Megatel Capital Investment

The Company's success depends significantly on the contributions of the Sponsor's management team, particularly Aaron and Zach Ipour. The Company has no employment agreements with these individuals and no key-man life insurance on any of them, creating material key-person risk.

“Our success depends to a significant degree upon the contributions of our Sponsor's management team. We do not have employment agreements with any of these individuals nor do we currently have key man life insurance on any of these individuals. If any of them were to cease their affiliation with us, our Manager or our Sponsor, our Sponsor may be unable to find suitable replacements, and our operating results could suffer.”

The fund's operations are entirely dependent on the Manager's management team (Zach and Aaron Ipour). There are no employment agreements or key-man life insurance for any of these individuals, creating key-person risk.

“Our success depends to a significant degree upon the contributions of our Manager's management team and the Developer's management. We do not have employment agreements with any of these individuals nor do we currently have key man life insurance on any of these individuals. If any of them were to cease their affiliation with us, our Manager, or our Developer, our Manager and our Developer's manager may be unable to find suitable replacements, and our operating results and the operating results of our Developer could suffer.”

MCI Income Fund V is last in the five-fund rotation for investment opportunities under the Investment Allocation Agreement, receiving an opportunity only after MCI SIF, MCI PEF, MCI PIF II, and MCI PIF IV each pass. This structural disadvantage could limit attractive lending opportunities available to the Company.

“The fifth proposed investment opportunity that meets the investment criteria for more than one of the parties of the Investment Allocation Agreement will be given to us. If we have insufficient proceeds to make the proposed investment, that investment opportunity will be given to the MCI SIF.”

The Manager has sponsored similar private programs concurrently and may do so in the future. Officers may face conflicts in allocating loan opportunities and may devote less time to this fund when managing competing vehicles.

“Our Manager has sponsored similar privately offered programs and may in the future, or concurrently, sponsor similar private and public programs that have investment objectives similar to the Developer and its SPEs. Our Manager and its affiliates and officers may have obligations to those programs, the fulfillment of which might not be in the best interests of us, or any of our investors. Our officers and the Manager may face conflicts of interest in allocating Loan opportunities, administration and underwriting of the Loans, enforcement of the loans, and other business opportunities.”

The indenture contains no covenant limiting the Manager's ability to cause distributions of cash to the sole member (MCI Holdings, LLC). Such distributions reduce amounts available to pay bondholders.

“Neither the Indenture nor the forms of Bonds contain any covenant limiting the ability of our Manager to cause us to make distributions of cash from us to our Member. We anticipate that distributions of cash will be made from us to our Member, in amounts as determined by our Manager, and that such amounts will be at least sufficient to pay all expenses and liabilities of our Member.”