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101785865_4.DOC

EATON ACTIVE SPECIAL OPPORTUNITY PROPERTY FUND

Investment Memorandum

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action you should take, you should immediately consult a person who

specialises in advising on the acquisition of or subscription for shares.

EATON ACTIVE SPECIAL OPPORTUNITY PROPERTY FUND (the "Fund") (a cell of a protected cell company called the LLP Property PCC Limited (the “Company”) which is

incorporated in Guernsey and registered with number 47141 and is a Registered Closed-Ended Investment Fund)

The Directors of the Company, whose names appear under the heading "Directors of the Company" on page

4, collectively and individually accept responsibility for the accuracy of the information in this Investment Memorandum. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Investment Memorandum is in accordance

with the facts and does not omit anything likely to affect the import of such information.

This Investment Memorandum contains general information relating to the Company and specific details relating to the Eaton Active Special Opportunity Property Fund only and not of any other cells.

OFFER FOR SUBSCRIPTION

This offer of securities is not made to members of the public in the Bailiwick of Guernsey. It is not subject to the Prospectus Directive (Directive 2001/24/EC) because, inter alia, it is an offer of securities by a closed-ended company addressed to investors who subscribe for or acquire securities for a total consideration of at least £50,000 per investor. Section 85 of the Financial Services and Markets Act 2000 (as amended by the Prospectus Regulations 2005) requires a prospectus to be produced and approved by the Financial Services Authority when an offer of securities is made to the public in the United Kingdom. In this case, please note that no such prospectus has been or will be produced for this investment on the basis (inter alia) that any offer will be made to or directed at "qualified investors" (as defined in the Prospectus Directive) only and/or the minimum investment total consideration is £50,000.

This document is a financial promotion of the Eaton Active Special Opportunity Property Fund (“the Fund”) by the Company which has been approved by LLP Services Limited (authorised and regulated by the Financial Services Authority).

Prospective investors should be aware that investment in the Fund involves a high degree of risk. The value of an investment in the Fund may go down in value and investors may not get back the amount originally invested. The investment may be illiquid until the Fund is wound up. Prospective investors should review the “Risk Factors” set out on pages 5 to 8 of this document.

Applications can be made directly to the Fund or to John Rawicz-Szczerbo (e-mail [email protected]) and/or to Michael Chandler (e-mail: [email protected]) of LLP Services Limited at 36 St George’s Wharf 6 Shad Thames London SE1 2YS (tel: 020 7357 9090).

The latest time and date for application is 3pm on 29 May 2009

mailto:[email protected]

mailto:[email protected]

101785865_4.DOC

Persons interested in acquiring Shares should inform themselves as to:

the legal requirements within the countries of their nationality, residence, ordinary residence or domicile for acquiring, holding and disposing of such Shares;

any foreign exchange restriction or exchange control requirements which they might encounter on acquisition, holding or disposal or Shares;

the taxation consequences which might be relevant to the acquisition, holding or disposal of the Shares; and

their eligibility to participate in the Fund.

The distribution of this document and the offering of Shares in certain jurisdictions may be restricted and, accordingly, persons into whose possession this document comes are required to inform themselves about and to observe any such restrictions.

This document does not constitute, and may not be used for the purposes of, an offer or solicitation by any person in any jurisdiction (i) in which such offer or solicitation is not authorised or (ii) in which the person making such offer or solicitation is not qualified to do so or (iii) to any person to whom it is unlawful to make such offer or solicitation.

Statements made in this Investment Memorandum are based on the law and practice in force at the date hereof and are subject to changes therein. Neither the delivery of this Investment Memorandum nor the issue of the Shares shall, under any circumstances, imply that there has been no change in the circumstances affecting any of the matters contained in this Investment Memorandum since the date of the document.

The attention of prospective investors is drawn to the fact that the investments of the Fund in immovable property will be long-term and of a relatively illiquid nature. Property is also cyclical in terms of movements in capital value. The profits of the Fund are likely to be in the form of capital gains payable on the winding up of the Fund after a five year time period. Investors should not expect any income to arise from the Fund prior to that date. The acquisition of Shares in the Fund should therefore in turn be regarded as a medium term investment subject to the same conditions.

Application forms from prospective investors wishing to subscribe for the Shares must be received by the Administrator on behalf of the Fund together with the relevant bank draft or cheque or a telegraphic transfer of funds at least 5 days prior to the end of the Offer Period. An application form is attached.

Consent under the Control of Borrowing (Bailiwick of Guernsey) Ordinance 1959 to 2003, as amended, has been obtained for the raising of up to £30,000,000 by the issue of the Shares. To receive such consent, application was made to under the Guernsey Financial Services Commission's framework relating to Registered Closed Ended Funds. Under this framework, neither the Guernsey Financial Services Commission nor the States of Guernsey Policy Council has reviewed this document but instead have relied upon specific warranties provided by the Guernsey-licensed Administrator of the Company. Neither the Guernsey Financial Services Commission nor the States of Guernsey Policy Council takes any responsibility for the financial soundness of the Company or for the correctness of any of the statements made or opinions expressed with regard to it.

As a Registered Closed Ended Investment Fund, the Company may not offer its shares directly to the public within the Bailiwick of Guernsey.

The Promoter and the Administrator have put in place measures to ensure that the Fund is not offered directly to the public within the Bailiwick of Guernsey. The Fund has not engaged a "Principal Manager" in Guernsey. The Directors will rely principally on advice from the Property Adviser and in limited circumstances only from the Promoter.

Prospective investors should not treat the contents of this document as advice relating to legal, taxation, investment or any other matters and are recommended to consult their own professional advisers concerning the consequences of their acquiring, holding or disposing of Shares.

This Investment Memorandum is dated 18 December 2007

TABLE OF CONTENTS PAGE NOS

1. SUMMARY OF THE INVESTMENT PROPOSITION ........................................................................ 1

2. DIRECTORS, PROPERTY ADVISER, ADMINISTRATOR, ADVISERS AND OTHERS .................. 4

3. RISK FACTORS ................................................................................................................................. 5

4. WHY INVEST IN UK AND CHANNEL ISLANDS COMMERCIAL PROPERTY ............................... 9

5. TRACK RECORD OF THE PROPERTY ADVISER'S TEAM .......................................................... 12

6. INITIAL SEED PROPERTY ............................................................................................................. 13

7. FEES AND EXPENSES ................................................................................................................... 14

8. TAX CONSIDERATIONS ................................................................................................................. 16

9. SUBSCRIPTION AND WINDING UP ............................................................................................... 18

10. GENERAL INFORMATION .............................................................................................................. 19

11. DEFINITIONS ................................................................................................................................... 24

12. HOW TO APPLY .............................................................................................................................. 26

EATON ACTIVE INVESTMENT MEMORANDUM (WEBSITE).DOC 1

1. SUMMARY OF THE INVESTMENT PROPOSITION

1.1 THE COMPANY

The Company is a Guernsey protected cell company (“PCC”). It’s registered address is PO Box 119 Martello Court, Admiral Park, St Peter Port, Guernsey GY1 3HB. A PCC can be thought of as being similar to a limited company that has been divided into legally distinct cells. The revenue streams, assets and liabilities of each cell are kept separate from all other cells. The investors in each cell will have rights to the profits arising from such cell. A PCC is a legal entity and provides legal segregation and protection of assets and liabilities for each cell. The benefit of having a cell of a PCC is a significant reduction of the establishment and running costs of the each cell, notably legal, distribution and administrative costs. The same lawyers, directors, auditors, promoters and administrators may be involved in connection with other cells of the PCC. The Eaton Active Special Opportunity Property Fund cell of the Company may own the shares of trusts or companies acting as special purpose vehicles ("SPVs"). Each SPV may own and purchase the properties in the UK and/or the Channel Islands.

The Property Adviser is Eaton Investment Management Limited, a subsidiary of LTC Holdings plc. The Property Adviser will act as the property adviser to the Fund. It will provide advice on property issues to the Fund. It will liaise closely with the Administrator and Directors of the Company. Each proposed property acquisition, development and disposal will be assessed by the board of the Company who will have to approve each transaction.

The Company's Investment Objectives and Restrictions

The objective of the Company as a whole is to carry on business as an investment company specialising mainly in property and land. The objects of the Company (and thereby, the Fund) are set out in full in paragraph 3 of the Company’s Memorandum of Association.

There are no material investment restrictions in the Company's Memorandum of Association.

Distribution Policy

It is not currently intended that any dividend will be paid to holders of Shares. Income received from the investments of each Cell is likely to be reinvested and thus reflected in the net asset value of the relevant Cell.

