LUMICITY FUNDING

THE INVESTMENT PARTNER FOR POULTRY FARMERS

Lumicity provides ambitious and entrepreneurial farmers with funding for building state-of-the-art poultry houses to produce chickens or eggs. Our expertise is in structured finance, funding farm businesses that wish to diversify and expand more quickly than they otherwise would be able to through self-financing and/or taking a loan from a bank.

FUNDING OF UP TO 100% OF THE BUILDING COST OF CONSTRUCTING NEW STATE-OF-THE-ART POULTRY HOUSES | NO MORTGAGE TAKEN OVER YOUR LAND | SALE AND LEASEBACK OF EXISTING POULTRY HOUSES TO RELEASE WORKING CAPITAL | 10 TO 20 YEAR LEASE STRUCTURE | CAN CONTRACT FARM FOR PROFIT-SHARE

LUMICITY LTD.| REGISTERED IN ENGLAND & WALES: 7324912

07747 806588 | INFO@LUMICITY .COM | WWW.LUMICITY .COM

PART 1: GROW THE FARM We provide value to poultry farmers by offering an alternative to bank finance that allows them to expand more quickly than they would otherwise be able to. Typically, this will be when they are in a location where there is a market requirement for expansion in production capacity.

The chart below illustrates how forecasted earnings before interest, tax, depreciation and amortization (EBITDA) for a broiler farm expansion plan might compare between conventional bank finance and Lumicity project finance. The EBITDA is after the rent payable to Lumicity which in this instance is 20.43p/ft2/month. The chart is based on 50,000 birds per house, a stocking density of 38kg/m2, an FCR of 1.56, an EPEF of 385, an average operating profit of £1.19/m2/week and a feed cost of £280/tonne, equating to a top performing farm. We’re principally interested in investing in top quartile farmers, however we will always work on a case by case basis.

Warning: The information in this chart is provided for informational purposes only and is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. You should undertake your own independent due diligence and seek professional legal and/or financial advice before making any investment decisions.

HOW WE WORK

Lumicity provides structured finance for the modernisation and construction of poultry houses. We do this by providing a high level of funding (typically 100% of the building cost) to construct new poultry houses and by releasing funds from existing poultry houses to invest in improving a farmer’s business. To do this we take a lease of the underlying land, fund and build the poultry houses and then lease them back at a competitive market rate. After the lease period terminates (which is typically 20 years for new houses), the ownership of the poultry houses transfers to the farmer and Lumicity has no residual rights, having returned its original investment. To facilitate development, and ensure the farmer maintains sufficient working capital within the business during this period of expansion, we can also buy and leaseback any existing poultry houses. This will release a significant percentage of their cash value, providing the farmer with the working capital to support any expansion plans.

WHAT WE FUND

We’re particularly interested in investing in businesses with a proven track record in poultry production and in young farmers, farmer’s sons & daughters keen to establish themselves as part of the family business. We will invest in the following enterprises:

Broiler | Broiler rearing | Free range broiler | Pullet rearing | Free range layer

FUNDING ROUTE 1: NEW BUILD & LEASEBACK

Subject to an upper limit, Lumicity will fund the building costs of installing new farm infrastructure including the technology required to operate it, freeing up a farm’s balance sheet for investing elsewhere. Typically, the farmer will cover certain costs such as site clearance, services diversions, demolition of any existing buildings, access roads, utility connections and landscaping. The farmer will benefit from quick access to state-of-the-art poultry house design and technology and repay the cost of this back to Lumicity over a 20-year period for an agreed quarterly rental.

FUNDING ROUTE 2: SALE & LEASEBACK

Subject to survey, Lumicity will purchase existing poultry houses including all the equipment required to grow chickens in an operating poultry house. We will release a substantial portion of the cash value of the houses, providing working capital for investing in expansion or elsewhere in the business. The farmer will continue to occupy and operate the poultry houses and will pay Lumicity an agreed quarterly rental (indexed by RPI). The farmer will pay a deposit (3 months’ rent) and will typically cover the costs of any remedial works recommended in the survey, insurance, Stamp Duty Land Tax and ongoing maintenance. The farmer will retain any subsidy payments and Renewable Heat Incentive payments. The farmer will benefit from quick access to cash locked up in poultry housing infrastructure, while being able to continue the poultry farming operation.

HOW OUR PRICING WORKS

The final building cost of the houses is fixed following a detailed procurement process. Lumicity will work with the farmer to make use of the most suitable contractors which ensures the farmer gets the best price for the construction of the poultry houses. At the proposal stage we will provide a Guide Price and Guide Rent based on a standard specification to give some sense of how much the project could cost and what size, specification of building and heating system can be expected.

The Guide Price for our standard broiler house includes the infrastructure needed to run a broiler house: foundations, concrete slab, steel structure, walls and cladding, heating and ventilation systems, power and lighting, feed and drinking systems, control and monitoring systems. The Guide Price doesn’t include planning, demolition, ground works, site clearance, leveling, drainage and access.

If the final cost of the house is different to the Guide Price, we will adjust the rental price that we will charge you accordingly, based on the pro-rata change in the capital cost. Note that we will fund up to 105% of the Guide Price. If the final capital cost is greater than 105% of the Guide Price, then we will discuss a course of action which will be one of the following: (i) farmer funds the additional capex; (ii) we adjust the specification to exclude certain optional extras; or (iii) we review the viability of the project.

