,
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AFRICA CAPITAL & BUSINESS SUPPORT LIMITED
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WHATTODONEXT LIMITED and NATIONAL O-MOBILE
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1.0 Executive summary

Opportunity 1: Agriculture Banking Within the Small Scale Agricultural Sector, various challenges have contributed to the current
scenario where over 95% of Nigerian farmers are Micro and Small Scale farmers but do not receive inability of these Farmers to access any form of Credit Services for their farming business activities. Lack of a well-structured value chain and lack of adequate technology is also a major problem. Lack of access to market is also a deterrent to the development of this sector. This major dilemma opportunities. Partnership NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE MICRO FEDERATION LIMITED
any real support from Government and the entire COOPERATIVE Sector. A Major problem is the
in the MSME Farming Sector has created a huge Creative Agric Value Chain Financing with MECHANIZED AGRICULTURE AND
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CREDIT
MULTIMEDIA COOPERATIVE FEDERATION LIMITED Members in this Sector. Opportunity 2: Telecom Banking
where over 95% of mobile phone users in Nigeria are on pre-paid billing plans while less that 5% offer postpaid members cheaper call rates. However, while most of the telecom companies surveyed would prefer postpaid members to pre-paid customers, they are also concerned about the extra burden of having to follow-up members to pay their bills as at when due (many of the Telcos who tried postpaid services presently have a large portfolio of unpaid postpaid bills). This major dilemma in the Telecommunications industry has created a huge Cooperative Microfinance take advantage of by developing COOPERATIVE products integrated with postpaid telecom products LIMITED Members. opportunities that NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED plan to of partner telecom companies for NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION
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Opportunity 3: MSME Banking Within the MSME Sector, various challenges have contributed to the current scenario where over 10 Million MSMEs are looking for innovative ways to access capital to expand their businesses and no Bank in Nigeria is really willing or able to offer that innovative access to MSMEs. This major dilemma in the MSME industry has created a huge Creative MSME financing opportunities that NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED plan to take advantage of for MSMEs members of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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are on postpaid billing plan. Ironically telecom companies prefer postpaid customer hence they
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Within the Telecommunication Sector, various challenges have contributed to the current scenario
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(MAMCIS) has developed a Unique Agric Value Chain Financing Model for NATIONAL O-MOBILE
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Opportunity 4: Cooperative Microfinance Banking Within the Cooperative and Microfinance Banking Institutions Sector, various challenges have
Cooperatives are competing with Commercial Banks by offering Micro Commercial Banking Services in the name of Microfinance Banking Services leaving the over 10 Million MSMEs confused and not seeing any need to bank with Cooperatives or Microfinance Banks as they do not see any real value that Cooperatives or Microfinance Banks can add to their Business. This major dilemma
in the Cooperative Microfinance industry has created a huge Creative MSME financing opportunities that NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED plan to take advantage of developing special MSME products integrated with Value added services for MSMEs members of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. Opportunity 5: Multilevel Marketing (Direct Marketing) Banking
scenario where over 10 Million Multi-Level-Marketers in Nigeria are not making enough money to is the inability of these MLM Marketers to access Micro Credit Services for their trading businesses. This major dilemma in the MLM industry has created a huge Creative Multi-Level-Cooperative LIMITED plan to take advantage of by developing products integrated with MLM Programmes for Members of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. Opportunity 6: Non Interest Banking Microfinance opportunities that NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION
Nigerian Central Bank has just recently introduced a non interest Banking policy in Nigeria. While the general understanding of this type of banking practice is new in Nigeria, the potential for this type of Banking especially among the Northerners is very massive. Various political and nonpolitical
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challenges have contributed to the current scenario where this concept is generating a lot of controversy as the predominantly Southern Christians view the Non Interest Banking policy as an Islamic Banking policy being introduced by an Islamic Central Bank Governor. The value of this fast growing Ethical Banking practice globally will be lost to Banks operating with the vastly Unethical Banking practices of the Commercial Banks by offering Micro Commercial Banking Services in the name of Banking Services. This new Ethical Non interest Banking Policy has created a huge Creative MSME financing opportunities that NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED plan to take advantage of through our Limited Partnership Cooperative Microfinance Methodology which is a Non Interest Banking methodology. National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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earn a living from their Multi-Level-Marketing Businesses. A major part of the problem is this sector
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Within the Multi-Level-Marketing Sector, various challenges have contributed to the current
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contributed to the current scenario where over 800 weak Microfinance Banks and over 130,000
Opportunity 7: Cashless Nigeria and Mobile Money Policy of Central Bank This present cashless policy of Central Bank has the potential to change the face of Banking and the economy of Nigeria. However, getting the Nigerian Banking public to adopt Cashless Banking MUST is incentive based and NOT sanction based as the central bank is currently approaching the policy promotion. Instead of penalizing Members for heavy cash transactions, we believe that
creative Cashless Credit products that are offered to Members who go cashless or open cashless Policy has created a huge Creative Cashless Micro Credit Product opportunities that NATIONAL O-
accounts in banks will lead to faster adoption of the policy. This new Cashless Nigeria Banking
MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED plan to take advantage of by developing creative Cashless Credit products for NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Members interested in going cashless. Opportunity 8: Agency Banking
Central Bank is about to introduce. This policy complements the Cashless Policy and has the Banking public to adopt Agency Banking Services of Banks MUST also be incentive based. We believe that creative Agency Managed Savings and Credit products that are offered to RAYSIDA policy. This about to be introduced Agency Banking Policy will create a huge Creative Agency Micro Savings and Credit Product development opportunities that NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED plan to take advantage of by developing creative Agency Savings and Credit products for NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Members interested in Banking with our Bank through our Agency Network. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED is being structured to operate as a Social Enterprise COOPERATIVE Network operating as an Independent Cell within the Members who use the Agency Banking centers will lead to faster adoption of the Agency Banking
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National SOCIAL BUSINESS operations of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. O-Mobile Multimedia COOPERATIVE Services will be comprehensive in terms of offered Financial Suite of Ethical Products that will include: 1. Multimedia COOPERATIVE Services, 2. Multimedia finance Services 3. Multimedia Investment Services 4. Multimedia Mutual Funds Services, 5. Multimedia Equities Investment Services, 6. Multimedia Capital Market Services
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potential to change the face of Banking and the economy of Nigeria. However, getting the Nigerian
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Closely linked to the present cashless policy of Central Bank is the Agency Banking Policy that the
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7. Multimedia Mortgages and Homes Services, 8. Multimedia Pension Services, 9. Multimedia Leasing Services, 10. Multimedia Insurance Services 11. Multimedia Health Services 12. Multimedia Transport Finance Services, 13. Multimedia and Rural Market Research Services.
Although it will costs a fair amount of money for NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE
FEDERATION LIMITED to do an in-depth research into prospective Cooperatives to be admitted in the NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED, this up-front cost will SOCIAL BUSINESS NETWORK. be eclipsed by a long-term relationship that will emerge out of mutual respect from O-MOBILE
Getting NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED to her full potential will require a new equity investment of between N2 Billion to N10 Billion by new FEDERATION LIMITED will start off Operations as a Social Micro, Small and Medium Enterprise Foundation operating in Nigeria. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED and NATIONAL O-MOBILE MULTIMEDIA Limited have developed a Micro Business MULTIMEDIA COOPERATIVE SOCIETY FEDERATION LIMITED Services in Nigeria. NATIONAL OMOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED and NATIONAL O-MOBILE MULTIMEDIA LIMITED will jointly launch NATIONAL O-MOBILE MULTIMEDIA Business Academy (O-Mobile MBA) for MSMEs Members of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. Mentoring and Advisory Service which will form the foundation of the NATIONAL O-MOBILE member cooperatives joining the FEDERATION. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE SOCIAL BUSINESS using SecureInvest Limited Partnership Methodology of THE BLUE CAPITAL
NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE SOCIETY FEDERATION LIMITED will start in Eastern Nigeria and gradually grow organically to all parts of Nigeria setting up of O-Mobile MBA
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Centers Nationwide in partnership with NATIONAL O-MOBILE MULTIMEDIA Limited which will serve as channels for offering our Social COOPERATIVE Services cost effectively to members Nationwide. Over the next three years, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE SOCIETY FEDERATION LIMITED Services and O-Mobile MBA Mentoring Services plans to reach 100,000.00 MSMEs and work with them to become Social Ethical MSMEs. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be raising capital for all Affiliate Cooperative Cell MFIs through THE BLUE CAPITAL SecureInvest Methodology but will be lending capital with THE BLUE CAPITAL LimitedPartnership Methodology.
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NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED services will ONLY be offered to individual Members of the Members Cooperatives. This means that NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Services are to be offered to dully admitted members of our member cooperatives. So part of the condition for opening account in NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED is the acquisition of Six thousand five Preference Non-Voting Shares in NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED at N6, 500.00. Our target is to aid 10 million MSMEs to become Social MSMEs in 5 years through our member Cooperatives Nationwide. This will create over N65, 000,000,000.00 (Sixty Five Billion) Tia 1 Capital for NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. Start Up Requirement
REGULATORY REQUIREMENT (NOT APPLICABLE) Target Tier 1A Capital (Member MFBs Capital) Target Tier 1B Capital (New Onshore Capital Investment) Target Tier 1C Capital (New Offshore Capital Investment) Target Tier 1D Capital (Preference Nonvoting Share Capital)
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Amount(N) 2,000,000,000.00 3,000,000,000.00 5,000,000,000.00 65,000,000,000.00 100,000,000.00 50,000,000.00 150,000,000.00 15,000,000.00 5,000,000.00 20,000,000.00 2,500,000.00 2,000,000.00 5,000,000.00 10,000,000.00 5,000,000.00 3,000,000.00 27,500,000.00
Initial Start-Up
Total Target Capital Base
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Cost of Raising Tier 1A Capital Legal/Documentation/Filing Total
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Refurbishment of building Total
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Office machines Furniture & fixtures ( Office ) Vehicles Communications Computers Total Full Internet / Mobile COOPERATIVE Application
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TOTAL 75,000,000,000.00 150,000,000.00 20,000,000.00 27,500,000.00
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5,000,000.00 KYC Solution Remote Transaction Systems for Micro Credit Management Total 2,500,000.00 2,500,000.00 10,000,000.00 10,000,000.00
MFB Business Process Provisioning Consulting Development of MFB Methodology Initial MFB Process/Methodology Training Business Plan Development 30 200.00 20,000,000.00 6,000.00 5,000,000.00
15,000,000.00
Total
Working capital Regional Offices 6 60,000,000.00
1,000,000,000.00 360,000,000.00
Total
GRAND TOTAL
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M4 M5 2,255,285,936 2,321,522 2,321,522 2,252,964,414 100% 120,718,893 4,907,945 4,907,945 2,127,337,575 94% 11,138,889 11,138,889 2,116,198,686 94% 27% -
First Year Month 1 to 6
Income Statement
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M3
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1,360,000,000.00 76,607,506,000.00
M6 3,078,175,000 4,005,112,149 2,321,522 3,075,853,478 100% 4,002,790,627 100% 161,860,346 208,268,079 4,907,945 2,909,085,186 95% 3,789,614,603 95% 12,388,889 2,897,946,298 94% 23% 3,777,225,714 94% 21% -
Revenue
408,604,620
Direct Cost
45,540,222
Margin%
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Gross profit
363,064,398
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920,731,009
1,536,214,693
5,321,522
2,321,522
915,409,487 99%
1,533,893,171 100%
89%
S&M
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25,831,827
50,388,147
84,762,331
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SG&A
54,425,287
4,224,193
4,907,945
EBITDA
282,807,284 69%
860,797,147 93%
1,444,222,895 94%
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Margin%
Depreciation
8,472,222
9,722,222
9,722,222
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EBIT Margin% EBIT Growth Rate
274,335,062 67% 68%
851,074,925 92% 41%
1,434,500,673 93% 32%
Interest & Finance Charges
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Profit/Loss Before Tax
274,335,062
851,074,925
1,434,500,673
2,116,198,686
2,897,946,298
3,777,225,714
Taxation Profit/Loss Before Tax (Month) Profit/Loss Before Tax (YTD)
96,017,272
297,876,224
502,075,235
740,669,540
1,014,281,204
1,322,029,000
178,317,790
731,516,491
1,663,941,928
3,039,471,075
4,923,136,168
7,378,332,882

Income Statement M7 M8 M9 M10 M11
Revenue
5,036,327,646
6,172,051,754
7,412,514,737
8,757,946,857
Direct Cost
2,321,522
2,321,522
2,321,522
2,321,522
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2,321,522 10,206,256,855 100% 100% 518,441,391 4,907,945 9,682,907,519 95% 95% 15,138,889 9,667,768,630 95% 13% 95% 14% 9,667,768,630 3,383,719,021 6,284,049,610 30,493,076,652
Gross profit Margin%
5,034,006,124 100%
6,169,730,232 100%
7,410,193,215 100%
8,755,625,335
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445,909,815 4,907,945 8,304,807,575 15,138,889 8,289,668,686 8,289,668,686 2,901,384,040 5,388,284,646 24,209,027,043
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10,208,578,377 2,321,522 4,907,945 16,388,889
SG&A
4,907,945
4,907,945
4,907,945
EBITDA Margin%
4,769,269,325 95%
5,848,207,228
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S&M
259,828,854
316,615,059
378,638,209
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95%
95%
Depreciation
12,638,889
13,888,889
13,888,889
EBIT Margin% EBIT Growth Rate Interest & Finance Charges
4,756,630,436
5,834,318,339
7,012,758,172 95% 15%
94% 18%
95% 17%
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4,756,630,436
5,834,318,339
7,012,758,172
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Taxation
1,664,820,653
2,042,011,419
2,454,465,360
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Profit/Loss Before Tax (Month) Profit/Loss Before Tax (YTD)
3,091,809,783
3,792,306,920
4,558,292,812
10,470,142,665
14,262,449,585
18,820,742,397
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M12 11,764,639,561 11,762,318,039 100% 596,244,450 11,161,165,644 95% 11,144,776,755 95% 81% 11,144,776,755 3,900,671,864 7,244,104,891 37,737,181,543
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178,317,790
553,198,701
932,425,437
1,375,529,146
1,883,665,093
2,455,196,714
Year 1 to 5 Summary
Income Statement Y1 Y2 Y3 Y4 Y5
Revenue
2,865,550,322
9,338,573,085
18,620,894,137
30,731,164,795
61,556,182,339
Direct Cost
25,326,964
27,619,090
33,142,908
36,457,199
43,748,639
2,840,223,358 99%
9,310,953,995 100%
18,587,751,229 100%
30,694,707,596
S&M
231,922,799
599,896,578
1,097,254,612
1,744,320,621
EBITDA Margin%
58,206,869,041 2031%
116,130,930,798 1244%
231,401,064,449 1243%
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461,357,906,004 1501% 19,166,667 461,338,739,338 1501% 50% 461,338,739,338 161,468,558,768 299,870,180,569 601,300,248,900
SG&A
107,485,185
156,675,920
192,087,995
241,960,137
Depreciation
19,166,667
19,166,667
19,166,667
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1243% 50% -
Margin% EBIT Growth Rate
2031% 50%
1243% 50%
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231,381,897,783 80,983,664,224 150,398,233,559 301,430,068,331
EBIT
58,187,702,374
116,111,764,132
231,381,897,783
20,365,695,831
Co op
58,187,702,374
116,111,764,132
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40,639,117,446
37,822,006,543
75,472,646,685
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75,559,188,087
151,031,834,772
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2.0 Introducing NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION

LIMITED Commercial banks, Investment banks, and Discount houses characterize the Nigerian financial industry. These institutions are the formal financial institutions in Nigeria but they provide strictly commercial Banking services to only about 35% of the economically active population. The informal financial institutions are characterized by Non-governmental organizations, Cooperative Microfinance Institutions (NGO-MFIs), Money Lenders, friends, relatives, and credit unions often serve the remaining 65% who do not have access to the formal financial institutions. This category
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61,512,433,701 100% 100% 3,337,512,094 302,441,057 920,588,474,433 1496% 149,666,667 920,438,807,766 1495% 920,438,807,766 322,153,582,718 598,285,225,048
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of the population comprises mainly of the low-income earners and the poor living in the rural and urban-rural areas of the country. The average Banking density in the urban area is one financial outlet to 32,700 inhabitants. In the rural area, it is 1 one financial outlet 57,000 inhabitants. This means that less than 2% of rural households have access to financial service. Although the government had in the past initiated a number of programmes to encourage and boost the small and medium scale industries, most of them were short-lived and could not effectively address the problems for which they were initiated.
This was often due to lack of understanding on Cooperative Microfinance Banking principles, lack of competent management, weak internal controls, lack of deposit insurance schemes, poor
corporate governance, weak regulatory supervisory oversight and weak capital base. The existing reveals a very large gap of the unserved people in the area of micro financing.
MFIs serve less than ten million out of over seventy million people that require their services. This
In 2005, the CBN in consonance with the supervisory and regulatory authority imposed on her came out with a Microfinance policy stipulating the laws and guidelines to govern the operations of team of well-motivated development and investment bankers with a passion for grass root and NATIONAL O-MOBILE MULTIMEDIA Limited with a goal of bridging the wide gap in the access to low and medium credit facilities, decided to set up NATIONAL O-MOBILE MULTIMEDIA Strategic Business Units of Cooperative Members of the NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. COOPERATIVE FEDERATION LIMITED to operate one National Cooperative Microfinance Bank as the Microfinance industry. These policies have been reversed in 2011. It is on this footing that a development and technology driven companies led by Africa Capital & Business Support Limited
NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be set up to operate NATIONAL O-MOBILE
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as a Cooperative Federation operating under the Cooperative Law of Nigeria. Membership of MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be open to Cooperatives willing and able to set up a COOPERATIVE within their cooperative as a strategic business unit offering SOCIAL BUSINESS services to their members. NATIONAL O-MOBILE
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MULTIMEDIA COOPERATIVE FEDERATION LIMITED will also invest in and grow a National
Microfinance bank regulated under the Microfinance Banking policy of the Central Bank. Our MISSION We provide affordable but sustainable financial and development services that enhances the productivity of MSMEs members of National O-Mobile Multimedia Cooperative Society Federation Limited
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Our VISION To redefine and create Cooperative Microfinance Services for 10,000,000 Social MSMEs members of National O-Mobile Multimedia Cooperative Federation Limited By 2020. Member cooperative societies join NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION Platforms. The new Social Media COOPERATIVE Business Unit will operate as a Strategic Business
unit of STATE MULTIMEDIA COOPERATIVE SOCIETY LIMITED operating under the franchise of Cooperative Laws of Nigeria.
NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED incorporated under the
NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will also invest in a Framework of the CBN and shall be adequately capitalized, appropriately regulated and supervised to address the financing needs of members of Cooperative members of NATIONAL O-MOBILE existing informal institutions and brings them within the supervisory purview of the CBN became country to meet the financial requirements of the Micro, Small and Medium Enterprises (MSMEs). It is the expectation of the regulatory authority that the policy would create a vibrant Microfinance System and provides the stimulus for growth and development. The specific objectives of the Policy are to: Enhance service delivery by Cooperative Microfinance institutions to micro small and medium enterprises (MSMEs); Contribute to rural transformation; Make financial services accessible to a large segment of the potentially productive Nigerian sub-sector that would be adequately integrated into the mainstream of the National Rural financial MULTIMEDIA COOPERATIVE FEDERATION LIMITED. The present policy, which also recognizes the necessary in order to enhance monetary stability and expand the financial infrastructure of the
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population which otherwise would have little or no access to financial services; Promote synergy and mainstreaming of the informal sub-sector into the national financial system; Promote linkage programs between universal/development banks, specialized institutions and Cooperative Microfinance banks; Reduce unemployment; and Enhance the implementation of the National Economic Empowerment and Development Strategy (NEEDS).
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Microfinance Bank established in line with the current Microfinance Regulatory and Supervisory
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O-Mobile Cooperative Funds provide seed capital to create a licensed Microfinance Bank, Capital Management Firm and a Trust company for members primarily Additional Biz Modules & Profit Centers for Members
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Profits to corporate stockholders & individual Members of the Cooperative & Companies in the Groups
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Profits
COOPERATIVE PORTFOLIO
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Social MSMEs Investments In Members Businesses
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Share certificates & Profits for Cooperative Members
Licensed Microfinance Bank and Trust Company Provides members with SecureInvest Trust Accounts, online banking and account management
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National O-Mobile Multimedia Cooperative Federation Limited
Investment funds
Members Cooperative Join O-Mobile Coop Federation and offer O-Mobile Private Banking Services to members through their independent private bank operated as a strategic business unit of their cooperative. Cooperative Member exchange investment capital for share certificates of common stock in the cooperative. Members are Digitally Registered in our cooperative system and ultimately control the Federation through there cooperative.
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3.0
3.1
Institutional history
Ownership NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED evolved from over 3 years work of a team with Africa Capital & Business Support Limited trying to implement our Mechanized Agriculture and Micro Credit Investment Scheme Rural Development. After trying to implement MAMCIS Programme through a private Trust (MAMCIS) and O-Mobile Multimedia Limited developing Social Enterprise Platforms for working through Regulated Microfinance Banks, we came to the conclusion that MAMCIS Regulatory guidelines are counterproductive to the goals and objectives of MAMCIS
Programme cannot be implemented through CBN regulated Microfinance Banks because the programme in the following ways:
which is not enough time for farmers benefiting from MAMCIS Programme to break even and pay back the MAMCIS loans
2. The prudential guidelines makes it impossible to implement our product life circle moratorium programme which essentially expects our loans to be paid back from proceed from farm and not income from any other business.
days. The amount includes the unpaid principal balance but excludes the accrued interest. Under PAR, loans are considered past due if payment has fallen due and remained unpaid) of CBM practically turns all MAMCIS Loans in the books of a Microfinance bank into a Bad loan and requires the Microfinance Bank to after 91 days on non-performance. make provision for the bad loan from shareholders fund as the loans are considered lost
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4.
The single obligor limit: (The maximum loan by an MFB to any individual
borrower or director, related borrowers shall not exceed 1 percept, and in the case of group borrowers, a maximum of five (5) per cent of the MFBs shareholders fund unimpaired by losses or as may be prescribed by the CBN from time to time. The aggregate insider-related lending at any time shall not exceed five (5) per cent of its shareholders funds unimpaired by losses) makes it impossible for most Microfinance Banks to administer the loans as there shareholders funds are too small to allow the size of the loans we are administering.
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amount of all loans that have at least one instalment past due for one or more
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3. The prudential guidelines of Portfolio At Risk ((PAR): The outstanding principal
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1. The Agric Credit Guarantee Scheme (ACGS) limits the tenor of Agric Loans to 12 Months
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ACBS Limited and O-Mobile Multimedia Limited has now decided to use cooperative approach powered by Social Multimedia Platforms to deliver MAMCIS Programme to members of the Affiliate Cooperatives hence the need for creating NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. Using the cooperative approach allows for the following flexibility in MAMCIS Programme namely: Limits to tenor of Agric Loans of 12 Months 1. MAMCIS Loan can now be tenured longer that 12 months as we no longer have ACGS
2. MAMCIS Loan will come with farm product life circle moratorium programme which from any other business. So essentially MAMCIS Loans will be operated with Product
essentially expects our loans to be paid back from proceed from farm and not income based moratorium depending of the farm circle of the product farmed.
3. Each Participating cooperative will now agree with their Members what interest they
4. Since Cooperative are non-profit, any profit made by the cooperative Unit will help to
THE PROMOTERS AND COOPERATIVES THAT ARE PART OF THIS NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED INCLUDE: 1. RAYSIDA STATE MPCS Limited, Abia, Enugu and Cross Rivers 2. Anambra State Commercial Farmers MULTIMEDIA COOPERATIVE Society Limited 4. Agro-Success-Cooperative Society Limited Enugu State 5. Agro-Success- Cooperative Society Limited Delta State 6. Ekpan Fish Farmers Cooperative Society Limited Warri 7. Agro-Success-Cooperative Society Limited Kogi State 8. Agro-Success- Cooperative Society Limited Cross Rivers State 9. Agro-Success- Cooperative Society Limited Imo State 3. Rivers Cooperative Federation Limited
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10. Agro-Success- Cooperative Society Limited Oshun State 11. Agro-Success- Cooperative Society Limited Bayelsa State 12. Agro-Success- Cooperative Society Limited Rivers State 13. Kogi Women In Agriculture Association Kogi State 14. Agro-Success- Cooperative Society Limited Benin City 15. Union West Africa Cooperative Society Limited Kogi 16. Ogbomosho Mechanized Farmers Multi-Purpose Cooperative Union Limited 17. Oyo State Agro Allied Farmers MULTIMEDIA COOPERATIVE Union Ltd 18. Social Welfare For Widows, The Needy And Unemployed, Abia State 19. Osun State Cass Growers Association
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grow the Cooperative Insurance Services for our members
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will charge there Members. No need to negotiate interest with microfinance Banks.
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20. Oshun State Mechanized Farmers Multi-Purpose Cooperative Union Limited 21. Divine Grace Integrity Cooperative Society Limited 22. Apex Fadama Multi Purpose Cooperative Union Limited 23. Imo God's Favor Cooperative Society Limited 24. Ileoluji Cassava Growers Association Ondo State 25. Inenergy Cooperative Society Limited 26. Akure Ire Akari Cooperative MPCS Limited 27. Ileraloro Fadama Cooperative Agricultural Multimedia 28. Ikoyi Orire MULTIMEDIA COOPERATIVE Society Ltd Society Limited
The ultimate vision is to get over 400 Cooperatives Nationwide to own and operate over
1,200 Social Businesses Units operating with one Unified SecureInvest Cooperative Microfinance Methodology powered by MCOLLECTPLUS Platform.
Microfinance
Institution
in
the
NATIONAL
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O-MOBILE MULTIMEDIA
FEDERATION LIMITED will be an independent cooperative Operating as a Independent Profit
3.2.1
The General Assembly
The SOCIAL BUSINESS network will operate with each co-operative SOCIAL BUSINESS policy and constitution making body of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. The General Assembly shall ratify the appointment of the Board of Trustee to oversee the operations of the President/CEO and Management of the affairs of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. The General Assembly will be made up of all members of the Board of all cooperative members of the Federation 3.2.2
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NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Board of Trustee will oversee the President/CEO and Management of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. The Board of Trustee will be a nine (9) member Board. The Board will have a Chairman known as the Chairman Board of Trustee who will
also Chair the General Assembly. The initial Board of Trustee of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be appointed by the founders at inception and the appointment will be ratified in the first General Assembly. If any vacancy exists thereafter or an existing member no longer qualifies to serve in the board, a new
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The Board Of Trustee
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running as a QUASI SBU/Independent Profit Centre. The General Assembly is the highest
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3.2
Organizational structure
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Center.
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Each of the Cooperative COOPERATIVE
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board member will be appointed by the exiting board and ratified by the General Assembly in the next General Assembly. The Trustee will meet as often as needed to deliberate and provide direction for the entire operations The of NATIONAL will O-MOBILE MULTIMEDIA and COOPERATIVE FEDERATION LIMITED. Trustee appoint President/CEO
3.2.3
Board of Directors of the National SOCIAL BUSINESS
The Trustee will also appoint a Board of Directors for the National SOCIAL BUSINESS to MULTIMEDIA COOPERATIVE FEDERATION LIMITED as applicable to the day to day operations of the National SOCIAL BUSINESS. Directors.
provide specific direction for the President/CEO and Management of NATIONAL O-MOBILE The Board of Directors will be a nine (9)
3.2.4
The Board of Advisers of Each Independent Profit Operation
All member Cooperatives will appoint a Board of Advisers for each independent SOCIAL BUSINESS Operations. This advisory board will provide advisory services for the operations of each COOPERATIVE Business. They advise the Board of the Cooperative about the National COOPERATIVE on the operations of the COOPERATIVE Operations. They do not Board of Advisers. operations of the SOCIAL BUSINESS operations and also advice the Management of the have executive powers. This Board will also be chaired by a Chairman COOPERATIVE
3.3 BOARD & GOVERNANCE NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE SOCIETY FEDERATION LIMITED
The Board of Trustee shall be primarily responsible for enforcing corporate governance of the NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE SOCIETY FEDERATION while the job
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of enforcing corporate governance in the National SOCIAL BUSINESS operations will be delegated by the Board of Trustee to the COOPERATIVE Board of Directors. Enforcing corporate governance in the Independent COOPERATIVE operations will be delegated by the Board of Directors to the Independent COOPERATIVE Board of Advisers. The President/CEO and his management team will be responsible for implementing the decisions of the Board of Trustee and the Board of Directors. The Boards and Management shall be constituted of persons of high integrity and unquestionable financial strength. The boards collectively shall be responsible for establishing strategic objectives, policies and procedures that would guide the activities of the bank. They shall also oversee and monitor the banks management performances.
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member Board and will have a Chairman known as Chairman COOPERATIVE Board of
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Management of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED.
3.4
Products & services O-Mobile COOPERATIVE business is a development and financial service business that centers on the mobilization and allocation of funds for the benefit of members of the Cooperatives who are members of the Federation. The major products of NATIONAL OMOBILE MULTIMEDIA COOPERATIVE SOCIETY FEDERATION will be deposits mobilized from individuals, groups, cooperatives, corporate organizations and donor agencies. NATIONAL
accept public deposit as we will operate as a COOPERATIVE for our Members only. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE SOCIETY FEDERATION will also not SOCIETY FEDERATION will only provide development and financial services to members of engage in Foreign Exchange Services. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE each member Cooperative. The lending facilities using the SecureInvest Methodology will be customized to suit the needs of members. Other services that NATIONAL O-MOBILE I. Payment services such as salary, gratuity, and pension for the various tiers of government. This service will be an Agency Banking Service of our regulated FEDERATION is only marketing this service as a Channel partner of our sister regulated Microfinance Bank. banks; case may be. II. Cash pick-up services/collection on behalf of its members through correspondent III. Local electronic money transfers within our network or correspondent banks as the IV. Promoting and monitoring loan usage among its members by providing ancillary capacity building in areas such as record keeping and small business management. V. Issuance of redeemable debentures to members to raise funds from members; VI. Provision of Cooperative Microfinance related guarantees for members to enable them have greater access to credit and other resources; Microfinance Bank. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE SOCIETY MULTIMEDIA COOPERATIVE SOCIETY FEDERATION will provide include:
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VIII. Provision of professional advice to poor persons regarding investments in small businesses; rendering managerial, marketing, technical and administrative advice to members and assisting them in obtaining services in such fields; enterprises; and related business development services such as co-operatives and group formation
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VII. Encouragement of investment in cottage industries and income generating projects for members;
IX. Mobilize and provide financial and technical assistance and training to microX. Performance of non-COOPERATIVE functions that relate to Cooperative Microfinance
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O-MOBILE MULTIMEDIA COOPERATIVE SOCIETY FEDERATION SOCIAL BUSINESS will not
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activities, rural enterprises.
industrialization and other support services needed
by micro
NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE SOCIETY FEDERATION also will be positioned to review and update her products and services to meet changing market demands and taste from time to time. Generally, three basic features distinguish Cooperative Microfinance products from other formal financial products. These are: (i) (ii) (iii) (iv) The smallness of loans advanced and or savings collected. Cooperative Microfinance Banking practice
The absence of traditional asset-based collateral. Character is an Asset in real Transactions usually based on existing or projected Cash flow of the SME
Robust Information Technology and Payment Infrastructure is very critical for the success of a real Micro Finance Operations in other to track cash flow and possible take repayment or savings before the cash get into the operations of the SME
4.0
4.1
Transformation plan
METHODOLOGY FOR IMPLEMENTING THE MISSION OF NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED
Since we are no longer using CBN Agric Credit Guarantee Scheme (ACGS) Guarantee to secure 75% of fund from our offshore funder as earlier proposed, we now need to develop Methodology. (For details of how SecureInvest will work, please see Appendix 1). NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE SOCIETY FEDERATION SOCIAL BUSINESS SecureInvest Methodology is powered by a robust central information technology platform called MCOLLECTPLUS Platform powered by MFIFLEX Platform. MCOLLECTPLUS Platform is used for providing efficient services to RAYSIDA Members at a lower cost. This MCOLLECTPLUS Platform SOCIAL BUSINESS will effectively cover very rural areas in methodology will also enhance productivity and facilitate growth of the economy. our own Credit Guarantee Programme. That Credit Guarantee Programme is SecureInvest
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Nigeria within three years of operations. The MCOLLECTPLUS diagram bellow shows the platform architecture
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NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be National No 90 of 1093 as Gazetted. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION Regulated Microfinance Bank and grow it to a National Microfinance Bank. 4.3 Shareholders
The shareholders of NATIONAL O-MOBILE MULTIMEDIA Cooperatives in the General Assembly. 4.4
Co op
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LIMITED will participate in the current CBN regulatory framework through investment is a
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Social Cooperative Network within the Nigerian Cooperative Society Degree and Regulation
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4.2
Organizational form
LIMITED will be members of Cooperative members of the Federation represented by their
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National O-Mobile Multimedia Cooperative Federation Limited Directors The Board will be formed and regulated in accordance to the NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Constitution. The following consultants have been working with Mr Benjamin Aduli to develop the NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Model is proposed as the first NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Board of Directors. Their names and any other names added will be sent to the NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Board Of Trustee as soon as they are constituted and letter ratified at the first General Assembly.
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COOPERATIVE FEDERATION
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1. Mr. TOCHUKWU KEMAKOLAM
TOCHUKWU KEMAKOLAM holds a Masters degree in Business Administration (Finance) from Aston Business School, Birmingham, United Kingdom. He also has a law degree from the University of Nigeria and has been called to the Nigerian Bar. He is a member of the
Chartered Management Institute UK. Mr. Kemakolam holds a certification in Strategic Management from Kensington University, USA. He participated in an exchange programme with the Groupe ESC Rouen, France. He has extensive research interests in Efficient Market Standi. Mr. Kemakolam has held strategic positions in FutureView at various times which have contributed to his immense experience and expertise. He was the pioneer Manager of Equities Market at different times. He has been the Company Secretary/Legal Adviser since the Abuja Branch of the Company and was also the Head of Capital Market and Head of Hypothesis, Pecking Order Hypothesis, Corporate Governance and the Doctrine of Locus
2. MRS OLANREWAJU ONIYITAN
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Olanrewaju Oniyitan is the Founder/CEO of W-Holistic Business Solutions. Prior to establishing the firm, she worked in the capacity of Head, Strategy and Business Development and as a Senior Consultant, with most of her career at KPMG Professional Services under the Business Advisory Services unit and Risk Management unit. Her consulting experience covers a wide variety of businesses, associations and international development agencies of varying sizes and in various sectors. Over the years, Lanre has guest lectured at top enterprise development Centres, developed numerous business plans, and written several articles on entrepreneurship, business planning, capital raising and the overall business operating environment. Lanre is also an independent consultant to ENABLE Nigeria, a Department for International Development (DFID -UK)/Adam Smith International initiative set up to strengthen Business Membership Organizations in Nigeria.
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2002 and is also the Head, Corporate Finance.
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Lanre holds a First Class degree in Business Administration, is a Certified Business Development Analyst (CBDA) and an Associate Accounting Technician (AAT). She is a graduate member of CEM 15/BET 1, an entrepreneurial programme inaugurated by the Pan African University, under the auspices of the Enterprise Development Centre (EDC). She is (IFC), a member of the World Bank Group. also a Certified SMEToolkit trainer, as awarded by the International Finance Corporation
Lanre is a seasoned writer, professional speaker, trainer, consultant and an enterprise early stage companies prepare for significant growth. 3. Benjamin Aduli
advocate. She particularly enjoys helping people start-up their businesses and also assisting
Mr. Aduli is the Managing Director /Chief Executive Officer. He is a certified ecommerce Business from the take-off of initial e-Business appreciation in the country. He is an I-direct Certified VSAT System Solution Developer, and a Content Management System Analyst and Designer. He was a research consultant with Growing Businesses Foundation, an organization dedicated to designing and initiating new drives for Micro financing. He was also the Unit Head (Micro Credit) with STC Elinex Limited He worked as Smartcard systems for Micro Credit Sub Sector. the coordinator for marketing as well as designing marketing strategies and suitable
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He is presently the Vice Chairman of Africa Capital & Business Support Limited and a director is the following Businesses: Mechanized Agricultural Investment Services Limited (Nigeria) Mainsail Trading Pty Limited (South Africa) Mainsail Investment Pte Limited (Singapore) Mainsail Trading Limited (Dubai) Global Reach Investment Limited (Dubai) Homeland Africa Plus Limited (Nigeria)
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solution developer that has been involved in many strategic operations in the Nigerian
