DECEMBER 2005 C G Market Review and Project Conceptualization for the Proposed Golf Resort Fiumefreddo di Sicilia, Sicily, Italy

1. INTRODUCTION….....…………………………………………………………….… BACKGROUND………………………………………………………………… OBJECTIVES……………………………………………………………………….2 2.THE ISLAND OF SICILY……………………………………………………… LOCATION………………………………………………………………………… ACCESSIBILITY…………………………………………………………………… TERRITORY AND CLIMATE…………………………………………………… SICILY AS A TOURISM DESTINATION……………………………………… INTRODUCTION………………………………………………………………… THE GOVERNMENTS POLICY TOWARDS TOURISM……………………… TOURISM DEMAND……………………………………………………………… SEASONALITY OF DEMAND…………………………………………………… FOREIGN TOURISM EXPENDITURE………………………………………… MAIN TOURIST POLES………………………………………………………… TOURISM EAST SICILY………………………………………………………… SUMMARY……………………………………………………………………… ANALYSIS OF THE GOLF MARKET……………………………………… GENERAL TRENDS…………………………………………………………… GOLF RELATED TOURISM..………………………………………………… DEVELOPMENT OF GOLF IN ITALY………………………………………… GOLF IN SICILY………………………………………………………………… SUMMARY……………………………………………………………………… AN OVERVIEW OF THE HOTEL MARKET….....………..…………………… INTRODUCTION………………………………………………………………… SUPPLT OF HOTEL FACILITIES……………………………………………… INDICATORS OF HOTEL PERFORMANCE………………………………… SUMMARY………………………………………………………………………...21 TABLE OF CONTENTS C G

6. PROPOSED DEVELOPMENT SITE…………………………………………… LOCATION AND ACCESSIBILITY…………………………………………… CHARACTERISTISTICS OF THE DEVELOPMENT SITE………………… PROPERTY TOPOGRAPHICAL……………………………………………… PROPOSED DEVELOPMENT………………………………………………… DEVELOPMENT HIGHLIGHTS………………………………………………… PROPOSED CONSTRUCTION VOLUMES………………………………… DEVELOPMENT CONCEPT MASTER PLAN…………………………………27 7. SUMMARY….....…………………………………………………………………… PROPOSED DEVELOPMENT CONCEPT…………………………………… THE GOLF COURSE COMPONENT………………………………………… THE HOTEL COMPONENT…………………………………………………… THE WELLNESS COMPONENT…………………….………………………… OTHER RESORT COMPONENTS…………………………………………… CONCLUSION…………………………………………………………………….30 AREA – HISTORY AND PROPERTY PHOTOGRAPHS……………………31 – 45 CONTACT DETAILS……………………………………………………………… TABLE OF CONTENTS C G

1 INTRODUCTION 1.1 BACKGROUND CASTELLO ASGR (Castello) is a United Kingdom company established for the specific purpose of development of projects in the tourism and hospitality sector of Sicily. Castellos attention has been focused on golf tourism developments centered around complete all inclusive resorts. To enhance our objectives Castello has formed strategic alliances with numerous companies that provide a wide range of valued expertise toward resort developments. For golf related tourism and resort developments Castello has a working relationship with the UK company A WORLD OF GOLF and U.S.company GOLFPLAN as well as numerous local architecture, engineering and construction companies. Castello has the exclusivity to purchase a site of 76 hectares in Fiumefreddo di Sicilia, near the area of Taormina on the east coast of Sicily. Additionally, two adjoining tracts totaling approximately 25 hectares are considered for purchase providing a total area for development of 101 hectares. The property is in agriculture use and is designated as agriculture property. Based on the location, characteristics and size of the site, Castello in association with A World of Golf /Golfplan has envisioned the development of a golf resort. The initial development concept is supported by the growing demand for golf and leisure tourism in Sicily and the lack of supply to cater to this demand. The development concept is based on the main components, namely: 170 – 200 Room 4 to 5 star Hotel with Executive Conference and Meeting Facilities 1-18 hole championship golf course. With area for additional 9 hole Executive course Golf Club House w/practice area and Golf Academy Beach Club w/bar-grill, pool and 5-10 rental mini-apartments or duplex type villas. Adjacent to Beach Club, 18 Hole Theme type miniature golf course and entertainment area. Spa – Tennis Club, also with health bar-grill, pool and 5-10 mini rental apartments. 50 – exclusive up-scale private villas of 150, 200 & 300m2. 60 apartments or mini villas of 60-75m2 (These units could be for sells, some reserved for rental and/or placed in some form of time share) The possibility with additional permitting and approvals to include a Yacht Club and Marina. C G 1

The main objective of this report is to provide a brief overview of the market potential of the proposed resort. Information provided is limited to the Hotel and Golf and tourism related developments. The villas and apartments associated with the developments are in demand, however this overview does not elaborate on the construction and sell of Villas and Apartments. Our objective focused on providing: Provide an overview of Sicily and Sicily as a tourism destination. Golf Market and Golf Related tourism. Hotel Market in Sicily Description of the site on which the development is planned. Provide a description regarding the proposed projects concept to include a Preliminary Master Concept. 2 THE ISLAND OF SICILY The aim of this section is to give a comprehensive overview of Sicily, regarding its location, level of accessibility, as well as to provide an economic and social background. 2.1 LOCATION Italy is divided into 20 administrative regions and each region is further divided into provinces. Sicily is the most southern region of Italy and is divided into 9 provinces. The Sicilian east coast, from north to south, is made of three provinces: Messina, Siracusa and Catania (where the proposed resort will be located). Sicily is a triangular shaped island located in the very heart of the Mediterranean Sea and at the tip of the boot of Italy, quite close to the northeast coast of Tunisia. With a surface of more than 25,000 square kilometers, Sicily is one of the largest regions in Italy and also the largest island in the Mediterranean Sea. Sicily has always been an island known for its beauty, natural environment, culture, climate and traditions. During its history, it was the home for the Greeks, Romans, Arabs, Turks and Italians to C G name a few, and traces of all these periods are nowadays clearly visible in its archaeological sites baroque architectures and in the rich gastronomy. 1.2 OBJECTIVES 2

