Offering Memorandum JJS$ 220,000,000 TRUMP OCEAN CLUB PANAMA Newland International Properties, Cmp. 9.50% Senior Secured Notes due 2014 To fund construction of Trump Ocean Club International Hotel & Tower, Panama Offering Price: 100% Newland International Properties, Corp., or Issuer, is a sociedad an6nima organized under the laws of the Republic of Panama, or Panama, through public deed number 3,482 from the Ninth Public Notary of the Circuit of Panama, dated March 28, 2006, registered in jacket 521258, document 929232 of the Mercantile Section of the Public Register, since March 30, 2006. The Notes will bear interest at a fixed annual rate of 9.50% which will be paid every six months on November 15 and May 15, commencing May 15, 2008. We may redeem the Notes, in whole or in part, at the redemption prices and times described herein. See "Description of Notes-Redemption." We have registered the Notes in Panama as described below. We have not registered and will not register the Notes under the U.S. Securities Act of 1933, or Securities Act, as amended, or under the laws of any state of the United States. We have not been and will not be registered under the U.S. Investment Company Act of 1940, or Investment Company Act, as amended. The Notes may not be offered or sold in the United States to or for the account or benefit of any U.S. person except pursuant to transactions not subject to the registration requirements of the Securities Act and applicable state securities laws. The Notes are being offered only (i) in the United States in reliance upon an exemption from registration requirements of the Securities Act, to Qualified Institutional Buyers, as defined in Rule 144A under the Securities Act, that are also Qualified Purchasers for purposes of Section 3(c)(7) of the Investment Company Act, and (ii) outside the United States, to persons who are neither U.S. Persons nor U.S. residents (within the meaning of the Investment Company Act) in offshore transactions in reliance on Regulation S. The Notes are subject to other restrictions on transferability and resale, as set forth in "Notice to Investors" and each purchaser of the Notes in making its purchase will be deemed to have made certain acknowledgements, representations and agreements as set forth thereunder. Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this offering memorandum. The Notes will be issued pursuant to an indenture between Issuer and HSBC Bank USA, National Association, as trustee. The Notes will be senior general obligations of the Issuer, secured by a first priority lien on substantially all of the assets of the Issuer. Investing in the Notes involves significant risks. See "Risk Factors" beginning on page 18. Price to investors 0 >121 Expenses Per Note................................ .......... ................. US$ 10,000.00 US$ 425.00 Total........................................................................ US$ 220,000,000.00 US$ 9,350.000.00 (I) Plus accrued mterest from November 14, 2007, if settlement occurs after that date. (2) Price to investors is subject to change. See "Plan of Distribution." Net proceeds to issuer US$ 9,575.00 US$ 210,650,000.00 The Notes being offered in accordance with Rule 144A under the Securities Act are expected to be ready for delivery in book-entry form outside Panama through the facilities of The Depository Trust Company on or about November 14. 2007. Notes being offered in accordance with Regulation S under the Securities Act are expected to be ready for delivery in book-entry form outside Panama through the facilities of Euroclear Bank, S.A./N.V., as operator of the Euroclear system, or Clearstream Banking, S.A., on or about November 14, 2007. Beneficial interests in the Regulation S Global Note (as defined herein) may be held in Panama through Central Latmoamericana de Valores, S.A., which is a participant in the Clearstream system. THE PUBLIC OFFERING OF THE NOTES IN PANAMA HAS BEEN AUTHORIZED BY THE COMISION NACIONAL DE VALORES OF PANAMA (THE PANAMANIAN NATIONAL SECURITIES COMMISSION). THIS AUTHORIZATION DOES NOT IMPLY A RECOMMENDATION ON THE PART OF THE COMISION NACIONAL DE VALORES TO INVEST IN THE NOTES. NOR A FAVORABLE OR UNFAVORABLE OPINION REGARDING THE BUSINESS OF THE COMPANY. THE COMISION NACIONAL DE VALORES SHALL NOT BE LIABLE FOR THE ACCURACY OR ADEQUACY OF THE INFORMATION IN THIS OFFERING MEMORANDUM OR THE REPRESENTATIONS CONTAINED IN THE REGISTRATION STATEMENT. THE LISTING AND TRADING OF THE NOTES HAS BEEN AUTHORIZED BY THE BOLSA DE VALORES DE PAJ\~4MA, S.A. (PANAMA STOCK EXCHANGE). THIS AUTHORIZATION DOES NOT IMPLY ANY RECOMMENDATION OR OPINION REGARDING THE NOTES OR THE ISSUER. Bear, Stearns & Co. Inc. f J.} /\ The d'1eof "'' plli>liooffomg of"'' No<~ m P>o=• i; N°'=bff 9. 2007 Md "'' dfile ofili,; offomg m=ornod= " No'"mbcc 7. 2007 The Issuer Mr. Carlos Saravia Newland International Properties, Corp. Calle 53 Obarrio Plaza 53 Panama City, Republic of Panama Telephone I Facsimile: 507-223-0225 Email: charlies@trumpoceanclub.com Initial Purchaser Bear, Steams & Co. Inc. 383 Madison Avenue New York, New York 10179 Independent auditors Mr. John C. Cheng Grant Thornton Cheng y Asociados 1st Ave C, El Carmen, No. 111 Panama City, Republic of Panama Telephone: 507-264-9511 Facsimile: 507-263-8441 Email: jcheng@gt.com.pa Local broker Mr. Gabriel Fabrega Mundial Asset Management PH Balboa Point 101, 4th Floor Balboa A venue and 40th Street Panama City, Republic of Panama Telephone (Panama): 507-225-2525 Telephone (USA): 201-484-8052 I 305-267-0626 Facsimile: 507-225-2390 Email: info@mundialam.com Trustee, registrar and paying agent Ms. Deirdra N. Ross HSBC Bank USA, N.A. 452 Fifth A venue New York, New York 10018-2706 Tel: 212-525-1398 Fax: 212-525-1300 Email: deirdra.ross@us.hsbc.com Co-Trustee Mrs. Rosaura Grajales de Medina HSBC Investment Corporation (Panama) S.A. Calle 47 Este Aquilino de la Guardia HSBC Bank Tower Panama City, Republic of Panama Telephone: 507-206-8696 Facsimile: 507-206-8481 Email: rosaura.grajales@hsbc.com.pa Legal advisors J 11 u· t' To issuer as to US. lmv Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, New York 10166-0193 To initial purchaser as to US. lmv Thacher Proffitt & Wood LLP Two World Financial Center New York, New York 10281 To issuer as to Panamanian lmv Sucre Arias & Reyes Edificio Sucre Calle 48E, Bella Vista Panama City, Republic of Panama Telephone: 507-204-7900 Facsimile: 507-264-1168 Email: nlabood@sucre.net To initial purchaser as to Panamanian lmv Arias Fabrega & Fabrega Edificio Plaza 2000, Piso 16 Calle 50 Panama City, Republic of Panama Telephone: 507-250-7000 Facsimile: 507-205-700 I Email: rarango@arifa.com Panama Stock Exchange Bolsa de Valores de Panama, S.A. PO Box 87-0878, Zone 7 Panama 7, Republic of Panama ' Conceptual architectural rendering of Trump Ocean Club not reflect1;g-current state of construction or "~·nhi,nrmn w;o (/ uJnor notice. 1 r .-- -· Ox:o Snki. Cris~6ti,:;.1•'cc,1cn .· ... J'ANAMA ··.~ ·.· ·.·.· . . • · tTulboa. · Va~rncnt~ ,.,· . ' "' '. ' , .:- PUNTA PACIFICA GUlF'.OF PANAMA: In making your investment decision, you should rely only on the information contained in this offering memorandum. Neither we nor the initial purchaser has authorized anyone to provide you with any other information. If you receive any other information, you should not rely on it. We and the initial purchaser are offering to sell the Notes only in places where offers and sales are permitted. You should not assume that the information contained in this offering memorandum is accurate as of any date other than the date on the front cover of this offering memorandum. NOTICE TO NEW HAMPSIDRE RESIDENTS ONLY NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER RSA 421-B WITH THE STATE OF NEW HAMPSHIRE, NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE, CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COivlPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT, NOR THE FACT THAT AN EXEivlPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION, MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. NOTICE TO FLORIDA RESIDENTS THE NOTES ARE OFFERED PURSUANT TO A CLAIM OF EXEivlPTION UNDER SECTION 517.061 OF THE FLORIDA SECURITIES ACT (THE "FLORIDA ACT") AND HA VE NOT BEEN REGISTERED UNDER THE FLORIDA ACT IN THE STATE OF FLORIDA. FLORIDA RESIDENTS WHO ARE NOT INSTITUTIONAL INVESTORS DESCRIBED IN SECTION 517.061(7) OF THE FLORIDA ACT HAVE THE RIGHT TO VOID THEIR PURCHASES OF THE NOTES WITHOUT PENALTY WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION. NOTICE TO PROSPECTIVE INVESTORS IN PANAMA THE NOTES HA VE BEEN AUTHORIZED FOR PUBLIC OFFERING IN PANAMA BY THE COMISION NACJONAL DE VALORES (NATIONAL SECURITIES COMMISSION), OR THE CNV, AND THE LISTING AND SALE OF THE NOTES HAS BEEN AUTHORIZED BY THE BOLSA DE VALORES DE PANAMA., S.A. (PANAMA STOCK EXCHANGE). NEITHER THE