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ENational O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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4. Mr. Chuks Chukwuocha Mr. CHUKWUOCHA M. CHUKS is a renowned strategist and policy advocate and has served with several organizations in various managerial capacities. He joined Global Partners & co. Ltd as an associate consultant in 1999, from where he later moved to Gold point consults Ltd. in a parallel capacity. He rose to become the project manager of Tritune Nigeria ltd, a subsidiary of the Gold point Group. He was later seconded to another subsidiary of the group TAMC, as head IT Department, whilst providing backup for the business development point group Vital Telecommunications Ltd as the managing Director.
unit of the group. He later moved up to head the start-up of the telecom arm of the Gold His expertise cuts across various fields of endeavor such as business development, project attended and participated in several management and entrepreneurial development training programmes. 5. Mr. Joel Omeike
experience covering generalist, specialist and lead roles in the Consulting, Financial, and Construction & Telecoms Sectors. Joel is a Business School Netherlands Graduate and highly successful business man and entrepreneur. He is a Project Management Professional (PMP) and a Certified Senior Facilitator, and Coach/Mentor, on national and West African conferences. He has developed Professional HR Manager (SPHR). He is sought after as a Key Note Speaker, Trainer, several Business Plans & Models, HR Performance Management models, HR solutions & applications, High profile training curriculum and development models. He is the author of the 100 Days Goals Achievement and Career Decisions! books. He serves on the Board of Auxesis Management School (AMS) an MSME Development Academy, Bosworth Analytics best practice HR Professionals, and P4PE an Initiative for Passion for Professional Excellence development. Drawing on his experience as a consultant (MCS, PMG & Workforce), a corporate manager (NNB, Sterling Bank & Servetek Engineering), and a professional HR practitioner, he provides customized business advisory services and training on topics such as Professional Excellence, People Management & Leadership, Business Modeling & Planning and
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a Business Intelligence Analysis firm, HR Network Africa an international community of
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Joel is a seasoned Business Advisor, MLM and HR Expert with over 15 years deep end
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structuring, negotiation, administration and management, ICT, strategy and policy. He has
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Organizational Development amongst others. To learn more about Joel Omeikes work and to sign up for P4PE Weekly, his free weekly inspirational email list, visit www.p4pe.com or email info@p4pe.com 6. MR. CHINEDU ACHUNINE
Chinedu is a consultant and currently runs Whattodonext Limited an MSME focused Management, Customer Care, Creative Thinking amongst others. He facilitates in different areas including entrepreneurship, financial management, customer care, work ethics. He experience. Have worked variously in different capacities and in different sectors as Head of Services Limited, Head of Admin/Finance Manager at Communications Towers Limited payment solutions, and mobile money. He has consulted for various companies in diverse sectors adding up to a vast pool of experience base 7. MR. TEMITOPE ODUTOLA has over 10 years of consulting experience. Proactive, creative and detailed with diverse Business Development at Robert Johnson Technologies Limited, General manager at Paging
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Temitayo commenced his career in Diamond Bank in 1999. There he acquired significant cross functional COOPERATIVE experience and his interests in MSME Business Advisory and Micro-Lending. Prior to his departure for an MBA education in 2007, he oversaw the phenomenal rise of Isolo branch to the 4th position (out of 133 branches) in his last role as Manager of the branch.
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amongst others. He has vast experience in the e-payment industry including hardware, e-
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Post MBA, Temitayo secured his internship with Serco Consulting the number one public sector consulting firm in UK and subsequently moved to OAD Management Consulting, UK where he led various consulting projects involving various developmental finance RAYSIDA Members in the UK and East Africa; these include Cooperative Microfinance Doclands UK Ltd, Fair-trade Finance Consortium, Paragon Mortgages , Baratt Homes UK & KIVA. Project Experience both home and abroad include Due Diligence, Strategy formulation/ Implementation, New Market/Product Development, Customer Experience Management, Credit Risk and Business Process Assurance. An Associate of the Institute of Credit Management UK, his interests also include Business Planning and Development of Policy Manuals (CGAP Standard) for MFIs and associated businesses. Temitayo is an avid Esteemed Edward De Bono Institute for the Design and Development of Thinking, University of Malta. He is currently a Senior Partner at HB & A Advisory Partners Limited, a niche MSME consultancy in Lagos Nigeria. 8. Mr. Nkemdilim Iheanacho
proponent of Creative Thinking and holds a Certificate in Lateral Thinking from the
where he leads sessions in strategy and competitiveness in executive programs and also a Researcher in the Lagos Business Schools Centre for Competitiveness and Strategy. His research and consulting interests are in those factors that lead to the increased competitiveness of firms, industries, regions and nations. He is currently attending PhD Specialization Seminars in the area of Competitive Strategy with interests in how resource complementarities confer competitive advantage. He has had prior experience in COOPERATIVE as a Relationship Manager in the Multilateral, Conglomerates and COOPERATIVE Group, as an Investment Banker where he was involved in Project finance, Mergers and Acquisitions and financial advisory and as a Consultant in THE BLUE CAPITAL Professional Services where he was involved in business advisory engagements to large multinationals and local corporates. His current consulting work span companies in the financial services industry, telecommunications, consumer markets and retail.
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4.5
Organogram & Responsibilities of Key Management
(O-Mobile Board Of Trustee) Chairman (??????????)
President/CEO Benjamin Aduli
CMO/CBDO Chinedu Achunine Perk Elijah Tony Nwalike
COO Wola Ajijola Victor Amushan
CIO/CTO Joel Omeiki Onyemn Ifendi
CFO/Internal Control Chuks Chukwuocha
Virtual Channel Director Lanre Oniyitan
Virtual Channel Director Joel Omieke
Virtual Channel Director Tony Nwakeli
Virtual Channel Director
Chinedu Acgunine
State Regional Managers
Independent Cell Bank Managers
Independent Bank Agency Center Managers
5.1
Institutional Analysis
5.1.1 Strengths
Cooperative business is a development focused business and most of the services are homogenous Nigeria, their products and services must be highly standardized and competitively giving members following:
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real value. Towards this end O-Mobile Cooperative federation strength will revolve around the O-Mobile COOPERATIVE Business Unit will be well capitalized to meet the needs of the environment within which members operates. With an initial target capital of N2 Billion from the membership of over 400 member Cooperatives Society Federation and new capital injection of over N5 Billion from partners offshore, O-Mobile Cooperative Society can effectively meet her Cooperative finance needs of members building strong loyalty from members nationwide. O-Mobile COOPERATIVE Business Unit Funds invested in SecureInvest Fund will also provide back to back credit which not only insures investors funds, but also provides good returns on the investments for O-Mobile Cooperative Funds. National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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within several industry sectors. For any cooperative organization to survive within the present
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5.0 Strategic Plan
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State General Manager
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Benjamin Aduli
State General Manager State General Manager
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(Interim O-Mobile Private banking Board Of Directors) Tochukwu Kemekolam (Chairman) Benjamin Aduli Lanry Oniyitan Joel Omeike Chinedu Achunine Nkemdilim Iheanachor Alex Nwauba Chuks Chukwuocha Okey Ezeogu (Coop Sec)
Highly initiative and participative management: the SOCIAL BUSINESS management will be readily available to take timely decisions on members request so as to remove the existing bureaucracy observed in the market. In addition, the management will ensure that the banks policies are reviewed to suit the customers needs as it arises. Aggressive and personalized marketing relationships: The marketing team will be made of identify and make recommendations on satisfying the needs of the customers. They shall
highly motivated staff with entrepreneurship interests. The team will from time to time
establish and maintain cordial relationships with NATIONAL O-MOBILE MULTIMEDIA reach of the customer. Staff training and development: NATIONAL O-MOBILE
COOPERATIVE FEDERATION LIMITED Members and ensure that they are always within the MULTIMEDIA COOPERATIVE
FEDERATION LIMITED will from time to time involve the field employees in training programmes that will enhance their productivity and organizational growth. Information technology: NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will also use good technological network to reduce time, and cost of managing the customers information. Todays COOPERATIVE business is electronically driven. NATIONAL developments in the world of COOPERATIVE and adapt with time.
5.1.2 Weaknesses
There are certain drawbacks which NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED may however encounter during the course of operations. Amongst these are: In ability of Cooperative Banks to support micro enterprises. Absence of support institutions in the sector. controls, poor credit administration and asset quality. Incompetent management, poor corporate governance, insider abuse, weak internal Low management capacity of clients.
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5.1.3
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Opportunities
The challenges of the Cooperative Microfinance industry provide ample opportunities for investors. There is a wide level of unserved markets in the Cooperative Microfinance industry. The enabling policy regulating the operations of the industry is such that will encourage not only investors, but also the entrepreneurs. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be able to create a forte within the environment through efficiency in the service and products they offer.
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O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will keep abreast of current
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Since the target is the low income earners and the poor, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be able to bridge the perceived gap that exists in the market by ensuring that relationships with members are highly personalized so as to impose confidence in the members and build their COOPERATIVE habits.
5.1.4 Threats/Constraints
environment of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED is general lack of confidence in the existing Banking culture in Nigeria. Although some formal (Commercial/Universal/Community) banks are already cited in the area, the driving force
Federation. Most of the existing banks have not been able to satisfy the financial needs of the entrepreneurs due to existing regulations and requirements for granting credits. Hence, with their present banks and move the banking operations O-Mobile SOCIAL BUSINESS Operation. there is tendency that some of the existing cooperative members may decide not to stay
NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED plans to mitigate this by undertaking aggressive membership mobilization before introducing NATIONAL OO-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will provide customary and sustainable growth of the SOCIAL BUSINESS operation. Lack of independent funds for lending: The primary focus of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED is to lend to the less privileged but productive sector of the economy. The ability of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED to effectively discharge its functions to achieve this target will depend on a large extent, on their ability to mobilize deposits. In addition to mobilizing funds from members, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will use the Regulated National Microfinance Bank to Mobilize Funds from the Public for on lending to our members. The CBN from time to time reviews the ratio MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED is always abreast of these changes. MFBs are presently excluded from mobilizing government funds, which is one of the cheapest sources of funds in the industry. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will therefore be posed with the challenge of out sourcing funds raising to meet the needs of our members. However, NATIONAL O-MOBILE National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization) of funds that could be made available for lending which will necessitate that NATIONAL OMOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED to them. In addition, NATIONAL personalized COOPERATIVE services that will enhance the relationship and guarantee
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centres on the O-Mobile COOPERATIVE confidence of the Members of the members of the
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Confidence: One of the major constraints identified and peculiar to the proposed operating
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MULTIMEDIA COOPERATIVE FEDERATION LIMITED has put in place strategy that will enable her source funds from social investors like PayPal Company Microplace with keen interest in fostering development in the poor areas. NATIONAL O-MOBILE MULTIMEDIA Limited Multimedia Business Academy will also be used to generate fund for investment and credit purposes for members. Accurate data on NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED area, it may be difficult to get good or genuine information about the customer. This is
because the area is still developing and layout of the town is not organized. This may lead to inability to trace and monitor credit members which may in turn lead to high loan NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED members.
defaults. Although then CBN has in its policies incorporated the Know Your Customer rule, use of our biometric solution to checkmate the possibility of granting facilities to ghost Information dissemination and standard setting Apex Institution: As the apex of the Federation, order to allow for uniformity in the industry, the regulatory authorities will need Similarly, standards to be kept should be flexible to meet the needs of the operational to keep the banks abreast of new initiatives and policies that will improve their operations. environment.
Technical skills- as regulators; as operators and as members: The COOPERATIVE relationship is tripartite and requires that all parties must work in consonance towards NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will from time to time train the staffs of the SOCIAL BUSINESS affiliate operation on the modalities of their operations to meet the objectives of the policy. Certification of Senior management of MFBs: The CBN has set the requirements for filling standards may be scared off as they will not be able to have good control of the affairs of attaining the common goal of the bank. Since this is a new initiative, it is expected that the
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the bank. In this regard, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will ensure that the management of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED get the needed industry certification as they have to move from O-Mobile SOCIAL BUSINESS to CBN regulated Microfinance Banking from time to time.
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5.2
Analysis of environment
A cursory analysis of the economic indices that revolve around Microfinance in 2005 revealed amongst others that: The share of micro credit as a percentage of total credit was 0.9%, while it contributed a meager 0.2 percent of the GDP.
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top management positions of MFBs. Towards this end, investors that do not meet these
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will employ the
Members Biometric Identity Solution: Due to the perceived low level of literacy in the
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70.2% of the population lives on less than $1 a day. Existing community banks and other Microfinance institutions had weak institutional and managerial capacity to meet existing market demands. The existing capital base of Microfinance institutions e.g. Microfinance Banks, which N20.0 million, is too small and grossly inadequate to meet the challenges of the ever growing market.
5.2.1 Place of operations
NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will carry out its operations as a Direct Bank offering services through Member COOPERATIVE Network. It will offer its financial services by: 5.3 Member Cooperative Banking Member Cooperative Agency Banking Mobile Telephone banking Internet banking Human Teller Machines POS Terminal Banking
Automatic Teller Machines (often through interbank network alliances)
Competition
NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be the first Social Enterprise Cooperative Microfinance Institution in leveraging direct Channels to market her products and services to members of the cooperative. Although a number of banks already exist within the Microfinance environs, most of these banks have not been able to meet the Microfinance needs of the market. The presence of these Banks in the MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED PRIVATE and Public BANKING as environments is not likely to pose any significant threat to the operations of NATIONAL Omost of them render Micro Commercial Banking services rather than real Micro credit services. There is no known existing COOPERATIVE MICROFINANCE INSTITUTION in Nigeria using Social Media to pioneer this new drive in the market. Where these informal institutions cannot understand the power of social media and how to use it to meet their goals, it will create a good opportunity for the NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED to woo the businesses as channel partners. In addition, these NGOMFIs form a major target of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED operations as they are closer to the masses and have better knowledge of their operations. It is expected that NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will work with these informal institutions and help them to tap into the power of Social Media. National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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5.4
Collaborators NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will work with the Microfinance Bank that invest in and their corresponding bank in performing other COOPERATIVE functions that are statutory not within the ambit of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED operations eg cheque clearing and international businesses. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED amongst others will: Invest surplus funds of the Our Regulated MICROFINANCE Bank; Maintain and operate various types of account with other banks in Nigeria;
Work with other NGO-MFI, cooperatives and developmental associations to help mobilize funds from the public and also facilitate the monitoring of facilities granted. Other collaborators in the scheme includes: o o o o o o o o o o o o o o o o o o o o o Project Management Consultant Correspondent banks Cooperative societies Development Associations Other Financial Advisers Legal Council Trustee Custodian Issuing House
Lead Financial Adviser/Fund Raising Programme Managers
Microfinance Software As A Service Providers Card Management Software Provider Credit Bureau Platform Provider Network Provider
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5.5
Regulatory factors The policy guiding the MFBs is in line with the powers conferred on the Central Bank of
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Nigeria by the provisions of Section 28, sub-section (1) (b) of the CBN Act 24 of 1991 [as National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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Card Issuing COOPERATIVE Partner Card Issuing Platform Partner Lasing Partner Insurance Annuity Provider National COOPERATIVE MICROFINANCE INSTITUTION Switching Partner Identity Solution Software As A Service (KYC) Strategic Social Investors
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amended] and in pursuance of the provisions of Sections 56-60(a) of the Banks and Other financial Institutions Act [BOFIA] 25 of 1991 [as amended]. However this will only be applicable to the Regulated Microfinance Banks that NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED invest in NOT the operations of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED itself.
financial gap between people, who never had access to such services before doubtlessly, simplifies all the operations of the MFBs and NATIONAL O-MOBILE
requires the support of government and those of regulatory authorities. The policy thus COOPERATIVE FEDERATION LIMITED will ensure that its operations conform to the set
standards of the CBN as long as it does not hamper our ability to serve our members. The CBN in the policy has put in place some incentives, which will enable the MFBs meet the FEDERATION LIMITED will use the investment in a regulated Microfinance Bank to access these benefit.
5.5.1 VAT
As part of the regulatory incentive to the MFBs, the CBN shall collaborate with the transactions, such as exemption from value added tax (VAT) on lending, or tax on interest NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED itself.
5.5.2
Tax
Similarly, the regulatory guideline stipulates that any MICROFINANCE INSTITUTION that
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5.5.3
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does not distribute its net surplus but ploughs it back and reinvests the surplus to finance more economically beneficial micro, small and medium entrepreneurship, shall be exempted from profit tax. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED being a business unit if a Non-Profit organization will hinge on this incentive to expand its operation and sustain a steady growth pattern. However, the board of Trustee will from
time to time review and recommend any portion of profits to distribute to the shareholders
as returns for approval by the General Assembly.
Rediscounting & Refinancing facility
Furthermore, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will utilize Rediscounting and Refinancing Facility (RRF) made available to Regulated MFBs for National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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income or revenue. Again this only applicable to the regulated Microfinance Bank and not to
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appropriate fiscal authorities in providing a favorable tax treatment of MFBs financial
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target and objectives of the policy. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE
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MULTIMEDIA
The new window of opportunity for the emerging Cooperative Microfinance Bank in bridging
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purposes of providing liquidity assistance to support and promote member Cooperatives programmes. This would be accessible in accordance with the CBN prudential requirements for the Regulated Microfinance bank that we invest in. These facilities will enable NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED to, on a sustainable basis, provide and render micro credits and other services to our members.
6.1
Markets & customers
The target markets of NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION COOPERATIVE FEDERATION LIMITED will not market our services to any one directly.
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NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be involved in indirect marketing through our member cooperatives. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will also work with Channel Partners who will be marketing the member cooperatives. This way, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will be in a better position to identify the needs of the members and project on their growth potentials. It will also impose more confidence on the members and foster their relationships with the SOCIAL BUSINESS and other financial and
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6.2
Marketing channels
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LIMITED are members of member cooperatives. NATIONAL O-MOBILE MULTIMEDIA
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6.0
Operational plans
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non-financial services provided by NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED. 6.3 Products and services Generally, a Cooperative Microfinance loan will be granted to member operators of microsalaried workers in the formal and informal sectors. The said loans are usually unsecured,
enterprises, such as peasant farmers, artisans, fishermen, women, senior citizens and nonbut typically granted based on the applicants character and the combined cash flow of the
business and household. Ordinarily, the tenure of Cooperative Microfinance loans is 180 days [6 months]. However, in the case of crops with longer gestation period, a maximum require joint and several guarantees of one or more persons. The repayment may be on a daily, weekly, bi-monthly or monthly basis in accordance with amortization schedule in the loan contract. Specific products that we have developed under this methodology include:
6.3.1 Loan Product 1: e.g. MCOLLECTPLUS O-Mobile Account
Agric Business loans will be made available to NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED Members with good projected cash flows. This facility is to enable them boost their working capital and take opportunity of seasonal market days or 90 days. They are usually in form of overdraft facilities. Interest rates are fixed in COOPERATIVE FEDERATION LIMITED. Fees charged will be determined by the management.
6.3.2 Loan Product 2: e.g. MCOLLECTPLUS O-MobileMAMCIS Agric Lease Account
Under the lease portfolio, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION consortium lending and supervise credit schemes to ensure access of Cooperative members
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to inputs for their economic activities. Leasing facilities could be to hire agricultural machines for cultivating, buildings, and other capital-intensive assets that would be above the near reach of the entrepreneur.
Loan product 3: e.g. MCOLLECTPLUS O-MobileMAMCIS Trade Account
NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED COOPERATIVE will be involved in buying, selling, supplying industrial and agricultural inputs, livestock, machinery and industrial raw materials for members on credit. NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED shall also act as agent for any members for the sale of such goods or livestock.
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LIMITED
