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J a n u a r y 2 0 0 2

I n v e s t o r - P r e s e n t a t i o n

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Table of Contents

Executive Summary Investment Highlights in brief

Art Market Art Market Overview – Art is an Asset – Art100-Index vs. Conventional

Investments – CAPITAL “Art Compass” – Art Market Outlooks – Problems of an Investment in

Art – The Fund as Problem Solution

Fund Policy SOLON Art Fund: Structure & Function – Management Company –

Executive Bios – Strategic Partner: KWB Kunstwertbrief AG – Asset Management Policy:

Diversification in 3 Dimensions – Strategy Descriptions – Chance/Risk/Time-Profile of the Portfolio

Investment Legal Set-up – Initialisation of the Fund – Ongoing Capital Acquisition and

Valuation – Pro-fit Participation and Redemption of Shares – Management Remuneration and Subsequent

Costs – Terms & Conditions

Disclaimer

Contact

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ExecutiveSummary

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Investment Highlights (1)

Art has not only immaterial value – combining a real estate-like substantial character with mobility and an impressive long-term yield of 10% p.a. on average, art has also an economic dimension.

Because of its slow cycles and its low correlation with the stock market, the fine art market is an attractive target for a portfolio addition in terms of an alternative investment.

But the fragmentation, inefficiency, intransparency and illiquidity of the art market are a tremendous hurdle for individual invest-ments in fine art, and considering the high price levels, diversifi-cation is only possible with assets of several million dollars.

SOLON Art Fund will offer a solution – with a minimum capital employment of only 100,000 US$, long-term and value-oriented investors can get access to an attractive and strictly diversified portfolio of artworks.

Executive Summary

5

Investment Highlights (2)

SOLON Art Fund is the first art fund to establish an asset mana-gement policy which strictly follows the principles of Modern Portfolio Theory: a wide horizontal and vertical diversification -monitored by an experienced management team showing com-plementary strengths – will result in an optimal chance/risk pro-file.

Combining different trading and asset management strategies, SOLON Art Fund will be able to show performance in every market phase which leads to a realistic target yield of 12 to 17% on average (over seven to ten years).

Exhibitions, merchandising and leasing are not only additional revenue sources, but also an exclusive emotional and social be-nefit for the fund’s investors.

5mn US$ are projected as basic capitalisation for the fund set-up; early investors will get special conditions.

Executive Summary

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Art Market

7

Art Market Overview

Annual volume of around 70bn US$ Even conservative estimations assume the total volume for fine art trading to

be between 50 and 100bn US$ per year. Detailed figures are only available for the auction

market: So-theby’s and Christies, the two market leaders, show a yearly turnover of 2.3bn US$ each; numerous smaller auction houses report trading volumes of less than 250mn US$ (e.g. Phillips: 225mn US$, Bonham‘s 70mn US$).

Private transactions are most important However, the auction scene only represents a small part of the art market;

most of the deals – especially in the premium segment – are operated by galleries, art

consultants and private transactions (“C2C”).

Fragmentation of supply and demand The most important players on the art market are: resellers and professional

art dealers (driven by economic interest), collectors (driven by passion), museums (build

up collec-tions and never act on the sell side) and corporates (using art for marketing and image purposes).

Market development: boom – crash – stability After the boom during the late 80’s had been brining an enormous increase of

the trading volume, the market had a terrible break-down when the debt financing-induced

specula-tion bubble burst in the crash of 1990/91. But the art market actors have learned from the past – after some years of recovery, the market now shows stability and moderate, con-tinous gains.

Art Market

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The World Auction Market

Kunstmarkt

0

500

1.000

1.500

2.000

2.500

3.000

1975 1985 1995

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

Auction Trading Volume (mn GBP, left scale)

Lots Sold (right scale)

Source: AMR Art Markets Research Ltd., London

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Art is an Asset

The real estate-like value character of art Art is one of the oldest methods of capital saving – like real estate, fine art is

immune to inflation, with the additional advantage of mobility. Especially in antique times

and in the Netherlands of the 17th century, art was of special importance.

