Investment ProposalThe Bophut HIP Hotel

Presentation Outline The Investment Objective

Property Description

Current Status

Projected Cash Flows

Scenario Analysis

Baseline Projection Assumptions

Hotel Operations

Partnership Structure

Appendix

The Investment Strategy

Objectives Produce a total annual return of 25%+ over a five year holding period Distribute income during holding period

Strategy Purchase underutilized newer building, in prime, beachfront location with title

to the land Convert building to luxury “HIP” hotel to maximize income and property value

(“HIP” concept similar Starwood’s W brand) Hire professional hotel management company to operate Apply innovative and effective marketing programs May leverage up to 33% of purchase price

The Request $400-800,000 in equity contributions from limited partners RB will invest $100-200,000 alongside other limited partners

Located in quaint, fast-growing Fisherman’s Village

Four floors, with six apartments and one street front shop.

Freehold title to beachfront land which is very difficult to obtain in this area

Size: approximately 6,500 square feet Two full-floor luxury penthouse apts. Each

w/ three bedrooms and three ensuite baths

Two direct waterfront one-bedroom apartments

Two large, studio apts. w/ kitchens, full bathrooms and balconies

One large, modern, street-level commercial space

High-speed, wireless internet and cable tv Convenient to Bophut’s great restaurants,

yoga, diving and shopping

Samui International

Airport

Property Description

Current Status Ownership

Corporate Structure: Thai Private Limited Liability Company Shareholders: Russell Blumenthal (40%), John Campbell (40%), Carl Lamb (20%). (Mr.

Blumenthal will invest a large portion of his sale proceeds back into this venture) Condition

All mechanicals in good operating order. No major maintenance required Current Selling Price: $875,000 Current Valuation:

Expenses Value @ Cap Rate

Unit Floor Use Features Percent Alloc Rent

Space (ft2) Market Rents Per ft2

Typical Monthly

Operating Monthly NOI Annual NOI 8.0%

1 Ground Commercial/Retail Street level, spacious, modern 12.5% 802 854 $ 1.06 $ 24 $ 829 $ 9,951 $ 124,390

2 Ground One Bedroom Apartment On the beach 12.5% 802 659 $ 0.82 $ 24 $ 634 $ 7,610 $ 95,122

3 First One Bedroom Apartment Direct water view 12.5% 802 732 $ 0.91 $ 24 $ 707 $ 8,488 $ 106,098

4 First Studio Apartment Large bathroom, kitchen, balcony 6.3% 401 366 $ 0.91 $ 15 $ 351 $ 4,215 $ 52,683

5 First Studio Apartment Large bathroom, kitchen, balcony 6.3% 401 293 $ 0.73 $ 15 $ 278 $ 3,337 $ 41,707

6 Second Three Bedroom Apartment Full floor, 3 ensuite baths, direct water view 25.0% 1,605 1,463 $ 0.91 $ 37 $ 1,427 $ 17,122 $ 214,024

7 Penthouse Three Bedroom Apartment Full floor, 3 ensuite baths, direct water view 25.0% 1,605 1,707 $ 1.06 $ 37 $ 1,671 $ 20,049 $ 250,610

100.0% 6,418 6,073 $ 0.95 $ 293 $ 5,780 $ 70,771 $ 884,634

The Property Size Pro Forma Income Net Operating Income

Projected Cash FlowsBaseline Case

Acquisition

Sources of FundsCash Investment, General Partner 0Cash Investment, Limited Partner 1,103,750Capital Improvement Loan 0

Total: $1,103,750

Uses of FundsPurchase, Real Estate 875,000Corporate Structuring Costs 25,000Brokers Commissions 0Points 0KSI Acquistion Fee 43,7501st Year Capital Improvements 150,0001st Year Funded Reserves 10,000

Total: $1,103,750

Property purchased at $136.34 per square foot.

Property Overview

Cash Taxable Cash Flow Taxable Gain ProceedsYear Invested Income Before Taxes on Sale of Sale

2006 1,103,750 0 32,4672007 37,126 68,0722008 122,053 131,5062009 165,886 174,5242010 180,596 189,220 1,874,618 2,892,039

Baseline Projection Assumptions

Sell in fifth year

Invest $150,000 in upgrade prior to opening

Selling price based on 8% cap rate

Room rate growth of 8%

Expense growth of 4%

Starting average room rate = $193/night

Average occupancy gradually increasing from 30% in first year to 50% in fifth year vs. Samui annual average of 67% (and moving up)

Tax rate of 30%

No debt

Scenario Analysis

5-yr Occupancy 165.00$ 195.00$ 225.00$

20% - 40% 3.5% 10.8% 16.8%

30% - 50% 18.2% 24.3% 30.7%

40% - 60% 22.9% 29.7% 35.6%

50% - 70% 30.0% 37.0% 43.1%

Average Nightly Rate

5 Year Internal Rates of Return (IRR)

Represents the projected internal rate of return over the first five years for each combination of occupancy growth range (years one to five) and the average nightly room rate at the beginning of the period. Room rates are projected to grow at an annual rate of 10%. IRR of 24.3% represents the Base Line Case projection result.