will operate micro leasing facilities, Cooperative related hire purchase, arrange
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line with cost of funds and the Credit policies of NATIONAL O-MOBILE MULTIMEDIA
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changes that may arise. These loans could be granted for periods ranging from 30 days, 60
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tenure of twelve [12] months shall be permitted. Our Cooperative Microfinance loans may
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6.3.4
Current product 1: e.g. MCOLLECTPLUS Current Account
Current accounts are usually ideal to facilitate third party transactions and payments. They attract interest rates from the members which are usually in form of commissions on turnover. This product is ideal for business transactions and for individuals, groups or entities with steady income and potentials for growth. This may be disincentive to the poor but it is necessary for credit processes. Usually, it is only current accounts that can be used to process loans.
6.3.5 Savings product 2: e.g. MCOLLECTPLUS fixed deposit Account
Fixed deposits are tenured funds which earn interest as returns to the investors, deposits could be on call, 7 days, 30 days, 60 days etc. it could also be revolving. Fixed deposits will enable NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED to make COOPERATIVE FEDERATION LIMITED is certain of the duration for which such funds may be
adequate projections on its financial needs because NATIONAL O-MOBILE MULTIMEDIA made available to them. These funds are usually borrowed out to members for other investment purposes. These deposits are interest sensitive. Higher rates attract more funds. from time to time match her interest portfolio with other banks and ensure that it makes However, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED wills adequate returns from funds placed. The target group are mainly high net worth members.
6.3.6 Savings product 3: e.g. MCOLLECTPLUS Non Secure Savings Account
This is the conventional savings account targeted at the low income earners, students, civil servants, etc. It is applicable to all strata of age and business. It attracts interest to the customers. It is also a good source of funds if well harnessed. 7.0 Initial Start-Up Financial Summary
REGULATORY REQUIREMENT
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Initial Start-Up
Amount(N) 2,000,000,000.00 3,000,000,000.00 5,000,000,000.00 65,000,000,000.00 75,000,000,000.00 TOTAL
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Target Tier 1A Capital (Member MFBs Capital) Target Tier 1B Capital (New Onshore Capital Investment) Target Tier 1C Capital (New Offshore Capital Investment) Target Tier 1D Capital (Preference Non-Voting Share Capital) Total Target Capital Base
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Cost of Raising Tier 1A Capital Legal/Documentation/Filing Total
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100,000,000.00 50,000,000.00 150,000,000.00
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150,000,000.00
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Rent/Land and Buildings Refurbishment of building Total
15,000,000.00 5,000,000.00 20,000,000.00 20,000,000.00
Generator Office machines Furniture & fixtures ( Office ) Vehicles Communications Computers Total
2,500,000.00 2,000,000.00 5,000,000.00 10,000,000.00 5,000,000.00 3,000,000.00 27,500,000.00
KYC Solution Remote Transaction Systems for Micro Credit Management Total MFB Business Process Provisioning Consulting Development of MFB Methodology Initial MFB Process/Methodology Training Business Plan Development Total
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2,500,000.00 2,500,000.00
Full Internet / Mobile COOPERATIVE Application
5,000,000.00
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30 200.00 6 60,000,000.00
GRADE COST CTER Sal/M MD OFR OPS OPS 478,203.22 30,332.58
10,000,000.00
20,000,000.00 6,000.00 5,000,000.00 25,006,000.00
Working capital Regional Offices Total
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1,000,000,000.00 360,000,000.00 1,360,000,000.00 76,607,506,000.00
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8.0
The initial staff requirement of RAYSIDA COOPERATIVE and their emoluments is as presented below.
GROUP/DEPT MD's OFFICE Chief Executive PA/Secretary/Receptionist
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GRAND TOTAL
Personnel Plan
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WHO
ROLE
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Others/M Travel/M 374,509.48 40,917.03 858,666.67 -
Vacant Vacant
President
Management Services
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27,500,000.00 10,000,000.00 15,000,000.00
Join Date M1 M1
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HCM Executive Director FINANCE Account Officer Head Internal/Fin Control Head, credit and Treasury TECHNOLOGY Installation & Maintenance Sys Analyst/Programmers
Vacant Vacant
SM ED
GEN GEN
177,720.31 427,176.36
145,380.41 332,359.93
214,666.67 644,000.00
M3 M3
Vacant Vacant Vacant
OFR SM MGR
GEN GEN GEN
30,332.58 177,720.31 103,914.21
40,917.03 145,380.41 115,464.34
214,666.67 107,333.33
M1 M1 M1
Vacant Vacant
OFR OFR
OPS GEN
30,332.58 30,332.58
40,917.03 40,917.03
M3 M1
MARKETING & OPERATIONS Head Marketing Head Operations Field Staff Field Staff Field Staff Field Staff Field Staff Field Staff Field Staff Field Staff Field Staff Drivers/Secretary Drivers/Secretary Drivers/Secretary Office Assistant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant Vacant CMO MM MGR SO GT GT GT GT GT GT GT GT GT GT GT GT GT Total S&M S&M S&M S&M S&M S&M S&M S&M S&M S&M S&M S&M S&M S&M 103,914.21 46,789.66 22,950.68 22,950.68 22,950.68 22,950.68 22,950.68 22,950.68 22,950.68 22,950.68 22,950.68 22,950.68 22,950.68 22,950.68 22,950.68 115,464.34 47,587.63 37,924.90 37,924.90 37,924.90 37,924.90 37,924.90 37,924.90 37,924.90 37,924.90 37,924.90 37,924.90 37,924.90 37,924.90 37,924.90
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9.1
Our Cooperative Microfinance Methodology
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This THE BLUE CAPITAL services will utilize guaranteed insurance products of Offshore and Onshore Insurance Companies as collateral to enhance debt and equity funding transactions from local and International investment institutions and entrepreneurs. The strategies provide a hedge or principal protection allocation model. The strategies will provide investment professionals and lenders with asset allocation tools that return an amount equal to their principal loan or investment in speculative funding arrangements, real estate transactions or business transactions.
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We will use SecureInvest Business Methodology of THE BLUE CAPITAL Limited. SecureInvest principal protection strategies will make it possible for our members and our Microfinance bank to have the best of two worlds namely: Security of Investments and Loans and Return on investment and Loans. This unique investment options are possible because SecureInvest provide Offshore and Onshore Securitization Products that can guarantee to return an amount equal to 100% of the principal invested or Loaned in an equity or debt funding transaction.
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9.0 Our Cooperative Microfinance Business Methodology
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107,333.33 M1 M1 M1 M1 M1 M1 M1 M1 M1 M1 M1 M6 M1 M1 M1
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9.2
Fundraising/financing Strategy
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The initial startup funds will be raised from our promoting member cooperatives. These principal promoters will form the first group of member cooperatives. This group A shareholders will raise the sum of N50 Million to buy an existing Regulated Microfinance Bank, change the name of the Microfinance Bank to Mosaic Microfinance Bank Limited and immediately start operations as a State Microfinance Bank in Lagos. This Group of Shares will be Non Secured ordinary Shares.
As soon as we get approval CBN for the change in name and ownership of the bank, NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED will develop all the trust structures needed to operate SecureInvest methodology for NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED and the Regulated Microfinance Bank and package a SecureInvest private placement offer to group B investors. This private placement will be marketed to Nigerians both home and abroad and to offshore Social investors. The Shares in the Regulated Microfinance Bank will be secured by SecureInvest Securitization Fund. SecureInvest Trust AG will underwrite this private placement. This means that any shares not sold in this private placement will be acquired and warehoused by SecureInvest Trust AG.
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The SecureInvest strategies were developed to help provide safety and security for investors investing in new or emerging companies in our local community. These strategies encourage banks and institutional lenders or investors in Nigeria to invest in ventures in our community that they previously would have avoided because of the risks involved. Entrepreneurs in our community that will utilize the SecureInvest strategies will found it easier to raise capital because of the benefits offered to investors.
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The benefit to the client company is that they are able to "reach" capital sources on a debt basis that would otherwise not be available to a company in our community, and on cheaper terms. This is an excellent device for risk adverse investment professionals, bridge financing, or permanent forms of financing for new Companies in our communities.
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9.3 Projected financial statements
Revenue
408,604,620
920,731,009
1,536,214,693
2,255,285,936
3,078,175,000
4,005,112,149
Direct Cost
45,540,222
5,321,522
2,321,522
2,321,522
2,321,522
363,064,398 89%
915,409,487 99%
1,533,893,171 100%
2,252,964,414 100%
3,075,853,478
100%
S&M
25,831,827
50,388,147
84,762,331
120,718,893
EBITDA Margin%
282,807,284 69%
860,797,147 93%
1,444,222,895 94%
2,127,337,575
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2,909,085,186 94% 95% 11,138,889 2,897,946,298 94% 23% 94% 27% 2,897,946,298 1,014,281,204 1,883,665,093 4,923,136,168 M10 M11 10,208,578,377 2,321,522 10,206,256,855
SG&A
54,425,287
4,224,193
4,907,945
4,907,945
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161,860,346 4,907,945 2,321,522
Depreciation
8,472,222
9,722,222
9,722,222
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11,138,889 2,116,198,686 93% 32% 2,116,198,686 740,669,540 1,375,529,146 3,039,471,075 8,757,946,857 2,321,522 8,755,625,335
274,335,062 67% 68%
851,074,925 92% 41%
1,434,500,673
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274,335,062
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851,074,925
1,434,500,673
96,017,272
297,876,224
502,075,235
178,317,790
553,198,701
932,425,437
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178,317,790
731,516,491
1,663,941,928
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Income Statement M7 M8 M9 M12
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Revenue
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5,036,327,646
6,172,051,754
7,412,514,737
Direct Cost
2,321,522
2,321,522
2,321,522
Gross profit
5,034,006,124
6,169,730,232
7,410,193,215
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2,321,522 4,002,790,627 100% 208,268,079 4,907,945 3,789,614,603 95% 12,388,889 3,777,225,714 94% 21% 3,777,225,714 1,322,029,000 2,455,196,714 7,378,332,882 11,764,639,561 11,762,318,039
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Income Statement
M1
M2
M3
M4
M5
M6
Margin%
100%
100%
100%
100%
100%
100%
S&M
259,828,854
316,615,059
378,638,209
445,909,815
518,441,391
596,244,450
SG&A
4,907,945
4,907,945
4,907,945
4,907,945
4,907,945
4,907,945
EBITDA Margin%
4,769,269,325 95%
5,848,207,228 95%
7,026,647,061 95%
8,304,807,575 95%
9,682,907,519 95%
11,161,165,644
95%
Depreciation
12,638,889
13,888,889
13,888,889
15,138,889
15,138,889
4,756,630,436 94% 18%
5,834,318,339 95% 17%
7,012,758,172 95% 15%
8,289,668,686 95% 14%
9,667,768,630
95% 13%
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9,667,768,630 3,383,719,021 6,284,049,610 30,493,076,652 Y4 30,731,164,795 36,457,199 30,694,707,596 100% 1,744,320,621 241,960,137 461,357,906,004 1501% 19,166,667 461,338,739,338 1501% 50% -
1,664,820,653
2,042,011,419
2,454,465,360
2,901,384,040
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100% 1243% 1243% 50%
4,756,630,436
5,834,318,339
7,012,758,172
8,289,668,686
Income Statement
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Year 1 to 5 Summary
Y1
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10,470,142,665
14,262,449,585
18,820,742,397
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24,209,027,043 Y3 18,620,894,137 33,142,908 18,587,751,229 1,097,254,612 192,087,995 231,401,064,449 19,166,667 231,381,897,783
3,091,809,783
3,792,306,920
4,558,292,812
5,388,284,646
Revenue Direct Cost Gross profit Margin% S&M
2,865,550,322
9,338,573,085
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25,326,964
27,619,090 9,310,953,995 100% 599,896,578 156,675,920 116,130,930,798 1244% 19,166,667 116,111,764,132 1243% 50%
2,840,223,358
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231,922,799 107,485,185
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SG&A EBITDA
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58,206,869,041 2031% 19,166,667 58,187,702,374 2031% 50%
Margin%
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Depreciation EBIT Margin% EBIT Growth Rate
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16,388,889 11,144,776,755 95% 81% 11,144,776,755 3,900,671,864 7,244,104,891 37,737,181,543 Y5 61,556,182,339 43,748,639 61,512,433,701 100% 3,337,512,094 302,441,057 920,588,474,433 1496% 149,666,667 920,438,807,766 1495% -
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Profit/Loss Before Tax Taxation Profit/Loss Before Tax (Month) Profit/Loss Before Tax (YTD)
58,187,702,374 20,365,695,831
116,111,764,132 40,639,117,446
231,381,897,783 80,983,664,224
461,338,739,338 161,468,558,768
920,438,807,766 322,153,582,718
37,822,006,543
75,472,646,685
150,398,233,559
299,870,180,569
598,285,225,048
75,559,188,087
151,031,834,772
301,430,068,331
601,300,248,900
10.0 Conclusion
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Consolidation in the Nigerian Microfinance Sector and the Cooperative Movement Sector will take Banking further closer to the average man. We believe that our COOPERATIVE approach will bring Banking to the un-banked Nigerians and we are determined to ensure that these COOPERATIVE services are available to people of our community in mutually beneficial ways for members and our economy at large.
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Appendix 1
SecureInvest Investment Methodology Developed By
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African Capital & Business Support Limited 31, Olumuyuwa Street, Off Oba Babington Street, Omole Phase 1, Isheri, Lagos +234-1-722-8613, 725-7114, 472-0289 www.acbsconsulting.com info@acbsconsulting.com
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SecureInvest The Strategies and Procedures There are strategies that can help investment professionals invest in new ventures and get results that are more predictable and less volatile. If you were investing in a new venture and had the option of buying one share of stock for ten Naira with principal protection or two shares of stock for N10.00 with no protection of principal, what would you do? Take the protection or the risk?
SecureInvest Principal Protection Strategies
THE BLUE CAPITAL services utilize guaranteed insurance products of Offshore Insurance Companies as collateral to enhance debt and equity funding transactions from local and International investment institutions and entrepreneurs. The strategies provide an hedge or principal protection allocation model. The strategies provide investment professionals and lenders with asset allocation tools that return an amount equal to their principal loan or investment in speculative funding arrangements, real estate transactions or business transactions. Here are just a few of the strategies that is available to O-Mobile Members of SecureInvest Programme. Irrevocable Insurance Trust Strategy
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The Guaranteed Contract of Insurance held in the trust is owned entirely by the lender(s) or investment professionals client(s). The beneficial interest in the trust has immediate value on the day the trust is funded. With assignment provisions, the beneficiary has the capacity to borrow against or transfer outright the beneficial interest at any time during the trust period. The trust period and maturity is dependent on the rates provided by the offshore insurance company at the time of funding. When providing a loan with the Insurance Trust, the Local or International lender receives multiple benefits based on the fact that the loan will be at least two times the traditional amount. The increased loan provides the lender with additional earnings from interest and additional asset value from the increased loan. In addition, since the International lender also owns the interest in the trust, the International lender may have approximately 50% more asset value than under a traditional loan at the time of funding.
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This money is used to purchase a contract of insurance from an Offshore Insurance Company that provides a fixed guarantee from a top rated Offshore Insurance Company where such insurance products exist. The lender(s) or investment professional client(s) providing the funds is usually the initial beneficiaries of the respective Irrevocable Insurance Trust. The terms of the guarantee are fixed upon funding of the trust and are non-contestable during the guarantee period. At the end of the guarantee period, the SecureInvest Irrevocable Insurance Trust distributes the proceeds to all parties that hold or own a beneficial interest.
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SecureInvest Irrevocable Insurance Trust is an effective estate-planning tool that provides principal protection for investment professionals while facilitating the acquisition of capital for African Micro, Small and Medium Scale entrepreneurs. Generally, when using an SecureInvest Irrevocable Insurance Trust for principal protection, some part of all monies raised through the debt/equity funding will be directed into the applicable Irrevocable Insurance Trust offshore.
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SecureInvest (MIP) principal protection strategies developed by THE BLUE CAPITAL Limited makes that option possible because it provides Offshore Financial Insurance that can guarantee to return an amount equal to 100% of the principal invested in an equity or debt funding in a given number of years weather or not the new venture succeeds or fails.
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The paragraphs that follow outline the common steps for determining and structuring an THE BLUE CAPITAL SecureInvest Strategy that could be most appropriate for client company situation. SecureInvest Annuity Collateral Strategy (SACS) The SecureInvest Annuity Collateral Strategy is used primarily to provide offshore collateral to guarantee an offshore loan in a debt transaction to Micro Companies in Nigeria. In this strategy, a Investor in Nigeria, an International or local lender partnering with SecureInvest Trust, or an Institutional Lender purchases an offshore annuity for 5-7 years form the offshore Insurance Provider provided by ACBS. The Local or Institutional Lenders in Nigeria purchasing the Annuity is thus insured or protected against loss of their principal plus they may actually receive gains from accumulated tax deferred interest accumulated over the life of the annuity.
The annuity purchasers can negotiate with the client company for a fee or revenue share for basically providing the collateral to the Offshore Bank or Institutional Lender that is making the offshore loan to the client company in Nigeria. Normally, this transaction will cost the client company in Nigeria no stock or less stock as compared to a straight equity transaction. The benefit to the client company is that they are able to "reach" offshore capital sources on a debt basis that would otherwise not be available to a company in Nigeria, and on cheaper terms. This is an excellent device for risk adverse investment professionals, bridge financing, or permanent forms of financing for Nigerian New Companies.
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The SecureInvest strategies were developed to help provide safety and security for investors investing in new or emerging companies and countries like Nigeria. These strategies encourage banks and institutional lenders or investors in Nigeria to invest in ventures that they previously would have avoided because of the risks involved. Entrepreneurs that will utilize the SecureInvest strategies will found it easier to raise capital because of the benefits offered to investors. SecureInvest Irrevocable Insurance Trust Strategies (SIITS)? The SIITS will not use surety bonds, bank guarantees or some type of dubious foreign insurance leverage instrument often referred to as a Form 4081. The SIITS are based upon the concept of setting aside a portion of invested capital to provide a hedge, or insurance, against loss or total loss if a venture is unsuccessful. The capital that is set aside is sometimes referred to as a sinking National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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This structure, given investment returns of approximately 5%-6% allows the Local Investor or the Institutional lender providing the SecureInvest Annuity to the lending client in Nigeria to obtain 100% of their investment proceeds, notwithstanding their Collateral fee or stock holdings in the Client holding company.
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The assignment of the annuity to the Offshore Bank or the Institutional lender is on a deficiency basis, whereby the annuity can never owe back to the offshore Bank or the Institutional Lender an amount greater than the original loan amount less payments received from the SecureInvest client company: (interest and principal). Cash value withdrawals may be made by the Annuity issuer to the Annuity holder up to 10% per year, which can either be taken in cash or used to keep the offshore bank loan current should the client company in Nigeria have a problem keeping it current.
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The SecureInvest Annuity underwritten by a Partner Offshore A.M. Best A+ insurance company is subsequently assigned to the an Offshore Bank or Institutional lender willing to accept the Offshore SecureInvest Annuity as collateral, whereby the offshore Bank or the Institutional Lender will lend approximately 30-50% of the face value of the annuity to the SecureInvest client company in Nigeria.
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fund. This sinking, or side fund, is invested in insurance products that offer a fixed rate of return that will enable this fund to eventually grow to an amount equal to the original principal investment. The diagram in bellow illustrates the concept:
Certainly the concept of setting something aside for a rainy day or establishing a reserve or accumulation fund as a form of insurance is nothing new. Investment professionals have been using reserve funds to provide additional security for investors and credit enhancement for lenders for some time. So what makes the SIITS unique? The SIITS are unique because they utilize an Irrevocable Insurance Trust or Insurance collateral to segregate and/or guarantee the value of the side fund or loan. Additionally, the funds in the trust are invested in tax-deferred guaranteed contracts of insurance offered by top-rated U.S. insurance companies rather than lower yielding products that are subject to greater market risk. These SIITS also offer transfer options that provide significant benefits for investors and entrepreneurs. How does the SecureInvest Insurance Trust Strategy (SITS) Work? The trust document, which explains the responsibilities of the parties, is a legal document. At the investor's option, an entrepreneur utilizing the SIITS agrees to set aside a portion of an investor's investment and deposit it into a trust which purchases a guaranteed contract of insurance. The insurance contract guarantees to pay the investor an amount equal to his or her principal investment in a specified number of years whether or not the entrepreneur's company succeeds or fails. National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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. In the past, investment bankers utilizing this sinking fund concept have invested these side funds in zero-coupon bonds and other conservative fixed products. Although these strategies offer an attractive asset allocation model there are several disadvantages. The first is if the fund is not structured or segregated properly it is subject to bankruptcy or attack by creditors and it lacks tax favorable portability or transferability for exchange or option purposes. Second, the investment products utilized in the sinking fund either provide low yields to maturity or they are subject to current taxes or accretion all of which extend the time period of the fund to reach the required or desired maturity value.
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The SIITS offer flexibility
Once established, the trust flexibility provides for the assignment of beneficial interest, assignment of trustee, change in custodian and early exit strategies. Some of the many early exit strategies include a stock exchange option for investors, a deferred compensation option for entrepreneurs and early trust distribution options for the benefit of both parties.
You might be able to do it a little cheaper and a little faster than $2 million and seven years and be willing to face the hassle of dealing with regulatory issues and authorities. But why spend your time reinventing the wheel and dealing with regulators when our professionals can help you implement the right principal protection strategy and give you the marketing and sales support you need to start your funding process in about a few weeks for a few thousand dollars. We will even help you structure your funding deal at no additional charge! Whether you're an investor in Africa investing in a project or an entrepreneur seeking capital it makes sense to let us do the work as part of our turnkey package and custom consulting program. Additionally, we can save you the time and expense of finding a trustee, third party administrator, custodian and insurance provider. We also help investors save money on trustee, administration and custodial fees. SecureInvest offers a turnkey consulting approach that you can implement a principal protection strategy in a fraction of the time and at a fraction of the cost that you could do it for on your own. It just makes sense to utilize THE BLUE CAPITAL SecureInvest strategies in funding transactions. We want to help investors and entrepreneurs get together. The SecureInvest Program connects entrepreneurs and investors The SecureInvest program will be promoted in Africa by Entrepreneur-Investor Matching Networks in all African Countries joining our Network. National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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You could develop strategies similar to the SIITS and implement a trust and purchase guaranteed contracts of insurance or you can utilize our consulting services and save a lot of time and money. We and our offshore partners have spent over seven years and over $2 million developing and perfecting the documents and procedures for the SIITS we offer and we have met the due diligence requirements and approval of the offshore regulatory authorities in the offshore financial services industry and the offshore media where components of SecureInvest structures exists.
