Adding Value While Managing Risk

1. Adding Value While Managing Risk

2. Profile of Fairlane • Manages traditional & non-traditional bond mandates • Experienced investment professionals • Targets high net worth and institutional investors • 80% of our investors have been with us for more than fifteen years

3. Fairlane’s History • Fairlane Asset Management was founded in 2003 • Merged with Strathy Investments Ltd. in 2005 creating over 25 years of experience • Registration with the Ontario Securities Commission: Portfolio Manager (PM) Investment Fund Manager (IFM)

4. Fairlane’s Business • Our focus is providing superior absolute returns • We concentrate in “Special Situation Investing” using the following investment strategies: • Long / Short Investing (Credit Arbitrage Fund) • Long Investing (A Plus Bond Fund)

5. Investment Approach • Thorough and detailed company research and analysis • Exploit inefficiencies across security classes • Focus on “out of favour” and “under-researched” securities • Invest in a small number of investments

6. Investment Philosophy/Principles • Protect clients’ wealth • Above average returns • Absolute return orientation • Value • Contrarian • Discipline A flexible approach allows us to capitalizeon opportunities through all stages of the economic cycle.

7. How we Structure our Portfolio • Invest in a focused and thoroughly researched portfolio of investments, primarily A+ rated securities or better • Portfolio typically consists of 15-20 credits due to the limited number of exceptional opportunities available • Strategy is to maximize returns over the long-term, not provide a stable 1% per month

8. Financial Instruments Utilized • Instruments used include: • Bank debt • Senior debt • Subordinated debt • Other liquid investment grade debt • We are not forced to remain in sectors that no longer offer value

9. Risk Management • Our goal is not to avoid risk, but to understand the risks we are taking and ensure that the portfolio is well compensated for them • Our key lines of defense: • Research • “Scenario analysis” and “stress testing” of portfolio allows us to assess overall risk

10. Fairlane Product Profile Fairlane Growth Fund Small to Mid Cap Equity Credit Arbitrage Fund Canadian Fixed Income Strategies Expected Return Fairlane A Plus Bond Fund Canadian Midterm Credit Bonds Risk

11. Fairlane A Plus Bond Fund • OBJECTIVE: • The philosophy of the Fund is to actively invest in under-valued investment grade corporate bonds with an average credit rating of “A” in order to achieve maximum reliable returns. The portfolio will have an average duration of no more than 5 years. • INVESTMENTS: • The investments are sovereign debt issued in Europe, US, Australian, New Zealand and Government of Canada. Currency is priced in US and Canadian dollar. Currency exposures are managed with hedges using options and futures.

12. Fairlane A Plus Bond Fund vs Globe Canadian Fixed Income Peer Index

13. Fairlane A Plus Bond – Monthly Returns 4% 0% 61 up 75.3% 20 down 24.7% Best Month: 4.23% April 2009 Worst Month: (1.16%) December 31, 2009 *Returns measured quarterly from Jan 2001 to Dec 2004 and monthly from Jan 2005 to Sept 2010 January 2001 to April 2011

14. Fairlane Credit Arbitrage Fund • OBJECTIVE: • The philosophy of the Fund is to opportunistically invest in credit where attractive risk adjusted returns can be captured. We seek the best values within the corporate bond market, understand them within a variety of market environments, take positions when we believe they are attractive and exit these positions when we feel they become less appealing. The objective is to invest when spreads are compelling, not to invest for the sake of deploying cash. The intention is disciplined security selection, rather than interest rate prediction. Anomalies in specific securities or sectors are identified through a rigorous evaluation process that utilizes fundamental analysis, credit analysis, historic time series, swaps and relative value. Government bonds are sold against securities to hedge market risk. • INVESTMENTS: • The portfolio will be a combination of investment grade credit, governments and provincials.

15. Fairlane Credit Arbitrage vs S&P 500

16. Fairlane Credit Arbitrage Fund: Leverage and Shorting • Leverage • Used to improve return profile of conservative investments • Currently using 2.8 times market value • Can be adjusted to suit client profile • Shorting • Short Canadian Government Bonds on a risk adjusted basis • Risk is monitored daily and adjusted weekly

17. Fee Information • Management fees annually cover: • office overhead • administrative staff • due diligence travel expenses • Performance fees (with high water mark) cover: • bonus pool for administrative staff • compensation for partners • Minimum account size: • 10 million Canadian dollars *A Plus Bond base fee 50 bps Credit Arbitrage base fee is 1%, performance fee is 15%

18. Why Invest with Fairlane? • Experienced • Solid track record • Focused on making money in absolute, not relative terms

19. The Ideal Fairlane Investor(Know your client) • Investment Size • investment does not represent more than 20% of net worth • investment does not tax the liquid financial resources of the client • accounts are segregated, therefore they are scaleable as well as transparent • Investment Horizon • minimum one year hold period, but prefer longer horizon • willing to take bad years with the good

20. Fairlane Team Philip Strathy Fixed Income and Small Cap Equities Vicki Hunter Fixed Income John Strathy Fixed Income Advisor Geoff McCrea Equity Arbitrage Rob Bradeen Equity Advisor

21. 30 St. Clair Ave West, Suite 1105 Toronto, Ontario M4V 3A1 t (416) 975-1920 f (416) 975-1933 www.fairlane-am.com | vcraig@strathy.com Contact