Baseline Case

Hotel OperationsCompetitive Advantages

Direct beachfront location with arguably the best views on Samui

Luxury-level, “HIP” style, personalized service

Located amongst the popular restaurants, bars, shops, yoga and spas and diving centers on the main street of Bophut Fisherman’s Village

Less than 10 minutes from Samui International Airport

Steps from the Ferry Port to neighboring islands and the Angton National Park islands

Can accommodate large families in luxury residential suites

Partnership Structure Limited Partnership or LLC

Koh Samui Investments LLC is the General Partner and will assume all management and reporting responsibilities

General Partner receives 25% of operating cash flow plus 25% of realized capital gains

90% of cash flow distributed as received

Assets will be owned through a Thai private limited company (may purchase shares of existing company to avoid transfer tax)

Taxes on money distributed will be the responsibility of the individual member

There is no capital gains tax in Thailand

Appendix

Photos of the property and surrounding area

Projected Income and Expenses

Analysis of Operating Cash Flows

Analysis of Resale

Partnership Analysis

The KSI Team

Disclaimer

Contact Information

Projected Income and Expenses2006 2007 2008 2009 2010

INCOME Gross Scheduled Rent Income 427,050 461,214 498,111 537,960 580,997Food & Beverage 55,456 66,822 88,250 100,997 104,027 Other Income #2 0 0 0 0 0TOTAL GROSS INCOME 482,506 528,036 586,361 638,957 685,024

VACANCY & CREDIT ALLOWANCE 337,754 343,223 351,817 351,426 342,512

GROSS OPERATING INCOME 144,752 184,813 234,544 287,531 342,512

EXPENSESCost of Sales - Beverage 13,301 14,631 16,094 17,704 19,474Payroll & Related Expense 12,000 12,480 12,979 13,498 14,038Other Expenses 12,407 12,903 13,419 13,956 14,514Administrative & General 9,080 9,443 9,821 10,214 10,622Sales & Marketing 5,448 5,666 5,893 6,128 6,373Energy 18,160 18,886 19,642 20,428 21,245Prop. Op & Maint. 6,356 6,610 6,875 7,150 7,436Management Fees 18,818 24,026 30,491 37,379 44,527Manager Salary 15,000 15,600 16,224 16,873 17,548TOTAL EXPENSES 110,570 120,246 131,438 143,329 155,777

NET OPERATING INCOME 34,182 64,567 103,107 144,201 186,735

Analysis of Operating Cash Flows2006 2007 2008 2009 2010

NET OPERATING INCOME 34,182 70,233 108,999 150,330 193,108 - Debt Service, Capital Improvement Loan 0 0 0 0 0 - Debt Service, Second Mortgage 0 0 0 0 0 - Debt Service, Third Mortgage 0 0 0 0 0 - Debt Service, Refinance 0 0 0 0 0 + Proceeds of Second Mortgage, Less Pts (after BOY 1) 0 0 0 0 0 + Proceeds of Third Mortgage, Less Pts (after BOY 1) 0 0 0 0 0 + Proceeds of Refinance, Less Points 0 0 0 0 0 - Funded Reserves* 10,000 0 0 0 0 Interest Earned on Funded Reserves 350 362 375 388 402 - Capital Additions* 150,000 0 0 0 0 - Tenant Improvements 0 0 0 0 0 - Leasing Commissions 0 0 0 0 0CASH FLOW BEFORE TAXES 34,182 70,233 108,999 150,330 193,108 Cash on Cash Return (CFBT/Initial investment) 3.10% 6.36% 9.88% 13.62% 17.50%Reserves Utilized 0 0 0 0 0Reserves Remaining 10,350 10,712 11,087 11,475 11,877NET CASH FLOW AFTER UTILIZING RESERVES 34,182 70,233 108,999 150,330 193,108 - Income Tax Attributable to Property 0 12,301 29,864 42,508 55,345

CASH FLOW AFTER TAXES AND RESERVES 34,182 57,932 79,135 107,822 137,763Cumulative Cash Flow After Taxes 34,182 92,114 171,250 279,072 416,835

Analysis of ResalePROJECTED SELLING PRICE, incl. pers. property 903,000 1,383,429 1,894,307 2,424,933 3,089,362 - Costs of Sale 43,900 68,100 93,950 120,700 154,100 - Capital Improvement Loan Payoff 0 0 0 0 0 - Second Mortgage Payoff 0 0 0 0 0 - Third Mortgage Payoff 0 0 0 0 0 - Refinance Payoff 0 0 0 0 0 + Balance of Reserve Fund 10,350 10,712 11,087 11,475 11,877BEFORE-TAX SALE PROCEEDS 869,450 1,326,041 1,811,444 2,315,709 2,947,139 - Total Federal Tax on Sale (5,168) 43,935 118,709 259,605 387,888AFTER-TAX SALE PROCEEDS 874,618 1,282,106 1,692,735 2,056,104 2,559,250

