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Proposed Fundraising Exercise for Bear Mountain March 25, 08 Seville Properties (Bear Mountain) Ltd or “Company” and Bear Mountain Village (the “Project”) The answers in this exercise are incorporated below. You should be aware that most of the answers to these questions are also available on this Sherwood & Associates secure website at www.sherwoodassociates.ca/bearmountain . For your convenience, we have included the key documents as attachments to this response. Information Requisition List 1. Profile of Seville Properties (Bear Mountain) Ltd’s shareholders i.e. experiences and track records in real estate industry. Please see attached PDF files: a) Harvey Simons Backgrounder & Work in Progress b) Harvey Simons Project History Album
2. Documentary evidence of the financial capabilities of the shareholders i.e. Harvey Simons and Catherine Simons, etc (if the Company is owned by individuals) Harvey Simons has sole control of Seville Properties (Bear Mountain) LTd. For documentation contact Gary Kinar, personal legal counsel for Harvey Simons. His contact details are provided below. Gary Kinar is familiar with all of the Simons family personal and corporate assets.
3. License(s) and/or government approval(s) for the Company to operate as a property development company in Canada (if applicable). This not required in Canada. Queries 1. Kindly furnish us the details of the property development projects to be financed/securitised for $525.0 million debt (Shariah compliance assets only). Please see attached Excel file which contains Assumptions, 5-year Development and Revenue Projections and the future revenue projections for Remnant Lands. Bear Mountain 5-year Development / Revenue projections March 19, 08
2. Kindly clarify the current shareholdings structure of Seville Properties (Bear Mountain) Ltd. Based on information prepared by Sherwood & Associates dated March 2008, Seville Properties is a Vancouver Island based real estate development firm with over forty years of experience. If this is the case, kindly furnish us details information, financial backgrounds (latest audited accounts) and track records of Seville Properties. Harvey Simons has sole control of Seville Properties (Bear Mountain) LTd. This information is best provided by the Company’s legal counsel Gary Kinar. He can be contacted at
3. Kindly clarify on the proposed debt to equity structure for the Project i.e. debt $525.0 million Canadian, how much is the equity contribution from the Company? Harvey Simons plans to provide $30M in equity. 4. Please provide details utilization of the fund to be raised a) Purchase price of $400.0 million - What comprise this? Shares worth $400.0 million? Completed properties? Lands? This is an outright asset purchase which includes all the properties referenced in the attached 5-year Development & Revenue Projections Excel document, which includes all pre-sales, work in progress, all remnant lands, 2 Jack Nicklaus golf courses and development sites and management contracts. The Company will receive all revenues from sales not yet delivered. The Legal descriptions of all land parcels and development have been prepared by Payne Edmonds, the Company's Vancouver law firm retained to handle the closing. Payne Edmonds is also in receipt of $500,000, which it holds in escrow pending closing.
- Any market valuation or 3rd party opinion on the above Purchase Price? i. Greater Victoria Appraisal Report, August 2007 by Sherwood ii. Price Waterhouse Coopers – Bear Mountain Model Sept. 10, 07 iii. 5-year Development and Revenue Projections referenced earlier
b) Construction revolver of $100.0 million. Please see attached files referenced below. - To finance which project in Bear Mountain Village? See 5-yr Dev/Rev proj - How long is the tenure? See 5-yr Dev/Rev proj - Source of repayment? - See 5-yr Dev/Rev proj and Pre sales and site sales i. 5-year Development and Revenue projections referenced earlier ii. Copy of Sales Template PwC March 2008.xls
c) Other fees, taxes, closing costs of $25.0 million (details of these expenses) - Consultant Fees: Sherwood & Associates 1% Capital Link 1.5% - Taxes: 2% - Closing Fees and Disbursements: to be detailed upon closing.
5. Kindly provide the total source of repayment for the $525.0 million debt. See Bear Mountain 5-year Development / Revenue projections March 19, 08
6. If the sources of repayment are from the Project, kindly furnish us the details of the Project to be developed and the latest sales status i. Price Waterhouse Coopers – Bear Mountain Model Sept. 10, 07 ii. 5-year Development and Revenue Projections referenced earlier
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Due Diligence Visit 7. Upon payment of the Purchase Price ($400.0 million) by the Company, is Seville Properties going to develop the Project by its own or it's going to sell some of the projects to other development companies as mentioned in the report prepared by Sherwood & Associates dated March 2008? Kindly explain the Company’s business strategies on this. The Company strategy is precisely as presented in the Sherwood & Associates Report – continue to develop certain properties on its own utilizing the exact same team that has been so successful since the beginning and sell some sites to other developers to accelerate debt repayment.
Furthermore, the Company intends to maximize its potential by applying for increased density on the Highland County side of the property after the new Saanich Water reservoir is complete. These development sites will be sold as building- ready commercial sites.
The Company anticipates enhanced values because of the new Trans Canada Highway Interchange and exit for Bear Mountain, and because of the Bear Mountain exposure leading up to the 2010 Olympics and beyond.
8. Has the Company identified yet the contractor for its Project? Kindly furnish us the background of the contractor including its financial background. In order to maintain continuity and momentum, the Company plans to utilize the exact same team that has been so successful since the beginning, in 2003. This group has developed a great working relationship and is very motivated by success. It includes: Bear Mountain Real Estate Sales Levelton Enviro Report, June 19, 07.pdf Bear Mountain Construction Guidelines
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