Private Capital and Financing

Investing Private Equity / Venture Capital / Private Placement Memorandum

Daniel, Russell & Charles Co., is a leading private growth equity investor. We have one of the longest records (17 years) in private capital investing, transitioning through three major long-term investment cycles. We have invested over $150 million across multiple highly diversified funds and partner with created over $400,000 million in fund liquidations. We have over $260 million in active portfolio investments.

Daniel, Russell & Charles Co., invests mainly in the United States with a focus on our three sectors of expertise: outsourced services, information technology, green projects bio fuel, biomass, renewable energy and healthcare businesses. We invest for expansion and growth in small and mid-size companies with established business models, high internal growth rates, and large-market leadership potential.

Deep portfolio company involvement

We help companies achieve highly profitable leadership positions in large markets. Daniel, Russell & Charles Co., is typically the lead (or sole) outside investor and invests up to $25 million. Daniel, Russell & Charles Co., works closely with its portfolio companies in many areas including:

• Strategy

• Recruitment

• Sales and marketing

• Corporate development

Unique approach is key to success
We build and maintain broad, deep, long-term domain expertise through a research and investment focus that encompasses both the private and public companies in our sectors of expertise. Relative to traditional approaches, this approach enables Daniel, Russell & Charles Co., to add unique value as an investor through:

• Superior understanding of our industries, for assistance with strategic planning

• Broader and deeper networks of industry contacts, for assistance with recruitment, marketing, and selling

• Better understanding of the institutional investor community, for subsequent financings

• A longer-term perspective on company development—well beyond the IPO

Finance Express Program

Daniel, Russell & Charles Co. established the Finance Express Program to deliver a service to its clients that are efficient and helpful in expediting the underwriting processes used in business finance transactions. DRC's Express Program was setup to handle the financing requirements of small businesses and corporations that might otherwise have a need for operating capital that could range from $100,000 to $20,000,000. The Program's guidelines and underwriting criteria covers what may be classified as the A+ to C borrowers and that may have a loan-to-value as high as 80% to 90% as an integral part of the Debt Coverage Ratio.

Commercial Express Program

The Commercial Express Program is an extension of the Finance Program identified above. This program is designed to handle projects that are exclusively linked to the construction and/or maintenance of apartment buildings, strip mall centers, shopping centers with anchor tenants, office buildings, medical centers, and manufacturing facilities, provided they are not generally considered to represent single purpose use. However, from time-to-time DRC will consider such projects on a case-by-case basis).

Generally, DCR will consider income producing commercial properties that have adequate debt coverage. In addition to DRC programs, its affiliate and associates relationships with numerous investor groups throughout the country that will underwrite and fund various projects of any size that we might engage. DRC offers the following types of loans and services:

• Multifamily

• Retail Properties

• Office Properties

• Heavy and Light Industrial Buildings

• Hotel Properties

DRC's Commercial Express Program is designed to simplify the process while giving you, the originator, a response in record time by submitting a few basic items. If you are interested in any one or a combination of our financing services, please carefully consider the enclosed items for completion to start the process of the Express approval.

In addition, DRC's Business Planning service is pleased to offer the following loan products:

Owner-User Commercial Real Estate Purchase, Refinance, and/or Construction Loans:

Whether it's to buy an existing building or to construct a new building, businesses with growing sales trends need not demonstrate historical debt service ability-they need only to show a .80 debt coverage ratio for the last twelve months ending a specified date in time. Real estate loan transactions may include construction financing provide that there is a permanent loan that has been approved. For real estate purchase transactions that might involve a current business owner, the 10% down payment may be borrowed--plus DRC will add all closing costs. In these types of transactions, the business must occupy at least 51% of the building. Loans are provided from $500,000 to $100,000,000.

Business Acquisition:

DRC can provide up to 85% of the financing costs for a Buyer, which equates to a Seller walking away with more cash up-front. We will finance up to 100% of goodwill. On loans of $1MM or under, no minimum collateral value required. Loan terms are 10 years without real estate or 25 years with real estate. We consider loans of $500,000 to $50,000,000.

Partner Buyout:

DRC can provide up to 100% of financing for a partner's buyouts. This type of transaction is based on a 10 year term for loans of $250,000 to $20,000,000 ( 25 year term that might involve real estate).

Equipment Financing:

DRC can provide 90% financing for equipment purchases for a term of 10 years. Financing is available for Capital equipment that is used in the business, which excludes transactions that might otherwise involve licensed vehicles and/or rolling stock. We consider loans of $100,000 to $10,000,000.

Franchise Financing:

DRC can provide up to 85% of financing for startup franchises or the purchase of an existing Franchise business. This type of transaction has a term of 10 years (25 year term with real estate). We consider loans of $100,000 to $2,000,000.