Internal Rate of Return, Before Tax -18.13% 14.03% 23.09% 26.02% 27.69%Modified Internal Rate of Return, Before Tax -18.13% 13.94% 22.62% 25.12% 26.37%Internal Rate of Return, after Tax -17.66% 11.74% 19.64% 21.52% 23.24%Modified Internal Rate of Return, after Tax -17.66% 11.68% 19.28% 20.88% 22.29%

PV, Net Operating Inc. & Sale Price less Costs of Sale 694,626 900,391 1,042,048 1,129,013 1,212,369PV, CFAT and Sale Proceeds after Taxes 727,040 884,970 971,620 991,284 1,032,861EQUITY, excluding reserves 903,000 1,383,429 1,894,307 2,424,933 3,089,362RETURN ON EQUITY (CFBT/equity) 3.79% 5.08% 5.75% 6.20% 6.25%

2006 2007 2008 2009 2010

Partnership Analysis2006 2007 2008 2009 2010

NET CASH FLOW FROM OPERATIONS (BEFORE TAX)

Total for Property 34,182 70,233 108,999 150,330 193,108

Cash Flow Distributed to Investor (RMB) 14,711 30,227 46,911 64,699 83,110

Cash Flow Distributed to General Partner 7,691 15,802 24,525 33,824 43,449

INVESTOR CAPITAL ACCOUNTBalance, Beginning of Year 703,750 680,423 678,419 679,111 682,169± Income or Loss from Operations (8,615) 28,222 47,603 67,757 88,329- Distributions from Cash Flow 14,711 30,227 46,911 64,699 83,110Balance, End of Year 680,423 678,419 679,111 682,169 687,388

+ Profit from Sale 0 0 0 0 943,711- Distribution from Sale 0 0 0 0 1,611,886

The Bophut Building Boutique Hotel Partnership AnalysisReport Prepared for Private Investor

2006 2007 2008 2009 2010

GENERAL PARTNER’S CAPITAL ACCOUNTBalance, Beginning of Year 0 (12,195) (13,243) (12,881) (11,282)± Income or Loss from Operations (4,504) 14,755 24,887 35,423 46,178- Distributions from Cash Flow 7,691 15,802 24,525 33,824 43,449Balance, End of Year (12,195) (13,243) (12,881) (11,282) (8,554)

+ Profit from Sale 0 0 0 0 493,367- Distribution from Sale 0 0 0 0 474,769

One-quarter Share 1,923 3,951 6,131 8,456 129,554

Measures of Investment Quality

IRR, Before-Tax: 27.69%MIRR, Before-Tax: 26.37%PV, at 25.00% $1,212,369

Debt Cap. Gross Cash on Operating Gross OperatingCoverage Rate Income Cash Expense Income, Expenses,

Ratio Multiplier Return Ratio $/sf $/sf

2006 0.00 3.26% 6.07 3.10% 76.39% 75.18 17.232007 0.00 6.69% 7.37 6.36% 62.00% 82.27 17.852008 0.00 10.38% 8.01 9.88% 53.53% 91.36 19.562009 0.00 14.32% 8.40 13.62% 47.72% 99.56 21.382010 0.00 18.39% 9.00 17.50% 43.62% 106.73 23.28

DisclaimerThis report is not intended as an offering to purchase securities.

The information and calculations presented in this analysis are believed to be accurate, but are not guaranteed. They are intended for the purposes of projection and analysis, and should not be used for preparation of income tax returns. Federal tax calculations in this report are based upon the Tax Reform Act of 1986, the Revenue ReconciliationAct of 1993, the Taxpayer Relief Act of 1997 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 and are subject to revision as well as further clarifications, interpretations, rulings, regulations and technical corrections.

These tax calculations are also based upon certain assumptions about the taxpayer and about the property, and do not take into account the possibility of Alternative Minimum Tax liability, the At-Risk rules, investment interest limitations, possible future-year indexing of tax brackets, or the impact of other investments which may intereact to produce tax consequences other thanthose projected here. The user of this program and information should consult a tax specialist concerning his/her particular circumstances before making any investment decision.

*Note especially that a taxpayer’s ability to use losses generated by this investment to offset income generated by this investment is likely to be affected by the taxpayer’s particular circumstances, including Adjusted Gross Income, and passive and investment income or losses from other activities. Consult your tax advisor regarding these issues.

Any reference to "this partner," "this LP" or "this member" refers to any partner ormember with a given percentage interest based on his/her share of capital invested.