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How can I use these strategies?
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The SIITS eliminates the worst-case investment scenario... full loss of principal with no return or income. It enables investors to have the best of both worlds...safety and potentially significant returns from new venture investments. Additionally, the flexibility of the trust allows for numerous exit strategies by the investor. These options and benefits encourage investors to invest in ventures that they might have avoided.
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Unlike zero-coupon bonds and other financial instruments, guaranteed contracts of insurance offer tax-deferred accumulation and higher yields thereby accelerating the trust's growth. A custodian or bank holds the trust, and the investors beneficial interest in the trust is not subject to bankruptcy or creditor claims of other investors, the entrepreneur or the company issuing its shares. Additionally, the beneficial interest in the trust can be transferred to accommodate a number of investor-entrepreneur benefits without liquidating the guaranteed contract of insurance and precipitating unfavorable tax consequences.
By proactively promoting and informing investors of the options they have through the utilization of the SIITS, we significantly increase the funding resources for entrepreneurs and provide new investment opportunities for investors. No other organization has developed such strategies that serve as such a powerful catalyst in bringing entrepreneurs and investors together. The SIITS strategies will also be marketed through financial institutions and financial services professionals and distributed via an National network of over 1000 independent consultants and mentors developed and managed by O-Mobile Multimedia Limited. Mechanized Agriculture Investment and Services Limited, P4PE Limited, Whattodonext Limited, Ipave International Consult Limited and W-Holistic Business Services Limited are currently develop a Network of Independent Business finance Agents promoting SecureInvest Investment Methodology to both entrepreneurs and investors.
Insurance Trust Implementation Procedures
Steps involved in Implementing the SecureInvest Insurance Trust Strategy
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For a lending transaction, the company that is borrowing the funds will have to demonstrate that there is sufficient collateral (temporary or permanent) available to make the initial loan. This information shall be required as part of the due diligence information. After the loan is closed, the proceeds will be used to fund the Guaranteed Contract of Insurance that is placed in the collateral trust with the lender as beneficial owner. Upon funding of the trust and the purchase of the insurance, the collateral used to close the loan may be released (or reduced if needed to protect the lender for payment of interest). For a lending transaction, THE BLUE CAPITAL or its affiliates shall provide the lender with addendum provisions that need to be included in a loan document in order to authorize the Insurance Trust implementation and to discuss the treatment of any principal payments made by the company receiving the funds. THE BLUE CAPITAL Partners shall make an application for the Guaranteed Contract of Insurance to the appropriate insurance carrier. The presentation shall include the due diligence information obtained from the client. Insurance Companies providing products for the SecureInvest Insurance Trust Strategies are rated excellent or better by insurance rating bureaus, have in existence National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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THE BLUE CAPITAL or its affiliate shall receive due diligence information about the company receiving funds. Such information shall include business plans, draft loan agreements (if a lender), offering documents and subscription agreements (if equity), collateral information (if debt) and any other pertinent information that will be needed to conduct a presentation to the appropriate insurance company that will issue the Guaranteed Contract of Insurance. THE BLUE CAPITAL shall give this information to its affiliate for formal presentation.
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The consulting agreement is an agreement between the company receiving the funds (borrower) and ACBS. Any other party that is involved in the transaction that is not an employee of the company/borrower must sign a SecureInvest confidentiality agreement. This applies to lenders, intermediaries and advisors such as attorneys and accountants.
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SecureInvest Strategies Consulting Agreement is completed and the appropriate fee is paid. Upon receipt of the Strategies Consulting Agreement and payment of the consulting fees, THE BLUE CAPITAL will prepare the applicable Irrevocable Insurance Trust Agreement.
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THE BLUE CAPITAL licensed consultants thus serve as independent financial intermediaries and provide funding resources for new ventures and opportunities for investors. By implementing an THE BLUE CAPITAL strategy you can get connected to an international network of capital resources or investment opportunities.
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sufficient reinsurance arrangements to cover any Insurance Trust transaction and must be members in the appropriate State Insurance Guaranty Fund. The lender or the investor will receive any requested due diligence information regarding the Insurance Company to be used in the transaction. In general, when the presentation to the insurance company includes sufficient due diligence information, the review and acceptance by the insurance company may completed in as little as 72 hours and possibly less. Generally, the presentation will be conducted at the end of the lenders review process. THE BLUE CAPITAL or its affiliates will work with the lenders during the process to make sure that terms of the loan and terms of the trust arrangement included in the SecureInvest Strategy are consistent
The Insurance Company providing the Guaranteed Contract of Insurance that will be placed in the trust will issue a commitment letter to the lender or investor within 24 hours prior to fund closing. The commitment letter shall detail the terms of the Guaranteed Contract of Insurance including the duration, the amount needed to fund the trust and the amount paid at maturity. THE BLUE CAPITAL or its affiliates shall coordinate any necessary communication needed between the insurance company and the lender or investor. All questions concerning the details of the SecureInvest Strategy and trust implementation will be addressed prior to closing. No funds will be transferred until the lender/investor understands the transaction and signs a statement to that effect. The statement will be attached to the appropriate trust agreement as Schedule A.
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Immediately after the closing, THE BLUE CAPITAL or its affiliates will contact the insurance company in order to receive formal documentation regarding the Guaranteed Contract of Insurance. The Trustee will maintain the actual Guaranteed Contract of Insurance in the Trust. The Trustee shall be responsible for handling all funds that are received at maturity. Such funds shall be distributed to beneficiaries at the time of distributions in accordance with the trust terms and at the direction of the Trustee and Third Party Administrator. THE BLUE CAPITAL will provide all beneficiaries of the trust with a copy of the Guaranteed Contract of Insurance, trust agreement with the pertinent Schedule A and any other pertinent information supporting the beneficiarys beneficial interest in the trust. The beneficiary shall also receive information concerning the assignment provisions and assignment procedures. In a situation where there is a sole beneficiary, the beneficiary shall have the ability to request changes in the Trustee. Depending on the facts surrounding the transaction and the appropriate parties involved, there
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Upon confirmation of the receipt of the appropriate funds by the Insurance Company, the Insurance Trust and Guaranteed Contract of Insurance is in place. As such, other funds will be distributed according to prearranged terms. Such other funds shall include THE BLUE CAPITAL fees, custodial fees, administration fees, bank fees, other broker fees and any other prearranged fees. The net funds remaining shall be available to the borrower in accordance with the terms of the loan agreement.
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Upon closing of the loan, the first funds to be transferred under any arrangement shall be the amount needed to fund the trust acquisition of the Guaranteed Contract of Insurance. The appropriate amount (that is determined prior to closing) is transferred to the Trust Bank Account. The funds are immediately transferred to the Insurance Companys bank account via wire transfer. Assuming that the funds are received by 10:30 AM EST by the Insurance Company Bank, the Contract of Insurance and the related guarantee will be effective upon receipt.
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Prior to closing, the Trustee shall be listed as an authorized representative to provide any instructions to the escrow agent that handles funds at the time of closing.
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Prior to closing, the Trustee of the applicable Irrevocable Insurance Trust shall establish a bank account at the lenders institution or at a location as directed by the party providing the funds.
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may be a possibility to change the Trustee of the Trust. Any of these changes would occur after the initial close of the transaction. Participating Subordinated Guaranteed Convertible Debenture The SecureInvest Convertible Debenture (SCD) is a funding instrument that offers guarantees and opportunities for investors while providing a variety of flexible financing options for entrepreneurs seeking capital. The SCD alleviates issues regarding the need to raise multiples of capital because funds raised in excess of working capital provide the collateral for retiring the debenture (paying off the loan) or converting it to equity. Additionally, if interest on the debenture is structured as a participation in revenues, both the investor and the company are afforded attractive cash flow options. Specifically, the investors can benefit from increases in revenues while the company is not strapped with interest payments during startup or during the absence of revenues. A win-win situation. Investor benefits
+ No risk plus high yield potential. + Guaranteed return of principalloan repayment is guaranteed by the InvestorProtector trust. + An assignable interest in the debenture or collateral value of the trust. + Competitive interest earnings or participation in revenues which provides immediate cash flow. + Convertible to common stock In the event of sale or IPO.
Entrepreneur benefits
+ Limited Partnership not normal equity.
+ Funding is paid off by InvestorProtector trust. + No loss of control.
+ Subordinated to bank debt which does not limit other borrowing or financing.
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+ Return On Investment at a guaranteed rate or flexible rate as a percentage of revenues.
+ Investor equity triggered only by sale or IPO of the company. + Does not limit additional stock or equity offerings.
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Appendix 2 SECUREINVEST IRREVOCABLE INSURANCE TRUST THIS SECUREINVEST IRREVOCABLE INSURANCE TRUST, executed and delivered in the City of Lagos Nigeria and effective according to the date enumerated below, by and between the
Grantor, including any Lender(s), of the Trust as hereinafter defined, and whom is listed
on the attached Schedule A; NATIONAL O-MOBILE MULTIMEDIA COOPERATIVE FEDERATION LIMITED, a cooperative, incorporated according to the cooperative laws of
Nigeria, or its successor, hereinafter referred to as the "Nominal Grantor; Africa Capital
the Third Party Administrator; Mainstreet Bank Trust and Asset Management Company Limited, located in Lagos Nigeria hereinafter referred to as Trustee and Asset Bank Plc located in Nigeria, hereinafter referred to as the Custodian of the
I.
GENERAL PROVISIONS
hereinafter referred to as the Initial Contribution, in certain insurance and financial instruments in order to pay such Grantor the amount provided for in the Schedule A at the end of the Holding Period as defined in Article II.
The Grantor under this Agreement may contribute and shall be deemed to have contributed assets Grantors interest is created using funds generated in conjunction with the financial transaction by
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Trust Protector, which is the source of funding for the Trust. For this purpose, the Trust Protector is acting as an agent of the Grantor to complete the contribution of funds. Upon the termination of the Holding Period, as defined in Article II, and in accordance with Article
II (c) herein, the Custodian of the Assets, upon written instructions from the Third Party Administrator, shall distribute to the Grantor, or his/her successors or assigns, as hereinafter provided, the entire balance of his/her principal account held in Trust.
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to the Grantors Trust with the concurrence of the Nominal Grantor, to the extent that such
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to invest the amount specified in the attached Schedule A received from the Grantor thereunder,
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The principal purpose of this SecureInvest Grantors Irrevocable Insurance Trust (the "Trust") is
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Assets.
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& Business Support Limited a corporation located in Nigeria, hereinafter referred to as
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This Trust is irrevocable. The Grantor realizes that the right may be reserved to revoke or amend this Trust, but that right is expressly waived, and this Trust is not subject to alteration, amendment or revocation by the Grantor. II. TRUST PROPERTY
The Grantor hereby establishes the Trust described herein, upon the terms and conditions specified
herein, and by signing this Trust Agreement transfers and assigns to the Trustee all right, title and interest of the Grantor(s) in the property identified on all attached Schedule "As," if any, which are
a part of this Agreement within the limits herein. The Initial Contributions to the SecureInvest
of the Grantor. The Grantor or the Nominal Grantor may make any additional contributions to the Trust for the benefit of the Grantor at any time during the term of the Trust. All such original property is referred to herein collectively as the "Custody Account."
During the term of this Trust, the Trustee shall hold the assets in a Custody Account for the benefit Timing of Distributions, below. The Trustee shall have no power to withdraw or to distribute encumbrance upon the assets. If the Trustee is removed, resigns or is no longer able to act as instructions and pursuant to said written instructions of the Third Party Administrator. The Trustee shall not distribute any assets held in the Custody Account to the Trustee and/or Third Party Administrator except for the payment of fees, including but not limited to attorneys fees, Trustees fees, administration fees, accounting fees, taxes and tax preparation fees, and as hereinafter provided, and pursuant to written instructions from the Third Party Administrator. subject to this Article II. The Trustee shall hold the assets in the Custody Account for the period of this Agreement and
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(a) Holding Period
(1) General Definition: Unless terminated in accordance with section (a)(2) or section (a)(3) below, the Holding Period
shall terminate at the end of the ten (10) year period beginning on the Date of this Agreement as
defined in Article VIII (l), or upon the maturity of the Investment(s), in accordance with Article IV (e), if maturity occurs earlier. Upon the termination of the Holding Period and subject to final distributions set forth in paragraph (c), Timing of Distributions, below, and pursuant to written instructions from the Third Party Administrator, the Trustee shall distribute to the Grantor or National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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Trustee then it shall transfer the Custody Account to the successor Trustee upon written
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assets held in custody, except as provided herein, and shall have no authority to place any lien or
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Grantors Irrevocable Insurance Trust shall be deposited into a principal account for the benefit
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his/her successors or assigns as hereinafter provided, the entire balance of the Grantors principal account held in the Custody Account. (2) Termination by Irrevocable Beneficiary: The Irrevocable Beneficiary may elect to terminate the Holding Period for their respective beneficial interest in the Trust after any of the following events occur: A) B) C) Insolvency of the nominal grantor or its successor; or Party Administrator or Trustee; or
Six (6) months prior to any rollover or exchange of contracts required (if any) by the Third Satisfaction of a performance agreement between the nominal grantor and the original Grantor where the beneficial interest has been transferred from the Grantor in accordance with the performance agreement; or
D)
Six (6) years from the date of the Initial Contributions to the Trust on behalf
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Upon the termination of the Holding Period and subject to final distributions set forth in paragraph (c), Timing of Distributions, below, and pursuant to written instructions from the Third Party Administrator, the Trustee shall distribute to the Grantor, or his/her successors or assigns as hereinafter provided, the Investment that is allocated to the Grantors account held in the Custody Account. If the Holding Period is terminated by the Irrevocable Beneficiary, the Irrevocable Party Administrator and Trustee with regard to the management of the Investment and any future the Trustee, Third Party Administrator and Trustee of any liabilities or responsibilities related to the administration of the Trust or the administration of the Investment. (3) Termination for lack of contributions: The Trust shall automatically terminate at the end of have been deposited into the Trust for the benefit of the beneficiary during that 12-month period. Beneficiary shall fully assume all duties and responsibilities formally held by the Trustee, Third distributions. Upon receipt of the Investment, the Irrevocable Beneficiary waives and/or releases
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(b) Assignment of Beneficial Rights - If the Grantor does not survive the term of this Agreement, then the Third Party Administrator shall instruct the Trustee to distribute the Grantors principal account to the Grantors Estate. However, if the Third Party Administrator physically receives written instructions from the Grantor within ten (10) days after the earlier of (i) the Grantors date of death or (ii) the termination of the Holding Period, said instructions shall be witnessed by two (2) witnesses, neither of whom may be the recipient named to receive all or any portion of the Trust, naming another person, entity or trust as the beneficiary, then the Third Party Administrator shall instruct the Trustee to make the distribution of the Grantors principal account to the designated person, entity or trust in accordance with Article II(c), Timing of Distributions. The National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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No distributions shall be required since no assets will have been placed in the Trust.
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twelve (12) months from the Date of this Agreement, defined in Article VIII (l), if no contributions
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Grantor/Irrevocable Beneficiary(ies) shall have, at all times, the right to revoke who shall receive the final proceeds provided the Third Party Administrator receives proper written authorization within ten (10) days after the termination of the Holding Period. Notwithstanding the foregoing, the Grantor/Irrevocable Beneficiary(ies) may file an irrevocable change of beneficiary designation with the Third Party Administrator, which must be notarized and witnessed by two (2) witnesses, neither of whom may be the recipient named to receive all or any portion of the Trust, which may become irrevocable upon the earlier of eleven (11) days after (i) the death of the
Grantor/Irrevocable Beneficiary or (ii) the termination of the Holding Period, as the case may be. A
revocable beneficiary may further assign his/her contingent interest only with a written and notarized authorization from the Grantor/Irrevocable Beneficiary, as the case may be, naming them as revocable beneficiary.
written distribution instructions within thirty (30) days after the termination of the Holding Period as defined in Article II (a). The Trustee shall make all distributions from the Custody Account within Trustee is unable to locate the beneficiary(ies) within thirty (30) days of receipt of the distribution Account. The Trustee shall use reasonable but thirty (30) days of receipt of the distribution instructions from the Third Party Administrator. If the instructions from the Third Party Administrator, the Trustee shall retain the assets in the Custody
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(c) Timing of Distributions The Third Party Administrator shall provide the Trustee with complete
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beneficiary(ies). If the beneficiary(ies) has not been located within one (1) year after the the other beneficiaries on a pro rata basis as instructed by the Third Party Administrator. If no beneficiary(ies) can be located, the Trustee shall distribute the Grantors account to his Estate. Neither the Third Party Administrator, the Trustee, nor the Trustee shall have any liability if they comply in good faith with the terms of this Article. The party who objects to the handling of this including attorneys fees, of all parties, if the Third Party Administrator, Trustee, and/or Trustee have acted in good faith. Article by the Third Party Administrator, Trustee, and/or Trustee shall pay all costs and fees,
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All costs incurred in locating the beneficiary(ies) shall be paid by the Grantors account. These costs shall include, but not be limited to, administration and distribution fees and attorneys fees. For this purpose, funds shall be withdrawn from the Grantors principal account. It is understood and agreed upon by the Grantors/Beneficiary(ies), that it is their sole duty and responsibility to notify the Third Party Administrator in writing of their current address. This writing must be sent to the Third Party Administrator by certified mail return receipt requested to Africa Capital and Business Support Limited, _________________________________ or such other address as the Third Party Administrator may indicate in writing from time to time. Any change of National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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termination of the Holding Period, then the Trustee shall distribute the Grantors account balance to
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efforts to locate the
only be revoked or amended by the named beneficiary. A revocable beneficiary designation shall
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address by the Third Party Administrator shall be considered made if sent by certified mail return receipt requested to the Grantor or Irrevocably appointed Beneficiary(ies) last known address on the books of the Third Party Administrator. Once the Trustee has paid or distributed the beneficiary(ies) the amount due and owing them beneficiaries on a pro rata basis, or has distributed the funds to the Grantors Estate as herein assets in the Custody Account.
(including any assets other than cash) from the Custody Account, has paid or distributed the other
provided, the Trustee shall be relieved of any and all future duties and liabilities with regard to the
(d) Termination of Trust Once all assets held in the Custody Account have been paid or distributed and all such final distributions have been completed as provided herein, or if the Holding Period terminates in accordance with Article II (a) (3), the Trust shall terminate III. SPECIAL LIMITATIONS AND POWERS
limitations on powers shall apply only during the term of the Trust: (1) No powers enumerated Grantor, Trustee, Third Party Administrator or the Custodian of the Assets, or any other person, except the Grantor/Beneficiary(ies), to purchase, exchange, or otherwise deal with or dispose of all in money or money's worth. or any part of the principal or income of the Custody Account for less than adequate consideration
IV.
Trust Protector
Appointment of Trust Protector: The Grantor hereby nominates and appoints FutureView Financial signing this instrument or otherwise assuming the duties of Trust Protector hereunder, the Trust
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Protector accepts this appointment and agrees to serve. If for any reason FutureView Financial Services Limited or its successor(s), is unable or unwilling to serve, then the Administrator, shall appoint a successor Trust Protector. (b) Successor Trust Protector (1) No alternate or successor Trust Protector shall have any responsibility for the acts or omissions of any prior Trust Protector, and shall have no duty to audit or to investigate the accounts or administration of any prior Trust Protector, nor, unless requested in writing to do so by a person Third Party
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Services Limited or its successor(s), as Trust Protector of the Trust created by this instrument. By
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herein or accorded to Trustees generally pursuant to law shall be construed to enable the Nominal
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(a) Limitation on Powers - Notwithstanding anything herein contained to the contrary, the following
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having a present or future beneficial interest under a Trust, any duty to take action to obtain redress for breach of Trust. (2) The Trust Protector may resign by delivering thirty (30) days written notice to the Third Party Administrator, and the Trustee. Upon such resignation, or any other vacancy, the alternate Trust Protector, if any, named in this instrument shall act as Trust Protector. However, such resignation shall not be effective until a new Trust Protector is appointed and accepts said appointment.
Successor Trust Protector shall be appointed only from among corporate portfolio Manager qualified to act under the laws of the Securities and Exchange Commission of Nigeria, licensed attorneys or licensed Certified Public Accountants. Notwithstanding anything in this instrument to the contrary, neither the Trustee nor Third Party Administrator shall be named as Trust Protector.
(3) The terms Trust Protector or Co-Trust Protector as they appear in this document shall be interchangeable and do not limit the authority or responsibility of anyone or the role of the individuals serving as a fiduciary of the Trust. The Trustee SHALL NOT be a Trust Protector. (c) Compensation - The Trust Protector shall be entitled to receive a Trust Administration Fee of
