THE CONVERGING WORLD

THE CONVERGING WORLD WE ARE ALL CONNECTED QUESTIONS AND ANSWERS (for lenders)

1. What are the terms of the loan?  We will give you 6% interest each year and repay your loan at the end of 5 years.  If you lend more than £25, for 10 years after your loan has been repaid we will donate, each year, a sum equivalent to the 6% interest payments, to a charity of your choice. 2. Who can make these loans? And how much can I lend?  You may provide a loan if you are: - an individual aged 18 or over and resident in the UK. - a corporate body whose registered office is in the UK. - a charitable trust, provided the trust’s rules allow for investment in a non-yielding asset (the Charity Commission provides further general guidance on social investment).  Buzzbnk can often receive money from overseas lenders although there are complications with respect to regulations in a number of countries, such as the USA. Please contact Buzzbnk for further advice.  You can lend anything upwards of £5. 3. How can I make the loan?  You will need to open an account on the Buzzbnk website www.buzzbnk.org/tcw and select our project ‘The Converging World’. The site will take you through the necessary steps.  For loans below £500 you will need to pay by card but above £500 this can be by card, cheque or bank transfer 4. When and how will I receive interest payments and the loan repayment?  Your interest payments will be paid annually into your Buzzbnk account (from which you can withdraw your money or back another project) within 28 days of the anniversary of the closing date of the funding round (December 31, 2011). 3rd Floor, Bush House, 72 Prince Street, BRISTOL, BS1 4QD, UK t: +44 (0) 117 927 7089 f: +44 (0) 117 917 7201 e: [email protected] w: theconvergingworld.org registered charity number: 1043572 company registration number: 3010221

THE CONVERGING WORLD WE ARE ALL CONNECTED

You will be able to see when the next payment is due in your “My Account – Loan Units” section once the funding round has closed.  The loan is repaid in the same way at the end of five years, within 28 days of the anniversary of the closing date of the funding round.  We will keep you up-to-date via online newsletters. You may also wish to follow our progress through Facebook, Twitter or our website 5. What are the risks involved in this loan?  There are clearly risks involved in this wind energy project such as: - Doing business in a foreign country which has its own legal and financial structures and ways of doing business. - Currency risk. - Changes in the sale value of electricity, government incentives, the wind profile, interest rates on bank loans etc. - Mechanical breakdowns, lack of capacity in the grid etc.  However, in response to these risks: - A wind turbine business is an established way of making money. TCW, itself, has three years experience of running turbines in India and we have our own local management team. - Once the turbines are built, the raw material (wind) is free of charge so profitability is high as long as the wind blows. - The Indian location is attractive in terms of growth, wind profile, government incentives, grid capacity and the selling price of electricity. - TCW is creating large cash reserves so that there are funds to deal with unexpected problems (such as mechanical failures). The reserves meet the levels recommended by banks and other experienced lenders into this type of business. - Mechanical breakdowns tend to occur near the end of a turbine’s life (20 years) whilst the investor will be repaid after just 5 years. - Wind turbines have a resale value if the company needs to sell in order to realise extra cash - Borrowed money has the first call on the profit of the business.  The money that you lend will be tied up for five years. Your financial situation needs to be one where you do not need to rely on this money. You should consider that any loans made are unsecured and should be from discretionary funds such that you can readily bear the consequences of a partial or total loss.

THE CONVERGING WORLD WE ARE ALL CONNECTED 6. Can I see more detail about the business plans for the new turbines?  Yes, please contact [email protected] for to request a document about the project. Sophisticated investors will qualify to receive a more detailed document which will include the risks and the projections. 7. Can I transfer my loan?  No the loan is non-transferable. There is no right for early redemption or withdrawal. This means that you must feel able to leave your money tied up for five years (e.g. held to maturity). 8. What if I die before the loan is repaid?  If you die then your estate will receive the full value of the loan and the interest payments when they are due. 9. What tax will I have to pay?  We cannot advise on tax although generally the interest received from the loan will be treated as taxable income and the loan will generally be assessed for inheritance tax purposes. 10. Where can I go for financial advice regarding this loan?  You can contact us if you have any further questions about how the loan works, although we cannot give you any financial advice. If you are in any doubt about whether this loan is suitable for you or in respect of the tax or inheritance consequences then you must consult an independent financial advisor.  The loan through Buzzbnk is unsecured and non-transferable. It is not subject to regulation under the Financial Services Act (FSA).  Buzzbnk has reviewed its business model in detail with the FSA under the guidance of their lawyers, Bates Wells & Braithwaite, and the conclusion is that there are no activities which currently need to be regulated, including their service to introduce potential lenders to borrowers for unsecured loans 11. Can I obtain carbon credits from you?  We produce carbon credits and these are available for sale. For more information email [email protected]  Businesses which invest in TCW may be interested in using their 6% interest to acquire carbon credits which we can make available at attractive rates.