1.2 THE FUND

The Fund is a Cell of the Company. The Fund may own Guernsey SPVs. Each SPV may own and purchase the properties in the UK and/or the Channel Islands.

The Property Adviser

Eaton Investment Management Ltd is a newly formed subsidiary of LTC Holdings plc, registered in Guernsey with company number 06235627, which will be dedicated to provision of property advisory services to the Fund. The directors of the Property Adviser are also directors of LTC Holdings plc. The Property Advisor is an introducer appointed representative of LLP Services Limited (the "Promoter").

LTC Holdings plc is a successful UK property investor and developer. It is now looking to become an adviser on property funds. Richard Smith (Executive Chairman) and Geoffrey Griggs (Non-Executive Director) are the directors in charge of this project.

LTC Holdings plc is one of the largest unlisted former Business Expansion Scheme companies, with over 1,100 private shareholders. It has grown organically and by corporate acquisition and built a diverse property investment and development portfolio. It is registered in England, company number 2570517.

Investment Objective

To deliver a consistently good performance from an individually selected portfolio of predominantly commercial properties in the UK and/or the Channel Islands with a target rate of return of at least 20% compound per annum.

The investment performance is to be achieved by the careful purchasing, development and management of such properties with a view to resale in the medium/long term at a profit.

Investment Strategy

To purchase primarily commercial property in the UK and/or the Channel Islands and to enhance its value.


As explained below, the Fund may exercise an option over the shares of a company which in turn holds a single commercial property with multiple tenants (the "Initial Seed Property") with a view to enlarging the property and further enhancing its value by means of obtaining beneficial planning permissions.

However, it is intended that the Fund will invest in several property assets in different locations thus diversifying risk for Shareholders. The Fund will rely on the advice of the Property Adviser and its professional advisers.

There is no specific limit placed on the minimum number of properties to be held by the Fund or the value of each such property or the location of any property. Decisions relating to property matters will be made by the Directors of the Company, advised by the Property Adviser with the objective of achieving a cumulative 20% return per annum on the Fund. The Property Adviser will be responsible for identifying and analysing potential purchase and sale opportunities. The Property Adviser will also manage, subject to approval of the board, projects to obtain planning permission or to prepare or enlarge properties and all other matters relating to the administration and management of the properties.

Decisions relating to investment matters will be made by the Directors of the Company and advice may be provided by LLP Services Limited (the Investment Adviser to the Company) where any regulated activities may be conducted in the UK.

Borrowings

There are no restrictions on the amount of borrowing by the Fund. However, it is anticipated that the property portfolio rental stream will enable the Fund to borrow around 60-70% of the portfolio value. In property terms these are reasonable levels of leverage. Leverage will be sought from suitable bankers. Fortis Bank (C.I.) Limited may be asked to consider other lending opportunities along with other bankers. This borrowing enables the Fund to increase exposure to the capital upside whilst maintaining a conservative approach to net annual cashflow. This size of portfolio provides for a good spread of locations and lot size that should produce an attractive variety of asset management opportunities.

Initial Seed Property

The Fund has entered into an put/call option deed with LTC Holdings plc to purchase the entire issued share capital of Eaton Commercial Properties Exeter Limited for £3.2 million together with any expenditure incurred by such company relating to the Portland House in Exeter. This company is the freehold owner of Portland House in Exeter city centre, a commercial office property that benefits from all the characteristics upon which the Fund will focus. Details of the property and the option agreement can be found in the section headed "Initial Seed Property" on page 13 of this Investment Memorandum.

Investment Period

The Investment Period shall be five years. The Investment Period may, on the recommendation of the Directors, be extended for a period of two years on the basis of adverse market conditions were difficult and if the Directors of the Company believed that the performance objective of the Fund will be better achieved with an extension. Alternatively, in circumstances where the Fund has been successful in the opinion of Directors, the Directors may ask investors to approve arrangements to extend the life of the Fund in order to match investors who wish to sell their shares with buyers, and possibly to raise additional capital. Any extension would require the approval of an Ordinary Resolution.

An Ordinary Resolution to wind up the Fund will be put before the Shareholders at the AGM at the end of the Investment Period.

Summary of Risk Factors

The shares in the Fund may go down in value and you may not get back the amount originally invested. Due to the envisaged level of borrowing by the Fund, the risk that the value of property assets may fall in value is magnified significantly should a fall in property values occur. Property investments are relatively illiquid and in some circumstances it may prove difficult to dispose of them at a reasonable price or at any price. The value of investment property may be adversely affected by a reduction in the demand for such property in the local rental market and this in turn may be affected by general economic growth factors such as the level of interest rates, levels of employment, etc.

The Shares are likely to be a relatively illiquid investment and you may not be able to sell your Shares prior to the winding up of the Fund.

Please refer to the section headed "Risk Factors" in Section 3 of this Investment Memorandum for a detailed explanation of risks.


Base Currency

The base currency of the Fund is Pounds Sterling.

Minimum Investment

The minimum investment is £50,000.

Fees Payable to the Property Adviser

The Property Adviser shall be entitled to:

an annual management fee equal to 1% of the acquisition cost of each of the properties purchased by the Fund, payable in quarterly instalments;

activity fees equal to 1% of the value of property on acquisition or disposal; and

a Performance Fee is payable on the winding up of the Fund where returns to investors exceed the Benchmark Return (an IRR of 12% compounded annually). Investors are entitled to 100% of the returns up to the Benchmark Return. To the extent that the annualised IRR of the Fund (from the last day of the Offer Period until any resolution to wind up the Fund) exceeds 12% but does not exceed 20% per annum, the Performance Fee shall be 25% of returns in excess of the Benchmark Return. To the extent that the annualised IRR of the Fund over such period exceeds 20% per annum, the Performance Fee shall be 35% of the returns. The Performance Fee is due to be shared on a 50:50 basis between the Property Adviser and the Promoter.

Details of these fees are set out in the section headed "Fees and Commissions" in Section 7 of this Investment Memorandum.

Marketing Fees and Commissions

The Promoter will be paid marketing fees equal to 2.5% of the gross subscription monies.

Introducers may be entitled to an initial commission of up to 6% of the investment amount. The Promoter may also pay a proportion up to 5% of any Performance Fees that it receives as commission to introducers.

Investors

This Investment Memorandum is primarily aimed at residents of the United Kingdom.

It is structured so that SIPP and SSAS investors may participate.

This Investment Memorandum is not aimed at anyone in any jurisdiction where such promotion would be illegal, notably the United States of America. It is primarily aimed at residents of the United Kingdom.


2. DIRECTORS, PROPERTY ADVISER, ADMINISTRATOR, ADVISERS AND OTHERS

Directors of the Company

Ian Hunt

Rick Denton Robert Guest

Directors of the Property Adviser

Richard Smith Geoffrey Griggs

Promoter and Investment Adviser

LLP Services Ltd 36 St Georges Wharf

6 Shad Thames London SE1 2YS

Legal Advisors as to Guernsey Law

Carey Olsen 7 New Street

Guernsey GY1 4BZ

Property Adviser

Eaton Investment Management Limited 28 Old Church Street

London SW3 5BY

Legal Advisors as to English Law

Beachcroft LLP 100 Fetter Lane

London EC4A 1BN

Administrator and Secretary

Fortis Fund Services (Guernsey) Ltd PO Box 119

Martello Court Admiral Park St Peter Port

Guernsey GY1 3HB

Bankers in Guernsey

Fortis Bank (C.I.) Limited PO Box 119

Martello Court Admiral Park St Peter Port

Guernsey GY1 3HB

Auditor

Colin Pickard & Company PO Box 511

Borough House Rue du Pré

St Peter Port Guernsey GY 1 6DU


3. RISK FACTORS

In addition to all other information set out in this document, the following specific risk factors should be considered carefully in evaluating the merit and whether to make an investment in the Company (and thereby the Fund). The information contained in this section is not intended to be an exhaustive listing of all potential risks associated with an investment in the Company. If you are in any doubt about the action you should take you should immediately consult your stockbroker, bank manager, solicitor, accountant, or other independent professional adviser authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities.

The Directors believe the following risks to be the most significant for potential shareholders. The risks listed, however, do no necessarily comprise all those associated with an investment in the Fund and are not intended to be presented in any assumed order of priority or to be exhaustive. In particular, the Fund’s performance may be affected by changes in legal, regulatory or tax requirements in any of the jurisdictions in which it or its subsidiary companies operate or intend to operate as well as overall global financial considerations.

Potential Shareholders should also take their own tax advice as to the consequence of their owning shares in the Fund as well as receiving returns from it.