REGISTRATION WITH THE CNV NOR THE LISTING OF THE NOTES ON THE PANAMA STOCK EXCHANGE IIvlPLIES ANY CERTIFICATION AS TO THE INVESTMENT QUALITY OF THE NOTES, THE SOLVENCY OF THE COivlPANY, OR THE ACCURACY OR COivlPLETENESS OF THE INFORMATION AS CONTAINED IN THIS OFFERING MEMORANDUM. THIS DOCUMENT SHALL BE KNOWN AS THE PROSPECTO INFOKMATIVO IN SPANISH FOR PURPOSES OF THE REGISTRATION OF THE OFFERING OF NOTES WITH THE CNV, AND AS THE OFFERING MEMORANDUM IN ENGLISH FOR PURPOSES OF THE OFFERING OF THE NOTES OUTSIDE OF PANAMA. THIS OFFERING MEMORANDUM HAS BEEN DRAFTED IN THE ENGLISH LANGUAGE. ALL PARTIES WHO PARTICIPATED IN ITS DRAFTING ARE FLUENT IN AND UNDERSTAND THE ENGLISH LANGUAGE. ALTHOUGH A CERTIFIED SPANISH TRANSLATION OF THIS OFFERING MEMORANDUM AND DOCUMENTS RELATING TO THIS OFFERING HAS BEEN SUBMITTED FOR PURPOSES OF THE REGISTRATION OF THE OFFERING OF NOTES WITH THE CNV, AND ALTHOUGH A CERTIFIED SPANISH TRANSLATION OF THIS OFFERING MEMORANDUM AND 1 DOCUMENTS RELATING TO THIS OFFERlNG MAY BE SUBMITTED AS EVIDENCE IN A COURT OF LAW OR GOVERNMENTAL AGENCY IN PANAMA, IN CASE OF A CONFLICT BETWEEN THE ENGLISH VERSION AND THE CERTIFIED SPANISH TRANSLATION, THE ENGLISH VERSION WILL PREVAIL. INFORMATION AS TO PLACEMENT WITHIN THE EUROPEAN ECONOMIC AREA IN RELATION TO EACH MEMBER STATE OF THE EUROPEAN ECONOMIC AREA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE OR WHERE THE PROSPECTUS DIRECTIVE IS APPLIED BY THE REGULATOR (EACH, A "RELEVANT MEMBER STATE"), WITH EFFECT FROM AND INCLUDING THE DATE ON WHICH THE PROSPECTUS DIRECTIVE IS IMPLEMENTED OR APPLIED IN THAT RELEVANT MEMBER STATE (THE "RELEVANT IMPLEMENTATION DATE"), NO OFFER OF NOTES HAS BEEN MADE OR WILL BE MADE TO THE PUBLIC IN THAT RELEVANT MEMBER STATE PRIOR TO THE PUBLICATION OF A PROSPECTUS IN RELATION TO THE NOTES WHICH HAS BEEN APPROVED BY THE COMPETENT AUTHORITY IN THAT RELEVANT MEMBER STATE OR, WHERE APPROPRIATE, APPROVED IN ANOTHER RELEVANT MEMBER STATE AND NOTIFIED TO THE COMPETENT AUTHORITY IN THAT RELEVANT MEMBER STATE, ALL IN ACCORDANCE WITH THE PROSPECTUS DIRECTIVE AS IMPLEMENTED OR APPLIED IN THE RELEVANT MEMBER STATE, EXCEPT THAT, WITH EFFECT FROM AND INCLUDING THE RELEVANT IMPLEMENTATION DATE, AN OFFER OF NOTES MAY BE MADE TO THE PUBLIC IN THAT RELEVANT MEMBER STATE AT ANY TIME: (a) TO LEGAL ENTITIES WHICH ARE AUTHORIZED OR REGULATED TO OPERATE IN THE FINANCIAL MARKETS OR, IF NOT SO AUTHORIZED OR REGULATED, WHOSE CORPORATE PURPOSE IS SOLELY TO INVEST IN SECURITIES; (b) TO ANY LEGAL ENTITY WHICH HAS TWO OR MORE OF (1) AN A VERA GE OF AT LEAST 250 EMPLOYEES DURlNG THE LAST FINANCIAL YEAR; (2) A TOTAL BALANCE SHEET OF MORE THAN EURO 43,000,000 AND (3) AN ANNUAL NET TURNOVER OF MORE THAN EURO 50,000,000, AS SHOWN IN ITS LAST ANNUAL OR CONSOLIDATED ACCOUNTS; OR (c) IN ANY OTHER CIRCUMSTANCES WHICH DO NOT REQUIRE THE PUBLICATION BY THE ISSUER OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE. FOR THE PURPOSES OF THIS PROVISION, THE EXPRESSION AN "OFFER OF NOTES TO THE PUBLIC" IN RELATION TO ANY NOTES IN ANY RELEVANT MEMBER STATE MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE NOTES TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE FOR THE NOTES, AS THE SAME MAY BE VARIED IN THAT MEMBER STATE BY ANY MEASURE IMPLEMENTING THE PROSPECTUS DIRECTIVE IN THAT MEMBER STATE AND THE EXPRESSION "PROSPECTUS DIRECTIVE" MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN EACH RELEVANT MEMBER STATE. INFORMATION AS TO PLACEMENT WITHIN SWITZERLAND THIS DOCUMENT HAS BEEN PREPARED FOR PRIVATE INFORMATION PURPOSES OF INTERESTED INVESTORS ONLY. IT MAY NOT BE USED FOR AND SHALL NOT BE DEEMED A PUBLIC OFFERlNG OF THE OFFERED NOTES. NO APPLICATION HAS BEEN MADE UNDER SWISS LAW TO PUBLICLY MARKET THE OFFERED NOTES IN OR OUT OF SWITZERLAND. THEREFORE, NO PUBLIC OFFER OF THE OFFERED NOTES OR PUBLIC DISTRIBUTION OF THIS DOCUMENT MAY BE MADE IN 11 OR OUT OF SWITZERLAND. THIS DOCUMENT IS STRICTLY FOR PRIVATE USE BY ITS HOLDER AND MAY NOT BE PASSED ON TO THIRD PARTIES. INFORMATION AS TO PLACEMENT WITHIN THE UNITED KINGDOM THE NOTES MAY NOT BE OFFERED OR SOLD AND, PRIOR TO THE EXPIRY OF THE PERIOD OF SIX MONTHS FROM THE CLOSING DATE, WILL NOT BE OFFERED OR SOLD TO PERSONS IN THE UNITED KINGDOM EXCEPT TO PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING OR DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSE OF THEIR BUSINESS OR OTHERWISE IN CIRCUMSTANCES THAT HAVE NOT RESULTED AND WILL NOT RESULT IN AN OFFER TO THE PUBLIC IN THE UNITED KINGDOM WITHIN THE MEANING OF THE PROSPECTUS REGULATIONS 2005. THIS OFFERING MEMORANDUM AND ANY OTHER DOCUMENT IN CONNECTION WITH THE OFFERING AND ISSUANCE OF THE NOTES MAY ONLY BE ISSUED OR PASSED ON TO A PERSON OF A KIND DESCRIBED IN ARTICLE 49(2) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 OR IS A PERSON TO WHOM THIS OFFERING MEMORANDUM OR ANY OTHER SUCH DOCUMENT MAY OTHERWISE LAWFULLY BE ISSUED OR PASSED ON (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS DOCUMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. ENFORCEMENT OF CIVIL LIABILITIES We are organized under the laws of Panama, and all of our directors and executive officers and our independent accountants named in this offering memorandum reside outside the United States. In addition, a substantial portion of our assets and a substantial portion of the assets of these persons, are located in Panama. As a result, it may not be possible for the trustee or investors in the Notes to effect service of process on us or such persons outside of Panama or to fully enforce, outside of Panama, judgments against us or such persons that are based on the civil liability provisions of the federal securities laws of the United States. We have been advised by our Panamanian counsel, Sucre, Arias & Reyes, that Panama is not a party to any treaties providing for reciprocal recognition and enforcement of judgments rendered in legal proceedings with respect to civil and cmmnercial matters. For a foreign judgment to be effective and enforceable in Panama, the Supreme Court of Panama must validate the judgment by the issuance of a writ of exequatur. Subject to a writ of exequatur, any final judgment rendered by any federal or state court located in the State of New York will be recognized, conclusive and enforceable in the courts of Panama without reconsideration of the merits, provided that (i) such foreign court grants reciprocity to the enforcement of judgments of courts of Panama, (ii) the party against whom the judgment was rendered, or its agent, was personally served (service by mail not being sufficient) in such action within such foreign jurisdiction, (iii) the judgment arises out of a personal action against the defendant, (iv) the obligation in respect of which the judgment was rendered is lawful in Panama and does not contradict the public policy of Panama, (v) the judgment is properly authenticated by diplomatic or consular officers of Panama or pursuant to the 1961 Hague Convention on the legalization of documents, and (vi) a copy of the final judgment is translated into Spanish by a licensed translator in Panama. FORWARD-LOOKING STATEMENTS This offering memorandum contains financial projections, assumptions and other forward-looking statements that reflect our current views with respect to future events. All statements, other than statements of hi.~tordl facts, included in this offering memorandum are forward-looking statements and involve significant risks C>11_ c.../ r" 1 lll and uncertainties. The words "expects'', "intends", "anticipates", "believes", "projects", "estimates" and similar expressions identify forward-looking statements. Statements regarding the following subjects may be impacted by a number ofrisks and uncertainties: • our business and operating strategy; • our financial projections, including cash flow and balance sheet projections; • our financial assumptions, including assumptions regarding macroeconomic conditions, sales, construction costs, and selling, advertising and administrative expenses; • our understanding of our competition and our ability to compete effectively; and • trends in the luxury real estate market in Panama and Latin America. Our financial projections and other forward-looking statements are based upon our beliefs, estimates and assumptions and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our financial projections, assumptions and other forward-looking statements. You should carefully consider these risks before you make an investment decision with respect to our Notes, along with the following factors that could cause actual results to vary from our financial projections, assumptions and other forward-looking statements: • delays or unexpected casualties related to the construction of the Trump Ocean Club International Hotel & Tower, Panama; • increases in costs and decreases in availability of raw materials; • our limited sales and