Prices will increase continuously On the one hand, the supply with high-grade artworks is limited and will be

hold on a stable level by the buying activity of museums and by destruction. On the

other hand, increasing prosperity brings additional buyers so that, on a long-term basis,

the prices increase continuously.

Long-term yields of 10% and more are possible During the last 20 years, an art investment brought an average yield of more

than 10% p.a., based on the “Daily Telegraph Art100 Index” observing the prices for the

world’s 100 most Important artists. With a combination of intelligent investment and trading

strategies, there is even more potential – but only in case of consequent selection and a

long - term investment horizon.

Low volatility Because of its specific features, the art market moves in slow and long-term

cycles. In consequence, the volatility of the art market is significantly lower than the up

and down on The financial markets which makes art an attractive portfolio addition in

terms of an alternative investment.

Art Market

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Art100-Index vs. Conventional Investments

Art Market

Source: Daily Telegraph, internal research

0

100

200

300

400

500

600

700

800

900

1983 1985 1987 1989 1991 1993 1995 1997 1999

DAX30-Index Dow J ones IA

Gold Art100-Index

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CAPITAL “Art Compass“

Art Market

6,40%

6,50%

6,80%

6,90%

8,20%

8,50%

8,60%

8,70%

8,80%

9,40%

10,40%

12,20%

15,00%

16,00%

19,30%

28,10%

30,10%

6,10%

8,60%

0,0% 5,0% 10,0% 15,0% 20,0% 25,0% 30,0% 35,0%

Unze Gold

Frank Stella

Claes Oldenburg

Fernandez Arman

Robert Rauschenberg

Lucio Fontana

J asper J ohns

Christo

Deutsche Aktienfonds

Richard Serra

Roy Lichtenstein

J oseph Beuys

Yves Klein

Gerhard Richter

Francesco Clemente

Georg Baselitz

Enzo Cucchi

Anselm Kiefer

Sigmar Polke For 30 years, German maga-zine CAPITAL has been pub-lishing its “Art Compass”, an index observing the prices for contemporary art.

For every exhibition in im-portant museums and on events like “Documenta” or “Biennale”, an artist earns a predefined amount of points. At the end of the year, CAPI- TAL adds up the points and presents them in an adv-ance/ decline list.

An increase of the amount of points shown in the “Art Compass” means also an in-crease of the artist’s popula-rity. Usually, this popularity gain is accompanied by a price increase on the same level.

Source: Thomas Gonzalez, „Kunst-Investment“ (Gabler-Verlag)

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Outlook: Time to Invest has Come

Current situation: “selective hausse“ At the moment, the art market shows a best-case scenario, a “selective hausse”.

New auction records are only achieved by artists and artworks of the “first row” while it is difficult to find buyers for objects of minor quality levels. A new speculation bubble can’t be noticed so that the market actors seem to have learned from the crash of 1990/91. Moreover, the introduction of the Euro also influences the art market – artworks can be used as vehicle for an anonymous exchange of cash money.

First half of 2002 will bring good opportunities for buyers In the 2nd Quarter of 2002, this special impact will clear off. In addition, some

of the art Portfolios which have only been built up under the motivation of the currency

exchange in Europe will be liquidated – with time pressure and acceptance for limited

losses. This situation with high short-term supply will offer vast opportunities to buy high-

quality art-works at good conditions.

Weak stock markets are an additional chance For the art market, the ongoing weakness of the world’s stock markets and

the political uncertainties could be an additional driver: On the one hand, more and more

people will realize the value character of an art investment which brings additional

demand. And on the other hand, former “New Economy millionaires” who have been buying some

premium artworks could be forced to bring them back to the market in order to get

new liquidity for other projects.

Art Market

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Problems of an Investment in Art

Heterogeneity Nearly every high-quality artwork is unique; quality levels are difficult to

define. Any attempt of standardisation (like it is done for stocks or bonds) is difficult.

Knowledge Authenticity and provenance of an artwork and the position an artwork has in

the artist’s whole oeuvre are important parameters for the valuation. But the expert

knowledge nee-ded for this information is scattered all over the world and difficult to access.

