Ogilvy Lakes Country Club

Introduction Ogilvy Lakes Pictures 1Ogilvy Lakes Pictures 2Background OpportunityStrategy Strategy ContinuedContact and Disclaimer Obsidian Capital A.I. Analysis

CONTENTS

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14th September 2010.

This document intends to briefly summarise the investment opportunity pertaining to Ogilvy Lakes Golf and Country Club with a view to acquiring the asset. It is a strategicdocument that attempts to give a high level overview of the opportunity available. Its main aim is to produce discussion amongst the restricted parties listed below. This is notan invitation to invest and is an internal document. RB and CC (see below) have formed an asset management and investment company within Switzerland (Obsidian CapitalSA) under the supervisory control of FINMA and ARIF. Most of the required due diligence has been undertaken. Feel free to call me if you have any particular queries.

Until further notice the document is restricted to the following persons (all of whom are considered as HNWI, sophisticated investors or investment professionals);

Peter Harrison (PH)

Chris Cocker (CC)

Richard Bentley (RB)

Mike Wolff (MW)

Scott Friedlander (SF)

Richard Avery Wright (RAW)

Frances Whitaker (FW)

Rob Jansons (RJ)

Vidhi Tambiah (VT)

Nick Neary (NN)

Peter Ertel (PE)

Introduction 03

Ogilvy Lakes Pictures 04

Ogilvy Lakes Pictures 05

Location

Ogilvy Lakes is situated in the municipality of Saint Faustin Lac Carre, about 1 hour north of Montreal and 20 minutes away from theinternationally renowned four season resort of Mont Tremblant. Mont Blanc, Ogilvy’s closest ski hill, is just a 5 minute drive away and there aremore than 361 ski trails within 30 minutes. In the summer, as well as having it's own golf course, Ogilvy Lakes is within a 30 minute drive ofmore than 30 courses, many of them of championship quality.

Overview

Ogilvy Lakes is a property of 575 acres situated on an established 18 hole golf course with over 5kms of shoreline on two lakes, Lac Rougeaudand Lac Vaseaux.

The property provides the opportunity of building 100 bespoke luxury log homes with either lakefront or spectacular views over the lake,mountains or the golf course, a particularly sought after commodity in the Laurentian region. Properties on golf courses in the Laurentians oftensell for in-excess of Cad$1.5 million and the Ogilvy Lakes site has pre-sold a number of units, including some in excess of Cad$1 million.

Also included in the sale price are:

o The existing golf clubhouse and restaurant, able to accommodate 100 diners and conferencing for 150 people.

o The Ogilvy Manor House. A magnificent stone mansion of over 7000 square feet comprising 9 bedrooms.

o 2 staff houses - one of 6 bedrooms and one of 2 bedrooms.

o 3 Tennis Courts

o A reservoir and water purification system with a 40,000 gallon capacity.

The site is stunning and is extremely well located for both Tremblant and Montreal.

Background 06

OpportunityDue to the recent credit crisis the original developer of Ogilvy Lakes has been unable to complete the purchase of Ogilvy Lakes Country Club from the vendors. Cad$7.70 Mwill have been paid to the vendor, but there is a balancing payment of circa Cad$3.65 M owed (the balancing payment).

An exclusive irrevocable option is available to purchase most of the site for Cad$3.65 M (including the golf course and country club in its entirety) before January 2011. Thisincludes everything bar the initial 38 plots that have been released in Phase 1 of the development. The estimated current value of the asset that would be purchased is inexcess of Cad$8 M. The GDV of the property portfolio is well in excess of Cad$40 million.

For the last 12 months Peter Harrison (PH) has been working closely with the distressed developer and has an open channel of communication with the vendor. For the momentthis means we have a unique insight into the deal, which is the reason we have the opportunity to buy the asset at the discounted price of Cad$ 3.65 M. PH is also overseeingPhase 1, so concerns about conflicts of interest between Phase 1 and the rest of the site are minimal. A number of phase 1 properties are now finished which means we haveshow homes to market with.

Ogilvy Lakes Country Club Special Purpose Vehicle (‘the SPV’) will be formed in order to purchase the Ogilvy Lakes Country Club along with the development rights for the 62plots. The intention is to buy Ogilvy Lakes Country Club, financially restructure, build a best of breed country club and spa with private membership status, enhance theplanning permission, develop out and sell the luxury log homes. There are also a number of potentially lucrative development and on-sell possibilities, including selling 100acres at the entrance of the site for Cad$1M.