C G Sicily's attraction is mainly due to its comfortable climate, its natural beauty, its culture and heritage. Due to its location, it has always been a meeting point for people coming from different countries and cultures, a welcoming place for merchants from east Mediterranean and people from north Africa. In effect, Sicily is a bridge between Africa and Europe but also between the Middle East and the rest of the Mediterranean area. 2.2 ACCESSIBILITY For being an island, Sicily enjoys a good accessibility. It is possible to reach the island through frequent flight connections, ferries, boat and even by train. The main transportation hubs of Sicily are Catania and Palermo having both airports and ports, while other important ports are located at the shores of Messina, Siracusa and Trapani AIR ACCESS The two main international airports of Sicily are Palermo Punta Raisi and Catania Fontanarossa airports. Trapani has a small regional airport that does receive international airport and a new international cargo and charter airport is to be opened this year in the Ragusa area. The airport of Palermo Punta Raisi, located 35 kilometers from Palermo city center exceeded a flow of more than 4 million passengers in It connects the west part of the island eleven Italian airports as well as international destinations like Paris, Madrid, London Cologne. In summer, more than 40 charter companies operate flights to the main airports of Sicily. Recently low cost carriers have entered the market and now connect Sicily to the main European capitals. During the past few years, Sicily also became a common destination for intra national low cost carriers. Following partial listing of some of the airlines operating flights to Sicily: Regular carriers: Alitalia, AirOne, Meridiana, Alpi Eagels, Maley, Iberia Airlines., British Airways, Air France, KLM, Delta, Air Malata,, Transavia, Aero Flights, Lufthansa, Luxair, Tunisair, Turkish Airlines, Wind Jet, Eurofly Charter airlines: Transavia, Euralair Azzurra, Thomas Cook, Aeris Aero Lloyd, Aigle Azur, Air Mediterrane, Amv Aviation, Arkia Israeli Airlines, Avianergo, British Midlands, Ceskoslovenske Aeroline, Channel Express, Condor Flugdienst, Corse Air, Crossair, European Aviation, Eurowings, Georgian Airlines, Kartago Airlines, Lauda Air, Md Airlines, Sobelair, Star, Tuninter, Viva Air, Tuninter, White Eagle; * Low cost carriers: Evolavia, Windjet, HLX JetOnly, Tyanair, Helvetic, Monarch Airlines, Hapag Lloyd, Virgin Express, Spanair, Transavia Airlines. 3

The Catania – Fontanarossa airport has witnessed an increase in the number of passengers since the early nineties exceeding 5 million passengers in 2004 reaching the level of the fourth most important airport in Italy and the only hub of Sicily. C G The majority of the flights arriving to Catania – Fontarossa airport are operated by the airlines of Alitalia, Meridiana and Windjet and the top points of embarkation are also domestic i.e. Rome and Milan. It is important to highlight that the high number of arrivals from these two cities is attributed to the fact that many foreign tourist reach Sicily through these airports via intercontinental flights. Catania – Fontanarossa Airport Traffic Source Fontanarossa Airport Authority Year 2006Traffic FebruaryJan-Feb 2006 Flights Passengers Following table highlights Number of flights and Passenger arrivals for the first 2 months of

2.3 TERRITORY AND CLIMATE TERRITORY AND NATURAL ENVIRONMENT Most of Sicilian territory is hilly (more than 61%) and only a small part is flat or mountainous (25% and 14% respectively). More than 1,000 km of beaches, filled With bays, cliffs and little ports dedicated to sun and sea lovers can be found all around the island. Moving further inland, numerous protected areas can be found. Among the 22 natural parks, 31 natural areas and the 28 reserves that cover almost 10% of the territory of the island, the most notable are: the Ficuzza Forest, the Pizzo Carbonara Reserve, the Pantani di Vendicari Oasis, and above all, the Etna mountain regional park, which is rich in different kinds of vegetation and volcanic activities. Altogether, approximately 230,000 hectares are made up of natural and protected areas and it is not difficult to perceive a touch of nature in any open air activity along the sea or in the inland regions. If we consider that more than 56% of the coastline is balneal, we can understand the potential of this island in terms of tourism attractiveness. The Sicilian coastline offers visitors a variety of different landscapes and scenarios. There are cliffs in the northeast part, sandy beaches in the south, and rocky small bays in the cast. The cast coast also has three main bays: Noto gulf, the large Catania gulf and the Augusta gulf (near the proposed development site). The great number of small islands in the north and in the southwest parts are also a further element of Sicilian enchanting landscape and panoramas CLIMATE Since ancient Greek times, Sicily has been represented and associated with the sun. The sun, in fact, affects all activities that take place in the island: agriculture, lifestyle, and tourism. With its favorable location and around 300 sunny days throughout the year, Sicily experiences nine months of summer and only three of very mild winter, The total amount of sunny hours is 2,500 on average per year, 500 more than the rest of Italy and 700 more than South of France. C G 5

C G Temperature is uniformly spread throughout the island. Average temperature during the summer season is 26 degC with the thermometers registering up to 40 degC degrees during July and August. Winters are very mild, especially on the coast, with an average temperature around degC. Humidity is scarcely present in the island, making easier to bear high temperatures. Water temperature varies between 14 degC in the winter and 25 degC in the summer. Many tourist guides recommend visiting Sicily in the mid seasons if the purpose of the visit is related to sport and culture. The graph below summarizes the relevant climate conditions (average temperature, sunny hours per day and water temperature) throughout the year for tourist destinations like Catania, Messina and Taormina. With a concentration of rain during the winter months (from November to February) and almost an absence of rain in the summer season (from June to August) the Sicilian mild season runs through nine months if not the entire year. Located near the coast, the proposed site can expect approximately 500 ram per year. 6

C G 3 SICILY AS A TOURISM DESTINATION 3.1 INTRODUCTION Sicily has always been included as a "to be seen" destination in every Grand Tour (the traditional long trip in Europe made in the beginning of the century, Nowadays this term is still in use to classify the trip to Europe made by Japanese and Americans who only spend one or two days in the same destination. The richness in archaeological sites, cultural spots, and architecture are considered among the most outstanding of Europe. Several spots on the island are protected by the UNESCO World Heritage and there are plans to increase these in the coming years. The richness and variety of architecture derive from its unique history. Milestones of which are: Under the Ancient Greek period all main cities were furnished with Greek theatres for dramas and representations, active ports with bastions, forums, temples and schools were the philosophers were teaching to their pupils. At the time of the crusades, walls, forts and other military bastions surrounded all cities of the island. Under the Arab period, most of the island has been redecorated in a unique Arabic style nowadays called "Sicilian Arabic" full of gold decorations, colors and ceramic mosaics. During the Renaissance era, most of the buildings have been reshaped according to the new baroque style churches and palaces, castles and monuments all express the idea of grandness, luxury and prosperity. This history is nowadays reflected in the more than 200 monuments, museums or archeological sites of international relevance. 3.2 THE GOVERNMENTS POLICY TOWARDS TOURISM The development of tourism has been defined as a top priority by the national government and heavily promoted by the Regional Government. It is worth to mention, that Sicily is considered an "autonomous region"; thus, decision On tourism developments and development incentives are taken on a regional level and not on a national one In the last years, an extensive advertisement campaign in Italy and abroad has been made to promote Sicily as a tourist destination. It is interesting to highlight the different messages for two different segments of demand: In Italy, the slogan used can be translated as: "Sicily: tourism and culture" to indicate and promote Sicily also as a cultural destination despite its main perception of sea and sun. At the international level, all advertisements broadcast on BBC or other internationally known channels promote the "sun and sea" products with the slogan. "Sicily, everything else is in the sun". 7