Intransparency of supply and prices Illiquidity is one terrible result of this lack of transparency. Buying and selling

art is much more difficult than dealing with real estate, and credits on art are hard to get.

Moreover, the illiquidity effect is even enforced by high transaction costs.

Illiquidity Illiquidity is one terrible result of this lack of transparency. Buying and selling

art is much more difficult than dealing with real estate, and credits on art are hard to get.

Moreover, the illiquidity effect is even enforced by high transaction costs.

High prices are a hurdle for diversification Really high-quality artworks usually have prices of 50,000 US$ upwards.

Calculating with an art portfolio representing 5% of total individual assets, this means that

even with a fortune of 2mn US$ diversification is impossible.

Art Market

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The Art Fund: Solution for Investors

Art market experience An experienced management is responsible for the selection of attractive

artworks, for administration and for sale – accompanied and supported by a world-wide

network of art experts and strategic partners which can only be established by an institution

like a fund.

“Money is power” – especially in the art business With the investors’ money the art fund has the financial power to act and

negotiate on a strong basis which will facilitate buying and selling and help to get the best

prices. Thus, the fund is using the inefficiency of the art market for its own purpose and gain.

Diversification brings risk reduction With a fund volume of 5mn US$ upwards, investments can be diversified

into different objects and strategies so that market and selection risks can be reduced to a

minimum.

Liquidity While single artworks are unique, the fund’s shares are standard good. Thus,

investment and disinvestment is possible much easier, faster and more efficient.

Taxation advantages Using certain options of company structuring, both the fund itself and the

individual inves-tor might profit from taxation advantages which could not be offered by other investment opportunities.

Art Market

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FundPolicy

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SOLON Art Fund: Structure & Function

Fund Policy

SOLON Art FundManageme

ntLtd.

Investor

Investor

Investor

Investor

Investor

Investor

Investor

Shares against investment

Shares against investment

ConsultancyAdministrator

Art-Experts

StrategicPartners

Dialogue

Co-operation

Dialogue

Co-operation

Auction

Gallery

Museum

Buyin

g

Selli

ng

Buyin

g

Selli

ng

f Dealer

Banks

Private

Buyin

g

Sellin

g

Buyin

g

Sellin

g

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The Management Company

Asset management and administration The management of the fund’s assets will be exclusively done by SOLON Art

Fund Mana-gement Ltd. This management company defines the principles of the fund policy, decides on purchase and sale of artworks, is responsible for balancing and administration and represents the fund towards third parties. Remuneration of the management company will follow a two-step-model: an agio to be paid by the investor at time of an engagement in the fund and a management fee related to the fund’s performance.

Management team with complementary strengths The three initiators of the project will also be owners of SOLON Art Fund

Management Ltd. and directors of the SOLON Art Fund: Reiner Opoku, Wolfgang Roth und Michael

Poetter – a management team with complementary strengths, combining internationality

and long-term experience in every economical sector which is important for the fund. An expansion of the management team will take place in accordance with the increase of the fund’s vo-lume.

Einbindung eines strategischen Partners geplant During 2002, the initiators will try to find a strategic partner for joining the

management company. Preferred partners are financial institutions who could support the

marketing and the capital acquisition so that the fund will reach its target volume (50mn

US$) as soon as possible in order to be able to participate in the whole potential which is

offered by the current market situation.

FundPolicy

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Management: Reiner Opoku, CEO

Dealer for contemporary art Reiner Opoku, coming from Cologne, has been professional

art dealer for nearly 20 years. His focus lies on works of artists like

Warhol, Richter, Polke, Twombly and Kippenberger as well as on

several new-comers of the 80’s and 90’s (Avantgarde).

Founder of “Kunsthaus“ in Cologne As Founder and former Managing Partner (1996-2000) of

“Kunsthaus” in Cologne, Opoku has succeeded inspiring broad masses for

the pur-chase of high-quality art. On 600 square meters, “Kunsthaus” – Euro-pean-wide an innovation - offers paintings, drawings, prints, sculp-tures and photos of numerous artists of all epochs, combined with exhibitions and merchandising shops.

Wertvolle Kontakte durch Kuratorentätigkeit Between 1983 and 1996, Opoku has been manager and

curator for va-rious European and American artists, among them J. G. Dokoupil,

Donald Baechler, Martin Kippenberger, Sigmar Polke und Rosemarie

Trockel. Thereby as well as by his activity as Sales Director Asia for

the Benedikt Taschen publishing house he orders apart from exten-sive market expert's assessment over valuable international contacts, both into the art scene and to media and social opinion leaders.

R. Opoku

FundPolicy

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Management: Wolfgang Roth, COO

Expert for classical modern art Wolfgang Roth is internationally active as art dealer for more

than 25 years. His special attention hereby applies to the German

Expressio-nism (and here to the artist movement “Die Brücke”) as well as to the

works of the classical modern art.

Scientific Studies After his boarding school time, spent in Geneva / Carouge,

Roth was student to the Columbia University, New York (the USA).

Graduated as Bacchelor of Arts and Master of Commerce / Art, he has a

wide-spread art-historical knowledge which is a crucial base for successful

trades with high-quality art.

Chartermember of Sotheby‘s Online The fact that Roth‘s expert knowledge is internationally in

demand Could also illustrated by his activity as Chartermember of

Sotheby‘s Online. Here, he participated actively in the initiation of the

Internet branch of the world largest auction house (launched in 1999).

At same time, he got the chance to further develop his personal art

specialist network. This benefits now also SOLON Art Fund where Roth

is res-ponsible for purchase and valuation.

W. Roth

FundPolicy

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Initiator: Michael Poetter

25 years of business development experience

During the 25 years of his career as independent entrepreneur, Mi-chael Poetter, graduated in economy, has been developing and trans-ferring a whole number of innovative business models. His experience thereby reaches from start ups over the initialisation of international joint ventures up to the structuring of complex transactions under in-tegration of major companies (e.g. Formula One sponsorship deal McLaren / Mercedes-Benz / Reemtsma).

Focussed on media, events and marketing The emphasis of its activity was particularly on event

marketing and the media business. Among other things, Poetter has been

sharehol-der in and managing director of “Variété Wintergarten“, Berlin Ticket GmbH and Radio Concept GmbH (Radio Energy 91,7 in Hamburg) as well as advisor to VIVA music television and co-initiator of popKOMM, a successful music fair.

Responsible for investor relations As initiator of SOLON Art Fund, Poetter will be responsible for

the de-finition of new business concepts and for investor acquisition and

communication. Moreover, his society contacts are of high importance

for the organization of Sales Events.

M. Poetter

FundPolicy

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Strategic Partner: KWB Kunstwertbrief AG

FundPolice

Certifying the market value of art With its international expert network and based on a proprietary estimation

scheme, KWB AG offers certificates about the long-term market value of artworks. This service

becomes revolutionary thereby that the company is responsible for the certified prices,

i.e. in the form of long-term purchase warranties. Thus, even credits on artworks are

possible, to-gether with KWB‘s banking partners.

Access to know-how, artworks and clients Through the partnership with KWB AG, SOLON Art Fund gets access to a

unique know- how pool within the area of art investment. Moreover, KWB‘s client base (professional

Dealers and private collectors) which is settled exclusively in the premium segment, can

be both source for good purchases and target group for sales.

Long-term security for the fund’s assets SOLON Art Fund intends to get so-called “Kunstwertbriefe“ for most of the

art objects held by the fund – notarially authenticated purchase warranties with 11 years

of run time whose valuation should be at least the fund‘s purchase price. Thus, on the

one hand the fund‘s assets are protected completely from losses, on the other hand the

investor recei-ves the unique certainty that the decisions of the management are checked again by an institution which is really independent due to its economic self-interest. With support of

KWB AG, SOLON Art Fund could also get bank financings for its art objects in order to

leverage its own working capital.

www.kunstwertbrief.com

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Asset Allocation: Diversification in 3 Dimensions

FundPolicy

Modern Portfolio Theory as basic principle The most important difference between SOLON Art Fund and its competitives

will be its Clear orientation at the principles of Modern Portfolio Theory. Basic

statement of this method is that an optimal net yield/risk structure can be attained only by

balanced diversi-fication. Therefore, SOLON Art Fund aims at a broad investment policy combining different temporal horizons, object classes and revenue streams in an intelligent manner.

Diversification level 1: temporal horizons SOLON Art Fund is neither an art dealing company nor another pure

investment trust. Therefore both short term-speculative positions and stocks, where the long-term

value is in the center of attention, will be structured.

Diversification level 2: object classes Huge accumulation risks are a substantial reason for the failure of many art

funds. This is why SOLON Art Fund won‘t concentrate on only a few object classes but will

bundle attrac-tive artworks from all promising epochs of the 20th (and 21st) century.

Diversification level 3: revenue streams The purchase and sale of artworks is the most important income source for

SOLON Art Fund, but not the only one. With exhibitions, merchandising, leasing, project

pre-finan-cings and venture capital, the fund has also additional revenue streams.

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Business Model

FundPolicy

Sale

Sources:

Auctions Galleries Art Dealers Private

Collectors Banks Fiscal

Authorities

Targets:

Auctions Art Dealers Collectors Corporated Fund Owners Museums

Operations:

Administration Research Media Marketing Exhibitions Events Merchandising Leasing

Purchase

Long-term yield target: 12-17% p.a.

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The “Buy & Hold“ Strategy

FundPolicy

Long-term “blue chip” portfolio One part of the fund‘s assets will be invested into selected, favourably acquired

works of established artists. Similar to shares of large companies, these „blue chips“

of the art market (e.g. Kirchner, Rothko, Rauschenberg, Warhol, F ontana, Beuys or

Richter) will show a moderate, but constant increases in value, while the downside

exposure is very low.

Permanent marketing is possible This strategy presupposes an internal time horizon between 5 and 10 years.

Differently than bonds or shares, art objects bring no current yields, but a creative

marketing allows to generate additional income during the holding period. In view of the

popularity of the acquired objects, attractive exhibitions can be organized at small expenditure .

A further source of yield is leasing – enterprises or privates can borrow the fund‘s artworks

against fee and insurance, whereby the owners of the fund enjoy preferred conditions.

Leverage will reduce capital freeze Nevertheless this strategy naturally causes a high capital freeze. However, this

effect can be reduced by crediting the artworks with support of the bank network of the co-

operation partner KWB AG. Without impairing the large marketing potentials, these loans

– handed out at conditions comparable to real estate loans – can reach 60% of the

market value. This influx of funds can be used again in alternative strategies.

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The „Newcomer“ Strategy

FundPolicy

Young artists promise superproportional yields There are numerous young artists who could already draw a certain attention on

them-selves by exhibitions and publications, but who are nevertheless still waiting for the ulti-mate break-through. SOLON Art Fund will also get engaged in this segment and build up stocks with several works of such promising artists. Because of lowest entrance prices, a multiplication of the capital assigned is possible if these artists succeed on the market

after a while.

Dispersion minimizes selection risks Even if SOLON Art Fund can rely on the competence of its network as well

as on the particular experiences of Reiner Opoku in terms of selecting these talents,

naturally certain uncertainties remain. However, this risk can be reduced by consistent dispersion,

Which again only a fund can ensure. Similar to the venture capital business, only one or

two out of a portfolio of ten artists need to achieve a „break-through“ in order to make the

overall strategy a successful investment. Yields of several hundred percent are possible;

prerequisite is a long-term engagement horizon of 7 to 12 years.

Intensive integration of partners The success of this strategy is also determined by intensive networking.

The ongoing establishment of an artist means not only financial expense (exhibitions,

catalogues), but also requires the interconnection of galleries, collectors and – above all –

media. Such project partnerships are started up and continuously monitored by SOLON Art

Fund.

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The “Arbitrage“ Strategy

FundPolicy

Turning inefficiency into profit This strategy uses the well-known inefficiency and intransparency of the art

market in the sense of a commercial stock. Again and again you can notice that for example a

painting of a Spanish artist is to be sold over an Italian auction house, although no

appropriate de-mand is available there. This is an opportunity to purchase at favorable prices and to re-offer the object in a better environment or to sell it in a private transaction a few months

later. Both works of established artists and objects from the „second row“ could be inter-esting for this strategy.

Short-term capital freeze provides rapid yields After deduction of transaction costs, the net yield expectation for this strategy

is approxi-mately 15 to 30%. This is clearly fewer than with other strategies, but the time horizon and the capital freeze duration are also substantially shorter with only 2 to 12 months. Beyond that the “Arbitrage“ strategy is an vehicle with which the fund can already prove first yields briefly after its launch.

Active observation of the markets is a prerequisite A very precise observation of the markets, above all a permanent screening

of auction catalogues, is the decisive prerequisite for a functioning arbitrage business.

On the one Hand the fund management has already developed suitable mechanisms for

this obser-vation, on the other hand the co-operation network is also helpful: The fund will get imme-diate notice of purchase opportunities resulting from clients rejected by KWB AG.

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The “Liquidation“ Strategy

FundPolicy

Market placement of large private collections Particularly in Europe the next 20 years will be an epoch of inheriting.

Especially in the middle class often considerable art possession is bequeathed. In many cases the

inherits will try to liquidate these objects quickly, e.g. because of inheritance taxes or

personal taste. But an individual sale is difficult for amateurs. Thus, SOLON Art Fund can

offer its services and take over the whole collection in the context of a block trade.

Financial structuring with partners and revenue sharing Usually, the purchase volume will exceed the financial power of the fund, at

least during the first years - the liquidation strategy is only one of several business models

for the fund and it would be a contradiction to the diversification principle to invest all

liquidity into one project. But together with partners like KWB AG, whose art banking know-how

and net-work enables loans on art, this gap can be closed. One option could be an immediate pur-chase rate, set below the market price, combined with a revenue sharing model: SOLON Art Fund gets an exclusive sales mandate for a pre-defined period (for good reason two to three years) and the excess of proceeds is divided up between the fund and the inherits.

Service is also useful for banks and fiscal authorities Potential targets for the “Liquidation” strategy are not only private collections,

but also stocks of banks (from distressed credits) or fiscal authorities (customs, fiscal

investiga-tion, fiscal enforcement). SOLON Art Fund will always be able to make a more attractive offer than the large auction houses.

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The “Venture Capital“ Strategy

FundPolicy

Incubator for new business ideas Due to its networking with all other market players, SOLON Art Fund will almost

automa-tically develop new business ideas, which have a strong art market reference, but which are not core business of the fund however. In such situations, the fund takes over an incu-bator role – the idea will be evaluated to a plausible, independent and profitable business model, suitable management for the new entity will be acquired and, together with stra-tegic partners and financial investors, a joint venture will be initialised.

Gains by shareholding The fund will keep a long-term shareholding in these spin-offs - usually with a

strategic proportion of 25,1 % - so that a further diversification level is introduced. In

future times, the complete spin-off of these activities into a newly established “art venture

capital fund“ is conceivable. Of course, the owners of this fund will directly profit of the initialisationof such a project.

First starting point: “Encrypted Art“ Under the label “Encrypted Art“ the fund initiators already have developed a first

business Model that is to be pursued in sense of the “Venture Capital“ strategy after a

successful establishment of the fund. This project concerns a software based on artificial

intelligence which independently detects underestimations or overestimations of art objects

on base of all available transaction data so that it would be a killer application for the

“Arbitrage“ strategy.

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Chance/Risk/Time-Profiles of our Strategies

FundPolicy

Time window for capital

employment

Yield

Risk

Heri-tage

Liqui-dation

Buy & Hold

Arbi-trage

Venture

Capital

Arbi-trage

New-comer

Arbi-trage

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Investment Story

FundPolicy

Participation in a professionally administrated art portfolio with a unique chance/risk profile, based on consistent diversification and intelligent Networking.

Prospect of high long-term net yields which are independent of the fluctuations of the financial markets (genuine alternative investment for portfolio admixture).