 Alternatively, the 6% repayments can be reinvested each year in order to build up a larger volume of carbon credits, at a known cost, which can be drawn down at a future date when there is a stronger need for credits and when market costs may have risen. 12. As a business lender, what CSR opportunities exist for our staff?  TCW is working with an increasing number of community foundations around the UK and, through them, with a variety of social and environmental projects. These include projects that are suitable for CSR involvement from local businesses.  We work with a specialist firm which advises and supports businesses in their CSR activities. Contact us on [email protected] 13. What happens if you do not raise all the money you need?  In the current funding round we are raising £500,000 to procure two additional turbines and will use a mix of loans offered through Buzzbnk and bank borrowing. If we raise less money then we will procure just one turbine and may alter the sum that we borrow from banks.  In the unlikely event that project does not proceed, we will return the money to lenders. 14. What will you do with my personal data?  TCW and Buzzbnk are compliant with the Data Protection Act 1998, the Privacy and Electronic Communications (EC) Regulations 2003 and all guidance and/or codes of practice issued by the UK Information Commission. Please see our Privacy Policies on-line for more detail.  For e-payments, Buzzbnk uses Secure Trading, the UK’s leading independent payment processor, offering the most reliable and secure internet payment gateway. Neither Buzzbnk nor TCW will see or have any access to your card details. 15. How much will my charity of choice receive?  If you lend over £25, a charity that you nominate will receive a donation in your name each year for 10 years, once your loan has been repaid. This will be at a level equivalent to the 6% interest that you will have received each year for the first five years.

THE CONVERGING WORLD WE ARE ALL CONNECTED 16. Can I change my choice of charity?  For loans of over £250 we will contact you each year to confirm your choice of charity before making these payments.  For loans of under £250 we will check with you and make these payments every five years. 17. Can I allocate my interest payments to charity from year 1?  It is clearly very valuable to your nominated charity if you can allow them to benefit from year 1. To do this, you can elect to pass some or all of your 6% interest payments to the charity and we will process these payments. This becomes a donation from you and the charity should be able to claim Gift Aid from the HMRC if you are a UK taxpayer, which adds a further 25% to the value of your donation. 18. Does Gift Aid apply?  If you are willing to pass some or all of your 6% interest payments to a charity of choice then this is a donation from you and the charity should be should be able to claim Gift Aid from the HMRC if you are a UK tax payer, which adds a further 25% to the value of your donation.  The payment received by the charity for 10 years after your loan has been repaid is a donation from TCW and this will not attract Gift Aid. 19. Can I just donate money to the charitable work undertaken by TCW?  You can certainly donate to TCW and your donation will be very gratefully received. Please see www.theconvergingworld.org

QUESTIONS AND ANSWERS For interested charities 20. How will this loan for the building of turbines benefit our charity?  The Converging World (TCW), a UK charity, shares the profit from its wind turbine business in India with other UK charities because: - This offer is attractive to people who may be prepared to lend money for social impact.