3.3 TOURISM DEMAND Sicily is a popular destination with tourism to the island increasing over the years reaching little over 5 million arrivals and 14 million guest nights in 2005 in commercial accommodation facilities. Since 2001, the total number of guest nights has slightly declined due to the decrease in foreign tourist visitation (caused by the events of terrorism, world economic crisis and international tourism decline). However, due to the quick recovery by the dominant domestic segment representing more than 60% of arrivals the total arrivals stayed above 4 million mark. According to Regione Sicilia Assessorato al Tourismo (the Sicilian Advocate for Tourisrn) in 2003 there were approximately 4.1 million arrivals and 13 million guest nights at commercial accommodation establishments in Sicily. 3.4 SEASONALITY OF DEMAND Historically, the peak season of foreign arrivals is during the hotter months of the year (April to September). It is important to highlight that due to the warm climate conditions and the presence of many cultural sites, the traditional summer season is longer than usual including also the shoulder months" of March and October. In these 7 months alone, Sicily receives 78.6% of all its annual visitors and 83.7% of all its annual number of guest nights. Slightly more equally spread than Italy, the above defined "shoulder months" also experience a high presence of business tourism. As Sicily cannot offer the possibility to perform winter sports (apart from skiing on Mount Etna), the months of November, December, January and February experience the least amount of foreign arrivals. It is important to highlight that April attracts one of the highest level of domestic arrivals due to the fact that the Easter break and other public holidays (i.e. 25th April) offer tourists the possibility to relax and enjoy the warm Sicilian climate just after the winter period. 3.5 FOREIGN TOURISM EXPENDITURE The importance of tourism for Sicily is also represented in the total expenditure, which also shows an increasing trend over the years (apart from a slight drop in 2001). In 2002, foreign tourists spent a total of EUR 792 millions on tourism related services. Source: Touring Club Italiano, (2004) 8 C G

C G 3.6 MAIN TOURIST POLES Historically, in Sicily, the key centers of tourism have always been the northeast coast and the city of Palermo. This phenomenon is confirmed when we compare the list of Italian cities with the number of arrivals per year. Messina, the province in which the famous town of Taormina is located, is ranked 24th nationally (the most visited area in Sicily). Furthermore Palermo is ranked 28th followed by Catania (49th), Agrigento (55th), and Siracusa (68th), Looking at the ranking within Sicily, we can say that most of the main tourist attractions are located along the coast, What is more relevant for the proposed project is that two of the top five most attractive provinces of Sicily are on the east coast (i.e. Messina and Catania). Although the provinces of Palermo and Messina attract the majority of foreign visitors, the Sicilian east coast attracts almost half of all visitors to Sicily. Taormina is a small mediaeval town, north of Catania, located on the top of a rocky mountain in the middle of a magnificent scenario containing the sea shore, the rocky beaches and the mount Etna as a background. It was an ancient Greek colony and a part of the mountain host the worldwide famous Greek theatre whose panorama is probably the most famous spot of Sicily abroad. It is the setting of the annual Film Festival as well as many other events throughout the year. Considering its attraction, Taormina is the area with one of the most developed tourist infrastructures and with the highest concentration of high quality hotels in Sicily. The property proposed for development is approximately 10 kilometers from Taormina. Taormina can be viewed from all locations on the property. Main tourist poles in Sicily relative to the proposed development Taormina 9

C G Giardini Naxos, a historic beach front tourist attraction is 5 km. north from the Fiumefreddo property. Main economic activities are tourism, Fantastic and famous are its beaches. The name of the town derives from Sicilian Giardini that means "citrus orchards". The addition "Naxos" derives from the name of the first Greek colony in Sicily. Giardini Naxos is a thriving tourist area, beaches, history and cultural, climate and friendliness of the people have made Giardini and Taormina two of the highest tourist destinations of Sicily. The beach from Giardini Naxos to the Fiumefreddo property is continuous and continues to Riposto, providing over 12 kilometers of continuous beach front. Mount Etna is the highest volcano in Europe and one of the most active as well. The beauty of this mountain is that it is currently "working". Since the summer of 1995, there is persistent activity on the top of the mountain generating smoke or very thin lava rivers visible during the day but especially at night. The peculiarity of Etna is that it is very close to the sea giving the property a unique background. Mount Etna can be readily seen from all locations on the property. The area selected for the Resort hotels has un-obstructed and magnificent views. Giardini Naxos Mount Etna The site proposed for development basically sets at the gateway to and is approximately 15 kilometers from Mount Etna National Park, 25 kilometers from ski resorts and the Crater Park and Visitor center. 10

3.7 TOURISM IN EAST SICILY As previously stated, Sicily has attracted over 5 million arrivals and 15 million guest nights at commercial accommodations in The trend of total arrivals is increasing by approximately 7% per year just along the Eastern Coast of Sicily. The Eastern Coats is considered quite popular among tourist accounting for half of all tourism arrivals (47%) and guest nights (50%) for all of Sicily. 3.8 SUMMARY In summary we can state that: Tourism attractiveness of Sicily is based on its natural resources, gastronomy, culture and the favorable climate almost all year round. There is a positive perception of Sicily among international travelers and strong links to the US market. We also believe that there are further opportunities that can enhance the tourism potential of Sicily and these are: Palermo becoming European Cultural Capital: Palermo is a candidate for EU cultural capital in Should the city succeed, the number of visitors who will make a tour of Sicily in and after 2010 will increase as experienced in many precedent EU cultural capitals (Porto, Bruges, Manchester, Lille, Genoa, Graz). All new tourist development plans and projects (e.g. golf circuit, marinas) are focusing in attracting the high quality (high spending) market segments of tourists Planned and ongoing development of infrastructure such as the development of the bridge over the Messina channel, highways, airports and marinas will further enhance accessibility and, as a result, increase attractiveness of the island of Sicily. As a conclusion, we can state that Sicily is expected to become a even more leisure/cultural tourism destination in the Mediterranean. This prediction is not only based on the tourism potential of the existing product (i.e. the beauty and attractiveness of Sicily) but on the continuous efforts of the local authorities to further enhance and promote it. C G 11

C G 4 ANALYSIS OF THE GOLF MARKET In research of the golf market, our focus is on the European and more specifically the situation on the Italian golf market. 4.1 GENERAL TRENDS Golf as a leisure activity has undergone a dramatic growth process throughout much of the world in recent decades. According to the Professional Golf Association, there are currently 30,000 golf courses registered worldwide and approximately 1,000 new golf courses are established annually. Presently, some 45 million people play golf throughout the world (of which 98% are amateurs). Although the United States is the largest market for golf in the world with around 17,000 courses and approximately 27 million golfers, the game itself derives from Europe and continues to have a strong presence with 5,595 golf courses and roughly 4 million registered golf club member 4.2 GOLF RELATED TOURISM On a worldwide level, golf tourism has been growing in the last decades. Due to constant improvement in the standard of living and the growth in disposable personal income, it is estimated to further increase in the future. As the following shows, golf tourism is not homogeneously spread throughout the globe. North America counts more than half of the total world golf tourism demand while Europe is only third behind Asia. Europe as a whole is reputed to represent the largest outbound golf holiday market in the world, after the Americas. The European market is also the largest feeder market for itself. It is a market segment increasingly sensitive to the rising cost of golf and is constantly seeking novel and different golfing opportunities. Golf Tourism in the World Africa – 2%South America – 2% Australia – 4%Europe – 9% Asia – 25%North America – 58% Source: European Golf Association (2004) 12

