Syndicated Commercial Property Investment. New bonded whisky warehouse investment • Annual Return 8.75% p.a, distributed quarterly in advance. • Blue Chip tenant - North British Distillery Company Limited (D&B 5A1). • A new 15 year lease, with no break options, incorporating fixed rental increases. • Strategically located on the Houston Industrial Estate, junction 3 of the M8 motorway, west of Edinburgh. • Target Annual Return following proposed disposal after 5 years c.10.00% p.a. Rougemont Limited is authorised and regulated by the Financial Conduct Authority. Ref No. 516918 August 2013 Important Legal Notice This document describes an investment in a syndicated commercial property that is partially funded with bank finance. An investment of this nature involves risk; it is illiquid in nature and may not be suitable for many investors. Investors must be prepared to bear the risk of any investment in the property, for an indefinite period, and be able to withstand the loss of all or part of their investment. All reasonable care has been taken to ensure the information and illustrations contained within this document are true and accurate, but they should not be construed as advice on which reliance should be placed. Please refer to the Risk Factors and assumptions upon which the Target Annual Returns in this document have been based. How Syndicated Property Works A syndicated commercial property investment is one where a number of private individuals, corporate entities, or pension funds collectively pool their capital to acquire a specific tenanted commercial property. Syndicate members own a percentage of the legal beneficial interest in the property pro-rata to the amount of their investment. In return members receive their share of the rental income and future capital growth. Rougemont’s operating structure has received approval from a number of major SIPP and SSAS Pension Trustee/Administrators; however, investors should contact their own pension fund advisors to ascertain whether such an investment is permissible within the rules of their own pension fund. FCA authorised Independent Financial Advisors should be aware that Rougemont is an Exempt CAD firm to which MIFID applies, except that it can receive and transmit orders in relation to one or more financial instruments, or in relation to investment advice. Accordingly, Rougemont is permitted to transmit orders with Non-MIFID Independent Financial Advisors and Professional bodies. As with any investment, syndicated property of this type carries the risk that the investment may fail to increase in value or may depreciate. Rental returns may not materialise. Your attention is drawn to the Important Legal Notice in this document and the need to take independent legal and investment advice. In summary the arrangements are as follows: 1. Properties are normally office, retail or factory premises let to a tenant with a good covenant strength on a long term lease. 2. An Independent Professional Custodian Trustee will hold the legal freehold/leasehold title to the property as Custodian Trustee. Syndicate members become beneficial owners of the property, as tenants in common, in direct proportion to their investment. 3. Syndicate members are entitled to receive their pro-rata rental income from the property together with their share of the capital receipt upon a sale of the Property. 4. A full legal pack containing a detailed Structure Note, a Syndicate Contract, Trust Deed and a Property Administration Agreement will be provided once a potential Syndicate member has made a formal reservation by completing the form at the back of this document. Any other relevant material will be available upon request. Potential Syndicate members must then arrange to receive advice from other independent advisors as necessary. 5. Acquisition of the property will take place only when sufficient Syndicate members have provided monies to fund the acquisition. Should insufficient funds be received the acquisition will not progress and any funds received will be returned immediately to Syndicate members. 6. An ‘Initial Period’ is set by Rougemont at the outset and in this instance the Initial Period will run from the Completion Date until its fifth anniversary (See No. 8). 7. Rougemont is the appointed Managing Trustee and will co-ordinate the purchase and handle routine decisions in relation to the property. The Syndicate members will retain control of major decisions such as, providing consent to assign leases or deciding to carry out structural alterations to the property. These decisions will be taken by a majority representing 75% (by value) of the Syndicate Price. Syndicate members will also employ a management company, Harlow Property Management Limited, to carry out services such as collection and distribution of rent and the provision of caretaking duties. However, if the Syndicate members collectively decide to instruct Harlow Property Management Limited to provide any non-core services then additional remuneration will be payable in respect of such services. Prior to the expiry of the Initial Period Harlow Property Management Limited will provide a quote for a continuation of its services. 