Most of the infrastrucutre for the development is in place. There are some basic road construction costs of about Cad$50,000 for each of phases 2 and 3 (phase 4 needs furtherinvestigation-but is estimated at Cad$200,000) and the main electiricty line into the development site has recently been laid. From then on, electiricty can be added to eachproperty on a marginal meter basis. Water and sewerage are provided through wells and septic tanks respectively, and these costs are included within our construction costs.The golf course is mature and aesthetically pleasing. It is not the hardest course in the world (a possible advantage as there are plenty of championship courses in the area), butit offers stunning views of the Laurentian countryside.

On paper the profits and IRRs are abnormally large. Successful real estate sales should create development profits in excess of Cad$15 M. The focus of the SPV will be toensure conservative execution of a best of breed development (tight control of throttle rate), generation of positive cashflow and the identification of an acceptable exit routefor investors.

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Strategy 08The significant purchase price discount allows the SPV room to manoeuvre, but execution and exit are critical. The main strategic points are listed below;

Distressed to De-stressed:

The current opportunity is available to the SPV because the current buyer is unable to complete the purchase. An investment of circa Cad$3.65 M will secure an asset valued atover Cad$8 M. The SPV will purchase the asset for cash in order to convert the distressed position into a de-stressed one. With no debt, the SPV will have time to enhance theasset, whilst locking in the initial purchase profit. The annual costs of running the country club on a skeletal service are currently circa Cad$100,000 (prior to enhancement) sothe SPV will have plenty of breathing space to optimise the asset.

Asset Enhancement:

Alternative 1

The SPV would spend circa Cad$2 million on the club house and country club amenities. Within the price we intend to do the following;

Total refurbishment of the club house and restaurant facilites, including curtilage around the club house to create an eating and recreation area with real wow factor.

Construction and fit out of swimming pool and gymnasium and construction of changing facilities

Resurface and refurbishment of the tennis courts.

Construction of reception area and fit out of pro shop

Construction of boat house for sailing club

Development of WMICCE area (weddings, meetings, incentives, conferences & conventions).

Alternative 2

Offer the country club on a long term lease basis to a professional operator, conditional on the above works (Alternative 1) being undertaken by the operator. The capitalinvestment made by the operator would result in a reduced lease rate. The SPV would retain the Freehold, but would eventually sell to either the operator or other externalinvestor.

Result of Investment

With this investment, Ogilvy Lakes will be able to offer a best of breed country club. The benefits will be significant;

Positive cash flow for the investment through country club memberships.

Positive cash flow from the lease of the restaurant.

Enhancement of the asset through the refurbishment of the country club. The value of the asset is significantly increased if the amenities are finished to a high spec, alsoallowing for early exits

Log home rental income will increase due to increased demand.

Number of log home sales will increase because of enhanced country club product.

Further Development Opportunities

Potential to develop and extend the manor house to provide a 5-10 suite boutique hotel.Develop a spa and wellness center at the most elevated point of the site, allowing for spectacular year round views of woodland, mountains and lakes

Planning Optimisation

CC and PH believe that the masterplan needs revisiting. Specifically, they would like to design a lower price point offering in the woodland back plots to tap into the domesticmarket. It is felt that a log home priced circa Cad$500,000 (with a construction price of circa Cad$300,000) will attract local buyers and enhance country club membership.

Organic Growth and Throttle Rate Control

Perhaps the most common error made developing property developments like Ogilvy Lakes is to focus too strongly on the property development side, and to disregard theunderlying leisure business. This is a mistake. The raison d’etre of the country club is the joie de vivre felt enjoying its amenities. This is why the SPV needs to focus on thecountry club development first and to develop a best of breed product. Get the country club right and log home sales will be sure to follow. Furthermore, if positive cash flow isgenerated within the country club through membership subscriptions, the pressure to make development sales will be erradicated.

Possible Government Loan

There is a serious possibility Ogilvy Lakes SPV could apply for a federal backed loan from the Business Development Bank of Canada (BDC is a Canadian Government LoanOrganisation), and this is being investigated currently. The bank’s aim is to stimulate investment within Canada, and the loan would provide adequate working capital at a lowinterest rate.

Building the right product at the right price

Businesses succeed when they produce the best product at the same price, or the same product at a lower price. I believe the low entry price point at Ogilvy Lakes CountryClub combined with the unique nature of the site will allow the SPV to produce the best product at the lowest price. Furthermore I believe the strong management team beingput into place to run the SPV will be able to steer the venture into abnormal profits. PH and CC have had an intimate working knowledge of the site within its local context for anumber of years. The global economy seems to be continuing to recover, and an unleveraged, high GDV product like Ogilvy Lakes Country Club should appeal to thoseinvestors who would like exposure to assets that hedge future inflation.