• Guide Price per 25,000 sq. ft. broiler house: £450,000 • • Guide Rent: £55,750 per year (indexed by RPI) • Lease period: 20 years •

OUR SECURITY

In addition to providing a high level of capital, Lumicity reduces the farmer’s risk of borrowing by not taking a mortgage over the land. Instead, the farmer grants to Lumicity a fixed-term lease over the land on which the poultry houses are sited. Lumicity then sub-leases the poultry houses back to allow the farmer to grow chickens on the site. If there is a default on the rental payments, Lumicity have the right to take on the operation of the poultry houses or replace the farmer with a tenant until the end of the original lease term.

PART 2: ABOUT LUMICITY LTD. Lumicity was founded in 2010 by Tristan Fischer, a clean technology entrepreneur. Since then the company has deployed more than £100m of capital investment into UK agriculture. This has largely been into solar farms and biomass heating systems in the UK agricultural sector. In 2014 we completed the largest ever biomass district heating project, rolling out 179 boilers across 248 poultry houses. In 2015 and 2016 our particular focus is on financing and building the poultry houses of the future.

“THE GROWTH OF THE POULTRY INDUSTRY HAS BEEN AN INCREDIBLE SUCCESS STORY FOR BRITISH AGRICULTURE. WE WANT TO SEE ITS SUCCESS CONTINUE BY ACCELERATING INVESTMENT INTO AMBITIOUS, HIGH-TECH POULTRY FARMING OPERATIONS.” TRISTAN FISCHER, FOUNDER & CEO

WHAT WE DO

We invest in modernising and expanding British and Irish poultry farming businesses to help them continue producing high quality, low carbon, chicken and eggs. Lumicity’s funding allows a poultry business to expand more quickly than through more conventional forms of finance. By funding high quality farming infrastructure for our farmers, we maximise their profitability and ensure they remain in business for years to come. Our focus is on providing poultry farmers with infrastructure that makes them the lowest-cost producers in the market and enabling them to operate on a scale that ensures they always have cash in their pocket.

WHO WE ARE

Our team is made up of ex-poultry agricultural managers, energy and financial analysts, engineers, project managers and data analysts and our expertise is in managing infrastructure project finance. We put together the optimal financial structure, identify and allocate the associated risks and structure the contracts that give third party investors and farmers peace of mind. We have more than 100 years’ experience in the poultry industry and 80 years’ experience in the finance sector. Between us we have handled billions of pounds’ worth of infrastructure investment. This heritage means we are able to channel money from investors into state-of-the-art farm infrastructure and technology.

WHO WE WORK WITH

We work with three different groups of people: investors, suppliers (reputable house builders & technology providers) and farmers. A central part of our offering to the agricultural market is the development of financial and legal structures that will attract investment into farm infrastructure projects. Institutional investors are a major customer of ours because we provide

them with long-term, low-risk returns on their capital. Through our engineering and procurement teams we work with the best suppliers and technologies in the market to design and build high quality, long-term farm infrastructure that are attractive assets for investors. To develop these assets, we want to work with farm businesses that either have plans for expansion or diversification into poultry farming.

POULTRY ENTREPRENEURS

We’re firm believers of matching our investment in technology and infrastructure with investment in the people managing and operating it. The Lumicity management team boasts more than 80 years’ experience in the finance and energy industries, with a combined CV covering: Citigroup, Barclays, McKinsey & Company, Shell, RWE, Climate Change Capital, BEE Group, and Mitie Asset Management. We hope our background will be useful to UK poultry businesses looking to flourish in a global market.

WHY WE DO IT

Poultry meat and eggs are healthy, affordable and versatile forms of animal protein, making them a perfect fit for modern day consumer preferences. However, the market currently faces challenges. The average age of a poultry house in the UK is 32 years (Source: NFU Housing Survey, 2015), avian influenza is an increasingly prevalent threat to the poultry industry worldwide and consumers have been largely left behind in the progressive story of where chicken and eggs come from. Solving these challenges by investing in more modern poultry houses, with better biosecurity and at the same time can be used to educate consumers about the standards of production adopted by British farmers, is where Lumicity sees a unique opportunity to support the UK poultry industry.

DISCLAIMER

This document is for discussion purposes only to facilitate the negotiation, preparation and execution of a definitive agreement. All pricing is indicative and subject to market conditions and due diligence. This proposal is not intended to create a binding or enforceable contract or to be complete and all-inclusive of the terms of any related transaction and must not be construed as giving investment advice within or outside the United Kingdom. This is not an offer or a commitment of Lumicity Limited or its affiliates. The transaction described herein is subject to further review and approval by Lumicity Limited and the execution of definitive agreements containing all appropriate provisions, including those relating to credit and limitation of damages and remedies.

CONTACT US

LUMICITY LTD.| REGISTERED IN ENGLAND & WALES: 7324912

020 7193 4524 | INFO@LUMICITY .COM | WWW.LUMICITY .COM

THE OLD BOAT HOUSE, MILL LANE, TAPLOW, BUCKS, SL6 0AA