Spanish Investment Opportunity
LOS PANDOS VINEYARD - FINAL FUND

SPANISH INVESTMENT OPPORTUNITY - LOS PANDOS VINEYARD

Heredad Los Pandos is a specialist property development company involved in a broad spectrum of activities within the real estate and wine sectors. Land acquisition, licensing, financing, due diligence, project management, sales and marketing and product distribution are some of the services offered. The company has responded to the changing market and today offers unique products in areas that are still attractive to investors. Having worked in the real estate arena for many years, moving into development and complimentary investments was a natural progression. Heredad Los Pandos is the result of this progression and will cement the company's place in the market as a reputable, knowledgeable and responsible development company with a realistic vision for sustainable development that provides a lucrative investment schedule.

Martin & Clews S.L. is the proud owner of over 8.3 million sqm of land (more than 2,000 acres or 830 hectares) which boasts various activities and existing buildings. At the heart of Los Pandos is the historical cortijo style building (large country house with internal courtyard) dating back to the XVI Century. The important historical Battle of Almansa (the Spanish War of Succession) was fought on this land in 1707. The cortijo will be restored in the future and transformed into a boutique style hotel and leisure facility. 80 hectares (200 acres) of vineyard with more than 180,000 vines are planted on the estate, the majority of which are more than 20 years old. Ecological with no artificial irrigation system, the grapes grown are principally Monastrell. This grape will produce 3 varieties of red wine and an exquisite rosé. The vineyard currently produces approximately 300,000kg of grapes per annum, presently taken off site for the production of locally produced wines.

After several months analysing the grapes, soil and financial returns for the construction of a state-of-the-art bodega overlooking the vineyard, the decision has been made to bring wine production back to Los Pandos. The building works will commence summer 2009. Production in year 1 will be at least 100,000 bottles with the facility to extend to a maximum of 1,000,000 bottles p.a. The bodega will be fitted with the best fermentation machinery, storage tanks and bottling facility available on the market and the wine will mature in French oak barrels. The agronomist, Claudio Riera, in collaboration with the oenologist, is working on a plan to plant new vines for future production, including grape varieties such as Tempranillo, Shiraz, Merlot and Cabernet Sauvignon. There will also be an experimental area of the vineyard for the evaluation of other varieties of grape for both red and white wine.

Please send me more details and the new Los Pandos brochure

LOS PANDOS VINEYARD - THE INVESTMENT - FUND THREE - FINAL FUND

As an alternative investment vehicle to more traditional real estate products, Los Pandos offers real and tangible returns with flexible entry levels for all investors. With a set 2 year term, guaranteed returns and a clearly defined exit strategy, the investment is something which is not readily available in today's worldwide real estate markets.

The owners of Heredad Los Pandos (Martin & Clews S.L.) are inviting a select number of investors to join their third and final vineyard syndicate fund which will be used for the further development of the vineyard. Early signs suggest that demand for the final fund will far outstrip supply. Monies raised through the Vineyard Syndicate Fund Three will go towards the following development in the vineyard:

• Stage 2 soil testing
• Preparation and installation of weather stations
• A 2 year study into the exact plantation areas to determine which grape varieties are best suited
• Study into the requirements for machinery for the second phase of the bodega which will produce wine from different grape varieties
  

All of the above requirements are necessary to optimise the vineyard and its yield, based on its available output. This will have a significant and positive effect on the organisation's profit.

Investors can place funds upwards of €5,000 with varying rates of return (see below) in 2 years time:

Investments of €5,000 to €15,000 : 15% return over 2 years
Investments of €15,001 to €30,000 : 19% return over 2 years
Investments of €30,001 to €50,000 : 21% return over 2 years
Investments of €50,001 to €75,000 : 23% return over 2 years
Investments of €75,001 Plus : 25% return over 2 years

WHAT IS THE RETURN DEPENDANT ON?