Security of the investment by the long-term substance and value character of high-quality artworks .

Preferred conditions for acquisition or leasing of art objects from the fund assets in order to explore also the emotional yield of fine art.

Access to an exclusive international circle of acquaintances from economics and society (events and journeys, which will be offered only to the shareholders of the fund).

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Investment

32

Legal Set-up

Structure will be fixed in accordance with first investors It is planned to determine the legal set-up of SOLON Art Fund in close

coordination with the initial investors which is a further advantage of an early commitment.

Nevertheless, it is already clear that a) the fund will not be located in Germany and that b)

there has to be defined a structure under which the administration of the fund‘s assets by

an external management company is possible and which opens the occasion to redeem

the shares after some years.

Option A: Offshore-construction One option is the installation of an offshore construction following the same

mechanisms which are pursued also by most hedge funds. Major advantage of this solution

would be that areas such as Aruba, Curacao or BVI provide effective administrative

structures and low taxation so that the liquidity of the fund (and thus its financial power) is not

weakened by additional deliveries. Problematic however is the tax treatment of the

yields in the country of the investor.

Option B: US company Alternatively conceivable is the establishment of a US company for the

fund. Here, the yields gained by the fund would be subject to a tax liability, but under certain

conditions the increases in value generated on the side of the investor are tax free.

Additionally, this option offers the advantage of a possible stock market listing of the fund

which could be interesting under the aspects of liquidity and marketing.

Investment

33

Initialisation of the Fund

Signing of preliminary agreements with potential investors

Target of the pre-marketing phase which is organized by SOLON Art Fund at the moment

is to sign preliminary agreements, in which potential investors make a commitment to pay

in the capital needed for the establishment of the fund (under the basic conditions stated

in this presentation)

Set-up of the fund only with commitments of at least 5mn US$

These preliminary agreements are closed under the delaying condition that the initiators

succeed in catching up commitments from different investors over a deposit of altogether

at least 5mn US$ until April 30th, 2002. With a lower starting volume, the fixed cost of the

fund structure would be in a misrelation to the business opportunities. Beyond that the

investment policy of SOLON Art Fund which is aligned to diversification requires a certain

minimum capitalization.

Reduced agio for initial investors The initial investors are integrated actively into the set-up process of the

fund and will receive effective shares in relation to their deposit. Additionally to the

deposited nominal amount, an agio of 3,25% of the total investment is due which is to be paid to

the manage-ment company. This agio will be used for covering of the administrative expense. Inves-tors, who enter the fund only after its establishment, will be charged with an agio of 5%, so that there is an additional incentive for early commitments.

Investment

34

Ongoing Capital Acquisition & Valuation

Immediate start of investment activities As soon as the legal structures are finished (this process usually takes about

three weeks) and the investors‘ fundings are paid in, the management company will

immediately initiate the investment activities of the fund.

Ongoing issue of shares (targeted fund volume: 50mn US$)

The investment activity will be accompanied by a permanent placement of further fund

proportions, based on international management roadshows with institutional and private

investors. The issue of new fund shares takes place on the basis of the Net Asset Value

(NAV) stated in the last quarterly report, plus an agio of 5%.

Conservative NAV calculation The fund‘s Net Asset Value will be the sum of the asset positions, i.e. the cash

money and the book value of artworks and equity investments. It is important to notice

that the book value will never be more than the entrance price (plus transaction costs). The

fund won‘t do any appreciations, an increase of the NAV only takes place when artworks

are sold at a price which is higher than the book value or when the fund generates other

income. As the fund will only show and report “real performance“, there will be no significant

increase of the NAV during the first 12 months after the launch.

Audited quarterly reports Every quarterly reports and NAV calculations will be checked by an external

auditor. The fund‘s shareholders will periodically receive Income Statements and MDA‘s.

Investment

35

Profit Participation & Redemption of Shares

Accumulation of all yields In order to strengthen the financial power of the fund – a substantial

determinant of its economic success – also from inside out, no yield payments are intended. All

yields will be accumulated and thus carry for an increase of the Net Asset Value. This

means, that the an effective profit taking by the investor is only possible by selling shares of the

fund or by redemption.

