Mastigo BayB a j a S u r , M e x i c o

Welcome to Mastigo BayBaja Sur, Mexico

Pristine andUntouched

M astigo Bay is a pristine and uniquely untouched property located just north of Cabo San Lucas on the Pacific Coast of Baja.

The over 30 acres of promontory point land located on the cliffs of Baja offers an opportunity for a world class resort and spa. The West facing cove enjoys stunning sunsets, uniquely perfect year round temperatures and warm water currents. Off the coast of these cliffs is located the “Golden Gate Banks” and boasts stellar big game marlin and tuna fishing.

Mastigo Bay is ready to build, with hard to obtain permits including Federal Zone access approval and secured building rites.

Located just 2 miles south of Todos Santos, Baja’s chosen “Pubelo Magico”, Mastigo Bay offers the jet-setter an experience in the Baja of old - an unmarred gem just hours from L.A. or a perfect day adventure for the boat owning bevy in Cabo.

Mastigo Bay

Mastigo Bay is located approximately 45 miles north of Cabo San Lucas and 45 miles south of the city of La Paz, on the west

coast of Baja’s peninsula. Situated within close proximity of the Tropic of Cancer, the region receives sun-kissed weather year round with an average temperature of 88 degrees inland, 80 degrees coastal. The ocean temperature averages 73 degrees. The cove of Mastigo Bay enjoys the moderate coastal temperatures throughout the property, while sheltering it from humid moisture. The coast off Mastigo Bay is also the recipient of a unique ocean current system, affecting only a portion of the Baja shoreline. The currents bring in water several degrees cooler than the rest of Baja. This slight change in water temperate has a profound climate impact on Mastigo Bay, creating a summertime high that is 12 degrees cooler than Cabo San Lucas (which can exceed 95 degrees.) With diminished humidity, and a wintertime high four degrees warmer than Cabo San Lucas (which can be as low as 60 degrees,) this cooler water temperature also decreases the regions risk of hurricanes, which tend to form in warmer waters.

Location & Climate

Location & Climate

Mastigo Bay

Located just 2 miles from Mastigo Bay is the city of Todos Santos meaning “all saints”. Todos Santos was awarded the prestigious honor of being named

the “Pueblo Magico” for the state of Baja Sur. Only one town per Mexican state receives this lifetime honor of being the most “magical” and receives additional government funds for improvements and upkeep, as well as prohibiting non-traditional commercial development (Costco/Walmart etc.) This ensures that the town will remain quaint. Todos Santos was the pueblo chosen in all of Baja. This quaint Spanish colonial artist town is the home of nearly 8,500 inhabitants and boasts a colorful plaza, pottery shops and art galleries. It has traditional Mexican ambiance reminiscent of Puerto Vallarta in the 1950’s. The history of Todos Santos is rich in agricultural and was once the most influential agricultural region in all of Baja. With prolific sugar cane, tomato and pepper production from abundant underground water, it supplied much of the region with produce. Just 45 minutes to the south of Mastigo Bay is the city of Cabo San Lucas. Guests who wish for a vibrant nightlife can find it within a reasonable evening drive or taxi.

Cultural Location

Flights to Cabo San Lucas and La Paz are available through major US cities including Los Angeles, San Diego, Phoenix, Tucson, Dallas, Houston and

Denver. Major air carriers include Alaska, AeroCalifornia, AeroMexico, Continental, Mexicana, US Airways and United Airlines. There are over 35 flights per day arriving in Cabo San Lucas. Los Angeles has six direct flights into Cabo San Lucas and five direct flights into La Paz airports.

The two-hour flight from Southern California to Los Cabos allows a traveler to have lunch in Los Angeles and arrive at Maravilla in time for a twilight dinner.

From La Paz, Mastigo Bay is an easy drive south on the newly paved Highway 19 offering a safe and enjoyable experience with beautiful desert scenery. Upon reaching Todos Santos this rustic terrain is transformed into lush palm trees and mango orchards.