operating history; • political, economic and other conditions in Panama and globally; • natural disaster-related losses which may not be fully insurable; • any loss of key personnel; • our significant transactions with related parties; • our ability to attract and retain sales executives or real estate brokerage fmns; • potential non-perfonnance of contractual obligations by our customers; • our ability to collect on our receivables and to deliver real estate products to our customers; • competition in the luxury real estate development industry; • the loss of tax exemptions granted to the project and other changes in applicable tax laws; • changes in interest rates or foreign exchange rates; and • various other factors, including those described under "Risk Factors." All financial projections, assumptions and other forward-looking statements contained in this offering memorandum are qualified in their entirety by these risks, uncertainties and other factors. You are cautioned not to C/ af < , IV place undue reliance on these forward-looking statements, which speak only as of their dates. We disclaim any obligation or undertaking to update publicly or revise any financial projections, assumptions and other forwardlooking statement contained in this offering memorandum, whether as a result of new infonnation, future events or otherwise. Future events or circumstances could cause actual results to differ materially from historical results or financial projections. PRESENTATION OF FINANCIAL AND OTHER INFORMATION Our functional currency is the U.S. dollar. Accordingly, the financial statements and financial projections included in this offering memorandwn are presented in U.S. dollars. Financial statements were prepared on a historical cost basis. The tenn "Panamanian government" refers to the government of the Republic of Panama. The terms "U.S. dollar", "U.S. dollars'', "dollar" and "dollars" and the symbols"$" and "US$" refer to the legal currency of the United States, which since 1904 is also legal tender in and the functional currency of Panama. References to the "Balboa" are to the official monetary unit of Panama, which serves only as coinage, and has been pegged at parity with the U.S. dollar since 1904. Financial Statements Tnis offering memorandum includes our audited financial statements as of December 31, 2006 and for the period from March 28, 2006, our date of incorporation, to December 31, 2006, which have been audited by Grant Thornton Cheng y Asociados, a member of Grant Thornton International, or Grant Thornton. Also included in this offering memorandum are our unaudited interim financial statements as of and for the six month period ended June 30, 2007, which have been reviewed by Grant Thornton. Our audited financial statements have been prepared and presented in accordance with International Financial Reporting Standards, or IFRS. Significant differences exist between IFRS and accounting principles generally accepted in the United States, which might be material in relation to the financial infonnation included in this offering memorandum. We have not identified or quantified the effect of any such differences. In making an investment decision, you must rely upon your ovm examination of the financial infonnation included in this offering memorandum. The financial projections inciuded in this offering memorandwn have been prepared by, and are the responsibility of, our management. Grant Thornton has neither examined nor compiled the accompanying financial projections. Accordingly, Grant Thornton does not express an opinion or any other fonn of assurance with respect to our financial projections. The Grant Thornton report included in this offering memorandum relates to our historical financial infonnation. It does not extend to the accompanying financial projections and should not be read to do so. Financial Projections This offering memorandum includes financial projections of possible cash flows and selected balance sheet items for the six months ending December 31, 2007 and for the seven years ending December 31, 2014. These financial projections are based on a set of assumptions, including assumptions regarding macroeconomic conditions, sales, construction costs, and selling, advertising and administrative expenses. When evaluating the financial projections, you should also consider the limitations of these projections as described in "Risk Factors-Risks Related to our Business-Projections included in this offering memorandum may turn out to be inaccurate." Our financial projections are based on a financial model that has been reviewed by our independent financial advisor, Advisory Services Ltda., a Colombian limited liability partnership and a member finn of the KPMG network of independent member fmns affiliated with KPMG International, a Swiss cooperative, or KPMG. KPMG has reviewed the integrity and mathematical accuracy of our financial model, confmned the reasonableness of the assumptions by comparing them to the underlying supporting infonnation, and confmned that the resulting financial projections have been derived correctly from our financial model. ~ v The frnancial projections included in this offering memorandum have been prepared by, and are the responsibility of, our management. KPMG conducted only a limited review of our projections and provides no assurances regarding the accuracy of the infonnation used by our management to prepare our financial projections. Rounding Rounding adjustments have been made to some of the figures included in this offering circular. As a result, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them. Market Data We make statements in this offering memorandum concerning market estimates and our position in relation to our competitors, among other matters. These statements are based on infonnation from sources we consider to be reliable. Although we have no reason to believe this infonnation to be materially inaccurate, it was not subject to independent verification and we cannot therefore provide any assurances regarding the accuracy and completeness of this infonnation. Available Information We are not required, nor will we be required, to file reports with the U.S. Securities and Exchange Commission or to deliver an annual report to the holders of the Notes pursuant to the Exchange Act, in connection with this offering, but in accordance with the Panamanian Ley de Valores (Decreto Ley No.I de 8 de Julio de 1999) (Panamanian Securities Law) and applicable rules thereto, we will be required to file certain reports with the CNV and the Panama Stock Exchange. The trustee under the Indenture governing the Notes will provide without charge, upon the written request of a holder of a Note, frnancial and other information required to be delivered by Rule 144A(d)(4) under the Securities Act to enable resales of the Notes pursuant to Rule 144A, unless, at the time of the request, we are subject to the reporting requirements of Section 13 or Section 15(d) of the U.S. Securities Exchange Act of 1934, or Exchange Act, or are exempted from such requirements pursuant to Rule 12g3-2(b) under the Exchange Act. Written requests for such infonnation should be addressed to Newland International Properties, Corp., Calle 53 Obarrio, Plaza 53, Panama City, Republic of Panama, Attn: Mr. Carlos Saravia. We have filed with the CNV a registration statement, of which this offering memorandum fonns a part. We will also file with the CNV and the Panama Stock Exchange our quarterly unaudited and annual audited financial statements, each prepared in accordance with IFRS, which differ in certain respects from accounting principles generally accepted in the U.S. This information can be obtained by investors upon request at the Panama Stock Exchange, located at Edificio Bolsa de Valores de Panama, Calle 49 y Av. Federico Boyd, Panama City, Republic of Panama, or upon request at the CNV located at Avenida Balboa, Edificio Bay Mall, Piso 2, Oficina 206, Panama, Republic of Panama. Our principal executive offices are located at Calle 53 Obarrio, Plaza 53, Panama City, Republic of Panama. Vl TABLE OF CONTENTS Page Forward-Looking Statements ...................................................................................................................................... iii Presentation of Financial and Other Infonnation ........................................................................................................... v Su1n1nary ........................................................................................................................................................................ 1 The Offering .................................................................................................................................................................. 