MUDHARABAH MUSYTARAKAH CONTRACT (Profit Sharing Cooperation and Investment Financing Contract) No... Bismillahirrahmaanirrahiim

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1 MUDHARABAH MUSYTARAKAH CONTRACT (Profit Sharing Cooperation and Investment Financing Contract) No.... Bismillahirrahmaanirrahiim With Allah SWT s guidance and blessing, the Mudharabah Musytarakah Contract, hereafter referred to as Contract was created and signed on this day..., date......, month....., year... (.../.../...), located in... by and between: 1. Indra Yuliawan in his position as the Head of Equitree from PT. Asuransi Allianz Life Indonesia, acting and on the behalf of Yayasan Allianz Peduli, located in... and with an address of..., is Shahibul Maal and hereinafter referred to as the First Party in this contract holder of Identity Card No...with an address of..., is an investee and hereinafter referred to as Second Party. Both parties agree and thereby mutually bind themselves in the Mudharabah Musytarakah cooperation hereinafter abbreviated as MM which is an integral part of the Equitree Program ( formerly known as Trust Network Finance), with terms and conditions of cooperation as stipulated in the following Articles: Article 1 GENERAL DEFINITIONS AND TERMS 1. The Equitree Program is a business mentorship and assistance program undertaken by the First Party to the Second Party, with the following stages: 1.1 The Selection Phase that is the stage in which the First Party provides the funds in the form of MM for one financing cycle that spans over 6 (six) months, as a means of assessing and determining whether the Second Party as an investee, based on the performance of his or her business and his or her trustful attitude, deserves further support in accordance with the predicate obtained, in the form of: Star, an investee who can produce a total profit equivalent to at least 20% of the original capital within one cycle of financing Superstar, an investee who earned the Star predicate 2 (two) times in a row. 1.2 The Mentoring Phase is a stage in which an investee with a Superstar predicate obtains assistance on business activities from a mentor with the aim of accelerating the development of his or her business in order to reach the formalization phase. As for the agreement, terms and conditions in the Mentoring Stage will be arranged separately. 1.3 The Formalization Phase is the registration of a previously unregistered business into a business entity with a legal status, official business license, and is legally recognized according to legal documents issued by the authorized institutions. The form of legal entity elected for Formalization shall be mutually agreed upon between the Parties. 2. Shahibul Maal is Yayasan Allianz Peduli with a legal body, which has funds to be managed by Investees in the form of businesses (dharabah) that produce profits (productive) and not contrary to Islamic Shari ah. 1

2 3. Investee also known as Mudharib is someone who obtains a mandate to manage funds from Shahibul Maal and one who provides Capital for the Equitree program. 4. Mudharabah Musytarakah is one form of the Mudharabah contract where the manager (Mudharib) also includes capital in investment cooperation. 5. Business Results are profit earned on the basis of the managed Capital and the procedure for the distribution of business proceeds based on the agreement of both parties. 6. Capital is the amount of money (rupiah) clearly states, in the form of non-receivable cash. 7. Follow-Up Investment is MM financing provided by Shahibul Maal after the previous financing cycle is completed. The granting of the Follow-Up Investment is non- compulsory and is the sole right of Shahibul Maal and is based on the assessment by Shahibul Maal on the Statement of Realization made by the Investee. 8. Statement of Realization is statement made by the Investee stating the position of the business activity at the end of the financing period in the form of profit, loss or break even, based on the Capital received by Investee through this contract. The statement is filled by the Investee itself fully based on faithfulness to Allah SWT in terms of honesty and fairness. Article 2 BUSINESS TYPES AND SCOPES 1. The business that will be run is... as a lawful and good business, not defective in the scales of Islamic Shari ah law, not contrary to government regulations, and not harming society. 2. In the event of any change in business type within the period of the Contract, thus, such amendment shall be reported to each Party who has the full right to cancel or continue this contract. Article 3 BUSINESS CAPITAL & PROPORTION OF CAPITAL The amount of business capital in the form of money is Rp (......) which will be given to the Second Party after this Contract is signed, and the Second Party acknowledges that he or she has received such amount of capital by signing this Contract. Article 4 TIME PERIOD AND STATEMENT OF REALIZATION 1. This Contract is effective from the date it is signed and expires 6 (six) months after that date; or when the Capital has been fully refunded, whichever is achieved first. 2. During the first 3 (three) months since the date on which the Capital is received, the Second Party is not allowed to reimburse the Capital both partly and wholly, in order for the Capital to be fully utilized for the development of the proposed business activity. 3. Upon entering the 4th (fourth) month and not surpassing the 6th (sixth) month since the date on which the Capital is received, the Second Party may initiate a gradual or simultaneous repayment of the Capital. 4. In the event that the repayment of the Investment is done gradually in which it will affect the calculation of Profit Sharing, the First Party shall submit the method of calculation entirely to the Second Party and the Second Party shall declare it in the form of Statement of Realization. 2

3 5. Delivery of profit sharing if any, may be performed simultaneously with the repayment of the Capital or at the same time, but not exceeding 6 (six) months from the date of this Contract. Article 5 RETURN ON CAPITAL AND PROFIT SHARING 1. The Second Party is required to return all of the First Party s capital as stated within article 3 including profit sharing (if any) by the latest on the date stipulated in Article Late return on Capital and Profit Sharing due to deliberate negligence or carelessness of the Second Party would rest in the entitlement of the First Party to cancel Follow-Up Investment commitment as mentioned in Article In the event that the business activity suffers a loss or break-even caused by the negligence of the Second Party, the Second party is required to return 100% of Capital to the First Party. The determination of negligence is mutually agreed upon and performed after the First Party obtains the Realization Report. 4. In the event that the business activity suffers a loss or break-even due to its own business factors, the Second Party is still obliged to return the remaining Capital as stated in the Statement of Realization. 5. In the event that business activities are profitable, the Parties have to agree to share profits based on a 50: 50 profit sharing ratio in which 50% business profits go to the Second Party and 50% of business profits go to the First Party. 6. The obligation to pay Zakah and taxes (if collected) is the individual responsibility of each party. Article 6 FOLLOW-UP INVESTMENT COMMITMENT AND RIGHTS TO REFER As part of the mission to assist the sustainability of the Second Party s business, the First Party is committed to providing Follow-Up Investment under the following conditions: 1. Follow-up investment shall not be granted if the Second Party returns less than 100% of the Capital and, as a result, the Equitree Program is terminated. 2. Follow-up investment shall be granted with an amount equal to the previous Capital if the Second Party returns the Capital in full without the profit sharing. 3. Follow-up investment, according to the following formula, shall be granted if the business activity yields any profit: Follow-up Investment = Previous Financing Capital + 3X (Three Times) Nominal Profit Sharing Received by the First Party 4. Second Parties with the Star predicates, as outlined in Article 1.1.1, get the right to refer other prospective investees that he or she knows well and for that the prospective investee, automatically, can follow Equitree Program as arranged in the attachment. 5. Second Party with the Superstar predicate, as outlined Article 1.1.2, shall obtain Follow-up Investment Commitment according to the formula above, and the following rights: 5.1. Obtaining a mentor and this aspect is arranged in a separate agreement Obtain financing under lighter terms and conditions as outlined in the appendix Obtain the rights to refer other prospective investees using lighter terms and conditions as stipulated in the appendix. 6. Follow-up Investment on business activities that fall in the categories of non-star or non-superstar may only be conducted maximum 2 (two) times consecutively during the Equitree Program. After that the Equitree program for the Second Party will be terminated. 3

4 7. The amount of Follow-up Investment is limited such that it cannot exceed 2 (two) times the amount previous financing capital. 8. If not utilized, the Follow-up Investment Commitment will expire within 2 (two) months for Stars and 3 (three) months for Superstars. Such that the Equitree program for the Second Party is terminated. Article 7 FORCE MAJEURE Force Majeure is an event that occurs beyond the scope and control of the Parties ability to avoid it such as: natural disasters, riots, rebellions, wars, and so forth. In the event of a force majeure none of the party required to exercise its rights and responsibilities which have not been exercised. The First Party, however, remains opened to Second Parties who wish to complete their financing responsibilities without any conditions. Article 8 CANCELLATION OF AL-MUDHARABAH MUSYTARAKAH 1. The Mudharabah Musytarakah Contract is nulled under the Syar i Law given that: 1.1. Second Party died or 1.2. Second Party is mentally incapable (insanity reason), or 1.3. Second Party is controlled by another party, or 1.4. The First Party is declared bankrupt by the court, or 1.5. First Party terminate it 2. In the event that this Contract is nulled and voided under the Syar i Law, the First Party shall have the right to transfer the Contract to the beneficiary of the First Party, to write off financing or to perform any other actions to the extent that it is not contrary to the syar i law. Article 9 OTHERS 1. By signing this Contract, the Second Party shall at the same time declare to have read and understood the Equitree Program Guidelines as set forth in Appendix Any amendment (either additions and/ or deductions) to this Contract and its appendix will be agreed upon by the Parties and subsequently set forth in additional letters and amendments signed by the Parties. 3. If any part of this Contract is unlawful and/ or unenforceable, then the condition does not automatically invalidate this Contract and will only invalidate such invalid and/ or non-applicable portions only. 4. This contract is binding and for the benefit of each party, and/ or substituting the rights and obligations of each party. 5. By signing this Contract, the Second Party shall at the same time give consent to the First Party to use Second party data and information for purposes including but not limited to research activities, data processing, promotion and marketing of either the First Party itself or jointly with other parties. 6. One Contracting Party may not transfer its rights and obligations in this Contract either partially and/ or wholly to any third party without the prior written consent of the other Parties. Thus, the Contract is signed by the Parties, made in duplicate of 2 (two), sealed with stamps, and each of which has the same strength of proof. 4

5 First Party, Second Party, First Witness, Second Witness,.... Appendix 1: This appendix denotes a unity that cannot be separated from the Mudharabah Musytarakah Contract Number... date... EQUITREE PROGRAM GUIDE The Equitree Program is an economic empowerment program that aims to support you in developing your business and train you to be a reliable entrepreneur. The Equitree Program is divided into several stages, namely: I. Selection Phase This phase lasts for 1-2 years. In this period, you as candidate will be selected through the provision of modest investment that will be used for a trial run of the business that you proposed. The Capital that we provide is through the Mudharabah Musytarakah contract and, as a result, we do not charge interest but, instead, it is in the form of profit sharing in accordance with the Statement of Realization at the end of the investment period. You make your own Statement of Realization based on the facts and we trust you to do so with full honesty. Selection Phase Guide a) Applying for the initial investment: In order to obtain an initial investment, you can apply to the Equitree investment committee or be recommended by an Equitree entrepreneur who has earned the Star status or Superstar status. This recommendation path will accelerate the initial investment request process to one day. b) Terms and conditions required for initial investment: The value of the investment capital that is to be given to the initial investment is at least Rp 1,000,000 and a maximum of Rp 2,000,000. Providing this investment capital does not require any warranty. During the first 3 months, you are not allowed to return investment capital. Starting on the 4th month and by the end of the 6th month you should be able to 5

6 return the following investment capital and the profit shared as agreed in this Musytarakah Mudharabah Contract. c) Time To Disburse Investment: It can take up to 5 business days from the time that the application is received until disbursement. Any follow-up investment will be processed in the next day. d) Minimum and maximum age to join the Equitree Program: The minimum age to get an initial investment of Equitree is 21 years and the maximum age is 40 years. e) Follow-up investment if your business benefits: With reference to the agreed Mudharabah Musytarakah Contract, if you return the investment capital plus the profit sharing then you are entitled to obtain the next investment capital with the amount automatically determined by the following formula: Amount of follow-up investment= (amount of previous investment capital)+ 3X (amount of profit earned by Equitree from previous investment) T he amount of follow-up investment capital is limited to a maximum of 2 times the previous investment capital. If you return the investment capital with the addition of at least profit shared 10% of the Capital and it will make you receive Star status, you can recommend other people (nonfamily members) to be participants of the Equitree program. In addition, you will also get promotional reward from Equitree for having recommended your friends. The term is explained in the recommendations section. If you return the two phases of investment consecutively with an additional profit sharing from the gains achieved with a Star status, then you are ready to enter the next stage, which is the mentorship stage with additional benefits. f) Impact if you do not return the funds on time: Either due to business performance, administration, or other reasons, if you do not return the full investment capital until the end of the 6th month of the investment period, your participation in the Equitree program will be terminated. Although the Equitree Program has been suspended due to the above reasons, according to the sharia contract you are still required to refund the remaining capital and we can provide an extension of the term and/ or the installment amount of the repayment according to your ability. g) About the status: baddie, goodie, star, and superstar : Baddie is a status when you return less than the original amount of investment that you received or pass the deadline of the agreed return period. Goodie is a status when the amount of investment you return is exactly the original amount of investment you received or plus a profit sharing of less than 10% of the investment. Star is a status when you return the investment in full and plus a profit share of at least 10% of the investment. Superstar is a status when you earn Star status 2 times in a row. h) Many investments can be accepted: You can only receive one Equitree investment per stage per person (per family or per Family Card). If your status is Goodie 2 times in a row then you are not eligible to continue the Equitree program. i) Time to take follow-up investment: 6

7 Once you are eligible to receive follow-up investment, you can immediately take up the investment capital with the agreement process only within 3 business days. You have 2 (two) months- or 3 (three) months for Superstar to decide whether or not a follow-up investment facility will be taken. If it has exceeded two months then the facility is expired and you cannot join the Equitree program anymore. j) Using electronic money in the process of receipt and payment. Equitree does not accept payments in cash. No Equitree officer or employee is allowed to carry out transactions using cash. We carry out all transactions through the use of electronic money. This means we will disburse your investment capital through electronic money and you are expected to return the investment capital in the form of electronic money. This process is faster and more secure than using cash. If you do not have an electronic money account yet, please contact the Equitree officer/ employee who will assist you. k) Partner involvement in Equitree: Your partner s formal agreement is not required, but we strongly recommend that your partner know and support the program you are currently following. It is very difficult to create a great business if your partner does not support your plans and dreams. In addition, we also need your emergency name and contact number, may be a partner or other close relative or friend you trust. l) Financing from the Equitree Program is based on Sharia principles: The first phase or selection phase in the Equitree Program is implemented with the sharia principles. We continue to work on improving the program to be in full compliance with sharia principles. The working Contract that we undertake is based on Mudharabah Mutsyarakah principle and this is in accordance with the Fatwa Dewan Syariah Nasional No. 50 / DSN-MUI / III / m) The types of business eligible to join the Equitree program: Equitree is open to various types of businesses such as food, services, agriculture, textiles, and others, provided that the business does not violate sharia law and principles. If you do not yet have a business type but already have a business proposal that matches the Equitree criteria, or you are recommended by your partner who has been an Equitree participant, then we can provide investment capital for you. The most important thing for us is your desire to have a successful business and become a successful entrepreneur. We believe that you are able to manage the investment capital that we provide you. n) How does the recommendation system work: After you have received Star status, you should be able to recommend one of your friends. Your friend can directly request Equitree to start the investment application process. You will receive a gift voucher after your recommended friend is approved to receive investment capital from us, and you will also get an additional gift coupon if your friend reach the Star title. This gift will only given when your friend is given his or her first investment capital. If the person you refer becomes a Baddie, there will be no harm to you other than that you will not receive additional rewards. You can still continue the Equitree Program as usual. So you are NOT responsible for the goodness or the badness of the person you have referred. You can refer others during the waiting period until the next investment period (2 months for Stars and 3 months for Superstars) even if you decide not to continue the Equitree 7

8 Program for yourself, or if you continue in the program by taking Follow-up financing- your reference can even be given before your next investment period is over. o) Provision of training and mentoring in Selection phase: At this stage Equitree only provides investment capital without providing training and mentoring. Training and mentoring will only be given after you complete the first stage (Selection) and when you enter in the second stage (Mentoring). II. Mentoring Phase This phase lasts for 1-3 years. During this phase, you will be accompanied by a mentor to be able to run the business development in accordance with the business plan. During this period of assistance, Equitree will again provide greater capital investment than at the Selection phase. The next step will be an agreement stating that Mentor and Equitree will receive a minority share of your business at the time the company is formalized, with you remaining a majority shareholder. A fuller explanation of this can be seen in the next section of this guide. In general terms and conditions in the mentoring phase are the same as the selection phase. However, since you are now a Superstar then we will give special treatments as follows: Business Capital Financing Unlike the Star that can drop into the Goodie, as a Superstar you will not lose the predicate, even if you return the business-funding fund evenly. If you have only 2 months (starting after full business return) to take the next investment, now you can wait for up to 3 months. Joker: You have 1 time to extend the investment period from 6 months to 12 months while in the mentoring phase. All you have to do is notify us of the extension, without needing to explain why. Booster: During the mentoring phase, you have 1 quota to ask us to double your venture capital. Just let us know at the time of app charging that you will take this booster facility. Please keep in mind that these rules are still valid as in the selection phase: Baddie= Quit the program and Twice in a row Goodie = Quit the program. Referal As a Superstar, you can provide more referrals to us, as long as it retains your own business profit at a rate of 20% or more with the mechanism described in the next example. Example: o You have just become a Superstar with 20% business profit (which means the share of profit for Equitree is 10%) for two consecutive times, then you can give 2 referrals from now onwards until the end of your investment term. If later at the end of your next investment you also earn 20% or more profit, then you can give 3 referrals at that time. o If your business profits on subsequent investments are less than 20% then you can no o longer provide referrals. But if on your fifth investment, you earn a profit equal to or greater than 20%, then you can give 4 referrals, because that is for the fourth time you complete the investment stage with 20% or more profit. The maximum number of referrals at the same time is 10 people. Please also note that as a Superstar, the people you refer can provide tangible benefits to your daily life. 8

9 Mentoring Phase Guide ( Mentoring) a) How to obtain a business mentor: Equitree will help you obtain a mentor. It is expected that you and your mentor will have a high level of compatibility so that they can work together to grow your business. You can request a one-time mentor change and it can only be done at the beginning of your two investment stages as a Superstar (approximately during the first year as a Superstar). After that time, you are now allowed to apply for a mentor change. b) The link between financing and mentoring: Mentoring will apply only after follow-up investment is received from Equitree and then you sign contract (contract) mentorship with mentor and Equitree. While receiving follow-up investment from Equitree, it is important that you have an active mentorship program. Therefore we must work together to run this mentorship program in the first 3 months since you become a Superstar because if not, then your risk of being removed from the Equitree program will be high. In addition to maintaining business performance at least always as a Goodie, there are some benchmarks that you and and your Mentor must achieve so that we can continue to support your business activities: i. As a Superstar, after 2 times investment (approximately 1 year): 1. You and Mentor must submit a "roadmap to formalization" to Equitree 2. Roadmap must be completed maximum 3 years since it started. 3. Roadmap should contain the financial business plan. 4. Roadmap must be approved first by Equitree before it is run. ii. Every 2 stages of investments (approximately every year): 1. Intermediary assessments will be undertaken, 2. This includes checking the progress of the business compared to the plan in the roadmap. 3. It also includes checking whether you and your respective mentors have fulfilled the minimal roles and responsibilities to be carried out. c) Mentoring Cost: The mentor is paid on a wage-pending basis to be set out in the contract in which you and the mentor agree on the aforementioned assistance given, you sincerely and willingly grant a small portion of your business ownership to the mentor after the business has been assisted in its development until it has a legal body. As long as you are a "Superstar", you must be accompanied by a mentor during the Equitree program. d) Roles and responsibilities of mentors: Mentors play a role in overseeing your efforts in becoming even bigger. Mentors are also responsible for the materials and methods of business counseling submitted to entrepreneurs. e) Time period in which a mentor is committed to give support: This aspect depends on your own agreement with the mentor. Equitree expects mentorship from mentors for at least 2 hours per month, either in the form of meetings or by telephone and electronic communications. You can also decide to officialize your business faster and enter the stage of company formation. III. Business Formation Phase 9

10 When your business scale is sufficient, Equitree will help you to obtain the right business license and minimum capital requirements (paid-in capital). At this stage we will separate the company's shareholding as approved in the previous stage. With the right business license, wider financial access to business capital, as well as access to marketing, and access to government will be opened to you. However, in line with your business license, you will have some obligations such as you have to keep company books, tax payments, and provision of social security facilities for employees. At this stage, Mentor and Equitree will continue to guide you in doing business for profit and how to run the business according to the latest regulations. At this stage Equitree will stop providing financing to you and in return will recommend you to banks or other financial institutions in order to get greater financing to grow the business. IV. Standing On Your Own Feet Phase At this stage, we see that you are successful and experienced to be a successful entrepreneur for yourself, your family and your employees. In other words, since you have been able to independently run and grow the business, Equitree and you Business Mentor will sell their shares back to you or to new business partners who will support your business in the future. The proceeds from the sale of these shares will be used by Equitree to assist and guide other small entrepreneurs. If you are interested, you can sign up to be a business Mentor and shareholder for them. Guide to Business Formation Phase and Standing On Your Own Feet Phase. Details about the training at the business formation stage of the company and the standing on your own feet phase will be given only to "Superstar". - the end of the document- 10