C G Based on a recent research performed by the International Golf Tour Operator Association, approximately 50% of European golf players have already participated in a golf related holiday. With the abundance of quality golf courses throughout Europe, the majority of Europeans prefer golf related holiday within Europe, thereby spending considerably less on travelling. Spain, France, Portugal, Morocco and Tunisia are considered the most attractive destinations in the Mediterranean. The main success factor is that these destinations can offer "golf circuits" since they are all able to offer several golf courses in close proximity., thus, able to attract wide segments of the international demand. Among the European countries, Sweden and Germany represent the largest outbound golf tourism markets. Seventy per cent of the Swedish golfers have already taken a golf related holiday, with a growing share of golfers taking two or more golf trips per year. Close to 57% of German golf holidaymakers, according to the European Golf Travel Report, took more than one golf related trip. The following table shows the four main European markets under review and their inclination to visit new non traditional golf destinations (such as Italy). PREFERENCES OF GOLF TRAVELERS (2002) CriteriaUKGermanSwedishFrench market market market market % of golfers who have been on a golf holiday 51% 70% 70% 51% % of golf holiday makers who took more than one golf holiday in % 57% 43% 41% % of golf holiday makers who like to visit new countries and new destinations 73% 73% 78% 70% SPENDING HABITS OF GOLFERS Accommodation and transport – 38% F&B, car rental excursions – 47% Golf related expenses – 15% Source Golftur 13

C G An increasing number of tour operators are offering a range of golf specific holidays throughout the world and such operators are reporting increasing levels of demand for new and non traditional golfing destinations. This is primarily due to the improvement of the air transport links, the development of low cost airlines and the fact that the traditional golfing destinations in the United States and in the United Kingdom are becoming both over priced and over played. As a result of the rises in both leisure time and disposable income, the rise in the number of golfers in Europe and the increase anticipated in the number of younger and older people travelling abroad, is forecasted to experience continued growth. The Economist Intelligence Unit indicates that the future of the market looks promising, particularly in relation to countries and regions like Japan and Europe. Within Europe, the number of golfers is estimated to grow at an annual rate of 15%. Although Europe has a significantly high growth rate, the overall participation rates of golf are still well below that of the United States. With the popularity of golf gaining ground in Europe, this would indicate continued growth in years to come, especially within the non traditional European golfing markets such as Central & East Europe, France and Italy. Based on a research study performed by the Italian Golftur, the distribution of associated with golf trips can be broken down into three categories. As can be seen previous pie chart, the majority of spending is on food & beverage and excursions golf actually accounts for only 15% of total expenditure. Golf tourists are high income tourists and they tend to spend 20 40% more than the average tourist. Combining their holidays with playing golf in golf resorts outside their country, golfers travel usually in shoulder and winter months, when the weather conditions in their own countries are not good enough (usually November to April). Golf tourism arrivals during the winter period make it possible to extend the tourist period and thus for all tourist infrastructure to remain active on a year long basis. In terms of spending on golf related holidays, North Americans represent the largest market by far. In 2002, an estimated EUR 24 billion were spent on golf related holidays, whereas Europeans spent an overall of EUR 1. 5 billion on golf travel that same year. 14 Golf tourism has many sub segments, and each should be approached with an "ad hoc" offer. Golf tourists can also be individual or groups, academy groups of novices, golf club and societies, business meetings and conferences or occasional golfers. They look for professionally organized and managed resorts. Their expectations depend on their ability to play golf.. novices are looking for practice units and golf instruction while the advanced golfer want to play as much as possible and try always different courses with different layout and characteristics sties. 14

C G Thus, some common requirements are'. Excellent standard of golf courses and a choice of courses at the destination. To be considered a basic golf destination, an area should host at least one championship golf course and other 2 or 3 good courses so that golfers can have a choice. Proximity of the courses. Courses should be within one hour driving distance between each other and close to the hotel facility. Upscale accommodation infrastructure. Usually a 4 or 5 star hotel. In addition the presence of additional attractions such as cultural heritage, local traditions, gastronomy, are considered valuable assets to complement the golf product. 4.3 DEVELOPMENT OF GOLF IN ITALY The game of golf was introduced in Italy no more than one century ago, mainly by English expatriates and magnates living in Italy in the winter periods to take advantage of the favorable weather conditions. They were the first to start building golf courses and introducing the game to Italians CURRENT SUPPLY OF GOLF COURSES Officially, as of 2004, there are 108 golf courses operating in Italy with more than 9 holes. The distribution all over the country is very heterogeneous. The majority of the current supply of golf courses is concentrated in the northern part of Italy. Approximately 56% of all golf courses are located in the regions, while only 8% in the south of Italy EVOLUTION OF DEMAND IN ITALY During the 80's and the 90's, when golf experienced a huge boom in the rest of Europe, Italy seemed not to be interested in this sport as other sport activities like tennis or sailing were preferred to golf. In the last decade however, the situation has been changing: more and more people are learning the game and joining a club. According to the Italian Golf Federation, this is due to: A change in the people's perception (no longer seen as a very exclusive sport),­ An increase in the supply (18 new courses plus 52 driving ranges opened in the years). And An improved domestic promotion of the game. Italy is currently experiencing a growth in the number of registered golfers of around 5% per annum according to the Italian Golf Federation. 15

C G 4.4 GOLF IN SICILY According to the Italian Golf Federation currently there are 340 registered golfers in Sicily, approximately one in every 15,000 people. Due to the lack of general awareness of the sport in the south of Italy the penetration is significantly less than the average in other Regions of Italy CURRENT STATUS OF GOLF IN SICILY Sicily currently has two 8 hole golf courses in operation and other golf related facilities include two driving ranges. The two courses in operation and brief summary of each follows: LE MADONIE GOLF CLUB course: 18 holes, mt 6004, par 72 IL PÌCCIOLO GOLF CLUB course: 18 holes, mt 5870, par 72 Il Pìcciolo Golf Club is an 18-hole par 72 golf course located in Castiglione di Sicilia, 25 km from the east coast of Sicily and Taormina. It is the first golf course constructed in Sicily and was designed by Luigi Rota Caremoli. This is an 18 hole course located 55 km from Palermo and 170 km from Messina and 15 km from Cefalù. It is anew course in Sicily opened in July