to investment decisions and administration of all assets maintained in the Custody Account. The Trust Protector shall be required to provide the Third Party Administrators, Trustee and the Trustee instructions shall be provided for all investment decisions, administration and distribution issues. with written instructions as to the handling of the assets maintained in the Custody Account. Such
V.
THIRD PARTY ADMINISTRATOR
(a) Appointment of Third Party Administrator The Trust Protector hereby nominates and appoints the Trust created by this instrument. By signing this instrument or otherwise assuming the duties
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of Third Party Administrator hereunder, the Third Party Administrator accepts this appointment and agrees to serve. If for any reason Capital Management & Trust Company Limited t or its successor(s), is unable or unwilling to serve, then the Trust Protector, as agent for the Grantor, shall appoint a successor Third Party Administrator. (b) Successor Third Party Administrators
(1) No alternate or successor Third Party Administrator shall have any responsibility for the acts or omissions of any prior Third Party Administrator, and shall have no duty to audit or to investigate the accounts or administration of any prior Third Party Administrator, nor, unless requested in National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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Capital Management & Trust Company Limited or its successor(s), as Third Party Administrator of
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(d) The Grantor hereby grants the Trust Protector all the powers, duties and discretion with respect
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2% of the total fund raised for the Project been administered by this Trust.
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writing to do so by a person having a present or future beneficial interest under a Trust, any duty to take action to obtain redress for breach of Trust. (2) Any Third Party Administrator may resign by delivering thirty (30) days written notice to the Trust Protector, as agent for the Grantor, and the Trustee. Upon such resignation, or any other vacancy, the alternate Third Party Administrator, if any, named in this instrument shall act as Third Party Administrator. However, such resignation shall not be effective until a new Third Party Administrator is appointed and accepts said appointment. Successor Third Party Administrators
shall be appointed only from among corporate fiduciaries qualified to act under the laws of Nigeria, licensed attorneys or licensed Certified Public Accountants. Notwithstanding anything in this named as Third Party Administrator.
instrument to the contrary, neither the Grantor nor Trust Protector nor, Nominal Grantor shall be
(3) The terms Third Party Administrator, Co-Third Party Administrator or Third Party Administrators as they appear in this document shall be interchangeable and do not limit the authority or responsibility of anyone or the role of the individuals serving as a fiduciary of the Trust. The Trustee SHALL NOT be a Third Party Administrator.
(c) Compensation - The Third Party Administrator shall be entitled to receive a Trust Administration
Custody Account. The Third Party Administrator shall be required to provide the Trust Protector, Trustee and the Trustee with written instructions as to the handling of the assets maintained in the Custody Account. Such instructions shall be provided for all investment decisions, administration and distribution issues.
(e) Investments - The Trust Protector hereby authorizes the Third Party Administrator to make all
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investment decisions with respect to the Custody Account. The Third Party Administrator shall provide the Trustee and the Trustee with written instructions in order to implement the investment decisions of the Third Party Administrator. Within thirty (30) days of the termination of the Holding Period, the Third Party Administrator shall provide written instructions to the Trustee and the Trustee regarding distribution of the Custody Account.
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discretion with respect to investment decisions and administration of all assets maintained in the
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(d) The Trust Protector hereby grants the Third Party Administrator all the powers, duties and
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Fee of .25% of the total sum of amount contributed into the Principal Account.
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If and when investing, reinvesting, purchasing, acquiring, exchanging, selling and managing property for the benefit of another, the Third Party Administrator shall act with care, skill, prudence, and diligence under the circumstances then prevailing, specifically including, but not by way of limitation, the general economic conditions and the anticipated needs of the Trust and its beneficiary(ies), that a prudent person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like aims, to attain the goals
of the Grantor as determined from the Trust instrument. Within the limitations of the foregoing, the Third Party Administrator may invest the Custody Account only in the following investments:
Certificate Of Deposits Offered International Banks CD- Callacterized Financing Program
Foreign Exchange Investment Programme Nigerian Federal Government Bonds
Nigerian Federal Government Dept. Instruments Nigerian Stock Exchange Quoted Stocks International Securities
Huge Funds
(list investments). It is understood by the Grantor/Beneficiary(ies) that the rating of the insurance company or other financial institution that sells the investment(s) purchased for the Trust Estate may change subsequent to the purchase of the investment. The Third Party Administrator, the Trustee and/or the Trustee shall have no duty, obligation or ability to liquidate the insurance or
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financial contracts and as such, no corresponding liability.
(f) Principal and Income - In determining what is principal and what is income, and which receipts
or expenditures to credit or charge to either, the Trustee and the Third Party Administrator shall, to the fullest extent permitted by applicable law, except as otherwise herein directed, apply the principles of the Principal and Income Law from time to time in effect in the Country in which this
Trust is being administered.
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Local and International Options Programme
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Certificate Of Deposits Offered By Nigerian Insurance Companies
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(g) Taxes - The Third Party Administrator shall pay taxes first from any excess funds, as defined below, retained in the Custody Account that are unallocated to the Grantors account. If additional funds are needed to pay taxes, funds may be withdrawn from the Grantors account. (h) Signature of Third Party Administrator - At any time the Third Party Administrator is acting as the Third Party Administrator, Two authorized signatures of the Third Party Administrator Company MUST accompany instructions to execute proxies or powers of attorney, and to sign checks or
orders to pay on deposits, accounts or credit balances of the Third Party Administrator with any
No other person or corporation dealing with the Third Party Administrator, except the Programme Managers, shall be required to investigate the Third Party Administrators authority for entering into any transaction or to see to the application of the proceeds of any transaction. (i) Accounting and Administration The Third Party Administrator shall be responsible for the
administration of the separate principal accounts. Expenses associated with the tax preparation will be paid from any excess funds, as defined below, retained in the Custody Account that are unallocated to any Grantors principal account. If there are insufficient excess funds, as defined below, the remaining expenses for tax preparation and payment will be paid by the Nominal
(j) Instructions for Custody Account The Third Party Administrator shall provide the Escrow
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Agent, if applicable, and the Trust Protector, with instructions as to the amount of funds to be transferred into the Custody Account as Initial Contributions. The Third Party Administrator shall at no time have access to these funds. (k) Restrictions on Distributions - This Agreement specifically provide that no distributions shall ever be made to the Third Party Administrator or its affiliated entities, except as provided herein and for the payment of commissions. Distributions shall only be made to the Beneficiary(ies) as provided herein. National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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Grantor.
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necessary. The Third Party Administrator shall also be responsible for the accounting and
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accounting and administration for the Trust, including tax preparation for the income tax return, if
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bank, banker, broker or trust company.
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(l) Excess funds Excess funds may be accumulated in the Custody Account. These funds will be generated due to the timing between the date when the funds are transferred into the Custody Account and the date when the investment is actually purchased. Generally, the date differential between the transfer date and the purchase date of the investment should be minimal. These
excess funds will not be allocated to the Grantor/Beneficiary(ies) but rather will be used to pay expenses and to pay tax liabilities, if any, as provided herein. Any unused excess funds at the termination of the trust, and after payment of all final expenses, shall be allocated on a pro rata basis to the Beneficiary(ies). VI. THE TRUSTEE
(a) Appointment of Trustee - The Trust Protector hereby nominates and appoints Union Trustee Limited, or its successor(s), Trustee of the Trust created by this instrument. By signing this instrument or otherwise assuming the duties of Trustee hereunder, the Trustee accepts this appointment and agrees to serve. If for any reason Union Limited, or its successor(s), is unable or
appointed, the Trust Protector, as agent for the Grantor, shall appoint a successor Trustee. (b) Successor Trustees
(1) No alternate or successor Trustee shall have any responsibility for the acts or omissions of any prior Trustee, and shall have no duty to audit or to investigate the accounts or administration of any prior Trustee, nor, unless requested in writing to do so by a person having a present or future beneficial interest under a Trust, any duty to take action to obtain redress for breach of Trust. (2) Any Trustee may resign by delivering thirty (30) days written notice to the Trust Protector, as
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agent for the Grantor, and the Custodian of the Assets. Upon such resignation, or any other vacancy, the alternate Trustee, if any, named in this instrument shall act as Trustee. However, such resignation shall not be effective until a new Trustee is appointed and accepts said appointment. Successor Trustees shall be appointed only from among corporate fiduciaries qualified to act under the laws Nigeria, licensed attorneys or licensed Certified Public Accountants. Notwithstanding anything in this instrument to the contrary, neither the Grantor nor Nominal Grantor shall be named as Trustee. National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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unwilling to serve, then Union Limited may appoint a successor Trustee. If no successor Trustee is
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(3) The terms Trustee, Co-Trustee, Successor Trustee or Trustees as they appear in this document shall be interchangeable and do not limit the authority or responsibility of anyone or the role of the individuals serving as a fiduciary of the Trust. (c) Bond - No Trustee shall be required to post any bond or other security for the faithful performance of any duties in that office. Every Trustee shall have the obligation of exercising all of its duties and discretions in a fiduciary manner. (d) Title - Title to the Custody Account shall be in the name of the Trustee.
(e) Exercise of Discretion - The Trustee shall not be required to obtain the order of any court of competent jurisdiction to exercise any power or discretion conferred under this instrument, but proposed action by the Trustee.
(f) Accounting - The Trustee shall not be required to file any accounting with any public official. The Trustee shall, however, through the Third Party Administrator maintain accurate records concerning the Trust, and shall furnish at the termination of the Trust an accounting of the Trust's condition, including receipts and disbursements to the Beneficiary(ies). This requirement may be satisfied by providing the Beneficiary(ies) with a copy of the Trust's federal income tax return, if one is required or prepared.
(g) Compensation - The Trustee is entitled to compensation based on the Trustee's fee schedule as the formation of the Trust. If any Trustee is not a commercial or professional fiduciary or has no fee schedule, the Trustee shall be paid such reasonable compensation as agreed upon by the Trustee and the Trust Protector, as agent for the Grantor, at the formation of the Trust. The Nominal Grantor shall be responsible for the payment of all Trustee Fees and Third Party Administrator Fees for the term of the Trust. See attached Schedule B, which is made part hereof. use accumulated funds contained in the principal account, on a pro rata basis, to pay such fees. If the Nominal Grantor is no longer capable of paying such fees, the Trustee shall be authorized to
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VII.
(a) Appointment of Trustee - The Trustee and The Third Party Administrator shall open Custody Account in any Bank in Nigeria (b) Custody Account - Custody Account means an account established by the The Trustee and The Third Party Administrator of the Assets to hold the property, including any income and
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THE CUSTODIAN OF THE ASSETS
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agreed upon by the Trustee, Nominal Grantor and the Trust Protector, as agent for the Grantor, at
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may, in the Trustee's discretion, petition a court for guidance or to pass upon any action or
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proceeds derived from that property, included in the Custody Account in accordance with the terms of this Trust Agreement.
(c) Books and Records - The Trustee shall keep records of all transactions with respect to the Custody Account including information necessary for the preparation of tax returns, and shall make these records and information available at reasonable times to the Trustee and Third Party Administrator.
(d) Inquiry - The Trustee shall not be responsible for or need to inquire into any acts or omissions of a prior Custodian of the Assets.
written statement of the administration of the Custody Account: 1) At least once a year;
2) Upon request at reasonable times by the Trustee; 3) Upon resignation or removal of the Trustee; and 4) Upon termination of the Trust.
(h) Compensation - The Trustee shall be entitled to receive a fee based on a percentage of the transfer to the Custody Account. (See Schedule B for the fee schedule for the Custodian of the this Agreement. If the Trustee resigns, is unable or unwilling to act as Trustee or is removed as Custodian of the Assets, then they shall refund a pro rata portion of their fees to the Trustee, or successor Trustee as the case may be, including interest thereon. The successor Trustee shall be paid the pro rata amount for acting as the Trustee for the remaining term of the Trust. (i) Resignation - The Trustee may resign by providing thirty (30) days written notice to the Trustee successor Custodian of the Assets.
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(1) If no successor Trustee is designated, a resigning Trustee shall provide this thirty (30) day written notice to the Programme Manager. (2) If no successor Trustee is designated, then the Trustee shall appoint a successor to fill any vacancy in the office of the Custodian of the Assets. (3) The resignation of the Trustee shall not be effective until a new Trustee is appointed and accepts said appointment. (j) Duties and Responsibilities - The Trustee shall have the following duties and responsibilities and no other: National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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and the Third Party Administrator specifying the effective date of the resignation to the designated
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Assets.) This fee shall be in full satisfaction of the Custodian of the Assets services for the term of
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value of the total Initial Contributions into the Custody Account within sixty (60) days of the date of
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(g) Written Statements - The Trustee shall provide to the Trustee and Third Party Administrator a
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(1) The Trustee shall distribute or transfer the Custody Account assets to the Grantor or Beneficiary(ies) as the case may be, upon written instructions, and pursuant to said written instructions, from the Programme Manager. (2) The Trustee may hold and retain as part of the Custody Account any property received from the Nominal Grantor, Grantor, Trustee, Third Party Administrator and/or Escrow Agent. (3) The Trustee may buy, sell, distribute, exchange, or invest the Custody Account only upon written instructions, and pursuant to said written instructions, from the Third Party Administrator. control, investment and retention of the Custody Account.
(4) The Trustee shall follow the directions of the Third Party Administrator in the management,
(5) The Trustee shall at all times keep the Custody Account, of which the Trustee has control, separate from all other property in a manner sufficient to identify it clearly as the Custody Account of this Trust. (k) Compliance with Instructions - The Trustee shall have no liability for any actions or omissions if and pursuant to said written instructions, and the Grantor, the Third Party Administrator and the Trustee shall indemnify and hold the Trustee harmless from liability.
(a) Spendthrift Provisions - The interest of the Nominal Grantor, Grantor, the Grantor, and the Revocable and Irrevocable Beneficiaries in the principal and income of this Trust created under this attachment, garnishment, levy, execution, or other process of law, to the fullest extent permitted by applicable law, as amended, and the Nominal Grantor shall have no right to encumber, hypothecate or alienate any interest in this Trust in any manner. IX. MISCELLANEOUS instrument shall not be subject to claims of the Nominal Grantors creditors, or others, or liable to
(a) Headings - The various clause headings used herein are for convenience of reference only and
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any conflict between such headings and the text shall be resolved in favor of the text. (b) Counterparts - This Agreement may be executed in any number of counterparts and each shall constitute an original of one and the same instrument. (c) Certified Copies - To the same effect as if it were the original, anyone may rely upon a copy certified by a notary public to be a true copy of this Declaration of Trust (and attachments, if any). Anyone may rely fully upon any statements of fact certified by one who appears from the original Declaration or an executed counterpart or a certified copy to be the Trustee or Trustee. (d) Notices - Until the Custodian of the Assets, Third Party Administrator and Trustee have written notice of any change of beneficiary caused by death or assignment, or other event upon which the National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)
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Definitions:
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VIII.
SPECIAL PROVISIONS
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the Trustee fully complies with the complete written instructions of the Third Party Administrator,
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right to receive income or principal of the Custody Account may depend, the Custodian of the Assets, Third Party Administrator and Trustee shall incur no liability for disbursements or distributions made or omitted in good faith upon the written instructions of the Third Party Administrator. (e) Grantor - The Grantor is the Investor who invested in the Nominal Grantors financial Programme. transaction as described in Article I. and appoint the Trust Protector to oversee the Investment
(f) Trust Protector - The Trust Protector is the agent of the Grantor and oversee the entire I. and appoint the Trust Protector to oversee the Investment Programme.
programme of the Investment in the Nominal Grantors financial transaction as described in Article
described in Article I. The Nominal Grantor or the Escrow Agent shall be the party who receives the Custodian of the Account, pursuant to the Third Party Administrators instructions. Neither the Nominal Grantor nor the Escrow Agent has any rights, title or interest in the funds transferred to (h) Revocable Beneficiary(ies) - The Revocable Beneficiary(ies) is the person, trust or entity that is recipient of the Grantors Trust or a stated portion thereof. The Revocable Beneficiary(ies) rights to met, provided the beneficiary designation has not been changed by the Grantor or his/her legal attorney-in-fact. (i) Irrevocable Beneficiary(ies) - The Irrevocable Beneficiary(ies) is the person, trust or entity that is irrevocably designated in writing to the Third Party Administrator and Trustee by the Grantor or Irrevocable Beneficiary to be the recipient of the Grantors Trust or a stated portion thereof. Once Grantor may not subsequently change the designation, only the named beneficiary may make a (j) Trustee - The Trustee shall mean the holder of the assets in the Custody Account in a custodial the Third Party Administrator and Trustee receive the Irrevocable beneficiary designation the new revocable or irrevocable beneficiary designation. capacity. the Trust.
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(k) Third Party Administrator The Third Party Administrator shall be granted authority by the Grantor to direct all investment and administrative decisions relating to the Trust Estate. The Third Party Administrator shall provide written instructions to the Trustee in order to implement all investment and administrative decisions. (l) Date of this Agreement For purposes of calculating the term of the Holding Period in accordance with this Agreement, the Date of this Agreement shall mean the date the Trustee signs and dates this Agreement.
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the applicable Grantors Trust shall not vest until the applicable provision in Article II(b) has been
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revocably designated in writing to the Trustee by the Grantor or Irrevocable Beneficiary to be the
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Investor investment funds as described in Article I and transfers them to the Trustee or the
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(g) Nominal Grantor - The Nominal Grantor is the entity that conducted the financial transaction as
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(m) Consent - The Grantor shall sign and date a Schedule A acknowledging and consenting to the terms and conditions of this Trust Agreement. (n) Governing Law - This Trust Agreement shall be interpreted, construed, and governed by the laws of the State of Lagos Nigeria. IN WITNESS WHEREOF, the Nominal Grantor, the Third Party Administrator, the Trustee, and the Trustee have signed their names this ______ day of _______________, 200__.
NOMINAL GRANTOR:
THIRD PARTY ADMINISTRATOR:
By:______________________________ By:____________________________
Its: ______________________________ Its:___________________________
Its: ______________________________ Its:____________________________
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By:______________________________ By:____________________________
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Trust Protector:`
TRUSTEE:
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STATE OF Lagos Nigeria, to wit: On this ____ day of _______________, 200__ before me, the undersigned Notary Public in and for the said City and State, personally appeared ______________________________, Nominal Grantor personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument as Nominal Grantor having acknowledged that he/she executed the same.
first above written. __________________________________ Notary Public My Commission Expires: _____________________
My Commission Expires: _____________________ STATE OF Lagos Nigeria to wit: On this ____ day of _______________, 200__, before me, the undersigned Notary Public in and for the said City and State, personally appeared ______________________________, Custodian of the Assets, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument as Trustee having acknowledged that he/she executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. __________________________________ Notary Public
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My Commission Expires: _____________________
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__________________________________ Notary Public
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IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written.
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STATE OF Lagos Nigeria to wit: On this ____ day of _______________, 200__, before me, the undersigned Notary Public in and for the said City and State, personally appeared _______________________________, Third Party Administrator, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument as Third Party Administrator having acknowledged that he/she executed the same.
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IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year
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STATE OF Lagos Nigeria to wit: On this ____ day of _______________, 200____, before me, the undersigned Notary Public in and for the said City and State, personally appeared ______________________________, Trust Protector, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument as Trustee having acknowledged that he/she executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. __________________________________ Notary Public My Commission Expires: _____________________
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written.
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My Commission Expires: _____________________
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__________________________________ Notary Public
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STATE OF Lagos Nigeria to wit: On this ____ day of _______________, 200____, before me, the undersigned Notary Public in and for the said City and State, personally appeared ______________________________, Trustee, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument as Trustee having acknowledged that he/she executed the same.
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SCHEDULE A IRREVOCABLE INSURANCE TRUST The undersigned Grantor, including any Lender, and the Nominal Grantor, hereby certify that they have read this Trust Agreement and agree that they and their successors and assigns shall be bound by its terms and conditions. Grantor has been given the opportunity to: (i) (ii) (iii) review the Trust Agreement, discuss the Trust Agreement with their legal and tax advisor/counsel.
ask questions and request additional information about the Trust Agreement, and