Investor profile

This offer is made to investors who are prepared to invest a minimum total consideration of £50,000 for the Shares. It is also made to or directed at qualified investors within Article 2.1(e)(i) of the Prospectus Directive.

This is a high risk investment and Shareholders may lose a substantial portion or even all of the money they invest in the Fund. An investment in the Fund is, therefore, suitable only for investors who are capable of evaluating the risks and merits of such an investment and who have sufficient resources to bear any loss that might result from such an investment. Such an investment should be seen as complementary to existing investments in a wide spread of other financial assets and should not form a major part of an investment portfolio. Investors should not consider investing unless they have a diversified investment portfolio. Investors should recognise that the price of securities and the income from them can go down as well as up. The price of Shares in the Fund may not reflect the underlying value of its assets.

Such an investment should be seen as medium-term in nature and complementary to existing investments in a range of other financial assets and should not normally form a major part of an investment portfolio.

An investment of this type is only suitable for financially sophisticated investors who are capable of evaluating the merits and risks of such an investment and who have sufficient resources to bear any losses which may arise there from (which may be equal to the whole amount invested).

No representation is or can be made as to the future performance of the Fund and there is no guarantee that the Fund will achieve its investment objective.

Investors should note that the property portfolio will be made up of relatively illiquid investments.

Business risk

There can be no assurance that the Fund will achieve its investment objectives. The investment results of the Fund will be reliant upon, amongst other things, the success of the Property Adviser’s strategies and advice.

Fundamentally, the success of the Fund depends on the skills and ability of the Property Adviser to purchase commercial property and to enhance its value.

Further performance

Past and current performance does not imply that future trends will follow the same or a similar pattern. Projections (if any) made in this document may not be achieved. Shareholders may not get back the full value of their investment and in certain circumstances Shareholders could lose all of their investment. The value of Shareholders’ investment could go down as well as up. This may be a function of changed market conditions including an adverse movement in exit yields.

Diversification

The Fund is likely to purchase one property at a time, through SPVs, to build up a small portfolio. The Fund will therefore hold a relatively small number of properties and this will be a relatively concentrated portfolio. There is a risk that one poor investment could materially adversely affect the performance of the Fund.


General investment and trading risks

All of the Fund’s investments present the risk of a loss of capital. Such investments are subject to investment-specific price fluctuations as well as to macro-economic, market and industry-specific conditions, including, but not limited to, UK economic conditions, UK financial policies and performance, governmental events and changes in tax laws. Moreover, the Fund may only have a limited ability to vary its investments in response to changing economic, financial and investment conditions.

Shareholder governance

Shareholders do not participate in the day to day management of the Fund or in the investment decisions made by the directors of the Company for and on behalf of the Fund. The Fund is dependent on the skills and experience of the directors and the Property Adviser and may be adversely affected if their services or the respective services of any of the Property Adviser’s key personnel cease to be available to the Property Adviser. The directors of the Company and Property Adviser and others who are involved in the operation and/or management of the Fund will spend time on matters other than the affairs of the Fund. In particular it is envisaged that the directors of Company may be involved in advising other cells of the Company or funds which may have similar or overlapping investment objectives to or with those of the Fund. The directors of the Company and the Property Adviser will endeavour to ensure that the performance of their respective duties will not be impaired by any such involvement that they may have and that any conflicts which may arise will be resolved fairly.

In the case of issues where the directors or the Property Adviser are in any doubt as to whether they have a conflict, the Administrator will be requested to determine the conflict and its decision will be final and binding.

Liquidity: Shares

Neither the Company nor the directors are providing or guaranteeing a market for the Shares. There is no guarantee that the Shares may be sold prior to expiry of the Fund or if a sale is practicable, that the sale price were to reflect the net asset value per Share of Shares in the Fund.

Liquidity: Property

The Fund will be trading primarily in commercial property in the UK and the Channel Islands.

The Fund’s investments may be relatively illiquid. This may make it difficult to acquire or dispose or investments. At times it may be difficult to obtain reasonable price quotations at all, for example in the event of a political or economic crisis. The Fund may therefore be adversely affected by a decrease in market liquidity for the assets in which it invests.

Returns

No representation can be or is deemed to be made as to the future performance of the Fund.

Information

The information given in this document is taken from current and reputable sources. The data in the above sections has been sourced from a number of sources which are detailed in the relevant section as appropriate. However no guarantee can be given that any such information is accurate.

Property values

Property investments can perform in a cyclical nature and values can increase or decrease. Economic, political and legal issues can affect property values as they can any other investment.

The performance of the Fund would be adversely affected by a downturn in the property market and other property markets, in terms of capital value and/or a weakening of rental yields.

The time that it may take to sell the properties held by the Fund will be affected by market circumstances and the time-scales for a success of any sale cannot be pre-determined.


Planning risk

There is a risk that planning consents may not be obtained or may be delayed significantly or granted subject to conditions. There is a risk that laws may be introduced which may be retrospective and affect existing applications which restrict development in coastal areas or areas of natural beauty.

There is a risk of title disputes, legal disputes with neighbouring land owners and legal disputes with architects, local government, governmental authorities and the like.

Valuation Risk

Property assets are inherently difficult to value due to the lack of marketability and unavailability of suitable information for determining current value of investments. As such valuations are subject to uncertainty.

Finance and borrowing

The Fund or any entity owned directly or indirectly by the Fund may use borrowing for the purpose of making investments. The Fund may borrow up to 2.5 times the equity capital invested in the Fund. The use of borrowing creates special risks and may significantly increase the Fund’s investment risk. Borrowing creates an opportunity for a greater yield and total return, but, at the same time, will increase the Fund’s exposure to capital risk and interest costs. Any investment income and gains earned on investments made through the use of borrowings that are in excess of the interest costs associated therewith may cause the value of the Fund to increase more rapidly that would otherwise be the case. Conversely, where the associated interest costs are greater than such income and gains, the value of the Fund may decrease more rapidly than would otherwise be the case.

The facilities granted by the bankers to the Fund may be terminated in certain circumstances which may adversely affect the Fund.

Economic Risks

The financial operations of the project may be adversely affected by general economic conditions, by conditions within the UK commercial property market or by the particular condition of vendors and other parties associated with land surrounding that held by the project.

Compensation scheme

The Financial Services Compensation Scheme, or similar protection for investors, is not be available for claims. There is no compensation scheme in Guernsey provided by the States of Guernsey, the Guernsey Financial Services Commission or any other body in Guernsey.

Substantial fees payable regardless of profit

The Fund will incur obligations to pay costs. The Fund will also incur obligations to pay the fees of the Administrator, the Investment Adviser, the Property Adviser, Auditors and all operating, legal, accounting, auditing, marketing, travel, directors’ and other fees and expenses. These expenses will be payable regardless of whether the Fund makes a profit. For further information, please see the section titled “Fees and expenses”.

Transaction costs

The Fund’s investment approach may generate substantial transaction costs, which will be borne by the Fund.

Competition

The property industry in UK is extremely competitive. In pursuing its investment objectives and policy the Fund will compete with many other funds and firms. In relative terms, the Fund may have little capital and may have difficulty in competing in markets in which its competitors have substantially greater financial resources, larger research staff and more investment professionals than the Fund has or expects to have in the future.

Tax considerations

Any changes to the taxation environment or a change in the tax treatment of the Fund may affect investment returns to Shareholders and each Shareholder will have to consider his own tax position and take his own advice on this matter.


Regulatory risks

The regulatory environment is evolving and changes therein may adversely affect the Fund. In addition, the environment in which the Fund operates is evolving and may be subject to modification by government or judicial action which may adversely affect the value of the investments held by the Fund. The effect of any future regulatory change on the Fund is impossible to predict.


4. WHY INVEST IN UK AND CHANNEL ISLANDS COMMERCIAL PROPERTY

Against a backdrop of rising interest rates and increased volatility in the financial markets, there has been a reassessment of risk amongst various asset classes. In the commercial property sector, the Property Advisers take the view that that certain sub-sectors are due for a correction and may be affected further by liquidity problems in the wholesale credit markets. The Property Adviser envisages rental yields starting to rise with values stabilising or falling in the short term. Therefore, traditional buy and hold investment strategies are now unlikely to produce above average returns.

But as the market undergoes its current phase the Property Adviser anticipates that bargains will be available and that certain properties, including those in the Fund's target sector, may be overly discounted. This, the Property Adviser believes, will present the Fund with attractive opportunities which it can exploit, providing investors with sustainable double-digit returns. This can be achieved by the selective and opportunistic acquisition of targeted properties which have low built density and which therefore offer scope to unlock significant value by securing beneficial planning consents for future redevelopment. In addition the Property Adviser will be seeking to apply other asset enhancement techniques which along with anticipated rising rental yields will further improve returns. The Property Adviser calls this the Active Strategy.

As part of a balanced investment portfolio, UK commercial property investment continues to present an asset class with the benefit of being relatively uncorrelated to other types of investment and has a lower general volatility compared with equities or bonds. These attractive characteristics are enhanced by the higher returns to be derived from a strategy which is highly selective in acquisition terms combined with a professionally aggressive and distinctive asset management approach.

The Active Strategy

The Fund will be aggressively targeting commercial properties with the following key characteristics:

Good and improving locations

Low built density

Potential to obtain capital enhancing planning consents

Favourable macro economic prospects for the city and region

Sound rental income

Above average rental yields

Scope for restructuring leases and improving income

Other asset management angles

Typically, the kind of property which meets these criteria is around 20 years old, with a relatively low built density (constructed at a time of restrictive planning) and is multi-occupied. The building may look dated, but its fabric is in reasonable order and its underlying location is good. This type of commercial real estate can produce good annual income yields during the holding/investment period.

The targeted property generally will be located in a city centre where there is an established regeneration programme and inward investment which are expected to give rise to improving real estate values in that locality.

The low built density offers scope to significantly enhance the underlying capital value by negotiating beneficial planning consents for future redevelopment with the local planning authority. Government guidelines now encourage greater built densities in urban areas. Many councils are now keen to implement this approach to ensure the improvement to the fabric and sustainability of their city centres.

It is also envisaged that other proactive asset management techniques will be applied to add or release value. For example, the leases can often benefit from rationalisation and updating, with tenants willing to pay a higher rent in return for a rearrangement of liabilities and certain improvements to the common areas (such as car parks and reception areas). In other cases it is advantageous to negotiate with tenants to release space and optimise internal configurations to increase rents to improve overall returns during the holding period.

It is important to note that whilst the Fund expects to add substantial value through planning gain it is not intended that actual development or reconstruction will be undertaken during the life of the Fund. When the Fund matures it is envisaged that the properties will be sold on to developers. Therefore the Fund (and investors) are not exposed to development risk and the priority return to investors is not dependant upon any development profit. The Initial Seed Property possesses all the key characteristics that we are seeking and to which the Active Strategy can be applied.


Board of Directors

The Board of the Company will have three Executive Directors. Each of the Directors, following advice received from the Property Adviser, has responsibility for the investments acquired by the Fund.

Richard Lovel Denton BA (Hons) TEPdip MSidip ACIB MBA

Richard is currently an Executive Director of Fortis Reads International Management Ltd and a Member of the Management Board of the Fortis Intertrust (Guernsey) Group. Richard was formerly a Senior Executive of Bank of Bermuda responsible for its European Private Banking and Trust operations throughout Europe (2001-2004) and previously with Bank of Bermuda, Group Marketing Director and locally in Guernsey, Managing Director of Bermuda Trust (Guernsey) Limited 1999 – 2001.

He was Senior Resident Officer of Coutts in Guernsey and Head of Marketing and Sales for their Offshore Group (1997 - 1999). Prior to moving to Guernsey, Richard was employed by the Coutts Group in London where he was Group Head of Strategy and Planning, and Business Development for their UK and international business.

Richard is a graduate from Nottingham University. He is a qualified banker (Associate of the Chartered Institute of Bankers); Trustee (Trust and Estate Practitioner and holder of STEP Diploma) and investment manager (Member of the Securities Institute), as well as having a Masters in Business Administration with Distinction from Warwick University. He has extensive business experience of fund structures in Guernsey and international pension vehicles, as well as offshore structuring).

Ian Hunt With over twenty years experience of the offshore fund environment in Guernsey before recently joining Fortis Ian has held several senior posts including Operations Director at Royal Bank of Canada Offshore Fund Managers, Director and Head of Funds at Bachmann Fund Services and Director and Head of Collective Investment Schemes at Kleinwort Benson Fund Services.

Ian has served on the boards of numerous closed ended and open ended funds as well as investment management companies and is currently a Director of Fortis Fund Services (Guernsey) Limited.

Ian is a member of the Securities and Investment Institute and a member of the Institute of Directors.

Robert Guest BA (Oxon)

Robert joined Beachcroft LLP as a partner in the Financial Institutions Group on 2 May 2006. He was previously a partner at Field Fisher Waterhouse dealing with split capital investment trusts, fund management start-ups and general advice to a wide range of brokers, hedge fund managers, banks and commodities brokers.

He was General Counsel and Compliance Director at SG Asset Management with Nicola Horlick, John Richards and Keith Percy (1997-2003). This was a start up backed by Societe Generale. It raised approximately £7,000,000,000 in funds under management in 5 years. It established ranges of retail and institutional funds and later managed some hedge funds. However, its main business was the management of segregated mandates for pension funds.

Robert held a similar position at Johnson Fry (1994 -1997) which was taken over by Legg Mason. Johnson Fry was a small publicly quoted company with a wide range of innovative tax-based products for private investors. It was well-known for promoting companies under the Business Expansion Scheme. It subsequently developed a range of unit trusts, investment trusts, enterprise zone unit trusts, fixed return PEPs and ISAs, insurance bonds and other products.

Robert is a member of the Securities & Investment Institute and of the Compliance Institute (legal adviser). He was a former Chairman of the Legal Advisory Committee of the Investment Management Association. He gives regular lectures on MiFID, financial promotions, senior management responsibilities, outsourcing, etc.

Robert Guest is also a non-executive director of LLP Services Limited


The Property Adviser's team

The Property Adviser has a highly experienced team with an excellent track record in acquiring the type of property and producing the levels of returns on equity sought by the Fund.

Senior members of the Property Adviser's team:

Richard Smith – Chief Executive

Richard qualified as a chartered surveyor with DTZ Tie Lung, and has over 25 years’ experience in the property investment and development industry. He has founded and directed the property investment strategy of several property investment vehicles including the Hunter BES stable of companies and Artesian Estates which merged with two sister companies and floated on the London Stock Exchange in 1999. He founded Hawksworth Management Limited in the 1990’s which promoted and managed over £30m of investment funds. Hawksworth was sold to LTC Holdings plc in 1998 and he was appointed Chief Executive of LTC in the same year. Richard is also Chairman of publicly quoted property services group HML Holdings plc.

Richard will direct the Fund’s property and asset management strategy with a particular focus on the potential for planning gain.

Geoffrey Griggs – Finance Director

Geoffrey qualified as a chartered accountant in 1978 with KPMG in the City and then moved to Spicer and Pegler where he became director of finance. He was later appointed managing director of MM&K Limited, a firm of City based specialist financial advisers, at the time of joining an associated company of Morgan Grenfell. He has been a director of a wide range of companies and is a Fellow of the Securities and Investment Institute and a Fellow of the Royal Society of Arts.

Geoffrey will oversee and optimise the Fund’s financing structure, the financial reporting to investors and will advise on strategic issues.

Timothy Matthews – Acquisitions

Tim trained with Moretons in Central London and has over 12 years experience in property investment, asset management and development. He has considerable expertise in acquisition negotiation and has led LTC Holdings plc’s acquisitions department for over 5 years and also directs the property research function.

Tim will head up the Fund’s acquisition programme and supervise the key property research and reconnaissance activity.


5. TRACK RECORD OF THE PROPERTY ADVISER'S TEAM

The active asset management of commercial property is one of the Property Adviser's specialist strengths built on LTC Holding plc's track record in this type of property. The team has the resources, contacts and professional and financial expertise required to maximise returns in this sector.

In recent years the team has been involved in numerous projects with investment and gross development values ranging from £3m to £10m. Employing the planning gain and active asset management techniques to be employed by the Fund these deals have produced annualised returns up to 27%. Examples of some recent transactions are set out below:-


6. INITIAL SEED PROPERTY

The Fund has entered into a put/call option deed (the "Option Deed") with LTC Holdings plc to acquire the shares in Eaton Commercial Properties Exeter Limited (the "Initial SPV"), a company incorporated in Guernsey with company number 47500, at a purchase price of £3.92 million plus approved expenditure. The Initial SPV holds the freehold interest in Portland House, Longbrook Street, Exeter, EX4 6AB in Exeter city centre. This commercial office property, pictured below, benefits from many of the characteristics upon which the Fund will focus.

The building is well located in Exeter’s developing city centre, close to the new Princesshay shopping centre developed by Land Securities. Exeter is situated in the growing south west region of the UK. The Property Adviser believes that the Exeter property market has significant growth potential in terms of rents and capital values. The fact that a number of other major property investors have recently positioned themselves in the Exeter market underpins the Property Adviser's belief in this location.

The building is let to good quality tenants and currently produces a rental income of £298,000 per annum. This produces a gross rental yield of 7.61% which equates to net yield after acquisition costs of 7.12%.

The Property Adviser's assessment indicates that there is significant scope to add further value by securing planning consents for higher density redevelopment for a number of alternative uses. There are also a number of opportunities for restructuring the occupational leases to improve rental income and the underlying value. A potential future redevelopment scheme (illustrated by the architectural drawing below) would include additional floors and a reshaping of the building to provide for a number of prospective future uses including retail and residential.

The Property Adviser believes this property can generate similar returns to those achieved by the asset management team on similar properties and illustrated in the track record set out in the section headed "Track Record of the Property Adviser's Team" at Section 5 of this Investment Memorandum.

Portland House today An architectural drawing illustrating the potential for future redevelopment

The Option Deed

Under the terms of the Option Deed, the Fund and LTC Holdings plc have granted each other the option to require the Fund to purchase and/or require LTC Holdings plc to sell the entire issued share capital in the Initial SPV. The option is exercisable by either party at any time in the period of three months from the end of the Offer Period for a purchase price of £3.92 million plus expenditure approved by the Fund.


7. FEES AND EXPENSES

The following contains specific fees information relating to the Fund only.

Introducer's Fee and Commission

The Promoter will receive an initial fee for marketing the Fund equal to 2.5% of the gross subscription monies payable within 14 days of the end of the Offer Period. Additionally the Promoter will be entitled to up to 6% of the gross subscription monies for the use as commission to pay to third party introducers.

Where a person directly invests in the Fund and there is no commission payable to any introducer or intermediary, the Directors shall enhance the allocation of Shares by a sum equal to the initial charge. Where a person invests via an introducer or intermediary and a commission is payable, the Directors shall enhance the allocation of Shares by a sum equal to the amount of the net initial charge having deducted any sum payable by way of commission.

The Property Adviser has been appointed an Introducer Appointed Representative of the Promoter in the UK. It shall be entitled to an introducer's commission of up to 4% for referring investors to the Promoter and in such circumstances the Promoter shall be entitled to a commission of 2% in respect of execution-only business. However, where the Promoter is required to give investment advice to an investor, its commission may rise to 4% and the introducer's commission payable to the Property Adviser may fall to 2%.

Fees payable to the Property Adviser

An acquisition and disposal fee of 1% (including VAT if any) of the price paid for each property acquired or sold by the Fund will be charged to cover market screening, property identification, financial analysis and purchase management and is payable by the Fund to the Property Adviser on completion of the acquisition. This fee is limited to the price paid for each property and does not include any other costs, charges and expenses.

An annual management charge of 1% of the value of the real property held by the Fund or its SPVs will be payable to the Property Adviser. Such charge shall be payable quarterly.

A Performance Fee is payable on the winding up of the Fund where returns to investors exceed the Benchmark Return (an IRR of 12% compounded annually). Investors are entitled to 100% of the returns up to the Benchmark Return. To the extent that the annualised IRR of the Fund (from the last day of the Offer Period until any resolution to wind up the Fund) exceeds 12% but does not exceed 20% per annum, the Performance Fee shall be 25% of returns in excess of the Benchmark Return. To the extent that the annualised IRR of the Fund over such period exceeds 20% per annum, the Performance Fee shall be 35% of the returns.

Please note that 50% of the performance fees are payable to the Promoter and Investment Adviser and the remaining 50% of the performance fees are payable to the Property Adviser.

Costs and expenses properly incurred on behalf of the Fund in the performance of its services may be charged to the Fund. In particular, the Property Adviser may, subject to the approval of the Directors, charge its normal fees for services that are additional to those of advising on or managing the properties of the Fund.

Other Disbursements

Legal, regulatory and incidental expenses will be borne by the fund. Carey Olsen's fees in connection with the establishment of the Fund have been estimated at £8,000. Beachcroft LLP's fees in connection with the establishment of the Fund have been estimated to be £50,000 plus VAT. Beachcroft LLP and Carey Olsen have been paid fees in connection with the acquisition of the Initial Seed Property and the formation and financing of the Initial SPV. These are to be borne by the Fund pursuant to the Option Deed.

Fees payable to the Administrator

The Administrator will provide a wide range of services, notably book-keeping, maintaining accounting reports, production of accounts, company secretarial duties and liaison with auditors.

The Administrator may charge such fees and transaction charges as may be agreed between the Administrator and the Fund from time to time.

The Administrator will charge the Fund a one off set up fee of up to £7,000 excluding legal and regulatory fees in respect of the Fund's establishment. Such fee is payable within 20 Business Days from the end of the Offer Period.

The Administrator will charge an annual administration fee based upon time spent charged in accordance with their


standard hourly rates in force from time to time subject to a minimum fee of £20,000 per annum in the first two years. The administration and company secretarial fees amount to 0.20% of assets under management per annum on the first £15 million (15,000,000 pounds) falling to 0.10% thereafter. The completion of annual accounts will cost £5,000 per annum. In addition, the Administrator is entitled to charge £1,500 per annum for the provision of dealing and registration services together with a fee of £50 per application.

Fees payable to Directors

The fees payable for the services of each of the Directors of the Company employed or engaged by the Administrator is currently £8,000 per annum (such fee to be borne by the cells of the Company on a pro rata basis) and there is a further payment of £2,000 payable by the Fund for their services and all reasonable expenses incurred in the course of their duties will be reimbursed. The services of Messrs Denton and Hunt are provided by the Administrator.

Fees payable to the Independent Valuer

The Valuers will charge such fees as may be agreed between themselves and the Fund from time to time. Fees currently agreed for valuations carried out at the request of the Fund and its bankers will fall into the following categories and in the following amounts:

Valuation for loan security purposes up to 0.1% of the value of the property to be acquired plus VAT inclusive of disbursements subject to a minimum of £500 plus VAT.

Subsequent to the initial valuation on acquisition, there will be an annual re-valuation for the property portfolio (with site inspections) for security purposes which have been costed out at 0.075% plus VAT of the initial portfolio value.

Fees payable to the Auditor

The Auditor will charge such fees as may be agreed between the auditor and the Company from time to time.

The Auditor has currently proposed to charge in the region of £7,000 in the first two years in relation to the Fund. These costs are subject to Guernsey inflation. There may be additional audit costs in respect of any SPVs of the Fund.

Fees payable to LLP Services Limited (Promoter and Investment Adviser)

LLP Services Limited shall be entitled to a one off fee of £3,000 plus VAT for approving this investment memorandum as a financial promotion.

LLP Services Limited shall be entitled to an annual fee of £5,000 plus VAT payable at the commencement of each year for acting as investment adviser to the Fund.

LLP Services Limited shall be entitled to introducer's commissions as set out above. It shall also be entitled to 20% of any Performance Fees set out above, which it may in turn pay, in whole or in part, to other intermediaries or introducers of investors. Unlike the Performance Fees due to the Property Adviser, the entire amount of such performance fees is payable on the sale or disposal of each relevant property.

Fees payable to the Company

The Company will levy further charges being a due proportion of the auditors' fees and directors' fees and any other disbursements of suppliers to the Company which are not directly attributable to each cell, such charges are to be borne by each of the cells of the Company on a pro rata basis.


8. TAX CONSIDERATIONS

The following is a summary of the tax treatment which, it is anticipated, will apply to the Fund. The summary is based on existing law and practice which is subject to changes to the relevant legislation, fiscal rules and practice and their interpretation and application. Except where otherwise stated, this summary is based on professional advice received by the Directors. The summary does not constitute legal or tax advice to particular investors.

Prospective investors should consult their professional advisers as to the possible tax consequences of buying, selling and holding property under a collective investment scheme under the laws of their country of citizenship, residence or domicile. Such persons are also advised to inform themselves on any exchange control regulations application under the laws of any relevant jurisdiction in relation to the acquisition, ownership or disposal of Shares.

Guernsey

The Fund

The Company (and thereby, the Fund) is registered in Guernsey as an exempt company and is, therefore, not liable to Guernsey income tax on profits derived outside Guernsey. It is not anticipated that any income other than bank interest income will arise in Guernsey. A fee (currently £600 per annum) is payable to the Guernsey Administrator of Income Tax in respect of the Company’s exempt status. Exemption must be applied for annually and will be granted, subject to the payment of the annual fee, provided that the Company continues to qualify under the applicable legislation exemption. It is the intention of the Directors to conduct the affairs of the Company so as to ensure that it continues to qualify for this tax exemption status.

As an exempt company, the Company will not be resident in Guernsey for the purposes of liability to Guernsey income tax. Under current law and practice in Guernsey, the Company will only be liable to tax in Guernsey in respect of income arising in Guernsey, other than bank deposit interest. It is not anticipated that any income other than bank interest will arise in Guernsey and therefore the Company will not incur any additional liability to Guernsey tax. No capital gains or similar taxes are levied in Guernsey on realised or unrealised gains resulting from the Company’s investment activities.

Guernsey does not levy taxes upon capital inheritances, capital gains (with the exception of a dwellings profit tax), gifts, sales or turnover, nor are there any estate duties, save for an ad valorem fee for the grant of probate or letters of administration. Document duty is payable up to a maximum of £2,000 in respect of a company with power to issue shares of no par value and which is a closed-ended investment company. No stamp duty is chargeable in Guernsey on the issue, transfer, switching or redemption of shares (other than on incorporation or subsequent increases in the level of authorised share capital where duty currently at the rate of 0.5% of the nominal share capital is payable by the Fund subject to a maximum of £5,000).

In November 2002, the Advisory and Finance Committee (now the Policy Council) of the States of Guernsey announced a proposed framework for a structure of corporate tax reform within an indicative timescale. The proposals, which were approved by the States in June 2006, confirm the earlier recommendations that the general rate of income tax paid by Guernsey companies (save for a few specified types of regulated business) would be reduced to 0% in respect of the tax year 2008 and subsequent years, and that exempt status would be abolished for the majority of companies. However, the States of Guernsey Administrator of Income Tax has advised that it is intended that collective investment schemes and closed-ended investment vehicles will continue to be able to apply for exempt status for Guernsey tax purposes after 31 December 2007. The Company will therefore be able to continue to apply for exempt status. Legislation in respect of the proposals has yet to be enacted.

The Policy Council has stated that it may consider further revenue raising measures in 2011/2012, including possibly the introduction of a goods and services tax, depending on the state of Guernsey’s public finances at that time.

Shareholders in the Fund

There is no capital gains tax (with the exception of a dwelling profit tax), estate duty (save for an ad valorem for the grant of probate) or inheritance tax in Guernsey.

Shareholders resident outside Guernsey and who do not carry on business in Guernsey through a permanent establishment situated in Guernsey are not subject to any tax in Guernsey in respect of any Shares owned by them.

No duties are payable on the transfer or disposal of the Shares. In the event of the death of a sole holder of Shares probate duty at a rate of up to 0.75 per cent of the value of the Shares at the time of death is levied in Guernsey on grants of probate and letters of administration, save where the condition for small estates exemption (not exceeding £10,000) are satisfied.


Shareholders who are resident in Guernsey will incur Guernsey tax on any dividends paid on Shares owned by them. The Company will be required to make a return to the Administrator of Income Tax of such particulars relating to any dividend paid to Guernsey resident Shareholders as the Administrator may require, including the names and addresses of the Shareholders and gross amounts of any distributions.

Guernsey has introduced measures that are the same as the EU Savings Tax Directive. However paying agents located in Guernsey are not required to operate the measures on payments made by closed ended investment companies.

It is not envisaged that there will be any Guernsey resident investors as the Fund is not being offered to the public in the Bailiwick of Guernsey. However, shareholders resident in Guernsey for the purposes of liability to Guernsey income tax would receive their dividends net of Guernsey income tax, but no dividends are planned.

United Kingdom

The Fund

Income Tax:

The Fund will be liable to basic rate income tax on its net rental income. Net rental income is broadly rents received net of expenses incurred in producing those rents. The UK, however, allows a wide range of allowances against rental income, the most notable being loan interest. The intention is the fund will be structured in such a way that it will be "tax neutral". This means that allowable expenses will be off-set against rental income

Corporation Tax

The Fund is not expected to be subject to UK corporation tax on its capital gains as it is not resident in the UK.

Shareholders in the Fund

Income Tax and Capital Gains Tax

Investors who are non-domiciled and neither resident nor ordinarily resident in the United Kingdom and who are not carrying on a trade, profession or vocation in the United Kingdom through a branch or agency to which their investments are attributable, are not expected to be liable to United Kingdom taxation on income or capital gains arising from distributions from the Fund or the sale of Shares in the Fund although they may be subject to foreign taxation in their own jurisdiction.

It is not anticipated that the Fund will pay any dividends. Investors who are resident or ordinary resident in the UK may be liable to capital gains tax in respect of gains made on the Shares.

Inheritance Tax

Investors who are non-domiciled in the United Kingdom should not be subject to UK inheritance tax, under current regulations, in respect of their shareholding in the Fund.


9. SUBSCRIPTION AND WINDING UP

Offer

The closed ended Fund will be open to subscribers for a period from the issue of this Prospectus until 30 April 2008 (the "Offer Period"). 30,000,000 Shares in the Fund are available for subscription by eligible investors at the close of the Offer Period at the price per Share of £1 each (including any initial charge). The Offer Period may be extended at the discretion of the Fund's directors.

The subscriptions will be held in an interest bearing account by the Administrator and any interest accrued at the best rate available from the Fund's bankers. Interest earned will be held for the benefit of the Fund.

Shares in the Fund will be issued in registered form and certificates will only be issued on request.

Subscription Arrangements

Application for subscription for Shares may take place during the Offer Period only.

The minimum investment is £50,000 per eligible investor. The Directors have the discretion to accept lower investment amounts. For each pound received and accepted, one Share will be issued.

The minimum value of the Shares in the Fund which must be subscribed for in the Offer Period before the Directors may proceed to allotment shall be £1,000,000. If subscriptions to this value of the Shares are not received, the Fund will not proceed and subscription moneys will be returned to investors (without any interest earned thereon).

How to Subscribe for Shares

The procedure for application is through completion of the Application Form at the back of this document.

The Directors reserve the right to reject any subscription in whole or in part.

Payment for Shares is to be made by cash, electronic transfer or cheque to the Administrator with cleared funds reaching the account specified in the Application Form, together with the Application Form, at least five working days before the end of the Offer Period.

Applicants will be sent a contract note detailing the amount invested within 10 working days of receipt of the Application. Within 10 working days of the end of the Offer Period investors will be informed of their precise Shareholding (including the number of Shares issued to investors)

Dissolution of the Fund at the end of the Investment Period

At the end of the Investment Period an Ordinary Resolution to wind up the Fund will be put to the shareholders at the annual general meeting of the Fund. In the event that this Resolution is passed by the shareholders then the Fund's properties will be disposed of in an orderly fashion.

The monies received after paying for any selling agents' fees on disposal or other associated costs, will be used initially to reduce the debts of this Fund in accordance with the borrowing agreement such that the original loan on each property is paid off.

The balance of the funds, unless it is the view of the Directors that some monies should be held in reserve for future costs, expenses and fees, will be distributed in accordance to each investor's shareholding on the last business day of April, June, September and December.

This distribution will continue until all the properties in the portfolio are disposed of, once all the outstanding costs, fees and expenses are paid. The Directors will decide whether any retention shall be made following the winding up of the Fund on advice of the Auditors.

If the shareholders do not resolve to wind up the Fund at the end of the Investment Period, the Ordinary Resolution will be put to shareholders at each subsequent annual general meeting until the Fund is wound up.


10. GENERAL INFORMATION

Corporate Structure

Incorporation and Share Capital

The Company is a protected cell investment company which was registered in Guernsey on 18 June 2007 with registration number 47141. The Company has an authorised share capital of 100 Management Shares of no par value (of which 99 Management Shares have been allotted and issued to John Rawicz-Szczerbo and 1 Management Share to the Promoter credited as fully paid up) and an unlimited number of ordinary shares of no par value.

Save as disclosed herein, no share or loan capital of the Company has been issued or agreed to be issued and no such capital of the Company is proposed to be issued or is under option or agreed conditionally or unconditionally to be put under option.

Under Guernsey law, a protected cell company may form several cells with each cell having its own unique investment objectives and representing a distinct portfolio of assets and liabilities. The cell structure permits the segregation and protection of assets of each cell from other liabilities of the Company and other cells. The base currency of the Company as a whole is sterling but the Company may issue Shares in relation to any Cell as Euro, US Dollar, Swiss Franc or any other currency-denominated Shares.

The Fund is a Cell of the Company.

Memorandum of Association

The Memorandum of Association of the Company provides that the Company's principal object is to carry on business as an investment company specialising mainly in property and land.

The objects of the Company (and thereby, the Fund) are set out in full in Clause 3 of the Memorandum of Association which is available for inspection at the registered office. Neither the Memorandum nor the Articles of Association contain any restriction on the investment powers of the Fund.

Articles of Association

The following is a summary of the principal provisions of the Articles of Association of the Company in so far as they have not been described earlier in this document:

Liability of members

The liability of its members is limited.

Variation of Class Rights and Alteration of Capital

Subject to the provisions of Guernsey law all or any of the special rights for the time being attached to any class of shares for the time being issued may (unless otherwise provided by the terms of issue of the shares of that class or the Articles) from time to time (whether or not the Company is being wound up) be altered or abrogated with the consent in writing of the holders of not less than three-quarters of the issued shares of that class or with the sanction of a resolution passed by a majority of three-quarters of the votes cast at a separate general meeting of the holders of such shares. All the provisions of the Articles as to general meetings of the Company shall mutatis mutandis apply to any such separate general meeting but so that the necessary quorum shall be two members holding or representing by proxy a total in aggregate of not less than ten per cent of the issued shares of the class.

The rights attached to the Shares shall be deemed to be varied by the creation or issue of any shares (other than Shares) ranking pari passu with or in priority to them as respects participation in the profits or assets of the Company.

The Company may from time to time by ordinary resolution increase its share capital by such sum to be divided into shares of such amounts as the resolution shall prescribe.

Issue of Shares

All Shares in the Company for the time being unissued are under the control of the Directors who may allot and dispose of or grant options over the same to such persons, on such terms and in such manner as they may think fit. Shares do not carry any rights of pre-emption. No shares in the capital of the Company, other than the Shares shall


be issued under this Investment Memorandum.

Classes of Shares

Management Shares

The rights attaching to the Management Shares are as follows:-

(i) Voting Rights:

On a show of hands every holder of Management Shares present in person or by proxy at a Meeting of holders of Management Shares shall have one vote, and on a poll, every holder present in person or by proxy shall have one vote for each Management Share held by them.

(ii) Dividends and distribution of assets on a winding up:

The Management Shares shall only be entitled to participate in non-cellular profits of the Company.

(iii) Redemption:

The Management Shares are not redeemable.

Ordinary Shares (the “Shares”)

The Shares of each Cell are divided into the classes specified in the investment memorandum in relation to the relevant Cell.

Where a performance fee is charged, each new issue of Shares of a particular Cell will be treated as a separate series for the purposes of calculating such Performance Fee payable to the Investment Manager. The Administrator may combine series if their peak performances in net asset value are identical.

Rights attaching to the Shares

Winding-Up

On the winding-up of the Fund whether voluntarily or otherwise, the value of the property assets of the Fund as and when disposed of, will be divided amongst the shareholders in accordance with their shareholding after all other financial obligations and costs have been met.

Voting Rights

On a show of hands, every holder of Shares present in person or by proxy at a Cell Meeting shall have one vote, and on a poll, every holder present in person or by proxy shall have one vote for each Share held by them.

Directors

Unless otherwise determined by ordinary resolution, the number of Directors shall be three.

There is no provision for the retirement of Directors on their attaining a certain age and the Articles do not provide for retirement of Directors by rotation.

The Board shall have power at any time to appoint any person to be a Director, either to fill a vacancy or as an addition to the existing Directors. Any Director so appointed shall hold office only until the next following annual general meeting and shall then be eligible for re-election.

There are no service agreements in existence between the Company and the Directors nor are any such agreements proposed.

For the purposes of the Company (and thereby the Fund), the address of all of the Directors shall be the registered office of the Company.

The Articles of Association of the Company contain the following provisions:

Article 32.2.3 contains a power enabling a director to vote on a proposal, arrangement or contract in which he


is materially interested.

Article 26.3 contains a power enabling directors to vote remuneration (including pension or other benefits) to themselves.

Articles 27, 28, 29 and 30 contain provisions concerning the nomination, appointment and removal of directors. A director may appoint an alternate director. The directors may appoint a director to an executive office. Directors can be removed by Ordinary Resolution.

Interests of the Directors and Other Parties

Save as disclosed in this section, no Director has any interest in any transaction which, since its incorporation, will or has been effected by the Fund, or any interest, direct or indirect, in the promotion of the Company or in any assets to be acquired, let or disposed of by the Company or are proposed to be acquired, let or disposed of by the Fund.

A Director who has any material interest in a contract or arrangement or proposed contract or arrangement with the Fund shall declare the nature of his interest at the meeting of the Board at which the question of entering into the contract or arrangement is first considered or if the Director was not, at the date of that meeting, interested in the proposed contract or arrangement, at the next meeting of the Board held after he becomes so interested.

In a case where the Director becomes interested in a contract or arrangement after it is made, such declaration shall be made at the first meeting of the Board held after the Director becomes so interested. A general notice may be given to the Board by a Director to the effect that he is a member of a specified company or firm and is to be regarded as interested in any contract or arrangement which may after the date of the notice be made with that company or firm and he shall be deemed to have made a sufficient declaration of interest under the Articles provided that either it is given at a meeting of the Board or the Director takes reasonable steps to ensure that it is raised and read at the next meeting of the Board after it is given.

It is not intended that any Director will have any personal interest in the Shares of the Company.

Please note that the Promoter has an interest in Shares of the LLP Property PCC Limited.

Borrowing Powers

The Board may exercise all the powers of the Company to borrow money against all or part of its property assets within the criteria set by the Lender (present and future).

The Fund may be leveraged and may borrow up to 250% of its Net Asset Value.

Transfer of Shares

The Shares of the Fund are freely transferable.

Dividends and Purchase of Own Shares

It is not intended that the Fund will pay any dividends prior to being wound up.

The Articles of Association of the Company contain the following provisions:

Articles 38.6 and 38.7 contain provisions concerning time limits on entitlements to dividends. No dividend will bear interest and after ten years dividends may be forfeited.

Article 3 contains provisions to enable the Company to purchase its own securities out of distributable profits or products of a fresh issue of shares.

Reports and Financial Statements

The accounting date of the Fund is 30 September each year and the Fund's first accounts will be prepared to 30 September 2008. The annual report and financial statements for the Fund in respect of each financial year will be prepared in accordance with UK GAAP and published within six months of the annual accounting date and will be sent to Shareholders of their registered address.


The current annual reports and financial statements (if any) will be available at the registered office of the Company. The Fund will maintain its books and records in Sterling and produce its annual accounts in Sterling.

Share Certificates

Shares will be in registered form. Certificates will be issued only upon request from Shareholders.

The Register of Shareholders will be maintained at the office of the Administrator.

General Meetings

The annual general meeting of the Fund will be held in Guernsey or such other place as the Directors may determine. Notices convening the annual general meeting in each year at which the audited financial statements of the Fund will be presented (together with the Directors' Report and Accounts of the Fund) will be sent to shareholders at their registered addresses not later than 21 days before the date fixed for the meeting. Other general meetings may be convened from time to time by the Directors by sending notices to Shareholders at their registered addresses or by Shareholders requisitioning such meetings in accordance with Guernsey law, and may be held in Guernsey or elsewhere.

Winding up

The Company

The Company may be voluntarily wound up at any time by Special Resolution. The Directors are bound to convene an extraordinary general meeting for the purpose of passing a Special Resolution for the winding up of the Company if the Company's authorisation under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 is revoked (unless the Commission otherwise agrees). On a winding up a liquidator will be appointed firstly to pay the debts of the Company and then to distribute its assets amongst Members, according to the rights attached to their Ordinary Shares. The assets of one Cell are not available to meet the liabilities of any other Cell and Shareholders are only entitled to share in the surplus assets of the Cell to which their Ordinary Shares relate.

The Fund

An Ordinary Resolution to wind up the Fund will be put before the Shareholders of the AGM at the end of the Investment Period, save that the Directors may put to Shareholders an Ordinary Resolution to wind up the Fund at an earlier date if it appears that the cumulative benchmark return is at least 12% compound per annum for a five year period. If a resolution to wind up the Fund is not passed, it may continue in existence. A resolution will be proposed each year following the fifth anniversary of the Fund.

Material Contracts

Property Advisory Agreement between the Company and the Property Adviser.

This Agreement defines the advisory role of the Property Adviser and sets out the terms of payment of the Property Adviser.

Administration Agreement between the Company (for and on behalf of the Fund) and the Administrator.

This Agreement outlines the role of the administrator and the terms of payment of the Administrator.

Regulatory Consents

All consents, approvals, authorisations or other orders of all regulatory authorities (if any) required by the Company under the laws of the United Kingdom and Guernsey for the issue of Shares and for the Investment Adviser and the Administrator to undertake their respective obligations under their respective agreements have been given.

Statutory Minimum Allotment

For the purposes of section 29 of the Companies Law, the minimum number of Shares which must be subscribed before the Company may proceed to allotment is 2.

