1.

Activated charcoal production in Louisiana

2. MSW project in Canada

3. Three MSW projects in Argentina

4. Green plant manufacture in Kalamazoo

5. MSW proposal for Springhill

6. Strategic presentation to 350 Key MSW decision makers.

1. Green waste collection in Florida: We have a client in California

who is seeking to invest into a green electricity generating plant. He is fully
funded and has three criteria which he needs to have fulfilled:

A. A sustainable supply of green waste of least 800 tonnes per day

B. An electricity sales price of at least $0.12 per KW/hour

C. A suitable site of at least ten acres of land at a maximum price of

$35,000 per acre.

We have now sourced all the criteria in Florida and we are at the stage of
concluding contracts with the various parties involved. We will make our
money by virtue of brokering the supply of green waste. As a minimum
this will be worth at least $2 million per annum in fees.

2. Activated Charcoal production in Louisiana & torrefied biomass

production in Louisiana: I attach as Appendix One the one pager on each
of these projects which summarises them quite clearly. We are now at an
advanced stage with six separate investor groups and have started the due
diligence process in detail with one of them. These projects will be
operational this year.

3. We have a very large MSW project in Canada where we have agreed

terms with the soon to be retiring owner of an existing MSW business. The
business currently processes more than 1,000 tonnes per day of MSW. That
volume of business can be tripled if more modern methods and equipment
were applied. Currently, all the MSW is put to landfill; and that has to stop.
We are negotiating with Wilson Systems to be the supplier of the necessary
processing equipment and they have also indicated a willingness to put up
the necessary early stage funding for this project as soon as their own
detailed DD is completed with their institutional investor; that is anticipated
to be in approximately six weeks time. At that point we can then complete
the early stage development of this project to the point where Wilson
Systems institutional investor will take on the project as our investor. The
Wilson system technology is performance guaranteed by Lloyds of London

4. Three MSW projects in Argentina: We have secured the

exclusive rights to utilise the CBE carbon diversion technology for processing
 MSW in Argentina. The projects will be owned by the Argentinean
municipalities involved; we will make commission on supply of the machinery
and, more importantly, in the supply of a long term management contract for
each project.

5. Green plant manufacture in Kalamazoo: The municipality of

Kalamazoo has indicated a willingness to fund a feasibility study with a view
to establishing a green technology manufacturing plant in Kalamazoo. We
have tendered for the work. Our tender is in Appendix Two. Provided our bid
is accepted we will also earn substantial additional fees from securing the
overall funding package. The appendix also outlines the technologies we are
involved with.

6. MSW proposal for Springhill: The municipality of Springhill in

Louisiana has indicated a willingness to pay for a detailed feasibility study to
establish the viability of an MSW processing plant for the municipality. This
project is at an early stage and we are still completing our proposal.

7. Development of a wide ranging strategy for supply of MSW

equipment and management to a range of Municipalities. This strategy,
which is the logical next development in our business, will be presented to
350 economic development officers in Chicago in mid march. This is an
important event for us because it will enable us to showcase our ideas,
expertise and in particular our project development and management skills
directly to 350 key decision makers.

Appendix One

USUK / WestWind Technology LLC

2
 The production of activated charcoal in Louisiana--- Executive Summary

USUK is a development company formed to undertake the commercialisation of a three phase

biomass strategy created by West Wind Technology LLC (WWT). This outline covers Phase One, the
production of activated charcoal utilising bagasse.

USUK has negotiated with the M.A.Patout Sugar mills in Louisiana to utilise waste output of Bagasse
in the manufacture of activated charcoal. The main plant produces approximately 600,000 tonnes of
Bagasse waste per annum. At present the bagasse is utilised very inefficiently to produce a small
amount of electricity; much less than the plant needs to operate. USUK will utilise new technology,
which is already established and tested.