C G GOLF COURSES UNDER CONSTRUCTION Currently there are two Golf related Resorts under construction in Sicily and one Golf course with club house facilities. The Rocco Forte will include 27 holes of golf course in the Rocco Forte Verdura Resort located on the south west coast of Sicily. The Sotogrande SA have under construction a 36 hole golf resort in the southern part of Sicily (Province of Ragusa). One 18 hole course with club house facilities is being constructed in Francavilla di Sicilia area, this course will be approximately 2 km from the Il Piccioòo Golf Club and approximately 15 km from the proposed Fiumefreddo di Sicilia site GOLFTUR – AN INITIATIVE TO SUPPORT THE DEVELOPMENT OF GOLF Founded in 2000 by Province of Catania, the Etna Natural Park and several municipalities", the Golftur Consortium is a partnership aimed to lobby at local administrative level to push political decisions toward the development of quality tourism such as golf. Golftur initiatives are located in the territories of the eleven municipalities forming the partnership and represent an important tool for tourism development at a regional level enhancing the coastal attractions and spreading tourism flows toward the inland areas. It is important to Note that the proposed development is supported by Golftur and the site is located in the Province of Catania. In 2001, Golftur has commissioned a study prepared by the Arthur D. Little Consulting firm regarding the feasibility of creating a golf circuit in east Sicily. The study (an extract of its findings has been prepared in the following box) confirmed the great potential of the area according to the critical success factors. Study of feasibility to realize a circuit of golf courses in the Provinces of Catania and Messina by Arthur D. Little & Golfvacanze In 2001, Arthur D. Little and Golfvacanze (the most important golf tour operator in Italy), were appointed by Golftur to create a master plan of golf development in cast Sicily. Starting from analysing current level of supply both for upscale hotel facilities and golf courses, the courses' employment rates for each area has been calculated and a date for the saturation level of each golf destination has been projected. Together with this analysis, those common critical success factors have been identified and matched with the environment in east Sicily. In particular, those factors have been enlisted as: Tourist attraction, Climate, Accessibility, Dimensions, level and supply of upscale accommodation, Dimension and variety of golf supply (in a logic circuit), and Prices of golf holiday packages. 17

C G The study concluded that the Sicilian area taken into consideration, meets all the pre requirement to become a golf tourism destination as being characterized by a high level and variety of tourist attraction (sun and sea as well as cultural heritage, sport facilities, traditions and gastronomy), a favourable climate all year long, a good level of accessibility, a good potential upscale accommodation supply that is increasing through the years FUTURE SUPPLY OF GOLF COURSES IN EAST SICILY As previously mentioned, Golftur has been created to identify, stimulate and assist future developments related to golf in the eastern part of the island. Since the study prepared by Arthur D. Little had a positive output, it is now up to the local governments and authorities to put efforts in smoothening the bureaucratic process for obtaining golf course and clubhouse building permits. Golftur has identified several potential sites for golf developments in Sicily. The proposed locations and the types of golf courses are illustrated in the following table. PLANNED GOLF COURSE DEVELOPMENTS IN EAST SICILY LocationProvince Type of course Catania city: a Catania CodavolpeCatania 18 hole b Catania PlayaCatania18 hole TaorminaMessina18 hole CalatabianoCatania18 hole Francavilla di SiciliaMessina18 hole MalettoCatania9 or 18 hole BronteCatania9 or 18 hole CarlentiniCatania 18 hole Source: Golftur NOTE: Location Calatabiano is the site proposed for development and Francavilla di Sicilia is the location previously mentioned that is now under construction. As the table illustrates, the planned golf courses are scattered around the city of Catania and Mount Etna. thus, all of them would be situated around or in close proximity of the Fiumefreddo di Sicilia site. 18

C G Another advantage of the location of these developments is that all of them are located near the sea and the main tourist attractions on the east coast. Golf is therefore an additional attraction to an area that is already well positioned on the domestic and international market. In accordance to future developments, the efforts of Golftur to promote the golf courses on the east coast and an increase penetration of the game, we would expect Sicily to experience hosting a new golf course every two years. The proposed site, located within the main circuit, would benefit from the network and Joint promotional activities Summary Sicily cannot yet be considered a golfing destination due to the lack of supply of courses. However, if we look at the future developments which could take place and if just one third of the proposed projects would be realized, it would be possible to establish, together with Il Picciolo Golf Club, the Francavilla di Sicilia golf course and the proposed project, a small circuit providing golf tourists adequate choices to play during a week long golf holiday. 5 An Overview of the Hotel Market 5.1 INTRODUCTION The supply of hotel accommodations in Sicily (as of 2004) counts altogether 37,000 rooms with a capacity of more than 74,000 beds. The island's supply of hotels is characterized by a great heterogeneity between the east and west coasts, as well as the inland and south coast. As the project proposed is being developed on the east coast of Sicily, We have focused our attention on existing comparable hotels and future developments taking place in the eastern part of Sicily. 5.2 SUPPLY OF HOTEL FACILITIES The table below presents the supply of total hotel accommodations in the three Provinces of Eastern Sicily, as well as that of upscale hotels only (four star, five star and five star deluxe). All HotelsUpscale Hotels Province Hotels Rooms % Hotels Rooms % Messina , ,897 Catania 82 4, ,972 Siracusa 67 3, East Sicily ,784 50% 69 6,431 60% 19

C G 5.3 INDICATORS OF HOTEL PERFORMANCE Based on our research, the total demand reported in the market of cast Sicily was around 2 million guest nights (out of a total supply of 6 thousand rooms on a year and summer period basis). In other words, the selected hotels achieved an average room occupancy of around 60% for the year The following presents key performance indicators of the operating year 2003 (net of VAT and breakfast). Performance indicators (upscale hotels) Taormina Area Catania area Average Occupancy Rate 67% 62% Average ARR (EUR) It is important to note that the above was taken from last printed available information, it should also be noted that from 2003 tourism has been increasing at an average of 7% in the East Sicily (Taormina – Catania areas) CHARACTERISTICS OF DEMAND Demand for upscale hotels 'In east Sicily seems to be concentrated around two main poles'. Taormina and Catania. Regarding the guest segmentation, the first represents the pure leisure tourism pole while the second is mainly devoted to business tourism. The business mix identified for the two poles is highlighted below. Guest segmentation in: Taormina Catania LEISURE 80 % 30 % BUSINESS / MICE 10 % 60 % OTHER 10 % 10% Our research concluded, that out of the main urban centers, leisure visitors generate around 80% of the total demand, while inside urban centers, the greater part of the demand is made by business (and MICE) segment with a percentage of around 60%. 20

C G 5.4 SUMMARY Actions have been taken in different areas in order to diversify the tourism product and to attract higher quality tourism and other market segments. European Cultural Capital in 2010, are foreseen to expect a growth in the flow and the quality of tourism in the upcoming years. Designation of numerous World Heritage Sites and other areas of historical and culture importance. For Golf Tourism and Golf Resort develops, the focus of this report, we re-emphasize the Arthur D. Little study in that The study concluded that the Sicilian area taken into consideration, meets all the pre requirement to become a golf tourism destination as being characterized by a high level and variety of tourist attraction (sun and sea as well as cultural heritage, sport facilities, traditions and gastronomy), a favourable climate all year long, a good level of accessibility, a good potential upscale accommodation supply that is increasing through the years. Despite its traditional products of "Sun and Sea", Sicily is also focusing on niche segments like golf, marina, culture and traditions. These key factors will definitively attract additional tourists and spread the flow throughout the year. To this aim, several activities and actions help achieve this (Taormina Film Festival, Consortium, Palermo candidature for the 21