The Founders' Syndicate is a seed capital investment opportunity, which gives a high return in a 2 year period. Martin & Clews S.L. undertakes to pay back the capital plus profit after 2 years and can comfortably do this. This is reflected by the agronomic report and the return is not subject to any sales of wine but simply covered by current farming yields. The owners can demonstrate their ability to pay back the investors in various ways:

• Current farm and vineyard profits which last year totalled €423,000
• Up to 50% grant from the Castilla la Mancha regional government on completion of building
• All monies invested are guaranteed with a unilateral mortgage charge
• The vineyard is part of a much larger eco-resort and the company has contracted revenues in excess of €14m, receiveable within the next 12 months

HOW IT WORKS

1. Money transferred to the developer's account will only be used for the purposes of achieving technical reports and building licenses for the pre-construction stage of the bodega.
   
2. A segregated plot of land will be used for the construction of the bodega and the total investment of €5m is secured with a unilateral mortgage charge to secure client investment. Investors have a secure mortgage charge in the land registry against the land and building. This means that invested sums are fully protected.
   
3. Two years after invested funds are received, the developer and owner of the bodega will have 30 days to return the initial investment plus the profit.
   
4. Throughout the investment term, investors will receive quarterly updates on the development.

Please send me more details and the new Los Pandos brochure

FREQUENTLY ASKED QUESTIONS

How many charges are registered on the land that secures this investment?
There are no other encumbrances on this land. According to Spanish Mortgage Law, mortgages must have a priority order. Any future borrowings would take second place, after the one that is already in place for this fund.

Crop failure?
The vineyard currently produces a profit in excess of €420,000 per year. Since the vineyard's inception two decades ago, there has been no crop failure. In addition, part of the initial fund raised will be invested in the improvement of quality and yield of the grapes. It's important to note that returns are not based on the vineyard profit.

What guarantees do I have for my investment?
A segregation in excess of 12 hectares (120,000 sqm) has been made in the land registry for the bodega plot. This is valued easily in excess of €10 per sqm without the building on the site. The total investment is secured by a unilateral mortgage charge in the land registry, thereby offering full protection of the invested funds.

Why don't we go to a bank for the finance?
The bodega will be built using private and public investment, as the general banking situation is extremely difficult on a worldwide scale. One of the funds primary objectives is to build a loyal investor base to whom we can present further exclusive investment opportunities to within the Los Pandos Eco Town over the course of the next 10 years.

Can an investor get money out of a syndicate before the end of a project?
The 'company' approach is no, as generally the funds are tied up in the project. However we would anticipate that in an emergency, it would be possible for us to find another investor to take up the opportunity.

When does the 2 years of the investment begin?
The 2 year investment starts when your funds are received in the Los Pandos Vineyard account.

Is this investment affected by worldwide credit crunch?
No. As the investment is being raised by loan agreements, we are not dependant on any kind of banking financing.

Are there any other costs or charges?
No, the fund does not have any set up, ongoing or closing fees. At the end of the term we return your invested amount plus the % return as detailed in the brochure.

What if they cannot sell the wine?
This investment is not affected by the sale of the wine, as the first year of production will be at least 2 years after your loan has been repaid. This investment is a stand-alone structure using company and farm revenues.

Please send me more details and the new Los Pandos brochure

SUMMARY

The vineyard itself is already a working vineyard and the vines are over 23 years old. Last year alone, 300,000 kg of grapes were sold to local producers and a net profit of €423,000 was made. The yields are due to be improved in the following years due to farming methods and new irrigation. When we reach a certain investment level of self finance, then we do have an additional credit line. When we have built the bodega in 2 years time the Castilla la Mancha regional government will give us 50% of the build cost back by way of a grant because it falls under their agri–food grant scheme policy.

GUARANTEE

The vineyard's 200 acres represents only 10% of the total land owned by the company. Ambitious plans are afoot to develop the area into an eco-town and the vineyard will become the centre piece of this in coming years. The initial aim and present focus is the regeneration of the vineyard by bringing back wine production. Due to its agricultural status, the vineyard is considered a "project of singular interest" and is therefore not subject to any planning law. Client monies have been secured by segregating a section of land where the bodega will be constructed. Clients' capital AND interest are secured by way of a charge on this land. This is registered in the land registry in the name of all investors in the project.

In simple terms, clients loan the money to the company, the company lends the money to the vineyard and this is secured by the way of a charge on the land. This system of investment means that at the end of the 2 year investment period, in the event that we do not pay back every single investor, they have instant rights to the land (which would be sold to pay back the loans). This land is currently undergoing a major planning application for an eco-town development plan.

Please send me more details and the new Los Pandos brochure

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