In addition to producing activated charcoal from a variety of feedstock the process also produces a by-
product of bio-oil which can be used in electricity production. The commercial arrangement with
M.A.Patout is that they will supply all their bagasse for free to USUK who will in turn supply all the
sugar mill’s electricity and heat needs for free. The activated charcoal plant will be located in its own
stand alone building near the sugar mill and would employ approximately 30 staff in addition to the
management team.

If the facility is operated on the basis of two shift days, five days per week it will utilise
approximately 60,000 tonnes of bagasse to produce approximately 25,000 tonnes of activated
charcoal per annum and would generate approximately 3.6 mega watts of net electricity; sufficient for
the sugar mill’s total energy needs. The production facilities are modular and can be expanded almost
without limit. It takes approximately six months to complete the construction and handover of the
facility.

Activated charcoal is extensively used all over the world for a multitude of purposes with its main use
being as a water filter. The market is well established with a rapidly increasing demand as more
countries are forced to deal with increased levels of water purification and developing countries are
forced to clean their drinking water for the first time. Current world wide annual usage is
approximately 1.2 million tonnes and the market is growing at more than 5% per annum. Recent US
legislation requiring US energy generators to remove mercury from flue gas emissions will further
accelerate the growth in the market. The selling prices for activated charcoal range from $1,000 to
$4,000 per tonne depending on quality. Bagasse will supply a uniform high grade raw material so the
quality expectation for the activated charcoal is in the upper half of that price bracket. USUK is in the
advanced stages of establishing off-take agreements with three major users of Activated Charcoal:
Norit Inc; Calgon Inc and MeadWest Vaco Inc.

This project will qualify for both state and federal grant support. It will qualify for the 30% grant
under the US federal recovery act of 2009 provided the project is started in 2010. The grant is only
paid out once at least 5% of the project cost has been spent. The financial projections in this plan
make no allowance for grant receipts. In addition, USUK/WWT has established that the debt section
of the project funding will qualify for support under the USDA loan guarantee structure. This means
that, subject to detailed scrutiny of the plan by the USDA, any loan funding will be 90% underwritten
by the USDA.

At a low average sales price per tonne of $1,000, gross annual income is estimated at more than $25
million with net profits after tax of more than $10 million per annum. The projected IRR is in excess
of 150% and the ROE in excess of 270%. The total project cost in the base case will be $12
million with a projected debt/equity split of 70/30.

Appendix One: Second Project USUK / WestWind Technology LLC

The production of Torrefied Biomass from bagasse in Louisiana--- Executive Summary

USUK is a development company formed to undertake the commercialisation of a three phase

biomass strategy created by West Wind Technology LLC (WWT). This outline covers Phase Two, the
production of Torrefied Biomass utilising bagasse.
USUK has negotiated with the M.A.Patout Sugar mills in Louisiana to utilise waste output of Bagasse
in the manufacture of activated charcoal. The main plant produces approximately 600,000 tonnes of
Bagasse waste per annum. At present the bagasse is utilised very inefficiently to produce a small
amount of electricity; much less than the plant needs to operate. USUK will utilise new technology,
which is already established and tested, supplied by Rotawave Ltd.

Torrefaction is the process of energy intensification of biomass. It is very important to the large scale
development of biomass as a fuel because in removing all the unnecessary waste from the biomass it
makes burning the biomass cleaner and more efficient and it also minimises transport costs.

Rotawave’s microwave based process for the extraction of water, petroleum products and organic oils
at very low cost from various resources, including oil drill cuttings, refinery and food waste streams
and biomass. The technology is based on the advanced simultaneous use of multiple electromagnetic
frequencies and a unique ceramic phase separation drum. This maximizes heat and mass transfer
within the system hence reducing plant size, material hold up and operating costs. In addition the low
intensity thermal regimes required allow oils to be recovered with no degradation. Rotawave is
excellent for the production of torrefied biomass.