From Los Cabos International Airport, the newly completed four-lane highway connects the towns of San Jose Del Cabo and Cabo San Lucas to Todos Santos.

Travel

Mastigo Bay is the perfect landing spot for savvy travellers staying in Cabo San Lucas. For boat owners, Mastigo Bay is just the

place to take a day trip adventure. With the ability to offer one of the few rare mooring spots between Cabo san Lucas and San Diego - Mastigo Bay is a perfectly situated opportunity

Not only is Mastigo Bay located in the “Golden Gate Banks” it is a particularily underfished area of these banks - making for a successful trip for sport and casual fishers alike. While the seafearing spend the day winning their prized catches, a luxy day spa is the perfect place for those who prefer a little relaxation.

For the non-boat-owners, a high speed sea shuttle from Cabo san Lucas can easily transport excursionists for a perfect day of boating, spa, and world class dining.

Mastigo Bay cove is owned by “Mastigo Bay Properties” a Mexican corpoaration and is associated with Desarrollos Todos Santos (DTS), S.A. de C.V. a Mexican development

comany.

As of December 1993, important changes favoring foreign investment include the right to purchase land outright even in the restricted zones. Until now investors have been reluctant to invest in areas where the real estate could not be used as direct security for their investments. The right to purchase without a “fideicomiso” (Trust) does not include residential property for individual homes. Under the new law a foreign investor could legally purchase, in his own name, a tract of land to be developed as a residential subdivision.

The individual lots, however, would require the use of a “fideicomiso” if purchased by foreigners. If, for instance, the foreign developer wished to retain one of the lots in his subdivision for himself for the construction of his own residence, then he too would require a “fideicomiso” for that tract of property.

Other major changes designed to attract foreign capital include the right for profits from foreign investment to be withdrawn from Mexico and sent to the country of origin of the foreign investor.

Also, foreign investors are guaranteed the same rights and restrictions as similar businesses owned or operated by nationals. Property and businesses owned by foreigners will be protected from expropriation under extensive legislation allowing expropriation only for reason of public domain and may not be enacted in a discriminatory manner.

Site Ownership & Laws affecting Mexcian Investment

Working within the Mexican System is an art. Much of the pre-development work at Mastigo Bay has been accomplished already and with great success. It truly cannot be overemphasized

the benefit of this work being in place. The permits and approvals that are already in place ensure not only that your resort is achievable, but that progress can begin immediately. Secured permits and approvals include:

� Approved EIR � Land use permits � Federal Zone Permits � Approved Routing Plan � US title insurance in place (Not easily obtained in Mexico)

Approvals & Permits

The potntial for the over 30 acres located at Mastigo Bay abounds. Please enjoy some of the plans explored and how they could inspire your world class resort.

Potential PlansPROJECT DESCRIPTION The Spa at Mastigo Bay is a proposed 40 unit Boutique Hotel and Spa located on a 3.41 acre hillside parcel within the Master Planned Development of Maravilla Resort. The sixteen building complex is comprised of one & two bedroom suites ranging in size from 650 to 950 square feet. Each Four and Six Plex buildings are located ocean front with spectacular views of Punta Lobos Bay.

The VillasDesigned by renowned architect Eddie Villarus at L’ARCH, these dramatic villas will be built with the finest materials and craftsmanship. Inside and out, the style is a

colonial Mexican Architecture but luxurious. Every villa, whether 1 or 2 bedroom, is on its own floor with 650 to 950 square feet of indoor and outdoor living space; each has a private entry through a garden courtyard. Rooms have 12 foot ceilings and distinct décor, with casually elegant handcrafted furniture and original Todos Santos artwork.

The details include: • All Master Suites include

double marble vanity counters,

• indoor/outdoor shower. • Indoor and outdoor dining

areas. • Large Plunge Pool and

Jacuzzi • Pocket Sliders to blend

outdoors and indoors.

• Individually controlled air conditioning and overhead ceiling fans.

