Keys to the Kingdom

Kathy Gregory

Experienced entrepreneurStarted a software company

15 years experience as a real estate agentVP of mortgage lending for a Canadian bank

Started Pardigm Mortgage processing company

ParadigmCurrent Situation

• Provides business processing outsourcing services to mortgage lenders in Canada

•Sub prime crisis was hitting US....Canada stricter finance rules helped them avoid similar crisis but the effects were felt around the world.....money started to dry up

•In canada, start up and foreign institutions started entering the mortgage lending industry in Canada........

•The mortgage market became more competitive

•Kathy identified an opportunity to provides these new lenders with the services to facilitate mortgage processing, lines of credit, and home equity loans

•She would customize her services according to the finance rules....of each unique market she served

•Paradigm quickly became successful, administering 3 billion of mortgages

It doubled to 6 billion one year later

Rev grew to 29 million

Earnings before interest, taxes, deprecation... were 4 million

Offices in Toronto and Vancouver

147 employees

They provided superior customer service

Conducted audits to ensure accuracy and to mitigate risk, and follow best practices for the

industry developing a solid reputation

In 2007 paradigm started working with Canadian Muslims

They identified an opportunity to develop sharia compliant mortgages

Sharia is Islamic law.....illegal to pay for the use of money.....the bank would have to buy the property and the buyer would have

to make payments to buy it from the bank at a higher priceNo late fees are applied

The bank asks for collateral but the property is in the name of the buyer????

Saudi investors wanted paradigm to help them build a mortgage business in Saudi

The Saudis were well educated and had the moneyThe saudis had experience in construction, oil, insurance,

equipment leasing

The Saudis would create a new company that would sell mortgages to low and middle income

families

A joint partnership would be created between paradigm and tlc, the Saudi company

10 million in start up capital would be needed

Of which paradigm would put up 1 to 2 million

Paradigm would own 40% of company

Meanwhile, the sub-prime crisis affected markets around the world and the recession hit

As governments tried to shore up financial institutions, banks stopped lending ..... With a

recession looming for the foreseeable future, they decided to put the joint venture on hold...........

SAUDI DEMAND FOR REAL ESTATE

91% of Saudis lease houses42% want to own

66% could afford to buyDef a growth market

Mortgage financing low in Saudi 2% of GDPStudies show that the Saudi real estate has huge

growth potential

Current Competition in Saudi Arabia

Real Estate Development Companies - provides interest free loans, many of which have been defaulted on

Public pension agency - purchased homes for government employees and the military

Saudi credit and savings bank

Other commercial banks

Mortgage Finance Companies

A coalition of four companies formed to fund housing projects

All knowledgeable in sharia finance law

Gregory and Saudis believe

There is little competitionThere is a high demand for mortgages

A new finance co would increase awarenessA pending real estate mortgage law would drive

demandThe new law would provide protection to lenders

And increase home ownership

CENTRAL QUESTION

Should Paradigm form the joint venture and enter the Saudi market?

Present Adv and Disadvantage

Growth opportunity to enter new marketProvides experience for entering other muslim markets in the futureYoung company with limited resourcesReal estate was a sketchy market at this pointCultural and religious differences huge.....Saudi is THE most restrictive country!Women have no rights in this country!!!!!!!!!Possibility of Anti-American partners......Market not well regulatedNot certain what the new law will look like

Pertinent Questions

Would you do business in SaudiWhat are the risks.....The ambiguity of the

pending lawWhat about the competition in Saudi..... The

newly formed coalitionDo you have employees who known language

and cultureAre the financial terms of the deal favorable

to ParadigmDoes Paradigm have the resources to enter

this market