In addition the low intensity thermal regimes required allow oils and syn-gas to be recovered with no
degradation which can be used in electricity production. The commercial arrangement with
M.A.Patout is that they will supply all their bagasse for free to USUK who will in turn supply all the
sugar mill’s electricity and heat needs for free. The torrefied biomass plant will be located in its own
stand alone building near the sugar mill. It takes approximately nine months to complete the
construction and handover of the facility. The plant will employ approximately 36 staff in addition to
the management team, and in the base case will process approximately 200,000 tonnes of bagasse to
produce 100,000 tonnes of torrefied biomass.

USUK has established relations with USA and EU electricity generators and with two of the world’s
largest non-forest products trading companies which are interested to receive regular supplies of
consistent quality, torrefied biomass. EU and USA generators are already required to burn a certain
amount of biomass fuel to compensate for the pet coke and low grade coal they mainly use. The rules
are not as stringent in the USA as in the EU but the US generators understand that they will become
so in the near future and are already introducing pelletized biomass into their fuel burning options. A
figure of $140 per tonne of torrefied biomass ex-plant has been used in the financial projections.

This project will qualify for both state and federal grant support. It will qualify for the 30% grant
under the US federal recovery act of 2009 provided the project is started in 2010. The grant is only
paid out once at least 5% of the project cost has been spent. The financial projections in this plan
make no allowance for grant receipts. In addition, USUK/WWT has established that the debt section
of the project funding will qualify for support under the USDA loan guarantee structure. This means
that, subject to detailed scrutiny of the plan by the USDA, any loan funding will be 90% underwritten
by the USDA.

At an average sales price per tonne of $140 ex-plant, gross annual income is estimated at more than
$14 million with net profits after tax of more than $5 million per annum. The projected IRR is in
excess of 50% and the ROE in excess of 90%. The total project cost in the base case will be $18
million with a projected debt/equity split of 70/30.

Appendix Two

4
Proposal For the Development of
a Centre of Excellence and
Large-Scale Manufacturing
Business for “GREEN”
Technology in the Municipality of
Kalamazoo

Index:
 1. Introduction

2. Background

3. Outline Development Proposal

4. Process required to facilitate development

5. Timeline

6. Appendices

Introduction

Smart Carbon is a recently formed consultancy which brings together a wide

range of expertise encompassing all the skills required to develop nearly every
aspect and variation of green projects. “Green projects” under our definition
include, but are not limited to, the following:

A. Alternative energy projects, with a particular emphasis on biomass and

bio-oil projects.

6
 B. MSW projects which reduce landfill; recycle large elements of waste and
produce energy.

C. Projects which utilise various forms of “waste” biomass such as bagasse.

D. Projects which increase agricultural efficiency by utilising recycled waste

as fertiliser.

The senior partners in the consultancy have more than 200 years of combined
high-level experience in designing, developing and managing these types of
businesses. A synopsis of the senior partner’s CV’s is in Appendix One. Smart
Carbon’s philosophy is on practical project development by researching and
securing projects which will supply realistic investor returns. This in turn means
that we investigate every aspect of a given project: technical, financial, markets
& customers and management.

The “green” sector has been the subject of much debate over many years
concerning its efficacy or indeed whether it is necessary at all. Our view is that it
is indeed vital that we move the world’s economies to better utilise the shrinking
resources we have in a way which will improve quality of life. The scientific
evidence backing up this view is now accepted by mainstream opinion.
Regardless of whether one accepts that view or not, the new commercial reality
is that “green” technology is here to stay and will play an increasingly important
part in all economic activity. Countries, regions, cities and communities who do
not embrace this new reality will rapidly be left behind in this new technological
race.