Grantor and Nominal Grantor acknowledge receipt and acceptance of final documents surrounding insurance company commitment letter.
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The Grantors contribution to the Trust is guaranteed through a collateral instrument issued by whose and a address telephone number is of __________________________________________________
_________________. The policy or reference number of the collateral instrument is _______________________________. The amount of ___________________ was contributed to _____________, 200__. At the end of the Holding Period, as described in Section II (a) of this Trust Agreement, the projected amount of ______________________ will be due Grantor on the maturity date of the guarantee contract of the collateral instrument, which is ______________ 200__. this Trust on behalf of the Grantor below named. This amount was transferred to the Trust on
IN WITNESS WHEREOF, the Grantor has signed their name this ______ day of _________________, 200__.
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the transaction including the Trust Documents, copy of the policy issued to the trust and the
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GRANTOR: By: ______________________________________ Printed Name: _____________________________ Address: _________________________________ _________________________________
WITNESS: By: ______________________________________
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Printed Name: _____________________________
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SCHEDULE B
COMPENSATION
ASSETS COMPENSATION
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Trustee Fee Schedule Irrevocable Insurance Trust
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The following fees will be assessed on all contributions to the trust.
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All parties of the Trust shall receive compensation based on a percentage of the assets transferred into the Custody Account. The appropriate fee shall be paid at the time an Initial Contribution is contributed to the trust on behalf of the Grantor. No other subsequent fees shall be assessed for a Grantor that has already paid the Trustee fee. The fees collected from the initial contributions are intended to cover the Trustee services with respect to the Grantors entire holding period.
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Appendix 3 [Name of Company] TERM SHEET FOR POTENTIAL INVESTMENT Series [ ] Preferred Stock Confidential
AMOUNT OF INVESTMENT
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The Company and the investors are discussing a private placement of shares of Preferred Stock on the following terms: Approximately $ $ to $
TYPE OF SECURITY
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* This includes an increase in the Companys Stock Option Plan to ____ shares, so that the Company shall have sufficient authorized number of options for employees, officers, directors and consultants for 12 months after the sale of the Series __ Preferred.
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VALUATION OF THE COMPANY
pre-money valuation on a fully diluted basis* Shares of the Companys Series __ Preferred Stock (Series __ Preferred), convertible into shares of the Companys Common Stock. $ (Original Purchase Price).
PRICE PER SHARE
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This term sheet summarizes the principal terms with respect to a potential private placement of equity securities of (the Company) by a group of investors (the Investors) led by _________________________ (Strategic Investor). This term sheet is intended solely as a basis for further discussion and is not intended to be and does not constitute a legally binding obligation except as provided under Confidentiality, Exclusivity, Expenses, Due Diligence and No Other Agreements below. No other legally binding obligations will be created, implied, or inferred until a document in final form entitled Stock Purchase Agreement, is executed and delivered by all parties. Without limiting the generality of the foregoing, it is the parties intent that, until that event, no agreement shall exist among them and there shall be no obligations whatsoever based on such things as parol evidence, extended negotiations, handshakes, oral understandings, or courses of conduct (including reliance and changes of position), except as provided under Confidentiality, Exclusivity, Expenses, Due Diligence and No Other Agreements below.
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T-FINANCING CAPITALIZATION
Common Stock Equivalent Number of Shares (%, fully-diluted) Common Stock Series A 1/ Series B 1/ [Series C 1/] [Series D 1/] Warrants 2/ Outstanding Options Reserved Options3/ ________________ Total 100.00% ______ 1/ Converts on 1 to 1 basis 2/ Consists of ________, _________ and ___________. 3/ Includes expansion of the Companys stock option pool by _________ shares.
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A merger, acquisition or sale of substantially all of the assets of the Company in which the shareholders of the Company do not own a majority of the outstanding shares of the surviving corporation shall be deemed a
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RIGHTS, PREFERENCES PRIVILEGES AND RESTRICTIONS OF PREFERRED STOCK
(1) Dividend Provisions. The holders of the Preferred will be entitled to receive dividends at the rate of 8% of the Original Purchase Price whenever funds are legally available and when and as declared by the Board. No dividend shall be paid on the Common at a rate greater than the rate at which dividends are paid on Preferred (based on the number of shares of Common into which the Preferred is convertible on the date the dividend is declared). Dividends on Preferred will be in preference to dividends paid on the Common. Dividends on the Preferred will be noncumulative. (2) Liquidation Preference. In the event of any liquidation or winding up of the Company, the holders of Preferred Stock will be entitled to receive in preference to the holders of Common Stock an amount equal to their original issue prices plus all declared but unpaid dividends (if any). The Preferred Stock will be participating so that after payment of the original issue prices to the holders of Preferred Stock, the remaining assets shall be distributed pro-rata to all shareholders on a common equivalent basis.
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liquidation. Optional Conversion. The holders of Preferred Stock will have the right to convert Preferred Stock at the option of the holder, at any time, into shares of Common Stock. The Series __ Preferred Stock shall initially be convertible on a 1 for 1 basis. The conversion rate shall be subject from time to time to antidilution adjustments as described below. (4) Automatic Conversion. The Series __ Preferred Stock will be automatically converted into Common upon (i) the closing of an underwritten public offering of shares of Common Stock of the Company at a public offering price per share (prior to underwriting commissions and expenses) that values the Company after the offering of at least $100 million in an offering of not less than $20 million and at a per share price of at least [twice] [three] times the Original Purchase Price, before deduction of underwriting discounts and registration expenses (a Qualifying IPO) or (ii) approval of 66-2/3% of outstanding Series __ Preferred Stock. (5) Antidilution. Proportional antidilution protection for stock splits, stock dividends, combinations, recapitalizations, etc. The conversion price of the Series __ Preferred Stock shall be subject to adjustment to prevent dilution, on a weighted average basis, in the event that the Company issues additional shares of Common or Common equivalents (other than up to _____ employee shares) at a purchase price less than the conversion price. (6) Voting Rights. The holders of Preferred Stock will have a right to that number of votes equal to the number of shares of Common Stock issuable upon conversion of Preferred Stock. (3)
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REGISTRATION RIGHTS
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(1) Demand Rights: If investors holding at least 30% of Preferred Stock (or Common issued upon conversion of the Preferred Stock or a combination of such Common and Preferred Stock) request that the Company file a Registration Statement for at least 30% of their shares (or any lesser percentage if the anticipated gross receipts from the offering exceed $5,000,000) the Company will use its best efforts to cause such shares to be registered; provided, however, that the Company shall not be obligated to effect any such registration prior to the earlier of (i) [12 months after closing date] [some specific date], or (ii) within one year following the effective date of the Companys initial public offering. The Company shall not be obligated to effect more than three registrations under these demand right provisions. (2) Company Registration: The holders of registration rights shall be entitled to piggyback registration rights on registrations of the Company or on demand registrations of any later round investor subject to the right, however, of the Company and its underwriters to reduce the number of shares proposed to be registered pro rata in view of market conditions. Any cutbacks shall first be from any Founder and management shares. (3) S-3 Rights: Holders of registration rights shall be entitled to an unlimited number of demand registrations on Form S-3 (if available to the Company) so long as such registration offerings are in excess of $1 million; provided, however, that the Company shall only be required to file three Form S-3 Registration Statements on demand of the holders of Preferred Stock every 12 months. (4) Superior Registration Rights: No shareholder of the Company shall be granted registration rights superior to those of the Preferred Stock without the consent of the holders of at least 50% of the Common issued or issuable upon conversion of the Preferred Stock. If superior registration rights are granted, the Company shall grant the same registration rights to the holders of Preferred Stock.
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(5)
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Expenses: The Company shall bear registration expenses (exclusive of underwriting discounts and commissions) of all demands, piggybacks, and S-3 registrations. The Company will pay the reasonable fees of special counsel to the selling shareholders. (6) Transfer of Rights: The registration rights may be transferred provided that the Company is given written notice thereof and provided that the transfer (a) is in connection with a transfer of all securities of the transferor, (b) involves a transfer of at least ________ shares (or the entire original investment position of the transferor), (c) is to constituent partners or members or (d) is to transferees who agree to act through a single representative. (7) Termination of Registration Rights: The registration obligations of the Company will terminate on the earlier of five (5) years after the IPO or, with respect to any holder of registration rights who holds less than 1% of the outstanding stock of the Company, at such time as all registrable securities of such holder are freely tradeable immediately in one transaction pursuant to Rule 144. (8) Market Standoff: In connection with the IPO, each holder of registration rights will be required not to sell or otherwise dispose of any securities of the Company (except for those securities being registered) for a period of 180 days following the effective date of the registration statement for such offering if so requested by the underwriters of such offering; provided that, all 1% or more holders, all directors and all officers are so bound and provided further that any early release from this standoff provisions shall be pro rata to all holders bound by the market standoff provision.
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RIGHT OF FIRST REFUSAL
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The holders of Preferred Stock shall have the right in the event the Company proposes an equity offering of any amount to any person or entity (other than for a strategic corporate partner, employee stock grant, equipment financing, acquisition of another company) to purchase all or any portion of such shares pro rata in proportion to their ownership stake in the Company based on outstanding shares. The Company has an obligation to notify all holders of Preferred Stock of any proposed equity offering of any amount. If the holders of Preferred Stock do not respond within 21 days of being notified of such an offering or decline to purchase all of such securities, then that portion which is not purchased may be offered to other parties on terms no less favorable to the Company for a period of 90 days. Such right of first offering will terminate upon an underwritten public offering of shares of the Company. In addition, the Company will grant the holders of Preferred Stock any rights of first refusal granted to subsequent purchasers of the Companys equity securities to the extent that such subsequent rights are superior, in good faith judgement of the Companys Board of Directors, to those granted in connection with this transaction.
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(9) Other Provisions: Other provisions shall be contained in the Registration Rights Agreement with respect to registration rights as are reasonable, including cross-indemnification (subject to the provision that under no circumstances shall a selling shareholders liability exceed the amount of net proceeds received by such shareholder on sale of his shares), the period of time in which the Registration Statement shall be kept effective, underwriting arrangements, the ability of the Company to delay demand registrations for up to 90 days (S-3 Registrations for up to 60 days) and standard information and inspection rights.
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PROTECTIVE PROVISIONS OF THE PREFERRED AS A CLASS
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So long as Preferred Stock remains outstanding, the Company shall not, without the vote or written consent of at least [662/3%] [a majority] of the holders of Preferred Stock, (i) authorize or issue any equity security senior to or pari passu with the Preferred Stock as to voting rights, dividend rights, redemption rights or liquidation preferences (ii) increase the number of authorized shares of capital stock of the Company (iii) change the authorized number of Directors (iv) amend its Certificate of Incorporation or Bylaws in a manner that would adversely alter or change the rights, preferences or privileges of any Preferred Stock (v) purchase or redeem any shares of Preferred Stock or Common Stock, other than the repurchase of shares from officers, directors, employees or consultants on terms approved by the Board or (vi) pay or declare any dividends or other distributions with respect to the Common or Preferred Stock. Written consent of [662/3%] [a majority in interest] of the Preferred shareholders, voting as a single class, shall be required for (a) any merger, consolidation, or other corporate reorganization, (b) any transaction or series of transactions in which in excess of 50% of the Companys voting power is transferred or in which all or substantially all of the assets of the Company are sold, or (c) permit any subsidiary of the Company to sell any securities to a third party.
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PROTECTIVE PROVISIONS FOR THE SERIES __ PREFERRED
BOARD OF DIRECTORS
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PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
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The consent of the holders of at least [662/3%] [a majority in interest] of the outstanding Series __ Preferred will be required for any action which would: (i) amend or repeal any provision of, or add any provision to, the Company's Certificate of Incorporation or Bylaws to change the rights of the Series __ Preferred, or increase or decrease the number of authorized shares of the Series __ Preferred; (ii) create any new series or class or shares having a preference or priority as to voting rights, dividend rights, redemption rights or liquidation preferences over that of the Series __ Preferred; (iii) create any bonds, notes or other obligations convertible into, exchangeable for or having option rights to purchase shares of stock with any preference or priority as to voting rights, dividend rights, redemption rights or liquidation preferences over that of the Series __ Preferred; (iv) reclassify any class or series of Common into shares with a preference or priority as to voting rights, dividend rights, redemption rights or liquidation preferences over that of the Series __ Preferred; or (v) apply any of its assets to the redemption or acquisition of any shares of Common, except from employees, advisors, officers, directors and consultants of the Company on terms approved by the Board. The Board of Directors shall consist of ________ (__) members. The holders of a majority of the Series __ Preferred shall be entitled to elect one (1) member of the Companys Board of Directors. The remaining directors shall be elected as follows: one (1) member elected by the Series __ Preferred; one (1) member elected by _______________; one (1) member elected by _______________; [and one (1) member elected by Strategic Investor], and ___________________________.
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Each officer, director, and employee of the Company has entered into a confidentiality and inventions assignment agreement including nonsolicitation of employee provisions for a period of one year after employment. The Founders and each consultant developing work for the Company have also executed such an agreement. ________________________________________ ________________________________________ ________________________________________
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________________________________________ ________________________________________
RIGHT OF FIRST REFUSAL AND COSALE AGREEMENT
PURCHASE AGREEMENT:
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MARKETING AGREEMENT:
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The Founders will enter into a right of first refusal and co-sale agreement pursuant to which, if the Founders propose to sell all or a portion of any of their shares to a third party, they must either permit the holders of the Series __ Preferred at their option (i) to purchase such stock on the same terms as the proposed transferee, or (ii) sell a proportionate part of their shares on the same terms offered by the proposed transferee. Such right will terminate upon the closing of a Qualifying IPO. The investment shall be made pursuant to a Stock Purchase Agreement acceptable to the Company and the Investors, which agreement shall contain, among other things, representations and warranties of the Company with respect to intellectual property, financial statements, litigation, previous employment, outside activities, Year 2000, the Company's standard 4-year stock option vesting (with one year cliff), covenants of the Company reflecting the provisions set forth herein, appropriate conditions of closing, including an opinion of the counsel for the Company, and other terms. The rights of the Series __ Preferred will not be less in any manner than the rights of the existing series of Preferred Stock. The negotiation, finalization and execution of a [Marketing Agreement] [Licensing Agreement] [other agreement] on terms mutually acceptable to the Company and Strategic Investor is a condition to Strategic Investors participation as an investor.
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QUALIFIED SMALL BUSINESS STOCK:
The Company will represent and warrant that there is no condition preventing the Series __ Preferred Stock from being Qualified Small Business Stock as defined in Section 1202(c) of the Internal Revenue Code of 1986, as amended. The Company will covenant that it will use reasonable best efforts to avoid actions or circumstances that would cause the Series __ Preferred Stock to cease to constitute Qualified Small Business Stock.
[OBSERVATION RIGHTS:
Strategic Investor shall have Board observation rights pursuant to Strategic Investors standard Board Observation Rights letter, separately provided to the Company.] Each Investor who purchases at least $______ million of shares shall have the right, exercisable no later than 15 days prior to the close of the Companys IPO, to purchase up to $ million of shares in the IPO at the price initially offered to the public less the underwriters discount. Such shares shall be fully registered and tradable without restriction. Such sale shall be conducted in compliance with applicable securities laws. If for any reason the Company is unable to sell such shares to the Investors because of securities law reasons, the Investors shall receive five-year warrants to purchase shares of Common Stock with the same dollar amount of securities and purchase price, containing customary provisions and net issuance rights to the holders.]
CORPORATE ISSUES:
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CONFIDENTIALITY:
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EXPENSES:
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The Company will pay the legal fees of outside counsel to Strategic Investor in connection with its investment and the [Marketing Agreement] [Licensing Agreement] [other agreement], payable by wire transfer at the closing as a condition to closing, in the fixed amount of $35,000 plus actual out-of-pocket expenses.
The Company will execute Strategic Investors standard letter, separately provided to the Company, acknowledging Strategic Investors unrestricted right to pursue other similar opportunities and not be restrained in its ability to conduct business. The existence and terms of this Term Sheet, and the fact that negotiations and discussion may be ongoing between the Company, Strategic Investor and the Investors, are strictly confidential and may not be disclosed by the Company to anyone except the Companys directors, senior executive officers and legal counsel.
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[IPO PARTICIPATION:
DUE DILIGENCE:
The Company shall fully cooperate in connection with the Investors due diligence review. Among other matters, satisfactory due diligence review is a condition for the Investors commitment to move forward on the transaction. Neither the Company nor any of the Companys directors, officers, employees, agents or representatives will solicit, encourage or entertain proposals from or enter into negotiations with or furnish any nonpublic information to any other person or entity regarding the possible sale of the Companys stock. The Company shall notify Strategic Investor promptly of any proposals by third parties with respect to the acquisition of the Companys stock and furnish it the material terms thereof. The Company shall deal exclusively with Strategic Investor with respect to any such possible transaction and Strategic Investor shall have the right to match such proposed transactions in lieu of such third parties. This right shall last for a period of 30 days from the date hereof.]
[EXCLUSIVITY:
NO OTHER AGREEMENTS:
ADDITIONAL ISSUANCES:
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This term sheet represents the entire understanding and agreement of the parties with respect to its subject matter, and supersedes any prior or contemporaneous representations, understanding or agreements between STRATEGIC INVESTOR and the Company. This term sheet and any related transactions may only be amended or documented in a writing signed by both parties who are signatories hereto.
Strategic Investor shall have the right to veto issuances of any shares of capital stock of the Company to the following entities for equity financing purposes at any time before the earlier to occur of the IPO or [date]: [any travel agency (whether on-line or off-line) and any financial services company.] [refine as necessary]
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WARRANTS:
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The Company will issue a warrant containing the following terms to Strategic Investor concurrently with the closing of the purchase of the Preferred: (a) Warrant to purchase shares of Series __ Preferred Stock convertible to Common Stock. (a) Exercisable in [number of tranches] in whole or in part at any time and from time to time from the date of grant through the expiration of the particular tranche. The exercise price and vesting of each tranche is set forth below: [insert details of the tranches-exercise price, number of shares, and term] (c) All tranches exercisable in whole or in part from and after the date of issuance until maturity of the particular tranche. (c) Method of exercise includes net issuance or cashless exercise rights. (c) Antidilution adjustments of the exercise price and number of shares subject to the warrant for events such as merger, stock split, reclassification, stock dividend. (c) Underlying preferred should be authorized and should be subject to antidilution protection during the term of the warrant. (c) Warrants may be transferred by Strategic Investor in conformity with applicable securities laws. (c) Registration rights comparable to those applicable to the Preferred will apply to the common stock obtained upon conversion of the Preferred Stock issuable upon exercise of the warrants. (c) Parties agree to treat and report for all purposes the warrant as part of Strategic Investors concurrent investment in the Preferred Stock pursuant to the Preferred Stock Purchase Agreement between the Company and Strategic Investor. The parties will not treat the Warrant and the shares as being granted or issued as property transferred in connection with the performance of services of otherwise as compensation for services rendered. (c) [Most Favored Nations. If Company enters into any other transaction with [another party] [a competitor] with provisions which, taken as a whole, are more favorable than the
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COUNSEL TO STRATEGIC INVESTOR:
EXPECTED CLOSING DATE Date:
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Strategic Investor By: __________________________ Title: _________________________ By: __________________________ Title: _________________________
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COUNSEL TO THE COMPANY:
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(c) Strategic Investor will be entitled to receive a stock purchase agreement with representations and warranties and customary closing documents including disclosure schedule and opinion of counsel at time of warrant exercise. Strategic Investor shall be entitled to do customary due diligence prior to the exercise of the warrant. ______________________________________ ______________________________________ ______________________________________ ______________________________________ ____________________________________
______________________________________ ______________________________________ ______________________________________ ______________________________________ ____________________________________ ____________________________________
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provisions available to Strategic Investor in the transaction of which the Warrant is a part, then Strategic Investor shall be entitled to the benefits of the other agreement. Company will not enter into a transaction with[another party] [a competitor] more favorable than the provisions available to Strategic Investor in the transaction of which this Warrant is a part, then Strategic Investor shall be entitled to the benefits of the other agreement. Company will not enter into a transaction with [another party] [a competitor] in which Company agrees to issue equity or rights to acquire equity where the provisions in such transaction are more favorable than those available to Strategic Investor.]
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National O-Mobile Multimedia Cooperative Federation Business

