2. Overview of Presentation:2
EB-5: The Basics
Individuals who might consider EB-5
Direct vs. Regional Center
Regional Center Entities
How to create a Regional Center

3. EB-5 : The Basics Congress created EB-5 category in 1990
10,000 green cards available each year in this preference
Two types of EB-5 cases: Direct and regional centers (RCs)
90-95% of EB-5 petitions now through RCs
I-829s: filed months after investor gets conditional resident status
I-829 procedure generally
Legislative status of EB-5 program – extended to September 30, 2015 – sunset of pilot program – likely to be signed this week.
November 3, 2011

4. EB-5 Basic Requirements
New commercial enterprise (created after November 29, 1990)
Must “benefit the U.S. economy”
Must create at least 10 full-time jobs
Must invest $1 million, or $500,000 if targeted employment area (TEA) (rural or high unemployment)
Procedure: File I-526 (invest/actively in the process of investing), then I-485/CP for CPR. Within 90 days of 2 yr anniversary, file I-829.
November 3, 2011

5. Individuals Who Should Consider EB-5
Parent who wants the children to go to school in the U.S.
Investors from non-treaty countries and E-2 investors who don’t qualify for regular EB-5 or age out child.
Retirees
Potential L-1 applicants who are nationals of China or Russia
Entrepreneurs who want to set up a new business in the United States that will not create 10 jobs
F-1 student who wants to start a business
November 3, 2011

6. Individuals Who Should Consider EB-56
Spouse of permanent resident
CEO/manager of a company who is not an L-1A transferee
Foreign nationals in a multiple-year immigrant quota waiting list
Individual owner of a business outside of the United States who doesn’t qualify for an L-1
H-1B nearing six year limit
Potential H-1B shut out by quota
November 3, 2011 6

7. Difference between Direct EB-5 and Regional Center EB-5?7
Difference between Direct EB-5 and Regional Center EB-5?

8. Individual EB-5 Investor buys business or starts new business8
Investor buys business or starts new business
Must be 10 direct employees
Few applications

9. Regional Center EB-5 What is a regional center?9
What is a regional center?
Over 95% of all applications
Huge increase in past 3 years (over 242 approved)
Main advantage =
Indirect employment counts

10. What are Regional Center EB-5 Entities?10
What are Regional Center EB-5 Entities?

11. Regional Center Entity11
Apply to USCIS for designation approval
Ongoing administration and compliance responsibilities
Markets projects for investors
Due diligence regarding investors’ source of funds
Prepares I-526 and I-829 packages
Ron

12. How to create a regional center?12
How to create a regional center?

13. Form I-924 Application Considerations and Costs13
Professional fees
Government filing fees for I $6,230
Regional center recoupment of costs through charges to investors
Regional center charges to project promoters
MOU for Affiliated Projects Financing costs
Source of Funds review
Banking & Escrow costs

14. When is money available to developer?14
Investor must invest 100% (usually $500,000) before I-526 filed
Money can go
To project immediately – if so TEA designation made at this time
To escrow
Released when investor’s I-526 is approved

15. How much Capital can be raised?15
Depends on job creation
Economist report projects job creation
Divide by 10 = maximum number of investors
Multiply by $500,000 = maximum capital raise

16. Investment Must Be “At Risk”16
Guaranteed redemption disallowed
What is allowed?
Third party insurance
How does it work?
Does it violate “at risk” provisions?
Ron

17. EB-5 Securities & Corporate Legal Considerations17
ARREA National Conference
Las Vegas – September 25, 2012
Presented by:
Jor Law, Esq.

18. Biography - Jor
Homeier & Law, P.C. is a law firm devoted exclusively to corporate and business transactional law, including securities, for clients ranging from established and publicly traded companies, to startup businesses and entrepreneurs in a wide range of industries. The firm’s practice includes finance, secured lending, mergers and acquisitions, licensing, securities, venture capital, new media, technology, e-commerce, and other general transactions. Homeier & Law, P.C., is a leader in EB-5 related corporate and securities transactions, and represents a number of regional centers as well as private EB-5 clients.
Jor Law is a founding shareholder of Homeier & Law, P.C.  As part of his regular corporate and securities practice, Jor routinely advises on EB-5 related transactions.  In that capacity, Jor represents both investors looking to invest through the EB-5 program as well as businesses seeking capital through the EB-5 program including through regional centers.  Jor frequently presents at EB-5 industry events, including those held by the American Immigration Lawyers Association, State Bar of California, and Los Angeles County Bar Association.  Jor received his J.D. from Columbia University and his B.A. from UC Berkeley.  Jor is a member of the California and New York State Bars.  In December 2008, Mr. Law was named a "Best Lawyer" by LegalForce.  For three years in a row, in each of 2009, 2010, and 2011, Jor was recognized by Super Lawyers magazine as one of “Southern California’s Super Lawyers – Rising Stars,” placing him among the top 2.5 percent of the best up-and-coming attorneys in Southern California who are 40 years old or younger, or who have been practicing for 10 years or less.

19. Disclaimer 19
This presentation is designed to provide practical and useful information on the subject matter covered. However, it is provided with the understanding that no legal, tax, accounting, or other professional services are being rendered or provided. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

20. Structuring: Equity or Loan or Equity & Loan Model?20
General Partner (usually the Regional Center)
Capital Raising Entity & Project Company
General Partner (usually RC)
Capital Raising Entity
Project Company
Investor
Investor
Investor
Investor
Investor
Investor

21. Common EB-5 Documents Consents, restrictions, etc. Due Diligence21
Consents, restrictions, etc.
Due Diligence
LOIs vs Term sheets
Equity vs Loan Agreements
Guarantees & Security Agreements
Subordination
Call/put
Side letters
Leases / Management Agreements, etc.
Consulting Agreements
Joint Venture
Resolutions & Corp Housekeeping

22. Securities Offering Documents22
Investor Questionnaire
Subscription Agreement
Offering Circular (PPM)
Limited Partnership Agreement -or- LLC Operating Agreement -or- Articles of Incorporation & Bylaws & Shareholders Agreement
Escrow Agreement(s)

23. How does EB-5 involve securities law?23
It’s just like a domestic money raise:
Financing secured from passive investors +
Success dependent on management by others =
A security

24. Objectives of the Securities Laws24
Two goals of Securities Laws
adequate disclosure (tell the truth)
prevent fraud (don’t lie)
Means to goal – registration and/or disclosure
Laws
Securities Act of 1933 – main (“primary transactions” by issuer)
Exchange Act of 1934 – for “secondary transactions” (resales by shareholders)
Blue Sky
Foreign
Don’t forget… the 1940 Acts [ ICA… IAA ]

25. Securities law requirements25
The offering of a security must be registered or exempt
Registration – IPO; expensive (time and $)
Exemption – must fit within, or lost
Primary FEDERAL exemptions: Reg D and Reg S
Example requirements:
Private offering (Reg D)
Non-U.S. persons (Reg S)
Don’t forget STATE exemptions
Don’t forget exemptions for large complex raises
Investment Company Act: < 100 s/h … “qualified purchasers”
Section 12(g) Exchange Act: < 500 s/h [JOBS = now 2,000!]
* Need to tread carefully – i’s & t’s – CAN be done

26. Finders Broker-dealers –vs- Finders Finders do not26
Broker-dealers –vs- Finders
Broker-dealers are usually finders;
Not all finders are broker-dealers
Finders do not
Solicit investors
Participate in securities offering
Regularly introduce investors
Receive compensation based on success
Finder issues – extremely fact specific so case-by-case

27. Three stages when securities docs are needed27
Generic doc set – accompany Regional Center application filing with USCIS
Most general, least specific – still needs to address anticipated project types
Offering doc set – used to solicit investors
Most detailed - disclose all specific terms of actual project being sold
Exemplar doc set – for USCIS to use as template for measuring all I-526s
BIG marketing plus – offering pre-approved
Caution: no material changes after submission to USCIS or start review anew

28. The Team Team worries about details – YOU focus on Big Picture28
“Same old, same old” – done domestically all the time
This is a securities offering – SEC compliance required
Same as typical U.S. domestic equity raise – Reg D (+ Reg S)
Need a team to prepare all parts of the offering:
Business plan – plan writer
Job creation report – economist
Securities offering documents – securities counsel (H&L does)
Transaction documents (debt/equity) – business lawyer (H&L does)
Entity formation(LPs, LLCs) – corporate lawyer (H&L does)
Financial pro forma projections – reviewed by CPAs
Marketing: foreign broker introductions – U.S.-based EB-5 consultant
Team worries about details – YOU focus on Big Picture

29. Contact 29
Michael G. Homeier, Esq. – (818) (direct);
Jor Law, Esq. – (818) (direct);
Clem Turner, Esq. - (646) (direct);
Vanessa Au, Esq. – (818) (direct);
Corporate Law Securities Law Business Transactions – EB-5

30. What other options exist for raising capital under the EB-5 program?30
Having project “adopted” by certified regional center
Purchasing already certified regional center – caution as to geographic scope & industry type
Pooled investment with individual EB-5 petitions
Troubled businesses – credit for preserving jobs
Laura to ask Ron

31. How does the developer find investors?31
Where are investors?
Personal contacts?
Brokers overseas?

32. Role of immigration counsel32
Advising developers of options
Putting together team of professionals
Reviewing documents for immigration compliance
Filing regional center application
Preparing and filing application for project preapproval
Filing EB-5 petitions for investors

33. Due Diligence SERVICES
EB-5 Funding &
Due Diligence SERVICES
Proposal Prepared Exclusively For:
2012 AREAA National Convention in Las Vegas, Nevada
Serious Resources.
Serious commitment.
September 25, 2012
Member, FINRA/SIPC

34. A FINRA Registered Broker-Dealer
Our resources and commitment have earned us a role as a market leader in providing investment banking and corporate advisory services to both leading and emerging financial institutions and businesses.
Our professionals possess significant experience in nearly all facets of business transactions including debt & equity capital placements, mergers and acquisitions (over 90 M & A transactions over the past 20 years), recapitalizations and accounting and due diligence analysis.
Clients in our Creditor Advisory practice include most of the nation’s top financial institutions and we have performed in excess of 2,700 engagements on their behalf.
During 2011:
LCG performed over 550 engagements for more than 55 different financial institutions.
LCG and its affiliates assisted 45 businesses in successfully navigating the current economic environment, including financings, mergers and acquisitions, and restructurings. 34

35. Lender’s Consulting Group
Lender’s Consulting Group provides independent due diligence and transaction support services to the financial services industry. Our professionals have extensive experience in credit underwriting, auditing, public accounting, workout management, business operations and account management.  Our specialized experience provides lenders and investors with additional insight into transaction risks that cannot be provided by most other accounting and audit firms.
Field Examinations
Survey Exams
Recurring Exams
Lender Due Diligence
Credit and Operations Reviews
Bank Acquisition Due Diligence
Valuation Services
Portfolio Valuation
Business Valuation
Quality of Earnings
Analysis of Historical Revenue Trends and Sustainability
Analysis of Recurring vs. Non-recurring Expenses
Analysis of Cash Flow Projections 35

36. Bridging the Abyss between Lenders and Borrowers
A sampling of our institutional clients: 36

37. LCG Capital Advisors
LCG Capital provides a broad range of investment banking and advisory services for its clients. A FINRA registered broker-dealer and SIPC member firm, which provides advisory services related to corporate mergers, acquisitions and divestitures, recapitalizations, equity placements and certain other advisory and investment banking services..
Debt and Equity Placement
Debt Offerings and Refinancing
Equity Offerings
Capital Structure Strategies
M&A Advisory
Sell Side and Buy Side
Management Buyouts
Debtor Advisory
Restructuring and Planning
Working Capital Management
Pre-Bankruptcy Planning 37

38. Our Team
Mike Xenick - Managing Partner Years of Experience: 22 Expertise: EB5 Advisory, Private Equity, Mergers & Acquisitions Previous Employers: Atlantic American Capital Advisors, Communications Equity Associates, Ernst & Young Education: Masters and Bachelors in Accounting - University of Florida
Brian Smith - Managing Partner Years of Experience: 18 Expertise: Corporate Finance, Commercial Credit, Structured Finance Previous Employers: Textron Financial Corp, Health Capital Education: Bachelors in Finance and Economics - University of Tampa
Paul Epstein - Managing Partner Years of Experience: 18 Expertise: Commercial Credit, Underwriting, Due Diligence Previous Employers: CitiFactors Financial, Healthcare Financial Services Education: Bachelors in Finance - University of Tampa 38

39. Our Team
Christopher Pizzo - Managing Director Years of Experience: 21 Expertise: Corporate Finance, Mergers & Acquisitions, Restructuring & Turnaround Previous Employers: Ernst & Young, The Knot, Vested Capital Partners Education: MBA in Finance - NYU, Bachelors in Accounting - SUNY Albany
MaryJane Wermuth – Associate Years of Experience: 5 Expertise: Corporate Finance, Mergers & Acquisitions, Restructuring & Turnaround
Previous Employers: Merrill Lynch, Gulfcoast Business Finance, Inc. Education: MBA in Finance – University of Tampa
Jessica Lister – Analyst & Project Manager Years of Experience: 2 Expertise: EB-5 Advisory
Previous Employers: American Land Lease Education: Bachelors in Finance – University of South Florida 39

40. EB-5 Funding Advisory Services Practice
LCG provides a broad range of advisory and support services to companies and individuals involved in U.S. immigrant investor programs, including the Immigrant Investor Pilot Program (“EB-5 Program”). Our clients include:
USCIS-approved EB-5 Regional Centers
Regional Center applicants, affiliated project developers
Registered foreign and U.S. securities representatives
We are trusted advisors to the principals and senior executives of these entities in their efforts to access U.S. and international capital markets to successfully and safely fund their project offerings.
As a broker-dealer registered with the SEC and FINRA, LCG’s process ensures the entire transaction is completed in compliance with U.S. securities laws and guidelines, especially transaction solicitation and payment of agent referral fees. 40

41. EB-5 Program Advisory Services Practice
FINRA Compliant Placement Agent
Compliance with U.S. Securities Laws
Solicitation
Investor Suitability
Payment of referral fees
Review, Analysis & Preparation of Project Transaction and Subscription Documents
Access to LCG’s secure virtual data room
Investor Intake and Related Compliance
“Know your customer”
Suitability/Accredited Investor forms
Coordinate flow of investor capital
Payment of agent referral fees
 Regional Center Advisory & Support
Detailed Analysis of Prospective Projects
Due Diligence and Market Research
Capital Markets Assessments
Risk Assessment and Mitigation
Certified Business Valuations & Appraisals
Quarterly Analysis of RC Project Portfolio 41

42. EB-5 Funding Process The LCG & USAdvisors EB-5 Program Process
The Initial Evaluation
Preparation for the Proposed Transaction
Marketing the Transaction
Private Placement
Closing the Transaction
The LCG & USAdvisors EB-5 Program Process 42

43. EB-5 Funding Process Access to project information
EVALUATION
PREPARATION
MARKETING
PLACEMENT
Access to project information
Evaluate and analyze business plan, pro forma financials, business case
Assess management team/project owners
Other detailed due diligence – project and EB-5 Program in conjunction with USAdvisors
Move forward with accepted projects
CLOSING
Agree on process
Develop process timeline
Assist with prep or review of PPM
Assist with or review marketing materials
Set up initial data room
Initial investor target list through proprietary referral network
Prepare & coach project management on process
Listing of project on EB5Info.com
Contact referral network
Distribute 1-page project description to interested parties
Evaluate suitability of interested investors
Disseminate PPM and other marketing information to suitable investors
Disseminate support information and answer questions
Assemble remaining due diligence data room
Facilitate completion and submission of subscription docs
Facilitate transfer of Admin Fee and investment into escrow
Assist investor counsel with I-526 prep
Communicate project progress and updates to investors during I-526 approval process
Closing 43

44. LCG’s EB-5 Funding Advisory Services Practice
We offer safety, security and risk mitigation to the project owner/developer and Regional Center
EB-5 Private Equity Placements
Solicitation and Funding of Private Equity & Debt Capital
Access to Foreign EB-5 Investors via LCG’s Proprietary Global Referral Network
U.S. Debt and Equity Placements
Structuring of Entire Capital Stack
Access to U.S. Debt & Equity Capital via LCG’s Proprietary U.S. Lender Database
Underwriting Services/Collateral Analysis
Registered U.S. Securities Representatives (“Agents”)
Assist with Initial & Ongoing Securities Registrations and Compliance
Access to High Quality Projects for Placement
We work with U.S. based real estate agents (AREAA members) to add to our network as registered reps, providing new commission opportunities 44

45. Contact Information
Tampa Headquarters
Fifth Third Center
201 E. Kennedy Blvd
Suite 325
Tampa, FL 33602
Phone: (813)
Mike Xenick, Jessica Lister,
Web:
New York • Chicago • Houston • Dallas • Boston • Atlanta • Miami • Indianapolis • Los Angeles
LCG is a trade name for LCG Capital Holdings, LLC and its subsidiaries and affiliates which include: LCG Capital Group, LLC, a Florida limited liability company, which provides debt placement, commercial real estate financing, loan portfolio divestitures, and certain other financial advisory services; LCG Advisory Services, Inc., a Florida corporation, which provides strategic advisory, light turnaround and distressed consulting, restructuring advisory, accounting support, interim CFO/controller services, and other corporate consulting services; and LCG Capital Advisors, LLC, a Florida limited liability company and a FINRA registered broker-dealer and SIPC member firm, which provides investment banking, private placement and merger, acquisition and divestiture advisory services.
Serious Resources.
Serious commitment. 45

46. Question and Answer Session
© 2012 Wolfsdorf Immigration Law Group (all rights reserved) . The contents of this document are proprietary and should not be duplicated or shared without the express permission from Wolfsdorf Immigration Law Group.
This presentation does not constitute direct legal advice and is for informational purposes only. The information provided should never replace informed counsel when specific immigration-related guidance is needed. 46 46
September 25, 2012 46