Background

The Midwestern part of the USA has been particularly badly hit by the recent
economic downturn. The bedrock industries of coal mining and car manufacture
have been in long-term decline for several decades. The recent financial hiatus
only served to accelerate the demise of large sections of the automotive
industry. Unemployment in the Midwest is amongst the highest in the US and
the region has been further affected by the seemingly inexorable flight of larger
business to the Southern US states. However, the engineering skills developed
over many generations of involvement in previous mainstay industries are still
available in the Midwest. The urgency is in seeking and securing alternative uses
for these skills. Smart Carbon believes that we are able to offer the start to a
viable alternative.

Outline proposal

The range of activities and expertise within Smart Carbon ensures that at any
one time we are dealing with the most up-to-date opportunities. It also affords
us a strategic view of how this new sector is developing and where the
bottlenecks to its necessary rapid progress are. It is a sector which is attracting
the best and most innovative minds. Unfortunately the sector does not always
supply the best means of bringing great ideas to practical fruition.

Smart Carbon is suggesting that Kalamazoo should create an engineering Centre

of Excellence which will specialise in “incubating” new developments in
engineering as they might apply to green projects. This is consistent with
utilising the existing pool of expert engineering labour which still exists in the
Midwest and in Michigan in particular. However, to ensure that the Centre of
Excellence is not simply a think tank with no practical benefit in terms of job
creation and retention, we believe that the Centre of Excellence should be
contained within a fully functioning, commercially run, profitable and profit-
driven engineering business.

Smart Carbon has secured the provisional manufacturing rights to four

technologies, three of which already have customers, which can be placed into a
new engineering business in Kalamazoo. The critical point about this strategy is
its ability to be immediately implemented in a commercially viable way. There
would be no need for any long planning stage while initial orders are secured.

Once the manufacturing of these initial four technologies is underway and the
basic engineering infrastructure has been established, the Centre of Excellence
within the business would provide early stage development facilities for other
green technologies which are perhaps at an earlier stage of development. The
early stage of development of new technologies and the building of prototype
assemblies and trial plants is the most difficult stage of bringing a technology to
practical fulfilment and commercial reality. The Centre would work closely with
universities and colleges in the Midwest to afford new ideas a practical place to
develop and, most importantly, build new technologies. Maintaining a stream of
such new technologies is the best immediate and long-term way of ensuring job
creation and retention in Michigan.

The four technologies Smart Carbon will bring immediately to this project are:

The Wilson System: Designed by Tom Wilson, an acknowledged expert in

MSW processing, the Wilson system is a cutting edge technology which utilises
autoclave technology to reduce all forms of municipal waste to a form which can
be safely returned to the land as a fertilizer. The process can also be used to
generate electricity. The technology is recognized as “best in class” for efficient
large-scale processing of MSW.

CBG Charcoal plant: CBG is the result of a collaboration of several

engineers which addressed the problem of production of biochar, activated
carbon and bio-oil from a wide variety of biomass waste materials such as
bagasse, timber off-cuts, bamboo, woody grasses and certain forms of processed
MSW . The technology can be recalibrated to deal with old tire processing and
produces high-value commodity output. The technology has its own custom
designed generator sets which run directly from the bio-oil produced from the
main conversion process. The system already has confirmed stand alone orders
and those will be further augmented by being able to be used as a secondary
processing “bolt-on” to the Wilson systems plants.

Rotawave: A state of the art technology which utilises microwaves in the

torrefaction of biomass. Torrefaction enables the maximization of energy from a
given amount of biomass. This is critical in reducing transport costs per BTU of
energy. Torrefied biomass will be the green energy source of choice by most
major energy producers in the world and the Rotawave technology is the
cheapest way yet devised for carrying out the process.

8
Vertical Flow Reactor Technology: Initially developed in the US to enable the
processing of severely toxic waste, the process has now been further refined to
enable the production of bio-fuels such as Ethanol and Butanol from waste
materials. The process is extremely efficient and commercially attractive by
virtue of utilizing vertical flow tubes drilled deep underground which generate
large amounts of heat and pressure at very low cost. Butanol will probably be
the next generation of mass use bio-fuel.

Although these technologies are very efficient, very cost effective and of proven
commercial viability, they require considerable expertise to manufacture. They
have the added attraction of sharing many common components. In addition to
the manufacturing being placed in Kalamazoo, there will need to be many “fitting
and assembly” teams trained to install the machines at the customer’s locations.
The market for these systems is numbered in the thousands of plants worldwide.
Smart Carbon anticipates that if this project is properly funded and implemented
it will create many hundreds of long-term sustainable, secure jobs.

Process required to facilitate development

The basic concept of locating a large-scale manufacturing plant for such

technologies, allied to a Centre of Excellence R&D facility to ensure a continuous
pipeline of further similar technologies, requires development of a full scale
business plan which will underwrite the investment necessary to turn this
concept into a reality. The following work needs to be carried out:

· Completion of formal legal licensing agreements for the four identified

technologies to confirm manufacture at Kalamazoo. The reason the
current arrangements are provisional is because the companies involved
do not wish to give unqualified commitment until they are satisfied that
the necessary investment has been obtained and that their technology will
be placed in a situation which affords it the best opportunity to prosper.

· Design of a plant layout which will afford the best economies of scale,
efficiencies and future adaptability. The initial scope and scale of the plant
will also have to be ascertained.

· Location of specific suitable site options for the plant which take account
of required space, ease of access for suppliers and workers and future
expansion requirements.

· Specific confirmation of availability of engineering trained workforce.

· Detailed sales and marketing plan encompassing not only macro economic
analysis of the world- wide market, but also detailed identification of
specific customer opportunities. All the technologies outlined above come
with specific identified customers, but these need to be contractually
confirmed.

· Development of a detailed financial model and business plan combining all

the other parts of the assignment in such a way as to underwrite and
secure investment for the project.
 · Securing of the investment for the project. Smart Carbon would initially
envisage an investment mix of conventional debt and equity allied to
various forms of state and federal government support. Once the overall
plan is completed Smart Carbon will present the investment opportunity to
such a mix of investors.

· Initial development of a Centre of Excellence strategy to ensure the

attraction of future technologies to Kalamazoo. This will involve liaison
with local universities and colleges to clearly set out what would be on
offer to new technologies and how such development will be paid for.

· Identification of a suitable management team.

Carrying out this work is a complex process requiring the creation of an overall
plan for a business which will be capable of manufacturing, on a long term basis,
a wide variety of different machines and technologies. It will require input from a
variety of disciplines, most of which Smart Carbon can supply internally, but
some of which will need to be supplied by outside sources. It will require
detailed liaison with the executives of the four businesses who own the initial
four technologies. We anticipate that this work will take approximately three
months and will cost $400,000.

Timeline

This is by definition an iterative process involving detailed liaison with many

different parties and will involve exploring all sensible options; discarding the
less suitable ones and arriving at an agreed detailed commercial strategy and
plan. It frequently involves revisiting previously discarded ideas because new
information uncovered at a later stage in the process allows these discarded
ideas to be viewed in a different light. For that reason the timetable outlined
below is of necessity only a best estimate.

1st March Start of consultancy project to develop feasibility and detailed

business plan.

15th April Initial interim report to Kalamazoo municipality

30th April Start of initial outline discussions with investing groups; Debt
and equity suppliers and government bodies.

31st May Formal completion of the business plan. Detailed discussions

with seriously interested investing groups. These will involve
input from the owners of the various technologies we intend
to manufacture.

30th June Selection of final shortlist of investors.

31st July Confirmation of factory location.

31st August Submission of planning applications for the building or site

30th November Start of building construction or building renovation.