8. An individual Syndicate member may sell their stake at any time. The Syndicate members may decide by a majority to sell the property at any time. However, an individual Syndicate member cannot force a sale of the whole of the property until the expiry of the Initial Period and must have attempted to sell their individual stake before making such a request. However, if a Syndicate member, being a pension fund, has beneficiaries who die during the Initial Period forcing the pension fund to be liquidated then the trustees of the pension fund have the right to force a sale of the property within 24 months of the death of the member in the event that the member’s interest in the property remained unsold. Investor Eligibility All syndicated commercial property investment opportunities promoted by Rougemont constitute an Unregulated Collective Investment Scheme (“UCIS”) as defined in the Financial Services and Markets Act 2000 (“FSMA”). Rougemont is authorised by the UK Financial Conduct Authority (“FCA”) to establish, operate and wind up UCIS (Reg. No. 516918). In receiving this document you acknowledge and accept the following disclaimer: This document contains important information. It is being sent to you as a category of person falling within The Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (“the Order”). The sole purpose of this document is to assist the recipient in deciding whether they wish to proceed with further investigation. Recipients should review this document having first considered the Key Points (page 3) of the arrangements and the Important Legal Notice (page 16). The description of the arrangements contained within this document constitutes a summary of the arrangements. A detailed description of the syndicated structure is provided to potential Syndicate members with the legal purchasers pack which will be provided should a potential Syndicate member wish to proceed. ‘Exempt Persons’ falling within the Order include: • ‘Investment Professionals’, who are Authorised FCA Persons and who are defined, according to the Financial Services and Markets Act 2000, as having professional experience of participating in a UCIS for the purpose of their business. • ‘Certified Sophisticated Investors’ who are defined as investors who are self-certified, or who have been certified by an FCA Authorised Person as being sufficiently knowledgeable to understand the risks associated with participating in a UCIS and who have signed a requisite Certified Sophisticated Investor Declaration in accordance with Article 23 of the Order. • ‘Certified High Net Worth Individuals’, who are defined as investors who have self-certified or who have been certified by an FCA Authorised Person confirming that during the financial year immediately preceding the date on which the certificate was signed, held an annual income of not less than £100,000, or net assets of not less than £250,000, excluding their primary residence and benefits from life policies. • A ‘High Net Worth Company’, which is defined as a corporate entity with called-up share capital or net assets of either (a) in the case of a company with more than 20 members, or which is a subsidiary of a company with more than 20 members, not less than £500,000 or, (b) in the case of any other body corporate, not less than £5 million. • Existing Investors in similar Unregulated Collective Investment Schemes as detailed in COB 4.12 of the FCA Handbook. Confirmation of prospective clients’ investor status must be received by Rougemont in advance of any information or promotional material in respect of an investment opportunity being provided. 2 The NBD Scotland Syndicate The NBD Scotland Syndicate - Key Points The Property A newly constructed stand-alone 107,650 sq. ft. bonded warehouse facility, located on one of Scotland’s most central distribution hubs to the west of Edinburgh and with immediate access to Junction 3 of the M8. The property has been divided into ten self-contained units for use as a bonded whisky maturation facility and has inherent alternative use prospects, particularly within the commercial storage market. Completion of the property took place in August 2013. Tenancy The freehold (referred to as “heritable interest” in Scotland) of the property is being acquired with the benefit of a new 15 year lease to North British Distillery Company Limited (the ‘Tenant’), which commenced on completion of the property. The lease has been established on full repairing and insuring terms, with no tenant break options and incorporates pre-agreed, upwards only fixed rent increases throughout the term. Tenant The North British Distillery Company Limited (www.northbritish.co.uk) was established in 1885 and is one of Scotland’s largest grain whisky producers. The company is a joint venture between two of the world’s largest and best known whisky producers, Diageo plc (www.diageo.com) and The Edrington Group (www.edringtongroup.com).