C G 6 THE PROPOSED DEVELOPMENT SITE In this section we introduce the proposed site for the development of the golf resort assessing its location and accessibility in relation to main urban centers and tourist poles. We also comment on the main characteristics of the site. 6.1 LOCATION AND ACCESSIBILITY The proposed site is located in the middle area of the south east coast of Sicily. Between Catania and Messina, in the north part of the Province of Catania, in the jurisdiction of the town of Calatabiano. The site is very close to the community of Fiumefreddo di Sicilia (2 km) and less than 4 km away from the main highway (A 18) connecting Messina to Catania and beyond. The property is centrally located being 2 km. from the community of Fiumefreddo, and less than 3 km away from the main expressway (A 18) connecting Messina to Catania. Less than 30 kms. from the city of Catania, 35 kms. from the Catania International Airport, 50 kms. from Messina and 10 kms. from the high profile tourist area of Taormina. The area is of the highest concentration of tourist in Sicily. It should be noted that approximately 3 kilometers south of the property, the Province of Catania has announced plans to construct a 350 Million Euro theme and water park. The site is located in the typical Sicilian countryside, in an un-spoiled natural environment. The site has very good exposure to the sun both in the summer and winter periods. The east property line borders on the Ionian Sea, providing 500 meters of beach frontage on a beach than extends 7 or more km North and South. Mount Etna can be readily seen from all locations on the property and Mount Etna National park is less than 10 km away. The Northern property line is bordered by the Minissale River and the South property line is bordered by the Fiumefreddo River and the Fiumefreddo National Park. The proposed site is characterized by the peaceful and natural environment of the countryside, the lack of noise and pollution and wonderful views in all directions. CATANIA TAORMINA MOUNT ETNA SITE 22

6.2 CHARACTERISTISTICS OF THE DEVELOPMENT SITE The property totals 76 hectares, however additional tracts of approximately 25 hectares are considered for purchase providing a total area for development of 101 hectares. The property is in agriculture use and is designated as agriculture property. The property is bordered on the East by the Ionian Sea which provides approximately 500 mts of beach frontage, on the North by the Minissale River, on the south by the Fiumefreddo River and Fiumefreddo National Park. The property boundary to the West is a deep ravine, which separates it from adjoining property. Adjacent properties are of citrus grooves and the Fiumefreddo National Park. From the sea, the property gradually rises or slopes inland rising from sea level to around 10 MSL, at the west end of the property, a steep incline is Excellent views of Mt. Etna, Taormina, the marina of Riposto and the coastline for many kilometers. The plateau (picture at right) is an ideal location for Hotel, Executive Conference Center and could also provide an area for Villa construction. The property is ideally located and has characteristics that combine well for the development of an upscale Resort Hotel with 18 hole championship golf course and other resort amenities such as spa – health club, beach club, tennis club, miniature golf and the possibility with additional permitting a marina complex. encountered rising from 20 MSL to 70 MSL and reaching a large plateau (highlighted on property topographical), the plateau has commanding views of the entire property (photo above) and providing C G 23

6. 3 PROPERTY TOPOGRAPHICAL BEACH AREA IONIAN SEA NORTH C B B A PROPERTY BORDERED IN BLACK – RIVER BOUNDARIES IN BLUE ADDITIIONAL PROPERTY CONSIDERED FOR PURCHASE BOREDERED IN RED PLATEAU AREA AS REFERENCED IN PHOTOS BORDERED IN GREEN C G 24

The property has many rustic farm buildings that can be restored and used for such purposes as Golf Club House, Spa, Beach Club, Tennis Club, Restaurants and various other uses. One dwelling (pictured above) was constructed around a well that goes back to Roman times and a large natural spring on the property is recorded to have been used during the Greek Period of Sicily occupation. Plateau in background is considered as area for the hotel and executive meeting center. 6.5 DEVELOPMENT HIGHLIGHTS 4 to 5 Star category 170 to 200 room Hotel with Executive Conference Facilities. Golf Club House with driving range, putting green and practice area. Golf Academy Beach Club with restaurant, pool and outdoor disco area. Beauty Farm / Health Spa, pool and 5 exclusive apartments/mini-villas. Tennis Complex Miniature Golf Course and outdoor entertainment area Areas for Exclusive Private Villas. If desired and with additional permitting, a Marina. Numerous rustic buildings that can be renovated for various uses such as restaurants, shops, rental or private dwellings. The total square meters of construction permits obtained will be in addition to the volume that can be realized from the renovation of existing Rustic structures. For example, there are building that can be restored that would make excellent facilities for Golf Club House, wellness center, Beach Club, rental cottages, restaurants or a variety of other uses. The Developer and the Concept Master Plan prepared for the Project can utilize the square meters obtained for new construction and the existing buildings as best determined. 6.4 PROPOSED DEVELOPMENT C G 25

6.6 PROPOSED CONSTRUCTION VOLUMES UTILIZATION – PLANNED DEVELOPMENTS The Mt. Etna Golf Resort as currently conceived has planned/proposed to obtain building permits for a total constructed volume of 170,000. cubic meters. Under current development plan approximately 131,000 cubic meters has been displaced, with planned utilization as follows: New ConstructionCubic Meters Hotel – 170 to 200 room w/executive conference center Spa-wellness center 96,000 Golf Club House W/Golf Academy 10,000 Beach Club 1,000 Apartments – 60 X 100 cubic meters each 6,000 Villas – 60 X 300 cubic meters each 18,000 Total New Construction Volume Displaced 131,000 Displaced Volume does not include cubic meters realized in use of existing rural structures. Currently the project has 39,000 cubic meters of planned permitted construction volumes that has not been utilized. With proposed purchase of additional property, additional areas as well as permitted volumes for new construction would become available. FOLLOWING PAGE – CONCEPT MASTER PLAN PREPARED BY A WORLD OF GOLF C G 26

6.7 DEVELOPMENT CONCEPT MASTER PLAN C G 27

C G 7. SUMMARY 7.1 THE PROPOSED DEVELOPMENT CONCEPT The underlying principal is to develop an integrated golf and tourist resort with an upscale hotel, the resort will include the following main components: – hole international quality golf course 2. 4 – 5 Star Hotel with meeting facilities 3. Wellness and leisure center Additionally, to increase the overall attractiveness of the resort other facilities such as, Tennis complex, Beach Club with pool and food service, and a Miniature Theme Style golf course will be included. Ancillary facilities to include food & beverage outlets, pro-shop, driving range, cart and club rental, souvenir/gift shops, etc. will be included in order to complement the main project components. 7.2 THE GOLF COURSE COMPONENT As previously stated, there is a demand for and an opportunity to develop a gold course along the East Coast of Sicily and link it to the golf circuit that is planned for development. The proposed site provides an attractive opportunity located near Catania and in close proximity to Taormina, two of the most popular tourist destinations on the east shore of Sicily. Based on our review of international trends in golf resort developments and matched with the physical conditions of the site, we have taken the following parameters into consideration for developing the golf course: Construction of an 18 hole golf course of international standards with large greens with a minimum of four tees per hole. The concept Master Plan allows that an additional 9 hole golf course could be incorporated into the project. Construction of a clubhouse with restaurant, bar and pro-shop as supporting facilities to include changing rooms, storage rooms and cart parking. Construction of other supplementary golf facilities such as practice area with driving range and putting greens. Additionally, in order to expand the services of the golf club a Golf Academy will be included, this will also attract families with non-golfing members but interested in the game, as well as attracting new players to the game form the local market. The final design, layout, etc. of the golf course and related facilities will be taken into consideration with the developer in preparation of the Master Plan. 28

C G 7.3 HOTEL COMPONENT We are of the opinion that given the local market conditions and location of the site, the planned accommodation facility should be positioned as an internationally recognized upscale hotel of 4 or 5 star quality. We have considered an upscale Hotel with a minimum of 170 rooms and a maximum of 200 rooms. We perceive designing a hotel offering guest rooms of different sizes and amenities to attract a wider range of markets, golfers, wellness guests, families, corporate events, etc. From our review of similar hotel facilities at golf resorts in the Mediterranean area, we have considered a structure that would include guest rooms, suites and apartments. All rooms of the hotel as well as the restaurant, outside dining areas, pools and bars will have commanding views of the golf course with the beach and sea in background and views of Mount Etna in the opposite direction. Due to the limited availability of appropriate conferencing capacity in the region, we are of the opinion that the proposed hotel should offer meeting space to attract meetings, incentives and convention markets (MIC). 7.4 THE WELLNESS COMPONENT Apart from the attraction of the golf course, a wellness component would be a draw card of the planned resort. It would also help stimulate demand during the golf off-season as ell as the local market. Wellness has proven to be a good synergy, not just with golf, but also with the meeting and incentive markets. Such a facility could offer indoor pools, message facilities, beauty salon, steam room, sauna and a fitness room. The wellness center can be incorporated into the hotel or any one of the rural-rustic building on the property grounds can be readily restored and would make an ideal wellness center. 7.5 OTHER RESORT COMPONENTS In addition to the Main Resort components and to add to the attraction of the resort, the development will have: A full service Beach Club, with pool, restaurant and bar, changing and locker rooms. The Beach club will provide service for the beach area and will cater to Hotel and drop in guests. The area for the beach club could also incorporate several apartment for hotel rental. Tennis Club, a tennis complex with 6 courts, health bar, restaurant, locker room and other amenities will provide an additional attraction for hotel guests. One of the existing rural-rustic structures on the property could easily be restored for the tennis Center and the wellness Center could also be part of the same facility. 29

C G Miniature Golf. A 18 hole Theme Type Miniature golf course has been included in the concept master for development with the project. The miniature golf course will be in close proximity to the beach club and will be Theme by incorporating water elements. Offering Miniature golf as part of the Resort activities will attract families to the resort as well as the local population. The course will have a mini-club house that will provide limited food and beverage service. Marina Facilities. A marina facility is an option to be considered, it will require additional permitting and planning. The marina would be located adjacent to the Beach Club and would be more of a transit marina rather tan providing permanent moorings. The marina would cater to day boats and yacht tenders from the large cruising boats that frequent the area during the summer months. Villas and Apartments. The site lends itself for the construction and sell of a maximum of 60 exclusive private villas, the Villa design(s) will be in keeping with local architecture and culture and built to American standards. In addition it is foreseen that 60 apartments will be included in the development. 7.6 CONCLUSION We are of the opinion that relative to market conditions, location of the site and resort facilities being offered that the planned development would be positioned as an upscale Golf Resort and tourist destination offering and providing amenities for even the most demanding tourist. The Developer has the possibility to create one of the leading golf resorts in the south of Italy as well as the Mediterranean area in general, attracting both international and domestic tourist. The resort will have something to offer everyone, beach, golf, wellness center, luxury accommodations and service. The location of the site coupled with the mild winter weather not only can provide winter golf, but the hotel guest or within 25 km of alpine and cross country skiing on the slopes of Mount Etna. This document was prepared to provide an overview of the proposed development, current and expected markets. Based on our knowledge of the local market and findings of our preliminary study, we can state that there is a demand for an upscale resort combining golf, hotel, wellness center and other tourist amenities in the environs of East Sicily. Our opinion has been confirmed through studies completed by KMPG Advisory services, Arthur D. Little and others. 30

C G 31

FIUMEFREDDO PROPERTY PROPERTY DEVELOPMENT DESIGNATED AS: MT ETNA GOLF RESORT LOCATION: Community of Fiumefreddo di Sicilia, (CT) Sicily Italy. The property is approximately 4 kilometers from the Interstate highway system connecting to Messina (50 kilometers), Catania (38 kilometers) and all points in Sicily and Italy. The property is approximately 5 kilometers from the high profile and tourist destinations of Riposta, Giardinia Naxos and 12 kilometers from Taormina. AREA: Following a brief overview of the communities of Fiumefreddo di Sicilia, Riposto, Giardini Naxos and Taormina. The area between Riposto and Taormina which takes in the Fiumefreddo property is an area of the highest concentration of tourist in Sicily. Offering beaches, history, culture and many other attractions that are unrivaled not only in Sicily but throughout the Mediterranean. Fiumefreddo di Sicilia (Zip Code 95013) The municipality has inhabitants, its surface measures hectares, with a population density of 802 inhabitants per square kilometer. The community rises over a coastal hilly area averaging 62 meters above sea-level. Situated in a valley of citrus plantations, Fiumefreddo di Sicilia boasts a conspicuous production of citrus fruits and vegetables. The handicraft activity is characterized by the production of wrought iron objects. The name Fiumefreddo derives from the homonymous river characterized by frozen waters deriving from Mount Etna's melting snow. The appositive di Sicilia was added in 1862 to distinguish it from the town of Fiumefreddo Bruzio, in the province of Cosenza. The first inhabited center rose in 1400, around a farmhouse that was property of the Parisio family. Approximately in 1600, it belonged to the lords Gravina Cruyllas, already owners from the feud of Calatabiano, which increased the growth of the town's population and economy. It was governed by this noble family until the abolition of the feudal regime. C G 32

Riposto (Zip Code 95018) The community of Riposto lies 7 kilometers to the south of the Fiumefreddo Property. A big tourist and agricultural center, Riposto boasts a rich production of wine grapes, citrus fruits, and olives. Pictured above a view of the old town of Riposto as seen from an area adjacent to the marina, an area reserved for local fishing and pleasure boats. The new Marina of Riposto (pictured above) is the largest and best full service marina between the cities of Catania and Messina. Located in an area of high tourist profile and being world class in design and marina services, it receives large sail and cruising yachts year round. The name Riposto derives from commercial Sicilian term U ripostu, that means "wine cellar" because Riposto used to function as a deposit for the huge quantities of wine gathered in the nearby towns of Giarre and Mascali. The first suburb belonged to the town of Giarre until 1841, when Riposto became independent thus experiencing a noteworthy financial an urban development. In 1939, the town became dependent once again, subjugated to Giarre's administration, and it was first called "Riposto-Giarre" and in 1942, it was named "Jonia". In 1945, the two towns were administratively divided once again. C G 33

