Engagement Procedures

COSCO accepts a limited number of engagements at any one time. Private placements of Private Equity typically requires a minimum of four months, with an initial period devoted to due diligence, data gathering, and presentation of recommendations. The remainder of the contract period generally involves creating the requisite marketing documents, contacting appropriate Accredited Investor candidates, arranging meetings, managing the negotiation process, coming to terms, and, then preparation of definitive documents. Private placements of Private Debt follows a similar path, but may take a month or so less, as the specific use of capital normally is important to the sources of this type of capital. Private placements of Public Equity have yet another path, defined by strictures of controlling regulatory bodies. COSCO's standard contract also provides for a proprietary period of eighteen to thirty-six months after termination of the contract, during which any business concluded with a contact arranged by COSCO during the primary term remains subject to the terms of the original agreement. Finally, post completion of a placement of Private Equity, COSCO also is retained for thirty-six months to provide assistance in executing whatever business plan has been agreed to as a foundation for the financing.

COSCO typically provides Services on a combined retainer and time-devoted basis. The retainer entitles the client to a priority call on an agreed maximum aggregate charging level of Services per month. Services required in excess of this standard are billed at set hourly rates. Expenses, as defined, are billed to the Client at the end of each month. Finally, depending on the nature of the engagement, COSCO, through its broker-dealer affiliate, Private Energy Securities, Inc. (member NASD, SIPC), typically receives as part of its compensation a success fee that recognizes its contribution to the predetermined objective of the assignment. Wherever possible, COSCO, through another of its affiliates, COSCO Investments LP, seeks to reinvest a significant portion of this success fee back into the equity of its industry clients, particularly pursuant to private placements in which COSCO has served in an active advisory capacity.