POSSIBLE STRATEGIES OF ACTION

REPORT ISSUED BY THE SOLICITORS JAIME OLAORTUA UGALDE Y EMILI MORAGAS FREIXA, AT THE REQUEST OF THE ASSOCIATION FOR THE AFFECTED OF TRAMPOLIN HILLS

PREVIOUS EVENTS

I.- The Company “Trampolin Hills Golf Resort, S.A.” has been declared in necessary bankruptcy proceedings.

II.- We have partial knowledge of the Decree of Bankruptcy Proceedings through transfer of copies and verbal information of the situation of reclassification of the land.

LEGAL AND FINANCIAL SITUATION

1.- Trampolin Hills has had inscribed in their name various plots of land, which are part of the total building land, which are not mortgaged, but with various embargoes for a total of over 2.000.000 €.

2.- There are other plots which are located within the boundaries of the Project, acquired by means of private contracts, the amounts due to be paid by Trampolin Hills being unknown.

3.- There are between 1400 and 1700 off plan sales contracts to buyers, for which some (an unknown number) have applied for the rescission of their contracts.

4.- The definite reclassification of the land is awaiting final approval by the Town Hall of Campos del Rio.

POSSIBLE STRATEGIES OF ACTION BY THE AFFECTED BUYERS.

A.- RESCISSION OF CONTRACTS.

In the case that all or a majority of the buyers of properties apply for a rescission of their contracts because of breach of contracts, there is no doubt that they would obtain a favourable resolution by the Courts, although we must examine the consequences.

It seems that the sums received by Trampolin Hills for the planned construction amounts to the quantity of some 50.000.000 €.

This option implies the loss of rights to allotments of property and to the obligations of construction of the home.

The quantities paid would constitute ordinary credit in the bankruptcy, or even subordinated for those who have not communicated their credit to the Courts within the legal time limits.

In the case of a massive application for rescission of contracts by the buyers, we believe that the Bankruptcy Administration (trustees in insolvency) would not take any steps towards paying and acquiring the plots bought through private contracts, because, probably, they would need to spend money that Trampolin Hills does not have.

The final approval of the reclassification would need to be applied for by Trampolin Hills, now directed by the Bankruptcy Administrators (trustees in insolvency), with no certain knowledge that these would present the petition, as ownership of all the plots included in the Project is still not at their disposal.

According to evaluations presented by Trampolin Hills, the value of the land without reclassification amounts to 6.091.195,11 €, and with reclassification, to 85.939.990 €, although one should take these evaluations with reservations, as they have been presented by the insolvent company.

If there is not a possibility for an agreement with the insolvent company, one would proceed to an ordained settlement of assets, and in the case that this is not possible, to publicly auction off the property. In the current property market situation, we think that the land, even if reclassified and sold ordinarily, would not cover the debts. No need to say the same if sold by public auction.

Of the obtained sum, the privileged credits would be paid first, followed by the ordinary and subordinated in legal proportions.

All this will take its time, the uncertainty of the sums which might be obtained, with the certainty that, if the land is not reclassified, the ordinary and subordinated creditors would practically not obtain anything.

We advise against the strategy of massive application for rescission of the contracts.

B.- APPLY FOR THE ALLOTMENT OF COEFFICIENTS OF PLOTS FOR BUILDING COMMUNALLY

The preliminary steps are that the Bankruptcy Administration (trustees in insolvency) acquire the plots which have not yet been inscribed, which are located within the boundaries, and the subsequent final approval of reclassification, which presents the difficulties described in the previous point A.

A condition without exception would be that the mentioned application of allotment is presented by a sufficient number of buyers who, communally, could carry out a significant part of the Project. This would require a substantial number of buyers.

The allotment would be asymmetrical, because there are buyers who have paid sums of less value than their theoretical plot, and others who have paid quantities much larger than that value, which would mean a complex elaboration, which could only be done and decided by the Bankruptcy Administrators (trustees in insolvency) and approved by the Bankruptcy Courts.

If allotment were obtained, the buyers would have to form a Co-Ownership, to build, or a Cooperative, compensate the financial unbalances amongst each other, act themselves as developers of the project to be carried out, having to find the financing, contract engineers and builders, with a new project and new budgets for building.

We advise against the strategy of applying for allotments of coefficients of building plots, because of its complexity and improbable success.

C.- NEGOTIATE AND APPROVE AN AGREEMENT WITH THE INSOLVENT COMPANY.

For this it is necessary to have the approval of creditors which represent more than half of the total credit; that is some 25.000.000 €.

The agreement would need to include the following conditions:

1.- Definite commitment on behalf of a financial entity, subject to the condition of approval of an agreement, to grant a sufficient credit to Trampolin Hills for starting the construction.

2.- Acquirement of the plots still awaiting deeds.

3.- Final approval of the reclassification of the land.

4.- Starting again the construction on behalf of Trampolin Hills, subject to the following conditions:

a.- Subscription to an Insurance Policy which guarantees the devolution of the quantities already paid and to be paid by the buyers, as established in the First Additional Resolution to the Construction and Development Act.

b.- Contracting, in charge of Trampolin Hills, of a Technical Office for construction control, without whose approval bills could not be paid or certificates of construction issued, neither by charging bank credit nor by charging quantities paid by buyers.

c.- Establish a control of disposal of funds on behalf of the Administrators of Trampolin Hills.

Because the mercantile legislation impedes the limiting of the functions of the Administrators of companies, it would be convenient to introduce in the agreement a prolongation of the intervention of the Bankruptcy Administrators, whose signatures would be needed for any act of disposal by the company.

The inconvenience of this solution is that we would have to continue dealing with the responsible members of Trampolin Hills, but the advantages would be that they would be totally controlled and that the conditions of price established in the contracts would be respected and, in the case of a new failure, the quantities paid would be covered by an Insurance Contract, with certainty of recovery independent of a new insolvency situation or of breach of contracts on behalf of Trampolin Hills.

D.- ASSIGNMENT OF THE CREDIT TO ANOTHER DEVELOPER, BUYING A NEW HOME FROM THIS

The possibility has been commented of another developer willing to buy the credit from the buyers, offering as exchange the sale of another home in another urbanization. This possibility should not be rejected blankly, although the new developer should respect the following conditions:

1.- Respect the final price of each home.

2.- That the urbanization is situated in an acceptable location for the buyers.

3.- That the types and qualities of construction should be equal or similar to those of Trampolin Hills.

4.- That there is an offer of insurance which guarantees the devolution of the quantities already paid, or to be paid, in case of breach of the contract.

And to thus inform, we release this report upon petition of and in the interests of the Association for the Affected of Trampolin Hills, while awaiting other better documented.

Barcelona for Murcia, 18th of February, 2010


Jaime Olaortua Ugalde Emili Moragas Freixa.

Solicitors