• Complete entertainment system with satellite TV, DVD, Stereo and CD.

• Telescope for whale-watching or star gazing.

• Wet Bar and Kitchen Area. • Full Internet Access • Fully Furnished

Potential Plans

Capella Ixtapa showcases the potential in a cove lika Mastigo Bay. Capella Ixtapa just won three “Top 10” 2011 Traveller’s choice awards including “Top 10 Hotels for Romance in the World”

Site Plan

Approved Land Plan for Mastigo bay

Potential Plans

Site Plan

Cliffside Hotel and Private Villas

A close up view of potential Hote/Spa and villas.

Cliffside Hote and Private Villas

World Class Spa Exceptional Fishing

World Class Spa Exceptional Fishing

Great Possibilities

Mastigo Bay has been approached by Greenhart Conservation LLC as a potential site for a large scale zip line. Due to the relativiley flat nature of most of Baja, Mastigo Bay offers permier conditions for a such an activity. With Eco-Tourism on the rise, more travellers seek nature based adventures.

Year 1 Year 2 Year 3 Year 4

Before Tax Cash Flow Projection

Investment and Sale (5,000,000) 0 0 0

Effective Income 0 0 10,995,000 34,037,500

Operating Expense (100,000) (6,221,222) (24,583,000) (997,778)

Cash Flow Before Debt (5,100,000) (6,221,222) (13,588,000) 33,039,722

Debt Service 0 6,221,222 14,713,000 (27,383,116)

Cash Flow Before Tax (5,100,000) 0 1,125,000 5,656,606

Taxable Income Projection

Taxable Revenue 0 0 10,995,000 34,037,500

Taxable Expense (100,000) 0 (6,695,158) (9,434,086)

Interest Expense 0 0 (2,416,667) (4,032,227)

Depreciation 0 0 0 0

Ordinary Income (100,000) 0 1,883,175 20,571,186

After Tax Cash Flow Projection

Cash Flow Before Tax (5,100,000) 0 1,125,000 5,656,606

Ordinary Income (100,000) 0 1,883,175 20,571,186

Capital Gains 0 0 0 0

Taxable Income 0 0 1,783,175 20,571,186

Taxes 0 0 (624,111) (7,199,915)

Cash Flow After Tax (5,100,000) 0 500,889 (1,543,309)

Real Estate Investment Analysis

Rate of Return Before Debt (IRR) 78.5%

Rate of Return Before Tax (IRR) 151.0%

Rate of Return After Tax (IRR) 102.1%

Net Present Value Before Debt @10% 46,876,784

Net Present Value Before Tax @10% 44,198,707

Net Present Value After Tax @10% 26,966,957

The data and calculations presented herein, while not guaranteed, have been obtained from sources we believe to be reliable. Produced by planEASe for Windows from Analytic Associates

Year 5 Year 6 Year 7 Sell

Before Tax Cash Flow Projection

Investment and Sale 0 0 0 0

Effective Income 38,119,688 14,883,750 6,201,563 0

Operating Expense 0 0 0 0

Cash Flow Before Debt 38,119,688 14,883,750 6,201,563 0

Debt Service 0 0 0 0

Cash Flow Before Tax 38,119,688 14,883,750 6,201,563 0

Taxable Income Projection

Taxable Revenue 38,119,688 14,883,750 6,201,563 0

Taxable Expense (10,499,225) (3,651,904) (1,521,627) 0

Interest Expense 0 0 0 0

Depreciation 0 0 0 0

Ordinary Income 27,620,463 11,231,846 4,679,936 0

After Tax Cash Flow Projection

Cash Flow Before Tax 38,119,688 14,883,750 6,201,563 0

Ordinary Income 27,620,463 11,231,846 4,679,936 0

Capital Gains 0 0 0 (5,000,000)

Taxable Income 27,620,463 11,231,846 4,679,936 (5,000,000)

Taxes (9,667,162) (3,931,146) (1,637,977) 750,000

Cash Flow After Tax 28,452,526 10,952,604 4,563,585 750,000

Total

Before Tax Cash Flow Projection

Investment and Sale (5,000,000)