Investment Exit

By completing the leisure facilities, I believe it is easier for investors, lenders and log home purchasers to see the site potential. This in turn should allow for earlier exit routes tobe identified.

Initial Investment amount is low compared to predicted profits. Once positive cash flow is generated the SPV expects to make investment repayments directly from cash flow. Asthese grow through time and financial strength and profitability increase it will also be possible to consider a redistribution of initial investment (and further profits) throughconservative debt issuance within the capital structure of the firm. I stress the need for conservative use of debt, and only when financial status dictates its use is prudent. Cashgeneration will be key here.

Conclusion and Structure

The low cost entry point of this investment should allow for large positive IRRs. An initial capital structure of 100% equity significantly reduces risk and provides much neededbreathing room and in these financially volatile times investors are as much bothered about capital preservation as capital return. The significant risk of inflation because ofrecent quantitative easing policies should make a real estate product such as this appealing to investors and inital interest from Quebec and Toronto seems to suggest this tobe the case. The natural structure for an SPV such as this is likely to be corporate in nature, probably a SICAV. Investors will expect the management of a direct investment likethis to be aligned through the payment of a management fee and carried interest payment. 2 and 20 are traditional and are probably about right. I believe a 6% hurdle ratelinked to a high water mark would also be appropriate.

Strategy Cont 09

CHRIS COCKER, CFA Charter ApplicantManaging Director, Obsidian Capital SA

M +41 (0) 793 539 711T +41 (0) 217 113 223

E chris@obsidian-capital.comSKYPE ccmay1969

Chemin Du Pertuis 91092 Belmont Sur Lausanne

Suisse

The information in this presentation is subject tocorrection and amendment. It does not constitute orform part of any offer or invitation to sell or issue, or anysolicitation of any offer to purchase or subscribe for anyshares in either Ogilvy Lakes SPV (Malta) established inMalta as a “SICAV” as defined in the Maltese FinancialServices Fund Guide (the “Guide”) published by theMaltese Financial Services Commission (the“Commission”) or any other investment products fromOgilvy Lakes SPV (Malta). Nor shall it, or any part of it,form the basis of, or be relied on in connection with, anycontract therefore.

The SPV may not be sold directly or indirectly in the USto a US person. Shares in the Fund are not available forsale in any jurisdiction in which the sale would beprohibited. Subscriptions will only be received andshares issued on the basis of the current OfferingDocument for the Fund. It is intended solely for the useof the person to whom it is sent. It is not an invitation tosubscribe and is by way of information only.

Please note that the price of shares may go down as wellas up and may be affected by changes in rate ofexchange. An investor may not get back the amountinvested. It is only suitable for investors who can affordthe risks involved. Performance is calculated on a totalreturn basis in the currency of the class and is net of allfees. This document should be read in conjunction withthe PPM.

10Contact Details & Disclaimer

7Obsidian Capital A.I. Analysis

l Site Analysis: Is it a prime and unique property investment opportunity?

l Financial Analysis: Is it distressed or discounted to Net Asset Value, allowing the fund to profit from financial restructuring? The probability of an acceptable IRR is significantly increased by purchasing at an NAV discount.

l Top Down Analysis: Is it a preferred macro location (country and region)?

l Business Strategy: Strategically does the opportunity produce compelling results when analysed using SWOT and Porter’s 5 Forces analysis?

l Alpha Availability: Does the opportunity allow the Fund to add future value? There are a wide range of areas we analyse:u Design - Fundamentally enhance or change the investment opportunity.u Business Synergies - e.g. Combining property development opportunites with a hotel and spa complex to maximise

sale values and hotel profitability.u Adding New Business Lines - e.g. Getting permission to open a new restaurant, swimming pool or spa complex thereby

adding new cash flows to the business and enhancing the product.u Management - Parachute in knowledgeable management teams to maximise income and minimise costs u Grants - Apply for all available grants to enhance returns

l Financial Modelling: Given the above parameters, does the opportunity offer extraordinary returns once the data is entered into the Obsidian Capital’s proprietary modelling tool?

l Execution Capability: Is this location compatible with execution? (The SPV will build local teams on the ground in order to minimise execution risk.)

l Exit: Does the opportunity allow for a reasonable exit?

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