10
Appendix One to Kalamazoo proposal Senior Partner CV’s

Iain MacAulay C.A. Chartered Accountant:

A Scottish Chartered Accountant with more than 25 years high-level experience

across a wide range of different industries. A former young businessman of the
year, Iain has successfully operated his own consultancy business since 1991
offering company restructuring, interim management and project development
management to a wide range of companies in different industries, including:
Textiles, Engineering, Software Design, Agro Businesses, Chemicals, Food
Processing, Leisure, Wind Power, Bio-fuels, Pulp & Paper,and Financial services,
The businesses range in size up to E1Billion turnover or more than E450M in
project cost. Iain has a wide range of experience in business management in a
variety of countries including Eastern Europe, the USA, Canada, Central America,
Kazakhstan, the Middle East and most of Sub Saharan Africa.

Iain has worked on the development of several large-scale wind projects and was
responsible for securing more than E450 million in non-recourse debt for a wind
project in the Czech Republic. For the last ten years Iain has worked very closely
with Professor John Woods in the development of plantation biomass projects for
energy and, more recently, in the production of activated charcoal. In developing
these projects Iain has built up a wide range of technical, financial and
commercial contacts in the alternative energy and MSW sector.

Professor John Woods:

Following a highly successful academic career, which culminated as tenured

professor of biology and director of the National Centre for Environmental
Education at Tennessee Wesleyan College, John co-founded West Wind
Technology in 1994 with his wife Susan Woods. John is the author of many
authoritative papers on Giant Reed grasses and Bamboos, collectively called e-
Reed, and is an acknowledged authority around the world in his subject. John
and his wife Susan are amongst the world’s foremost plant biologists in their field
of expertise. In particular they are experts in the micro-propagation of elite
species of Bamboo and Giant Reed grasses. Their breakthroughs allow a
biomass production of 10 to 25 times that of forest and can be accomplished
world-wide wherever a suitable site is identified. They have extensive
experience in large-scale farming practices and are similarly experienced in the
collection and assessment of the data necessary to assess potential
development sites for the commercial production of e-Reed Biomass. e-Reed
is suitable for the replanting and recovery of damaged land

David Mackie:

David Mackie has worked in the pulp, paper and chemical sectors for more than
25 years. This work enabled David to acquire extensive knowledge of the timber
sector and the energy sector, pulp & paper being volume users of both. An
industrial chemist by training David has extensive high-level contacts with the
major European energy producers. David provides consulting services to some
of Europe’s largest timber companies and is experienced in large-scale project
development.
Adrienne Brown:

Adrienne is an attorney with over 15 years of commercial practice experience

handling complex intellectual property and business litigation. Adrienne is a
litigation specialist who works with clients to develop litigation strategies using
early case assessment methods. She has high level experience in a broad range
of other matters, including private capital raising transactions, mergers and
acquisitions, licensing transactions, joint ventures, and other commercial and
financial transactions, as well as developing, managing and protecting valuable
proprietary technology and related intellectual property assets. She is
particularly experienced in dealing with US governmental funding processes and
their related legal complexities.

Peter Metcalf: BSc (Hons) MSc

Peter is a leading authority in the processing of Municipal Solid Waste (MSW) and
other wastes into sustainable energy and/or saleable products. Peter is
knowledgeable of almost any waste disposal system but is particularly expert in
the fields of steam autoclaving of raw MSW, pyrolysis, gasification and
conventional combustion. Peter is the Joint developer of the Wilson System for
conversion of un-segregated raw MSW into a carbonaceous medium suitable for
conversion to bio-fuel. He has worked on many successful MSW projects around
the world.

Jody Thomas:

Jody co-founded Global Fuel Technology (GFT) with Dan Ford. Jody has 25 years
experience working in the recycling business. His knowledge and experience in
the recycling sector allied to his sales and consulting contacts has enabled GFT
to secure contracts in the waste recycling business. Jody owns BCK Ventures, a
company involved in recycling tires, waste oil and municipal solid waste. BCK
Ventures recently worked in New Orleans following Hurricane Katrina as a
contractor performing storm clean-up and demolition. In the earlier part of his
career Jody worked for Waste Management in various capacities, eventually
managing seven landfill locations in Northern Michigan.