Effective Income 104,237,500

Operating Expense (31,902,000)

Cash Flow Before Debt 67,335,500

Debt Service (6,448,894)

Cash Flow Before Tax 60,886,606

Taxable Income Projection

Taxable Revenue 104,237,500

Taxable Expense (31,902,000)

Interest Expense (6,448,894)

Depreciation 0

Ordinary Income 65,886,606

After Tax Cash Flow Projection

Cash Flow Before Tax 60,886,606

Ordinary Income 65,886,606

Capital Gains (5,000,000)

Taxable Income 60,886,606

Taxes (22,310,312)

Cash Flow After Tax 38,576,294

Real Estate Investment Analysis

Unit Sales Profit

Account Amount

Unit Sales Planned

Phase I- 120 Fractionals $36,000,000

Phase II- 120 Fractionals 37,800,000

Phase III- 120 Fractionals 39,690,000

Lots B-1 to B-6 3,900,000

Lots B-7 & B-8 Terraced 5,000,000

Punta Algodness Lots 1 5,000,000

Total Unit Sales Planned $137,390,000

Less: Sale Commissions 33,152,500

Net Sales Planned $104,237,500

Less: Costs Planned

Land Acquisition $5,000,000

Boutique Hotel Costs 13,544,000

Indirect Costs 3,898,000

Other Costs 1,860,000

Infrastructure Costs- Lots 5,400,000

Other Indirect Costs 2,100,000

Total Cost Planned $31,802,000

Profit before Debt Costs $72,435,500

Less: Draw Loan Interest & Fees $6,448,892

Project Profit $65,986,608

Project Cost

Summary

Cost Item $/Unit Total % Total $

Land Acquisition 89,285.71 15.72% 5,000,000

Total $89,285.71 15.72% $5,000,000

Boutique Hotel Costs

Div. 200 Site Improvements 6,500.00 1.14% 364,000

Div. 220 Landscaping 10,000.00 1.76% 560,000

Div. 230 Amenities 20,000.00 3.52% 1,120,000

Div. 300 Vertical Construction 205,357.14 36.16% 11,500,000

Total Boutique Hotel Costs $241,857.14 42.59% $13,544,000

Indirect Costs

Div. 100 Architectural 4,928.57 0.87% 276,000

Div. 101 Engineering 3,696.43 0.65% 207,000

Div. 102 Supervision 3,571.43 0.63% 200,000

Div. 103 Permit & Fees 1,071.43 0.19% 60,000

Div. 104 Legal 892.86 0.16% 50,000

Div. 105 Taxes & Insurance 446.43 0.08% 25,000

Div. 106 Contingency 25,000.00 4.40% 1,400,000

Div. 107 FF&E 30,000.00 5.28% 1,680,000

Total Indirect Costs $69,607.14 12.26% $3,898,000

Other Costs

Div. 1710 Contractor Fee 8,928.57 1.57% 500,000

Div. 1720 Developer Fee 5,357.14 0.94% 300,000

Div. 1730 Marketing Budget 10,000.00 1.76% 560,000

Div. 1740 Boat Budget 8,928.57 1.57% 500,000

Total Other Costs $33,214.29 5.85% $1,860,000

Infrastructure Costs- Lots

Div. 100 Architect & Engineeri 1,785.71 0.31% 100,000

Div. 102 Supervision 3,571.43 0.63% 200,000

Div. 103 City Permits & Fees 892.86 0.16% 50,000

Div. 104 Legal 446.43 0.08% 25,000

Div. 105 Taxes/Insurance 446.43 0.08% 25,000

Div. 200 Grading, Paving, Curb 89,285.71 15.72% 5,000,000

Total Infrastructure Costs- Lots $96,428.57 16.98% $5,400,000

Other Indirect Costs

Contractors Fee 8,928.57 1.57% 500,000

Developers Fee 5,357.14 0.94% 300,000

Contingency 14,285.71 2.52% 800,000

Marketing Budget 8,928.57 1.57% 500,000

Total Other Indirect Costs $37,500.00 6.60% $2,100,000

Total Project Cost $567,892.86 100.00% $31,802,000

Cost Item $/Unit Total % Total $

Land Acquisition 89,285.71 15.72% 5,000,000

Total $89,285.71 15.72% $5,000,000

Boutique Hotel Costs