Investment makes sense only under long-term aspects As already follows from the explanation of the asset management strategies of

the fund, an investment into SOLON Art Fund only makes sense with a sufficiently long

time horizon. This should be at least 7 years, since only after this time the results of all

strategies flow into in the Net Asset Value. In order to underline this long-term aspect and to

avoid loads of the fund‘s liquidity caused by potential discharges, the redemption of shares

in the fund is impossible within the first three years after establishment of the fund.

Redemption will be possible quarterly (starting in the 4th year)

Starting from the fourth year after establishment of the fund, the shares can be returned

at their current Net Asset Value proportion. The redemption demand has to be announced

By the investor three months in advance. For the case of possible discharges the fund will

reproach an appropriate liquid reserve. During the three-year waiting period shares could

be sold “over the counter“ to other prospective customers; under certain circumstances

however also the possibility of a lending exists.

Investment

36

Management Remuneration & Subsequent Costs Agio 5% (for initial investors 3,25%)

Management fee 0,5% per quarter (= 2% p.a.) This fee represents the basic remuneration of the management company. At

the end of each quarter, the management company will charge the fund with 0,5% of

the Net Asset Value as it is proven in the Income Statements. This remuneration takes place

only if the fund was invested to at least 50% of the accumulated capital influxes at the

deadline.

Performance fee 25% Beyond that the management company receives a performance fee of 25% of

the achieved increase in value. This fee will also be charged quarterly. Basis for the

calculation of the performance fee is the increase of the Net Asset Value during the preceded

quarter, sett-led over new capital influxes.

Costs of bookkeeping & audit: about 2% p.a. At the end of each quarter, the fund will also have to pay the cost for the

administration of the fund company, the audit of the Income Statements and the determination

of the Net Asset Value. The exact amount depends on the business volume and the

capitalization of the fund; under normal corcumstances, these administrative cost should not

exceed an annual average of about 2% of the Net Asset Value however.

Investment

37

Terms & Conditions

Investment Target: SOLON Art Fund(unlimited trading and investment trust for artworks)

Type of Investment: Share purchase / co-foundation

Domicile: to be fixed

Fund Management: SOLON Art Fund Management, Ltd.

Minimum Investment: 500.000 US$ plus 3,25% Agio (initially)

Management Fee: 0,5% p.q. plus 25% performance fee

Yield Payments: none (accumulation)

NAV Determination: quarterly (according to book values)

Redemption of Shares: quarterly (after 3 years)on NAV basis

Investment

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Disclaimer

In accordance with the undisclosure agreement signed between the initiators of the SOLONArt Fund project (Reiner Opoku, Wolfgang Roth, Michael Poetter) and the recipient of thismemorandum, the content of this documentation is to be treated strictly confidentially. Eachoffence against this obligation is civilly pursued. In all other respects it is pointed out that theuse or utilization of this document for every other purpose than the purposes named in theundisclosure agreement represents an abusive use and possibly also a violation of the copyrights of the initiators.

Moreover, the recipient should notice that the purpose of this memorandum is only the general information concerning the business idea presented herein. This memorandum does not represent a request to purchase or sell securities or equity investments.

Exclusive and single basis for a potential capital commitments of the recipient in the SOLONArt Fund project is either an official offering circular or a detailed investment contract bet-ween the investor on the one hand and the initiators or a legal entity created by them for thispurpose on the other hand. If the recipient should have to accept losses caused by a capitalcommitment in the described project, any liability and responsibility of the initiators or a legalentity represented by them is categorically impossible as far as it refers to thi memorandum.Since the project described herein is still in the planning phase, all detail specifications andlabels have a purely indicative character.

All information after best knowledge and certainty, but without any guarantee.

Investment

39

SOLON Art Fund Projectc/0 Michael Poetter

Uhlandstraße 175D-10719 Berlin / Germany

Tel. +49 (0)30 88 47 01-0Fax +49 (0)30 88 47 01-

13eMail cobeho@aol.com