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AFRICA CAPITAL & BUSINESS SUPPORT SERVICE LIMITED

O-Mobile Multimedia Cooperative Federation Limited

The Blue Capital MocroSecureInvest

LimitedPartnership Operations Methodology

National O-Mobile Multimedia Cooperative Federation Limited Business Plan

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

3.1. 3.2. 3.3. 3.4.

Ownership Organizational structure Board & governance Products & services

5.2. Analysis of environment

5.5. Regulatory factors

5.5.1. VAT 5.5.2. Tax 5.5.3. Rediscounting & Refinancing facility

5.4.1. Correspondent banks 5.4.2. Cooperative societies 5.4.3. Development Associations

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

4.1. 4.2. 4.3. 4.4. 4.5.

7.2. Fundraising/Financing strategy 7.3. Projected Financial Statements

7.3.4. Assumptions underlying the projections

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

______________________________________ Signature ______________________________________ Name (typed or printed) ______________________________________ Date:

This is a business plan. It does not imply an offering of securities.

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

Upon request, this document is to be immediately returned to _______________.

FEDERATION of different Cooperatives working together to operate a National

Proposed BUSINESS Name

Bank Location of Company Ownership

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

+2347032224967 KEMSON CONCEPT LIMITED and NATIONAL O-MOBILE

MULTIMEDIA COOPERATIVE SOCIETY FEDERATION LIMITED

MULTIMEDIA COOPERATIVE FEDERATION LIMITED

Mr. Chuks Chukwuocha

FUTUREVIEW FINANCIAL SERVICES LIMITED

W-HOLISTIC BUSINESS SERVICES LIMITED

Mrs. Lanre Oniyitan +2348037169737

Mr. Joel Omeike +2348035798352 vc@acbscapital.com

AFRICA CAPITAL & BUSINESS SUPPORT LIMITED

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

WHATTODONEXT LIMITED and NATIONAL O-MOBILE

1.0 Executive summary

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

Total Target Capital Base

Cost of Raising Tier 1A Capital Legal/Documentation/Filing Total

Rent/Land and Buildings

Refurbishment of building Total

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

Working capital Regional Offices 6 60,000,000.00

First Year Month 1 to 6

EBIT Margin% EBIT Growth Rate

274,335,062 67% 68%

851,074,925 92% 41%

1,434,500,673 93% 32%

Interest & Finance Charges

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

Profit/Loss Before Tax

Taxation Profit/Loss Before Tax (Month) Profit/Loss Before Tax (YTD)

First Year Month 7 to 12

Gross profit Margin%

EBIT Margin% EBIT Growth Rate Interest & Finance Charges

7,012,758,172 95% 15%

Profit/Loss Before Tax

Profit/Loss Before Tax (Month) Profit/Loss Before Tax (YTD)

National O-Mobile Multimedia Cooperative Federation (Nonprofit Organization)

Gross profit Margin%

Margin% EBIT Growth Rate

Taxation Profit/Loss Before Tax (Month) Profit/Loss Before Tax (YTD)

Signature Name (typed or printed) __ Date: