The Investment Banking (“IB”) has developed the following investment criteria for potential clients and investors to be well informed when approaching the Bank:

• Mainly member states of the Gulf Cooperation Council (the “GCC”).
• The greater Middle East region will be considered on a case-by-case basis only for investment grade countries with a rating of no less than BBB- by Standard & Poor’s or any other equivalent rating by an internationally reputable agency.
• Other countries that are of investment grade will be considered on the basis of:
      a.   their geographic proximity to Bahrain;
      b.   the presence of a member company of the Dar Al Mal Al Islami (“DMI”) group for the
            provision of assistance (when applicable);
      c.  the inviting party and its credibility; and
      d.  the management terms during the Investment Period.
• Countries unrated will not be considered by the Bank.
  

• All medium to low risk sectors/industries (e.g., infrastructure, real estate, etc.) where the Bank has developed expertise internally, or through a joint venture with Sponsors that have recognizable experience in that sector/industry; and
• High risk sectors/industries (e.g., technology, biotech, etc.) would only be considered on an exceptional basis and if solid grounds to do so are exhibited.
  

• Between US$5 to US$30 million; and
• Greater than US$ 30 million on the basis of syndication and book-building
  

• Mainly US$ and US$-pegged currencies;
• Not more than 10% of the Bank’s equity if other currencies than the above; and
• Other currencies provided that FX risk is hedged.
  

• Targets:
      a.   green field projects (with off-take agreements already in place unless otherwise           specified);
       b. existing, well established concerns with positive net income; and;
       c. existing companies that are in the growth stage and:
             i. have concluded at least two previous financing rounds after seed capital; and
             ii. have positive EBITDA
• Straight equity with a clear exit strategy determined and agreed upon prior to funding;
• Equity-like structures (e.g., diminishing equity participation and other hybrid structures) with a defined exit strategy or other exit options; and
• Other known or innovative structures provided that:
      a.   Sharia’a compliance is obtained;
      b.   Credit enhancements are embedded; and
      c.   Risk mitigation mechanisms are acceptable.
  

• Maximum range of five to seven years; and
• Grace period may be granted for projects only with development phases not exceeding 2 years (i.e., internal cash generation should start at the end of the grace period).
  

• Board representation in the event of a joint venture set-up;
• Crucial decisions that would impact the investment opportunity during the Investment Period; and
• Financial administration in respect of fund application and distributions.
  

• Macro and micro risks involved;
• Mitigation of risks available;
• Sponsors contribution;
• Sponsors track record with regard to the industry contemplated;
• Length of the Investment Period; and
• Net returns to existing and new investors in line with risks and comparables.
  

• Annual, semi-annual, quarterly, or monthly after the expiration of the grace period
• Profit excluding principal or a combination of both;
• With a priority to existing and new investors until the Hurdle Rate is attained; and
• Excess profits above the Hurdle will be shared with higher weights to the Sponsors in the event the Sponsors provide sufficient risk mitigation and/or over-perform the initial projections.
  

• Retainer fees: paid by the Sponsors to the Bank for due diligence, advisory, and structuring work undertaken by IB;
• Structuring and Placement fees: if the consideration is raised on a best efforts basis, a fee will be paid by either the client or the investors at the time of successful closing or shared between both;
• Management/Agency fees: a percentage of the committed or uncommitted capital will be charged to the project or the venture undertaking the project depending based on the transaction type; and
• Performance fees: for any return in excess of the projected Hurdle Rate, that is disclosed to investors, will be determined and agreed on a case-by-case basis.
  

• Financial institutions approaching the Bank will be considered on the basis of the quality of their relationship with the Bank, their overall reputation, their monetary participation, the parties related to the fund offered, and their experience in the products or countries/sectors where their fund is seeking investment opportunities;
• The Bank will not participate in funds where units or shares are offered at a premium. The premium on assets acquired on behalf of a fund will be examined on a case-by-case basis;.
• Structuring fees are allowed within the Investment Banking norm; and
• Placement fees should be waived or reduced to a minimum.