5 Summary Historical Financial Information ................................................................................................................. 15 Summary of Financial Projections ............................................................................................................................... 16 Risk Factors ................................................................................................................................................................. 18 Use of Proceeds ........................................................................................................................................................... 29 Capitalization ............................................................................................................................................................... 30 Selected Historical Financial Information ................................................................................................................... 31 Management's Discussion and Analysis of Financial Condition and Results of Operations ...................................... 32 Business ....................................................................................................................................................................... 39 Manage1nent ................................................................................................................................................................ 62 Principal Shareholders ................................................................................................................................................. 66 Certain Relationships and Related Party Transactions ................................................................................................ 68 Description of Notes .................................................................................................................................................... 69 Notice to Investors ..................................................................................................................................................... 105 Certain U.S. Federal Income Tax Considerations ...................................................................................................... 108 Certain Panama Tax Considerations .......................................................................................................................... 110 Plan ofDistribution .................................................................................................................................................... 112 General Infonnation ................................................................................................................................................... 114 Legal Matters ............................................................................................................................................................. 115 Independent Accountants ........................................................................................................................................... 115 Independent Financial Advisor .................................................................................................................................. 115 Independent Appraiser ............................................................................................................................................... 115 Independent Engineer ................................................................................................................................................ 116 Index to Financial State1nents .................................................................................................................................... F-1 Annex A- CB Richard Ellis Collateral Valuation and Appraisal Report ................................................................. A-1 Annex B - Executive Summary of Independent Engineer Report of Louis Berger .................................................. B-1 Annex C - Financial Projections ............................................................................................................................... C-1 PAGE INTENTIONALLY LEFT SUMMARY This summary highlights information contained elsewhere in this offering memorandum but does not contain all the information that may be important to you. Before making an investment decision, you should read this entire offering memorandum. You should also carefully consider the information set forth under the headings "Risk Factors" and "A1anagement 's Discussion and Analysis of Financial Condition and Results of Operations", as well as the financial projections and accompanying assumptions, and the financial statements and accompanying notes. appearing elsewhere in this offering memorandum. Unless the context indicates otherwise, when we refer to "Newland", "Trump Ocean Club", "we", "our". "us". the "project" and the "development", we are referring to the business operated by, the property owned by and the project being constructed and developed by Newland International Properties, C01p .. a Panamanian c01poration. Overview of Trump Ocean Club We are a real estate development company established to develop the "Trump Ocean Club International Hotel & Tower" in Panama City, Panama. Trump Ocean Club is being developed as a multi-use luxury tower, overlooking the Pacific Ocean, with luxury condominium residences, a world-class hotel condominiwn, a limited nwnber of offices and premier leisure amenities. Trwnp Ocean Club will be located on the Punta Pacifica Peninsula, one of the most exclusive neighborhoods in Panama City, on approximately 2.8 acres (11,200 square meters) of land, including approximately 295 lineal feet (90 lineal meters) of oceanfront. When fully developed, Trump Ocean Club is expected to have 69 floors of construction and to include, among other things, the following amenities: • 627 luxury residential condominium units, including one, two and three bedroom units; • 369 world-class hotel condominium units, including fully furnished studio style rooms and suites; • private beach club on the island of Contadora, Panama; • international casino; • pier facility and yacht club; • pool deck; • 29 boutique shops; • 20 office lofts; • restaurants; • business center; • wellness spa; and • 1451 parking spaces. Given the international prestige and name recognition associated with the Trump brand name and the breadth of our product offerings, we believe Trump Ocean Club will be a unique development not only in Panama, but also in the Central American and Caribbean regions. We broke ground on May 5, 2007 and, through June 30, 2007, have presold approximately 64% of the building's condominium and commercial units, amounting to approximately US$ 278.7 million or 54% of our estimated gross sellout. We expect to complete and deliver our hotel and residential condominium units by the end of August 2010. As of June 30, 2007, we have invested approximately US$ 34.8 million in the development of the Trump Ocean Club. Additionally, we have invested US$ 0.9 million in land acquisition costs under a contract for promise of purchase for the real property where we will develop our private beach club. CB Richard Ellis, Inc., or CBRE, a leading c01mnercial real estate services finn, has appraised the Trump Ocean Club tower and private beach club and estimates the project's "as is" development value to be US$ 113.6 million as of September 14, 2007. After giving effect to this offering and Newland's pro fonna cash balance, CBRE estimates the market value of the project to be US$ 362.9 million. A copy of the CBRE appraisal report is attached to this offering memorandum as Annex A. Financing of Trump Ocean Club The total cost to complete Trump Ocean Club is estimated to be approximately US$ 227.l million, including US$ 25.9 million in land acquisition costs, US$ 173.0 million in direct construction costs, and US$ 28.2 million in furniture, fixtures and equipment, or FF&E, but excluding project overhead, selling and administrative expenses and financial costs. See "Annex C-Financial Projections-Business Assumptions-Construction Costs." As of June 30, 2007, we have invested approximately US$ 25.9 million in land acquisition costs and US$ 1.0 million in direct construction costs for the development of Trump Ocean Club. Between June 30, 2007 and the closing date of this offering we anticipate to incur, and use a portion of our customer down payments to pay for, an additional US$ 14.7 million in direct construction costs. Accordingly, on the closing date of this offering, we estimate the remaining cost to complete Trump Ocean Club will be approximately US$ 185.5 million. We estimate that the net proceeds from this offering will be approximately US$ 210.6 million. Of the total net proceeds, we will use US$ 