Giardini Naxos (Zip Code 98035) The city is 5 km. north from the Fiumefreddo property. Main economic activities are tourism, Agriculture and handicraft. Products mostly cultivated are citrus fruits, olives, vegetables, wine-grapes. Typical handicrafts are wrought iron works, embroideries and artistic pottery articles. Fantastic and famous are its beaches. The name of the town derives from Sicilian Giardini that means "citrus orchards". The addition "Naxos" derives from the name of the first Greek colony in Sicily. Naxos was founded by Calcidesi in 735 B.C. near the bay of Schisò and it was preeminent over the others colonies of the island in religious matter because here was located Apollo Archegetes's altar. The God protector of Greek colonization in Sicily n 403 B.C. Giardini supported Athens against Siracusa and was destroyed by tyrant Denis. In the Byzanthine period populated nucleus enlarged along the coast. The present city grew back in the same area. In the following centuries the city lost part of its importance and in the Middle Ages its territorial role was only to be the port of Taormina. The bay, today is one of the major stopping points for cruising yachts and local fisherman using traditional methods and boats fish the bay and surrounding waters. Today, Giardini Naxos is a thriving tourist area, beaches, history and cultural, climate and friendliness of the people have made Giardini and Taormina two of the highest tourist destinations of Sicily. The beach from Giardini Naxos to the Fiumefreddo property is continuous and continues to Riposto, providing over 12 kilometers of continuous beach front. C G 34

Taormina (Zip Code 98039) This glamorous and historical Resort area is 12 km. distant from The Fiumefreddo property. Taormina is famous for its tourism which makes of it one of the chief town of Sicilian tourism. The beautiful town of Taormina bases its livelihood upon tourism. Local handicraft is centered around wood and iron works and handmade embroideries. Agriculture is limited to cultivation of vegetables and fruit and includes fresh fish caught by local fisherman in the old and traditional ways. Taormina is part of the towns of Vitùlia, the calves' land, and its name derives both from Greek Tauromenion and from Latin Tauromenium and both have the same meaning "Bull". Many civilizations followed one upon the other from the VIII century B.C., in 392 Taormina was conquered by Dionysius I of Siracusa, in 358 by Anomarco, and in 345 by Corinthian General Timoleonte. It was later a possession of Agatocle and Ierone II of Siracusa. In 212 it had a great development and passed with all of Sicily into Romans' hand. Normans were in possession in1079 and made of it a prosperous town for all the medieval period. Taormina is full of archaeological areas where it is possible to admire the Greek Theatre (second in Sicily for its vastness after Siracusa's one) built in Hellenistic period it has been recently restored; ruins of Odeon, a Roman building of imperial period and the Naumachie, a great residue of hydraulic engineering of Roman period. Taormina, is considered the pearl of Sicilian tourism and organizes in July and August the famous show of cinema, music and theatre, the "Taormina Arte". Taormina has the highest concentration of tourist and tourism in Sicily. C G 35

Sicilia (island(s)), Italy Sicilia (island(s)), Italy Sicilia (island(s)), Italy Sicilia (island(s)), Italy PROPERTY LOCATION FIUMEFREDDODI SICILIA PROPERTY 36

PHOTO LOCATIONS REFERENCED IN BOLD NUMBERS PROPERTY TOPOGRAPHICAL PROPERTY BORDERED IN BLACK – RIVER BOUNDARIES IN BLUE ADDITIIONAL PROPERTY CONSIDERED FOR PURCHASE BOREDERED IN RED PLATEAU AREA AS REFERENCED IN PHOTOS BORDERED IN GREEN BEACH AREA IONIAN SEA NORTH C B B A 37

NORTH SIDE AERIAL VIEW OF PROPERTY BOTTOM OF PHOTO BEGINNING BEACH FRONTAGE NORTH PROPERTY LINE RIVER MINISSALE. WEST PROPERTY LINE C G 38

SOUTH SIDE AERIAL VIEW ENTRY TO PROPERTY FROM COMMUNITY OF FIUMEFREDDO SOUTH PROPERTY LINE NOT VISABLE IN THIS PHOTO WEST PROPERTY LINE – BLACK BORDER C G 39

ENTRANCE TO PROPERTY, VIEW OF TAORMINA IN BACKGROUND. VIEWS OF TAORMINA FROM MOST ALL LOCATIONS ON PROPERTY. PORTION OF RURAL FARM BUILDING AT ENTRANCE TO PROPERTY. LARGE BUILDING (not pictured) TO RIGHT OF LARGER TREE BEHIND ROCK FENCE C G 40

AREA NEAR ENTRY TO PROPERTY LOOKING IN DIRECTION OF SITE FOR HOTEL PLATEAU WITH VIEW TO WEST OF MT. ETNA. THIS AREA CONSIDERED FOR HOTEL AND EXECUTIVE CONFERENCE CENTER AND OTHER COMMERCIAL USES. C G 41

VIEW OF AND FROM PLATEAU, LOOKING NORTH WEST IN DIRECTION OF NEBRODI MOUNTAIN RANGE VIEW FROM PLATEAU LOOKING IN DIRECTION OF GIARDINI NAXOS IN FOREGROUND AND TAORMINA ON HILLSIDE IN BACKGROUND. C G 42

VIEW FROM PLATEAULOOKING IN DIRECTION OF SOUTH EAST PROPERTY LINE, AND FIUMEFREDDO RIVER. SEA IN BACKGROUND IS NOT VISABLE IN THIS PHOTO VIEW FROM PLATEAU LOOKING IN DIRECTION OF MIDDLE OF PROPERTY EAST PROPERTY LINE. PROPERTY LINE AT BEACH FRONT, PAST TREE LINE. C G 43

VIEW FROM PLATEAU LOOKING IN DIRECTION OF THE NORTH –NORTH EAST PROPERTY LINE. VIEW FROM PLATEAU LOOKING IN DIRECTION OF SEA AND EAST PROPERTY LINE. C G 44

AREA CONSIDERED FOR BEACH CLUB, POOL AND OTHER BEACH FACILITIES RUSTIC BUILDING ON PLATEAU WITH TAORMINA IN BACKGROUND C G 45

Questions, Site Visit or Request for Additional Information should be directed to: CASTELLO ASGR In Sicily: In United Kingdom: Antonio La Ferrara Charles Shelton Ron Parker A WORLD OF GOLF – United Kingdom Andrew Mair Mobile: GOLFPLAN – United States Ronald Fream C G 32 Florence Way, Basingstoke Hampshire - RG24 9SA England Tel: +44 (0) – Fax: +44 (0) DISCLAIMER - All the information contained within this report has been collected and compiled by CASRELLO ASGR Ltd. This report is confidential and is for use only by the persons to whom it is issued. This report may not be copied or distributed by the recipient to third parties without written consent by CASTELLO ASGR. 46