Div. 200 Site Improvements 6,500.00 1.14% 364,000

Div. 220 Landscaping 10,000.00 1.76% 560,000

Div. 230 Amenities 20,000.00 3.52% 1,120,000

Div. 300 Vertical Construction 205,357.14 36.16% 11,500,000

Total Boutique Hotel Costs $241,857.14 42.59% $13,544,000

Indirect Costs

Div. 100 Architectural 4,928.57 0.87% 276,000

Div. 101 Engineering 3,696.43 0.65% 207,000

Div. 102 Supervision 3,571.43 0.63% 200,000

Div. 103 Permit & Fees 1,071.43 0.19% 60,000

Div. 104 Legal 892.86 0.16% 50,000

Div. 105 Taxes & Insurance 446.43 0.08% 25,000

Div. 106 Contingency 25,000.00 4.40% 1,400,000

Div. 107 FF&E 30,000.00 5.28% 1,680,000

Total Indirect Costs $69,607.14 12.26% $3,898,000

Other Costs

Div. 1710 Contractor Fee 8,928.57 1.57% 500,000

Div. 1720 Developer Fee 5,357.14 0.94% 300,000

Div. 1730 Marketing Budget 10,000.00 1.76% 560,000

Div. 1740 Boat Budget 8,928.57 1.57% 500,000

Total Other Costs $33,214.29 5.85% $1,860,000

Infrastructure Costs- Lots

Div. 100 Architect & Engineeri 1,785.71 0.31% 100,000

Div. 102 Supervision 3,571.43 0.63% 200,000

Div. 103 City Permits & Fees 892.86 0.16% 50,000

Div. 104 Legal 446.43 0.08% 25,000

Div. 105 Taxes/Insurance 446.43 0.08% 25,000

Div. 200 Grading, Paving, Curb 89,285.71 15.72% 5,000,000

Total Infrastructure Costs- Lots $96,428.57 16.98% $5,400,000

Other Indirect Costs

Contractors Fee 8,928.57 1.57% 500,000

Developers Fee 5,357.14 0.94% 300,000

Contingency 14,285.71 2.52% 800,000

Marketing Budget 8,928.57 1.57% 500,000

Total Other Indirect Costs $37,500.00 6.60% $2,100,000

Total Project Cost $567,892.86 100.00% $31,802,000

This material does not constitute an offer to sell or a solicitation to buy. Offers will be made at a later date only to persons designated by the General Partner of “Mastigo Bay Prporties”. The Maters set forth herein are illustrative only and do not constitute representations, warranties or covenants of any party.

This material is being provided only to a limited number of individuals personally known by the principals of the General Partner based upon their preliminary expression of interest in the information contained herein. Such information is strictly confidential, and this material should be delivered only to the addressee and should not be duplicated or otherwise delivered to any other person without the prior express written consent of the General Partner.

In addition, this Confidential Information Memorandum includes certain projections with respect to the anticipated development budget and future operating performances of Mastigo Bay Properties. Such projections reflect various assumptions of management concerning the anticipated future performance of The Spa at Mastigo Bay.

These assumptions may or may not prove to be correct. In any event, actual results will vary from projected results and such variations may be material. No representations or warranties are made as to the accuracy or reasonableness of such assumptions or the projections based thereon.

For More

Infromation:Please contact:Dennis FrenchEquity Directions IncEmail: french@equitydirections.com Telephone: (760) 360-8001Fax: (760) 360-0290

Hasta

Luego!

Maravilla, Equity Directions Inc