15.0 million to repay outstanding amounts on our existing bridge loan facility, approximately US$ 9.6 million to make our initial deposit in the Debt Service Reserve Account established under the Indenture, and US$ 186.0 million to fund the Construction Escrow Account to be used for the construction of Trump Ocean Club. For additional infonnation regarding the use of the proceeds of the Notes, see "Use of Proceeds". Through June 30, 2007 we have presold approximately 64% of our building's units by entering into unit purchase agreements with our customers. Under these unit purchase agreements, prior to completion of construction of the related real property, our customers are required to make dovvn payments directly into an account established at HSBC Investment Corporation (Panama) S.A., or HSBC Panama Account. Restrictions upon the use of these funds for development of the Trump Ocean Club were removed on May 22, 2007, upon compliance with all preestablished conditions. We estimate that on the closing date of this offering, there will be approximately US$ 23.7 million on deposit in the HSBC Panama Account. On July 16, 2007, we entered into a bridge loan facility with Bear Steams Commercial Mortgage, Inc. to assure us the ability to fund a portion of the construction costs associated with Trump Ocean Club. We deposited funds disbursed under the bridge loan facility into an escrow account established with Key Bank Real Estate Capital, or Bridge Escrow Account. We estimate that on the closing date of this offering, there will be approximately US$ 11. 7 million on deposit in the Bridge Escrow Account. On the closing date of this offering, we will repay all outstanding amounts on the bridge loan facility and will gain access to the amounts held in the Bridge Escrow Account. On the closing date of this offering, we will transfer, to the Construction Escrow Account, US$ 11. 7 million from the Bridge Escrow Account and a sufficient amount from the HSBC Panama Account to cause the amounts on deposit in the Construction Escrow Account to exceed the estimated remaining direct construction costs andFF&EbyUS$15.l million. Our ability to withdraw funds from the Construction Escrow Account to fund the construction costs of Trump Ocean Club is subject to, among other requirements, receiving required certifications from the independent engineer regarding the progress of construction. See "Description of Notes-Construction Escrow Account." 2 We expect that our selling and administrative expenses, project overhead, and financial costs, will be covered with cash on hand and collections from our customers under our unit purchase agreements. See "Annex C-Financial Projections". Ownership of Trump Ocean Club Trump Ocean Club is being developed by Newland, which is controlled by Ocean Point Development Corp., a Panamanian holding company, or Ocean. Ocean is controlled, directly and indirectly, by Roger Kl1afif, Arias Serna y Saravia S.A., or Arias Serna & Saravia, and Espacios Urbanos S.A., or Espacios Urbanos. Roger Kbafif owns interests in several companies in Panama with operations in diversified industries, including Kedco Fashion Corp. and Rafkas Imp/Exp, two companies in Panama's Colon Free Zone. In addition, Mr. Kbafif owns interests in several real estate projects in Panama, including the development of two beach resorts, the Coronado Country Club Resort outside Panama City and the Emerald Bay resort in Contadora Island, Panama. Arias Serna & Saravia is an architectural and engineering fmn headquartered in Colombia with wide-ranging experience in the real estate business. Espacios Urbanos is a real estate brokerage firm headquartered in Colombia and dedicated to the sale and marketing of residential, commercial and industrial properties. Neither Roger Kbafif, Arias Serna & Saravia nor Espacios Urbanos o-wns an interest in any company which may compete with Trump Ocean Club. See "Business - Project Sponsor and Key Strategic Partners." Market Dynamics The real estate market in Panama has experienced high growth rates over the last 5 years, as a result of Panama's economic and political stability, low cost of living, attractive weather, convenient location, the use of the U.S. dollar as legal tender and the widespread availability of long-tenn mortgage financing to local and foreign borrowers. These conditions have made Panama an increasingly attractive retirement destination for U.S. and Canadian baby boomers. In addition, Panama's Spanish-speaking culture has drawn an increasing number of residents from Spain and other Latin American countries. As a result of these trends, Trump Ocean Club primarily targets affluent U.S., Canadian, Spanish and Latin American individuals who consider purchasing real estate in Panama or the Central American and Caribbean regions. Trump Ocean Club's luxurious design and amenities have also attracted customers in the local market due to the limited offering of this type of products in Panama. Our Strengths Unique products witlt strong customer appeal We believe Trump Ocean Club offers unique products in the market in which it competes, since its luxurious residential units and world-class hotel condominiums are complemented by amenities such as an international casino, a private beach club, the only 24-hour yacht club in Panama City and other premier leisure services. In addition, Trump Ocean Club benefits from its location at the heart of a large urban center, Panama City. As of the date of this offering memorandum, we believe that Trump Ocean Club is the only luxury complex in Panama that will offer this combination of amenities to its customers. Our historical sales data reflects the strong customer appeal of our products. As of June 30, 2007, 64% of our units have been presold for US$ 278. 7 million or 54% of our estimated gross sellout. Diverse customer base and strong sales contracts. As of June 30, 2007, over 85% of our customers reside outside of Panama, including approximately 41 % in the United States, 8% in Canada, 11 % in Venezuela, 9% in Colombia and 16% in other countries. In addition, the unit purchase agreements executed by our customers include provisions that protect the economics of our project: (i) the obligation of our customers to make aggregate down payments of at least 30%, (ii) a restriction on unit re-sales without our express written consent, (iii) the obligation to pay a commission with respect to any re-sales equivalent to between 3% and 8% on the final re-sale price, (iv) Newland's right to increase the purchase price of any unit by up to 6% of ilie contract price, (v) the absence of any contractual penalties for the delayed delivery of our units, (vi) our ability to demand specific perfonnance of the unit purchase agreements from our customers, and (vii) customer's forfeiture of any amounts paid under a unit purchase agreement in the event of a breach of contract, including a payment default or breach of the resale restrictions. Attractive economics and future recurring revenue sources. We estimate the total completion cost of Ocean Club to be approximately US$ 268.9 million, excluding sales and administrative expenses and 3 financial costs. We estimate the gross cash sellout from our residential, hotel and commercial units and private beach club memberships to be approximately US$ 512.3 million. In addition, upon completion of Trump Ocean Club, we expect to generate recurring revenue from the operations of our casino, hotel, restaurants, spa, private beach club and yacht club. Premier brand. We benefit from the international prestige and name recognition associated with the Trump brand name in the real estate and hospitality industries. We believe that our use of the Trump name facilitates the branding of Trump Ocean Club as an exclusive, luxurious and high quality tower, which will enhance the marketing and sale of our real estate products to affluent individuals in the United States, Canada, Europe and Latin America. See "Business-Principal Project Agreements-License Agreement." Experienced sponsors and mallagement team. Our sponsors have wide-ranging experience in the successful execution ofreal estate projects in Latin America. In particular, Arias Serna & Saravia has more than 26 years of experience in the development and construction of luxury hotels and other real estate projects, and Espacios Urbanos has more than 20 years of experience in the sale and marketing of real estate products. Tax Benefits. Upon completion of this offering, and once we enter into a hotel management agreement with a hotel operator, we will be eligible to register with the Panamanian Institute of Tourism. This registration will entitle us to benefit from certain tax incentives with respect to the hotel component of Trump Ocean Club, including exemptions from import duties on construction materials and equipment and property transfer taxes. These exemptions will allow us to develop Trump Ocean Club and sell our hotel condominium units with significant cost reductions. However, we have not included these tax incentives in the assumptions underlying our financial model. We are a Panamanian sociedad anonima (corporation) incorporated on March 28, 2006 by public deed number 3,482 from the Ninth Public Notary of Panama and recorded with the Public Registry of Panama on March 30, 2006 under record number 521,258, document number 929,232 of the microfiche section. We are not an affiliate of Trump Entertainment Resorts, Inc. or Trump Organization, LLC. We market Trump Ocean Club under the Trump brand name pursuant to a license agreement with Trump Marks Panama LLC. Our corporate website is www.trumpoceanclub.com. The infonnation on our website is not a part of or incorporated by reference in this offering memorandum. 4 THE OFFERING The following summmy contains information about the Notes and the offering and is not intended to be complete. This summmy does not contain all the information that is important to you. For a more detailed description of the terms and conditions of the Notes. see "Description ofNotes." Issuer.. ................................................. Newland International Properties, Corp. Securities Offered ............................... US$ 220,000,000 aggregate principal amount of 9.50% Senior Secured Notes due 2014. Payment Dates .................................... November 15 and May 15 of each year, c01mnencing on May 15, 2008. Interest Payments ................................ Interest on the Notes will be payable semi-annually in arrears on each Payment Date. Principal Payments .. .. ..... ........ .. .. ... ..... Principal payments will be made in seven equal, semi-annual installments on the Payment Dates occurring on November 15, 2011, May 15, 2012, November 15, 2012, May 15, 2013, November 15, 2013, May 15, 2014, and November 15, 2014. Final Maturity Date ............................. November 15, 2014. Use of Proceeds ................................. . We will use the net proceeds of this offering, together with certain amounts on deposit in escrow in the HSBC Panama Account and/or the escrow account relating to the Bridge Loan Agreement, to (i) fund the Debt Service Reserve Account, (ii) repay the loan pursuant to the Bridge Loan Agreement and (iii) fund the Construction Escrow Account (as defined below), which will be used to pay for the costs of the construction of the Project. See "Use of Proceeds." Construction Completion Support Agreement. .................................... . Mr. Roger Khafif, Mr. Carlos A. Serna and Mr. Eduardo Saravia (the "Completion Support Parties") will enter into a construction completion support agreement with the Trustee, dated November 6, 2007 (the "Construction Completion Support Agreement"). Pursuant to the Construction Completion Support Agreement, the Completion Support Parties jointly and severally agree to pay, within 10 business days of an independent engineer's Evaluation Report (the "Escrow Top-Up Date"), the related Construction Shortfall, if any, to the Construction Escrow Account. With respect to each Escrow Top-Up Date, the obligations of the Completion Support Parties shall be deemed to be satisfied if, on or before such Escrow Top-Up Date, Newland shall deposit the related Construction Shortfall into the Construction Escrow Account pursuant to, and in accordance with the conditions set forth in, the Indenture, and the Trustee shall have received written notice from Newland to such effect on or before such Escrow TopUp Date. The Construction Completion Support Agreement will not be a guarantee of payment of the Notes, and Noteholders will have recourse only to Newland and the Collateral for repayment of their Notes. "Construction Shortfall" means, in respect of an Evaluation Report, the greater of (a) zero and (b) (i) the Estimated Completion Cost minus (ii) the greater of (A) zero and (B) (x) the Current Account Balance minus (y) the Minimum Escrow Balance. 5 "Estimated Completion Cost" means, as of the related Evaluation Date, the estimated cost to complete Construction of the Project as detennined by the Independent Engineer based on the Construction Budget, taking into consideration both expected increases and decreases in the costs of any remaining items required to complete construction as compared to the costs budgeted therefor in the Construction Budget. "Evaluation Report" means each report dated as of an Evaluation Date and prepared by the Independent Engineer and delivered, together with the related Eligible Escrow Withdrawal Request, to the Company, each Construction Completion Support Party, the Trustee and the Co-Trustee, identifying in reasonable detail: (1) the Current Account Balance as of a date not more than five (5) Business Days prior to the date of such report (as requested by the Company from the Trustee pursuant to Section 4.03(d) of the Indenture); (2) the Estimated Completion Cost; and (3) the amount of (and, ifapplicable, the reason(s) for) any Construction Shortfall. "Minimum Escrow Balance" means, as of any date, (a) the Estimated Completion Cost as set forth in the most recently available Evaluation Report (or, if such date is an Evaluation Date, such Evaluation Date) times (b) 7.5%. Ran.king............................................... The Notes are our senior secured obligations and will rank equally in right of payment with all of our existing and future senior indebtedness and senior in right of payment to all of our existing and future subordinated debt. Collateral............................................ The collateral will consist of: • the real property relating to a unit purchase agreement prior to the delivery oftitle to the purchaser; • all other real property (including, without limitation, the beach club, the common areas and the pier facility and yacht club), comprising the Project; • payment receivables and other rights and interests arising under our unit purchase agreements; • the Trump License Agreement; • all insurance proceeds relating to real property constituting the collateral or underlying the receivables; subject to any provisions in our unit purchase agreements; • all cash and other cash equivalents in the accounts maintained by the trustee; • all other revenues arising from the operation of the Project, including, without limitation, revenues arising from the operation of the casino, the hotel, the restaurants and the spa, including any leases relating thereto; • Newland's rights to the architectural drawings for the Project; Newland's rights under the construction contract with Opcorp Arsesa y/.( . ~ 6 International Inc., or Opcorp; and • all proceeds of the foregoing. See "Description of Notes-Collateral and Security." Debt Service Reserve Account.......................................... A segregated account in the name of the trnstee. On the closing date of this offering, an initial deposit will be made therein from the net proceeds of the offering equal to the amount of interest payments due on the Notes on the next Payment Date (the "Debt Service Reserve Account Initial Deposit"). After the closing date of this offering, amounts will be deposited into the Debt Service Reserve Account to maintain the amount on deposit at an amount equal to the sum of the amount of interest on and principal of the Notes that will be required to be paid to the Noteholders on the next Payment Date, except that with respect to principal of the Notes, such amounts will be deposited beginning on the first Payment Date (the November 15, 2011 Payment Date) on which principal of the Notes is payable (the "Reserve Requirement"). Income on amounts invested in the Debt Service Reserve Account will be transferred to the Collection Account by the Trustee on a monthly basis, provided that no Default or Event of Default has occurred and is continuing. On each Payment Date, the trustee will make payments from the Debt Service Reserve Account of interest on and principal, if any, of the Notes due on such Payment Date to the extent funds on deposit in the Collection Account and Investment Account are insufficient to make such payments. See "Description of Notes-Debt Service Reserve Account." Construction Escrow Account.......................................... A segregated account in the name of the trustee. On the Closing Date, Newland will deposit the sum of the net proceeds of the offering (after deduction of underwriting discounts, offering expenses, the Bridge Loan Repayment Amount and the Debt Service Reserve Account Initial Deposit) and, from amounts remaining on deposit in escrow in an account held on behalf of Newland by HSBC Investment Corporation (Panama) and an escrow account relating to the Bridge Loan Agreement, into the Construction Escrow Account, an amount sufficient