Miscellaneous

The Fund has not, since its incorporation, been involved in any legal or arbitration proceedings and no legal or arbitration proceedings are known to the Directors to be pending or threatened against the Fund.


No person has, or is entitled to be given, an option to subscribe for Shares.

The Fund does not have a place of business in the United Kingdom.

To the extent not held as security for the Fund's borrowings, the deeds and other documents relating to the properties will be held by the Administrator on behalf of the Fund.

Notice of meetings and other notices from the Fund will be sent to holders of Shares by post to their registered addresses.

Documents available for inspection

Copies of the following documents may be inspected during usual business hours on any Business Day at the offices of the Administrator in Guernsey in each case at the addresses stated in the Directory of this Investment Memorandum:

Certificate of Incorporation of the Company;

the Memorandum and Articles of Association of the Company;

the Companies Law under which the Company was incorporated.


11. DEFINITIONS

Accounting Period Each period of twelve months ending on 30 September in each year.

Administrator Fortis Fund Services (Guernsey) Ltd.

Bankers Fortis Bank (C.I) Limited or Banca Comerciala Romana or such other bank as may provide services to the Fund from time to time.

Benchmark Return The IRR of 12% per annum compounded annually.

Business Day a day other than a Saturday, Sunday, bank holiday or public holiday in Guernsey.

Cell A cell of the Company constituting a segregated portfolio of assets and liabilities.

Companies Law The Companies (Guernsey) Laws 1996, as amended.

Fund Eaton Active Special Opportunity Property Fund.

Initial Seed Property Portland House, Longbrook Street, Exeter, EX4 6AB registered at the Land Registry under title number DN330150.

Initial SPV Eaton Commercial Properties Exeter Limited, the company whose shares are the subject of the Option Deed.

Investment Adviser LLP Services Limited

Investment Period The period of five years from the date of the first acquisition of a property by the Fund.

IRR Internal rate of return per annum, net of commissions, fees or other charges.

Management Shares A management share of no par value in the capital of the Company identified as part of the non-cellular assets of the Company and having the rights attached thereto prescribed in the Company’s articles of association.

Net Asset Value The value of the net assets of the Fund from time to time as determined by the Directors.

Net Asset Value per Share The Net Asset Value divided by the number of Shares in issue or deemed to be in issue.

Offer Period Subscriptions to the Fund will be open for a period until 29 May 2009 from the date of issue of this Investment Memorandum. The Offer Period may be extended at the discretion of the Directors of the Fund.

Option Deed The Option Deed entered into on or about the date of this Information Memorandum between the Fund and LTC Holdings plc, details of which are found under the section headed "Initial Seed Property".

Ordinance The Protected Cell Companies Ordinance 1997 to 1998, as amended, supplemented or replaced from time to time.

Ordinary Resolution A resolution of the Company in general meeting or, where the context requires, of a meeting of the Fund passed by a simple majority of the votes cast thereat by the Shareholder entitled under the Articles to vote there at.

Performance Fees The fees described in Part 5 to the Property Adviser and others in the event that the Performance Benchmark objective of a property of 12% compound per annum is exceeded.


Promoter LLP Services Limited.

Property Adviser Eaton Investment Management Limited, a subsidiary of LTC Holdings plc.

Shareholder Holder of Shares in the Fund.

Shares Ordinary Shares in the Company of no par value issued in relation to specific Cells, the proceeds of allotment of which form part of the assets of the relevant Cells.

Special Resolution A resolution of the Company which is passed by a majority of not less than three-quarters of Shareholders who (being entitled to do so) vote in person, or by proxy, at a general meeting or a meeting of the Fund, as the case may be, in accordance with the Companies Law and the Ordinance.

SPV Trusts or companies the shares of which are owned by the Fund and are used as special purpose vehicles for the purchase and ownership of properties.


12. HOW TO APPLY

Procedure for application for the Fund

If you wish to apply for Shares in the Eaton Active Special Opportunity Property Fund cell you must complete the Application Form(s) contained in the Eaton Addendum in accordance with the instructions printed thereon and sent it together with payment in full by cheque, bank draft or telegraphic transfer. Applications sent by post should be addressed to:

LLP Services Limited 36 St George's Wharf 6 Shad Thames London SE1 2YS

Applications and cleared funds must be sent to as to arrive not later than five working days prior to the end of the Offer Period.

An application will not be valid unless these requirements are fulfilled and cheques and bank drafts presented for payment are honoured on first presentation. All cheques will be presented on receipt by the Administrator.

Applicant Undertakings

By completing and delivering an Application Form together with payment each applicant undertakes to the Company as follows:

it acknowledges the right of the Company to scale down applications and to reject applications in whole or in part. In such case application monies will be returned to applicants by cheque sent through the post at the applicant's own risk.

any application shall be irrevocable and any cheque or bank draft presented for payment will be honoured on first presentation.

the application and any issue of Shares is made on and subject to the terms and conditions of this document, the Application Form and the Articles.

the application for Shares is based solely upon the information in this document and no other information or representation has been relied upon.

any monies returned to it will not include any interest which may have been earned while they were held by the Administrator.

Money Laundering Declarations

The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Regulations 2002 require the Company to establish the identity of the person by whom or on whose behalf an application form is lodged with payment.

The application or agent lodging an Application Form shall be deemed to agree to provide the Company with such information and other evidence as the Company may require to satisfy the Verification of Identity Requirements.

The Administrator will notify applicants of the proof of identity which will be required. By way of example, an individual may be required to complete a client profile form and produce a copy of a passport or identification card duly certified by a public authority such as a notary public or the police in their country of residence, together with evidence of their address such as a utility bill or bank statement. In the case of corporate applicants this may require production of a certified copy of the certificate of incorporation (and any change of name), memorandum and articles of association (or equivalent) and the names and addresses of all directors and/or beneficial owners. If satisfactory evidence is not produced, subscriptions may be cancelled. If a subscription is cancelled, any funds received by the Administrator shall be returned without interest, less any charges to the remitting bank, to the account of the remitter quoting the applicant's name. Funds remitted by bank draft will be returned by post at the applicant's risk by bank draft to the paying bank without interest, less any charges for the account of the drawer, quoting the applicant's name.

Shares will not be allotted to the applicant until the Verification of Identity Requirements has been complied with to the satisfaction of the Administrator.


The documentation required to comply with the Verification of Identity Requirements will vary depending on the type of applicant, the nature of the relationship between the Company and the applicant, and whether the applicant is in a Recognised Jurisdiction as defined under Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Regulations 2002.

Recognised Jurisdictions

Austria, Australia, Belgium, Canada, Denmark, Finland, France, Germany, Gibraltar, Guernsey, Greece, Hong Kong, Iceland, Ireland, Isle of Man, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, United Kingdom, United States of America.

Applicants from Recognised Jurisdictions

Individual Applicants

The Company will require the following due diligence documents to be appended to the application form:

a certified copy passport or national identity card which must contain the identity of the applicant, the number of the document, a clear photograph of the applicant, the signature of the applicant as well as the date and place of issue of the document and expiry date.

an original telephone, water, electricity or similar invoice addressed to the residential address(es) for review and return. The invoice should not be more than three months old. The Company will be pleased to return the original document if requested to do so.

NB: Should any other party retain signing authority over the investment (e.g. financial adviser) then due diligence documentation regarding that party will also be required by the Company.

Corporate Applicants other than Nominee Companies

The Company will require the following due diligence documents to accompany the Application Form:

a certified copy of the applicant's statutory documents. This will include the Certificate of Incorporation, Changes of Name Certificate (if applicable), the Memorandum and Articles of Association and the authorised signatory list.

due diligence documentation as for individual applicants will be required in respect of the beneficial owner and a maximum of four principal Directors (or the authorised signatories if the Directors and signatories are not the same).

NB: Where the applicant is a plc quoted on the stock exchange of the jurisdiction of the applicant then it will be sufficient to supply a copy of the latest set of audited annual accounts and the authorised signatory list.

Corporate Applicants: Nominee Companies

The Company requires that the nominee confirms:

the jurisdiction in which the nominee operates.

the nominee is regulated and giving details of its regulatory body.

that the nominee has obtained satisfactory due diligence on the applicant (a certified copy passport of the applicant and an address confirmation).

that they will supply copies of due diligence to the Company on demand.

Applicants from Non Recognised Jurisdictions

The Company will require all applicants from non-recognised jurisdictions to provide the equivalent documentation that would accompany an Application Form from a recognised jurisdiction (as above), as a minimum. However, all applications from non-recognised jurisdictions will be considered on a case-by-case basis and additional due diligence documentation may be requested.