- TCW’s mission is broad and overlaps with those of many other charities. Helping other charities to succeed helps TCW to further its own mission - to deliver sustainable development, care of the environment and support for socially and economically deprived communities.  In practical terms, TCW pays lenders 6% interest annually and the loan is repaid at the end of year 5.  In addition, for amounts lent over £25, after the loan has been repaid, TCW will donate to the lender’s charity of choice a sum equivalent to 6% of the loan, each year for 10 years  Some lenders may elect to pass to the charity the interest they receive in the first five years but this is purely their choice. This would generally attract Gift Aid. 21. How do we encourage people to lend to this project, within the regulatory guidelines?  Buzzbnk has undertaken extensive research into this question as it is fundamental to their service.  They have reviewed their business model in detail with the FSA under the guidance of their lawyers, Bates Wells & Braithwaite, and the conclusion is that there are no activities which currently need to be regulated, including the service of introducing potential lenders to borrowers for unsecured loans.  Language can be important and in communicating with your contacts you should talk about an opportunity to lend money as part of new way of helping charities. You should not describe this as an investment nor make any projections as to the anticipated performance of the loan.  We have developed a draft letter for a charity to send to its supporters describing this opportunity, see attached. 22. Will we have any liability to people who have made these loans?  No. The money you receive is a grant from TCW. The lenders are relying entirely on TCW for the repayment of their loans. The lending relationship is held directly between the lender and TCW. 23. Is there a risk that lenders will not get their money back?  Yes there are risks which we have outlined in the risk section (above). Each lender must make their own assessment of the risk and be prepared to lose all or part of the loan.

THE CONVERGING WORLD WE ARE ALL CONNECTED 24. What can we tell our contacts about the nature and security of the loan?  It is best if you refer your contacts to the information on the TCW and Buzzbnk websites and advise them to contact TCW if they have specific questions on [email protected]  You should not provide an opinion on the nature and security of the loan in case this is misinterpreted as a form of advice.  The loan through Buzzbnk is unsecured and non-transferable. It is not subject to regulation under the Financial Services Act (FSA).  Buzzbnk has reviewed its business model in detail with the FSA under the guidance of their lawyers, Bates Wells & Braithwaite, and the conclusion is that there are no activities which currently need to be regulated, including their service to introduce potential lenders to borrowers for unsecured loans 25. What information can you provide to help us assess this loan?  A document explaining the project is available upon request. If you qualify as a sophisticated investor then a more detailed document is available which includes the projections and risks. For a copy of the document please contact [email protected]. 26. How can people make a loan and nominate our charity?  A lender will need to open an account on the Buzzbnk website www.buzzbnk.org/tcw and select our project ‘The Converging World’. The site will take you through the steps for making the loan  For loans below £500 you will need to pay by card (credit or debit, debit normally being the cheapest method) but above £500 this can be by card, cheque or bank transfer. 27. How will we know when a loan has been made, nominating our charity?  TCW will pass this information to you, having given lenders the opportunity to remain anonymous. 28. How secure are the benefits promised to the charity?  The donation starts after five years and depends on the continued profitability of TCW’s renewable energy business. However, the payment of these sums takes priority over any other use of the surplus from this business

THE CONVERGING WORLD WE ARE ALL CONNECTED QUESTIONS ABOUT BUZZBNK 29. What is Buzzbnk?  Buzzbnk is an online marketplace that connects social ventures from all walks of life with backers, supporters and fans. It is a unique online platform that is set to change the way people give, offering them a whole new way of doing good with their money, to make bright ideas a reality.  Buzzbnk offers social ventures the chance to raise seed capital, gather funding from family, friends and other networks, and keep them in touch with the progress of a project.  Buzzbnk is a social enterprise incorporated as a Limited Liability Partnership with not-for-profit, for-profit, and individual shareholders. Buzzbnk is owned 63% by charities with key funding provided by CIVA, Esmée Fairbairn Foundation, The Tudor Trust, and The Wates Foundation. Depending on targets met, over 10 % and up to 20% of profits will additionally be donated to charity, making a total contribution to charity of over 73% of any profits.  63% of Buzzbnk’s assets are held by registered charities and over 63% of profits will be donated to charity. As such, they are not themselves registered with the UK Charity Commission; however within their company charter their primary purpose is to promote Social Investment according to the definition of the UK Charity Commission to comply with the conditions of their charitable investors. 30. What fees are charged and by whom?  Buzzbnk charges a small registration fee (£25) for TCW to join the site and for support in developing the offer. There is a 5% administration fee on funds raised. Buzzbnk seeks to build a financially sustainable platform which will have the ability to grow and support other social ventures. 31. What happens if Buzzbnk ceases trading?  Buzzbnk administers the loans, the interest payments and the repayment of capital but the commitment to make these payments rests with TCW. Buzzbnk provides TCW with an efficient service but if it stops operating then TCW will take over these responsibilities. All payments will be honoured by TCW.