Dan Ford:

In 2007, Dan started working with the Louisiana Power Group and Dr. James
Gaddy in Fayetteville Arkansas to locate and develop a cellulosic ethanol refinery
in Alabama. From this work Dan recognized the need to identify and secure MSW
options. Dan co-founded Global Fuel Technology in 2008 with Jody Thomas to
create a business specializing in locating and securing commercially viable MSW
contracts from municipal authorities across the American continent.

Dan also has more than 20 years experience in the gasoline and diesel business
as multi-unit supervisor for one of the world’s largest independent gasoline
distributors, later as owner of a multi-unit convenience store chain. In his earlier
career, Dan founded Ford & Associates, a professional sales management and
consulting company in the convenience store, restaurant and wholesale grocery
12
industry, which assisted in site selection, funding acquisition, construction,
training and operations.

Appendix Three

Large scale equity investors

We have a total of what I categorise as six “live” and serious potential investors.
With one exception these are all people we have been dealing with for several
months. That time has been spent getting these people comfortable with what
we are doing, the people involved and the detail of our financial models and
strategic plans. They are as follows:

A. Private investor group in New York. Originally only interested in putting

up seed corn funding. They have now moved to a position where they
are looking at the full funding for the Louisiana project; debt and equity.
My colleague is leaving for New York tomorrow and has a series of
meetings over Friday, Saturday and Sunday with this group. I hope to
have more feedback next week.

B. Red River Bidco. Bidco based in Louisiana for which I have now
completed their application. They can make equity and loan
investments but are saying they would strongly prefer to only provide
the debt. I am now answering the questions which resulted from the
War & Peace like application. To cover the possibility that they will only
supply the debt they put me in touch with a Louisiana based equity
fund with whom Red River deal and who are interested to look at our
proposal. They are:
 C. Advantage Capital Partners. I am just now completing their standard
application form as a prelude to more detailed discussions with them in
conjunction with Red River. Rather confusingly they can also supply
debt as well as equity. However, as Red River brought us to them I
think the unwritten deal is that if Advantage supply the equity Red river
will be left the debt.

D. Private Louisianan investors.

E. Institutional Investor X. This is a VERY large fund management group

with whom we have been talking for some months. They have already
gone through our basic numbers and plan and have told us they want
to move forward to more detailed DD in the near future. I know they
are serious because they are in the final stages of KPMG led DD on an
investment into one of the MSW companies we are involved with. We
have signed fairly stringent NDA’s with this company so I cannot
divulge their name. They do not make opportunistic one-off
investments. They are strategic investors who target a sector; look for
the “best in class” technology in that sector; secure a good
management team and then back it to the hilt. They look for “roll-out”
technology which can be applied in a variety of locations and
situations. They will seek to exit after 3 to 5 years. Their DD with
KPMG will cost circa $500,000 each time they do it, so when they get to
the stage of spending that kind of money they have made the decision
to invest unless something horrible emerges from the DD process. Our
plan dovetails precisely with, and augments, the investment they are
currently completing. We are told that they will have the other deal
completed in about six weeks and will then move onto us after that.
This investor would be, by far, the best option for us.

F. International Forest Products (IFP). We have been working with this

group for nearly a year; initially indirectly through Scottish & Southern
Energy and over the last few months directly. They are the second
largest non-wood forestry products trading company in the world; last
year’s turnover circa $1.6 billion. They are owned by the Kraft family.
They have selected us as their strategic development partner for the
US. The proposal has been agreed in principle by their US board and
will be implemented formally once their new UK MD is fully in place; I
hope that will be within a few weeks. They will then back our projects
in order to secure commodity output to trade with.

USDA: All the options apart from Institutional investor X will make use of the
USDA loan guarantees we have agreed in principle with the USDA office in
Louisiana. This is an important “risk reduction” tool for us to offer investors.

14
Appendix One
16