September 30, 2014

• Peter Nanula• Chairman, Concert Golf Partners

• Chris Watkins• General Manager, Gaillardia Country Club

• Nate Kalb• General Manager, Heathrow Country Club• General Manager, Legacy Club at Alaqua Lakes

INTRODUCTIONS

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• Arnold Palmer Golf founders• 35+ clubs since 1993 (including both Palmer and Concert Golf clubs)• CGP is a boutique owner-operator

• Premier private clubs only• Major metro areas• Large-scale clubs

• We own and operate 7 clubs today:• Heathrow CC – Orlando, FL• Legacy Club – Orlando, FL• Carrollwood CC – Tampa, FL• Golf Club of Amelia Island – Jacksonville, FL• CC Woodmore – Washington, DC• Gaillardia CC – Oklahoma City, OK• MacGregor Downs CC – Raleigh, NC

• More clubs soon to join• We have a dedicated $50m fund

• Solely for investing in country clubs• Freestone Capital is a $3b asset management firm

ABOUT US

OUR TEAM

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• Peter Nanula – Chairman• Managing Director, Freestone Capital• CEO, Arnold Palmer Golf• Principal, Warburg Pincus• AB & JD, Harvard University

• Susan Dunnavant – Chief Operating Officer• Director, Valley Crest Golf Management• VP, Arnold Palmer Golf• BA, Florida Atlantic

• Aaron Straub – Director of Operations• General Manager, Shula’s Restaurants• F&B Director, Westin• Sommelier

• Michael Padden – Director of Membership Sales• President, Three Oaks Hospitality• Membership sales at Kiawah Island; La Quinta; The Woodlands

WHAT MAKES US DIFFERENT

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• Boutique private club operator• Select few clubs we tend to carefully

• Well-capitalized• All-cash – no debt• Important for clubs over the long term

• Continuous capital improvements• Immediate capital projects funded up-front• Monthly reserve funding

• Equal focus on golf, dining and other amenities• Total member experience• Passion for service

• We listen to our Members• “Stewards for your Club”

HOW WE GOT HERE

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• Sep 2013: Acquired Textron Note, matured in 2010• 20+ year relationship with Textron• Textron was exiting the golf lending business• They had been promised re-financings for 3+ years

• Oct-Dec 2013: Defaults and Concessions• Numerous loan defaults• Surprising revelations• Offered concessions and more time

• Jan-Feb 2014: Foreclosure Proceedings• We finally had no choice – started foreclosure• Borrower filed Chapter 11 bankruptcy

• March 2014-Now: The Future of Hawthorns• Meetings with Creditors Committee and Borrower• Competing plans for the Club’s futureWe are prepared to be part of the long-term solution.

WHY WE LIKE HAWTHORNS G&CC

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• Large, supportive family membership• Top-notch golf course• Full amenities• Affluent part of the Indy market• Attractive Hamilton Proper residential community• Thoughtful, active committee members

Opportunity to make improvements and grow the Club for the long term

OUR PROPOSAL

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Transaction

• All mortgage debt paid off.• Membership deposit refunds:

• New, reliable payout structure.• Prepaids:

• Honor all pre-paid F&B minimums.

• Honor all pre-paid dues; sponsor member program.

• Capital improvements:• Immediate $1.3m+ estimated

projects – golf course and facilities.

• Reserve funded monthly.• Working capital funded up front.

• Estimated $200-400k.

Covenants

• Club remains private.• No assessments – ever.• 1-year dues freeze.• Reciprocity with our other clubs –

and access to 500+.• Advisory Board of members.• Members have first opportunity in

any future sale.• Inheritability continues.• Legacy credits guaranteed.• Membership transfers with your

home.

MEMBERSHIP DEPOSITS

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Current Status

• ~$13m total refunds owed.• Resigned list ~$4.5m of this.• Club has not been paying

refunds according to bylaws.• Bankruptcy and foreclosure

typically wipe out these liabilities.

• Hawthorns is worth ~$5m and HGCC loan amount is roughly $5m.

• There is nothing left of the current assets to pay refunds.

Our Plan

• However, Concert Golf wants to honor the members’ investments in the Club.

• We will exchange old notes for new refund rights:

• 4:1 payout at 80% of then-current initiation fees.

• 10:1 payout for resigned members, at 40% of then-current initiation fees.

• Additional payment to>$16k initiation fee payors.

• Transparent wait list.• Realistic payouts to members

5-10x annually.

WHY DEBT-FREE?

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• Concert Golf prefers to operate private clubs on a debt-free basis.

• Debt service payments can starve clubs of needed capital improvement funding.

• We fund a large capital improvement reserve at closing, in a local Indy bank account, for immediate improvement projects.

• We also fund a capital improvement reserve monthly, rain or shine, with ~3% of gross revenues.

• When the economy softens, we always continue to fund the capex reserve.• Debt-laden clubs are forced to use all their cash to pay the

bank, deferring maintenance and planned improvements.

CAPITAL PROJECTS

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Golf Course

• Cart path upgrades• Maintenance equipment• Maintenance building• Possible croquet, other

Clubhouse

• Roof fixes• HVAC and water heater

replacement• Kitchen equipment• Interior and exterior refresh

• Carpet and paint• Ceiling tiles• Furnishings• Players Lounge• Ladies locker room

• Parking lot and sidewalk repairs

Preliminary scope based on 70-page inspection report and Member input.

Immediate Projects Estimated at $1.3m+

BENEFITS TO HG&CC MEMBERS

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• Long-term financial stability – no debt• Capital improvements fully funded up front• Experienced, quality club operator• Strong covenants to ensure Club preservation• No assessments ever• Reliable refund rights• Affordable dues and minimums

• Frozen at current rates for a year

• Home values protected

WE HAVE DONE THIS BEFORE

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CC Woodmore – Before

• Arnold Palmer Signature Design outside Wash DC

• #7 ranked course in DC area

• Storied history since 1981• $600/month dues• Debt + Refunds + Capital

Projects led to assessments

• Each assessment led to attrition

• 350->300 Golf members

CC Woodmore – After

• Concert paid off all debt• Invested $1m+ in Capital

Projects• More underway…

• Course conditions improved

• Food quality improved• +95 new members• $500k new banquets

booked into 2014• Happy Board, members

Dec 2012: Club Transitions to Concert Golf.

WHAT CHANGES?

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No Change

• Identity and culture stay the same.

• Membership categories stay mostly the same.

• Dues and minimums stay the same.

• Bylaws mostly the same.• Activities and traditions remain.• Staff mostly the same:

• 90-day evaluation period.• General Manager is point

of contact.

Change

• Years of capital projects accelerated.

• New members added gradually.

• Course conditions improve.• Dining experience

improves.• Debt-free = Financial

stability.• No assessments ever.• Less Board / committee

time.

HOW CAN CONCERT GOLF DO BETTER?

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• This is our only business.• We have operated ~35 clubs.• Best practices.• Streamlined governance.• Purchasing power.• Recruiting magnet.• Laser focus on member satisfaction.• Operating discipline – no other agendas.• Unlimited capital.

Just like your favorite restaurants and hotels.

ADVISORY BOARD

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• Advisory Board is critical liaison with Members.• Small group representative of Member groups.• Capital Projects prioritized by Members.• Accountability via your General Manager.• Members keep all activities and traditions.

– We like to add new events and programs for a vibrant club.

Members have a voice in the Club’s direction.

WHAT DO OUR MEMBERS SAY?

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“Now we just pay our dues and enjoy the Club. The course is better. The improvements are happening. And it’s all someone else’s problem. What’s not to like?”• Former President, Woodmore

“Your personnel are first class.  You have made changes that are very noticeable and appreciated.  And the projects you have planned are the things we (members) have had on our “wish list” for quite some time.”• Past Board Member, Heathrow

“I am a HUGE supporter of you and your team…the Club has never been better!” • Past Board Member, Golf Club of Amelia Island

QUESTIONS

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Concert Golf is a “private equity fund”

False.

Concert Golf is one of the leading private club owner-operators in the US, with over 750 employees at 7 upscale private clubs across the East and Midwest. Our funding comes from more than 60 wealthy families who are long-term investors in timber, real estate and similar properties. Concert Golf is a well-capitalized hospitality company that can provide a secure long-term future for the Hawthorns.

QUESTIONS

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Concert Golf will sell the Hawthorns in 2-3 years

False.

In fact, Concert Golf has never sold a single one of its clubs. Ever.

Concert Golf’s investors are wealthy families, like many Hawthorns members, who invest for the long-term. There are no timelines or plans to ever sell the Hawthorns. Concert Golf has committed to long-term ownership at the Hawthorns, and has also committed that if a change in ownership ever is contemplated, the members will have the right of first discussion to own the club.

QUESTIONS

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Concert Golf will fire lots of our favorite employees

False.

In fact, Concert Golf has very low turnover at our clubs. All Hawthorns staff will be reviewed during a normal probationary period.

 

Members should be aware that the current owners of Hawthorns did not give raises to the club staff for 5 straight years from 2009-2013.  Not a single raise for a single employee. Concert Golf has provided its staffs with raises every year.

QUESTIONS

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Will the Club Still Face Continuing Litigation and Bank Defaults?

No.

If Concert Golf becomes the owner and operator of the Hawthorns, the foreclosure litigation and the Chapter 11 bankruptcy of the current club owner will terminate. Concert Golf is not a party to any litigation at any of its clubs nationally.

More importantly, Concert Golf does not use any debt to purchase its clubs, so there will be no bank involved. And therefore zero risk of bank defaults, foreclosures, or the uncertainty that has surrounded the Hawthorns for the past several years.

QUESTIONS

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Will the Golf Shop Be Able to Purchase Inventory?

Yes.

Concert Golf is a “Platinum” or “Preferred” customer at all of its clubs nationally, due to prompt payment and large multi-club purchases from the top brands of golf equipment, golf balls and golf apparel. We receive exclusive products at our clubs, and we often receive the best products in advance of when other clubs get their merchandise.

QUESTIONS

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Will Member Refunds Depend on How Much Cash the Club Has Available?

No. Unlike past promises of refunds, which have not been paid due to cash problems at the club, Concert Golf has committed to strict adherence to the 4:1 and 10:1 payout ratio – regardless of the cash resources of the club. Concert Golf views these commitments to members who paid large initiation fees with the promise of future refunds as a contractual obligation rather than an optional payment, and we have committed in writing to a transparent, reliable process for making these payments to note holders.

IN SUMMARY

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• No more debt• No dues increases for a year• No assessments – ever• No change in Club identity• Reliable refund rights

• Years of capital projects accelerated – and funded up front• Back office professionally managed• Gradual member growth• Improved course conditions and dining

IN SUMMARY

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QUESTIONS?