such that the amount on deposit in the Construction Escrow Account exceeds the remaining direct costs (as certified on the Closing Date by the Company to the Trustee) of construction and furniture, fixtures and equipment as of the Closing Date by US$ 15.1 million. Funds held in the Construction Escrow Account will be invested by the Trustee upon the prior written direction by Newland to the Trustee in Eligible Investments pending withdrawal; provided that the Trustee will as of any date maintain, in the fonn of Cash Equivalents, an amount at least sufficient to pay for construction of the Project for which disbursements will be required during the six (6) months following such date. Income on amounts invested in the Construction Escrow Account will be transferred to the Collection Account by the Trustee on a monthly basis, provided that no Default or Event of Default has occurred and is continuing. Newland will grant the Trustee, for the benefit of the holders of the Notes, a first priority security interest in the Construction Escrow Account and all amounts on deposit therein to secure the obligations of Newland under the Indenture and the Notes . .fi;{ 7 Upon receipt from Newland of an Eligible Escrow Withdrawal Request that complies with the requirements of the Indenture, the Trustee will transfer cash in the requested amount from the Construction Escrow Account to the Co-Trustee for payment by the Co-Trustee by check to the related contractors. The Support Parties may, pursuant to the Construction Completion Support Agreement, be required from time to time to transfer funds to the Construction Escrow Account, as described herein under "-Construction Completion Support Agreement". In addition, both Newland and each Construction Completion Support Party may from time to deposit additional amounts into the Construction Escrow Account pursuant to, and in accordance with the conditions set forth in, the Indenture. Any amounts remaining in the Construction Escrow Account upon Construction Completion will be transferred to the Collection Account for application in accordance with the Priority of Payments. An "Eligible Escrow Withdrawal Request" will be a written request delivered to the trustee not less than 3 Business Days prior to the requested date of withdrawal to transfer cash from the Construction Escrow Account to the co-trustee for payment of the related contractors by check, certifying (i) that the withdrawal conditions are met, (ii) as applicable, whether or not the Independent Engineer, in the Evaluation Report submitted in connection with such request, determined that a Construction Shortfall exists, and (iii) that such funds will be used to pay the contractor(s) specified in such notice for the Construction services provided by such contractor in accordance with the Construction Contract and the Plans and Specifications, accompanied by a certification from the Independent Engineer to the effect that the construction relating to the Project to which such request relates has occurred consistent with the Plans and Specifications. "Eligible Investments" means (i) Cash Equivalents and (ii) securities issued by the government of the United States or the Republic of Panama, in each case having maturities not less than 180 days before the final Payment Date. "Withdrawal Ratio" means, at any date, the percentage equivalent of a fraction (a) the numerator of which is the sum of (i) the sum of (A) 1.25 times the principal amount of Cash Equivalents in or for the credit of the Investment Account and (B) the principal amount of all other Eligible Investments in or for the credit of the Investment Account, and (ii) the aggregate principal balance of all Eligible Receivables subject to the Lien of the Trustee under the Indenture and (b) the denominator of which is (x) the principal balance of the Notes from time to time outstanding minus (y) the sum of (A) the principal amount of Eligible Investments in or for the credit of the Construction Escrow Account and (B) the DSRA Principal Reserve~ provided that if the denominator in clause (b) is zero or less than zero, the Withdrawal Ratio shall be deemed to be 125%. "Withdrawal Ratio Requirement" means, with respect to any requested withdrawal from the Construction Escrow Account, that the Withdrawal Ratio shall be equal to or greater than 125% after giving effect to such requested withdrawal. A e e "Des:dption ofNotes-Construction Escrow Account" < J Release Account ... ... ... .. ... ... .. ... .... .. ... .. A segregated account in the name of the tmstee that includes only cash equivalents, the proceeds thereof and interest earned thereon. Collection Account............................. A segregated account in the name of the trustee that includes only cash equivalents, the proceeds thereof and interest earned thereon. Investment Account............................ A segregated reserve account in the name of the trustee which includes only Eligible Investments, the proceeds thereof and the interest earned thereon. Collateralization Ratio Requirement ... Under the Indenture, it is an event of default if we fail to meet the Collateralization Ratio (i) within six months of the closing date or (ii) for a period of 30 successive days at any time thereafter. In addition, failure to achieve the Collateralization Ratio will prevent us from making restricted payments and entering into certain other corporate transactions. "Collateralization Ratio" means, at any date, the percentage equivalent of a fraction (a) the numerator of which is the sum of (i) the aggregate principal balance of all Eligible Receivables subject to the Lien of the Trustee under the Indenture and (ii) the sum of (A) 1.25 times the principal amount of Cash Equivalents in or for the credit of the Investment Account and (B) the principal amount of all other Eligible Investments in or for the credit of the Investment Account, and (b) the denominator of which is the principal balance of the Notes from time to time outstanding minus the DSRA Principal Reserve; provided, that if the denominator in clause (b) is zero or less than zero, the Collateralization Ratio shall be deemed to be 125%. 9 Application of Amounts on Deposit in Accounts .. .... ....... .. ...... .... ... ... .... . Under the unit purchase agreements, purchasers are required to make payments directly into the HSBC Panama Account, an escrow account established at HSBC Investment Corporation (Panama) S.A. ("HSBC Panama"). Pursuant to the co-trustee agreement among Newland, the trustee and HSBC Panama, as co-trustee, all payments made by any obligor under a unit purchase agreement to the HSBC Panama Account (after the deduction of the amount of the fee due to licensor in respect of such unit in accordance with the Trump License Agreement) will be transferred twice weekly into the Release Account. Such amounts will then be held in the Release Account during each monthly collection period and released to us on a weekly basis until the full amount of the Monthly Working Capitai Amount has been so released (or, if the full Monthly Working Capital Amount is not accumulated during such monthly collection period, the amount so accumulated as of the end of such monthly collection period), and all remaining collections, if any, in the Release Account during such monthly collection period will be transferred to the Collection Account on the first Business Day in the calendar month in which the related Disbursement Date shall occur. "Monthly Working Capital Amount" means, for each monthly collection period, the sum of (i) the Monthly Working Capital Requirement (as defined herein) for such monthly collection period and (ii) provided no default or event of default shall have occurred and be continuing, the aggregate amount of any monthly working capital shortfalls for prior monthly collection periods. On the 15th day of each month or, if such day is not a Business Day, the next succeeding Business Day (each, a "Disbursement Date"), the following amounts will be applied by the trustee in the following order of priority (the "Priority of Payments"): (1) if such Disbursement Date (A) is not a Payment Date, to retain on deposit in the Collection Account up to an amount sufficient to pay the fees, expenses and indemnities of the Trustee, the Co-Trustee, the Independent Appraiser and the Independent Engineer on the Payment Date next succeeding such Disbursement Date, or (B) is a Payment Date, from the Collection Account (or, if amounts on deposit therein are insufficient, from the Investment Account) to pay the fees, expenses and indemnities of the Trustee, the Co-Trustee, the Independent Appraiser and the Independent Engineer; (2) if such Disbursement Date (A) is not a Payment Date, to retain on deposit in the Collection Account, up to an amount sufficient (together with any amount so retained pursuant to this clause (2) on a prior Distribution Date not yet released) to pay interest and principal, if any, due on the Notes on the next Payment Date, or (B) is a Payment Date, (i) from the Collection Account, (ii) if amounts on deposit therein are insufficient, from the Investment Account, and (iii) if such amounts in (i) and (ii) herein are insufficient, from the Debt Service Reserve Account, to pay interest and principal (if any) due on the Notes on such Payment Date; (3) if such Disbursement Date (A) is not a Payment Date, to 10 transfer from the Collection Account to the Debt Service Reserve Account, up to an amount sufficient to maintain the Reserve Requirement as of such Disbursement Date, or (B) is a Payment Date, to transfer from the Collection Account (or, if amounts on deposit therein are insufficient, from the Investment Account) to the Debt Service Reserve Account, up to an amount sufficient to maintain the Reserve Requirement as of such Disbursement Date; (4) ifthe Collateralization Ratio Requirement is not met or ifa default or an event of default shall have occurred and be continuing, to transfer all remaining amounts from the Collection Account to the lnveshnent Account, for investment in Eligible Investments as specified in writing by the Company to the trustee; if the Collateralization Ratio Requirement is met and 110 (5) Default or an Event of Default shall have occurred and be continuing, to transfer from the Debt Service Reserve Account to Newland all amounts in excess of the Reserve Requirement after application of amounts on deposit therein on such Disbursement Date in accordance with the Priority of Payments; and (6) with respect to any amounts remaining after the application of clauses (1) through (5) above, to transfer such amounts from the Collection Account and/or the Investment Account, as the case may be, to the Company. To the extent amounts on deposit in the Collection Account (or, if applicable, the Investment Account) are insufficient to pay amounts due and payable on any Payment Date according to the Priority of Payments, we will be required to pay any such shortfall to the trustee to enable the trustee to make such payments on such Payment Date. In addition, we may, at any time and from time to time, contribute further amounts to the Inveshnent Account. Except in connection with any liquidation of the collateral following an event of default, amounts will not be pennitted to be withdrawn from the Construction Escrow Account to make payments on the Notes on any Payment Date. Upon acceleration of the Notes or the failure to pay principal on any Payment Date or upon any redemption in full of the Notes, amounts on deposit in the Accounts will be applied by the trustee, frrst, to amounts owing to the trustee in respect of fees, expenses and indemnities of the trustee, the co-trustee, the Independent Appraiser and the Independent Engineer, and, second, to pay interest on and principal of the Notes and any other amounts owing to the holders of the Notes pursuant to the Indenture. Any remaining amounts will be distributed to us. See "Description of Notes-Application of Amounts on Deposit in the Collection Account and the Investment Account." Additional Amounts ............................ All payments made by us under or with respect to the Notes will be made free and clear of and without withholding or deduction for or 011 account of any present or future taxes, levies, imposts, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the Republic of Panama or any political subdivision or taxing authority of or in the Republic of Panama ("Taxes"), unless we are required to withhold or deduct any amount for or on account of Taxes by law or by the ~p~ ;, ( / 11 interpretation or administration of law. If we are required to withhold or deduct any amount for or on account of Taxes from any payment made by us under or with respect to the Notes, we will, subject to certain customary exceptions, pay such additional amounts ("Additional Amounts") as may be necessary so that the net amount (including Additional Amounts) received by each holder of Notes after withholding or deduction will not be less than the amount the holder would have received if Taxes had not been withheld or deducted. See "Description ofNotes-Additional Amounts." Optional Redemption .......................... We may, at our option, redeem up to 35% of the principal amount of the Notes with the proceeds of certain sales of our equity at the redemption price listed under "Description of Notes-Optional Redemption." We may make the redemption only if, at least 65% of the original principal amount of the Notes remains outstanding after such redemption and the redemption occurs within 45 days of the date of such equity offering. We may, at our option, beginning on the third anniversary of the Closing Date, at any time, upon not less than 35 or more than 65 days' prior notice, redeem all or a portion of the outstanding principal amount of Notes at the redemption prices set forth under "Description of Notes-RedemptionOptional Redemption." In addition, we may, at our option upon not less than 30 or more than 60 days' prior notice, redeem the Notes at a price equal to 100% of the outstanding principal amount of the Notes plus a make-whole premium set forth under "Description of Notes-Redemption-Optional Redemption." Optional Redemption for Changes The Notes may be redeemed at our option, in whole but not in part, at any in Panamanian Withholding Tax .... time prior to the final maturity date of the Notes upon not more than 60 nor less than 30 days' notice to holders of the Notes at a redemption price equal to I 00% of the outstanding principal amount of the Notes (together with accrued and unpaid interest, if any, to (but excluding) the date fixed for redemption, plus any Additional Amounts), if, as the result of certain changes in or amendments to the tax laws of the Republic of Panama, we have or will become obligated to pay Additional Amounts in excess of the Additional Amounts that we would be obligated to pay if Taxes were imposed with respect to payments of principal, premium or interest at a rate in excess of 10%. See "Description of Notes-Redemption-Redemption For Changes in Withholding Taxes." Change of Control... ............................ Ifwe experience a Change of Control, each holder of the Notes will have the right to require us to repurchase all or a portion of the Notes at 101% of the principal amount of the Notes on the date of purchase, plus any accrued and unpaid interest to but excluding the date of purchase. See "Description of Notes-Redemption-Redemption at Option of Noteholders upon Change of Control." Covenants ........................................... The Indenture will, among other things, limit our ability to: • pay dividends or make distributions in respect of our or its capital stock 12 or to make certain other restricted payments or investments; • incur additional indebtedness; • sell assets; • make certain investments; • create liens; • consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; • engage in certain transactions with affiliates; and • enter into new lines of business; in each case as more fully described in this offering memorandum. See "Description of Notes-Certain Covenants." Form and Denominations .................... The Notes will initially be issued in the fonn of one or more global Notes without interest coupons, registered in the name of The Depository Trust Company, or its nominee. The Notes will be issued in minimum denominations of US$ 10,000 and integral multiples of US$ 1,000 in excess thereof. See "Description of Notes-Book-Entry, Delivery and Fonn." Transfer Restrictions ........................... The Notes will not be registered under the Securities Act. The Notes are being offered only to (a) in the United States in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, to "Qualified Institutional Buyers" (as defrned in Rule 144A under the Securities Act ("Rule 144A")) that are also "Qualified Purchasers," as defined below, or (b) outside the United States in compliance with Regulation S under the Securities Act to persons who are neither U.S. Persons (as defrned in Regulation S) nor U.S. residents (within the meaning of the U.S. Investment Company Act of 1940, as amended and the rules promulgated thereunder (the "Investment Company Act")). A "Qualified Purchaser" means a "qualified purchaser" for purposes of Section 3(c)(7) of the Investment Company Act. See "Notice to Investors." Governing Law................................... The Indenture, the Notes, the Co-Trustee Agreement and the Construction Completion Support Agreement will be governed by the laws of the State of New York. The Mortgage and each of the unit purchase agreements will be governed by the laws of the Republic of Panama. Trustee, Registrar and Paying Agent.. HSBC Bank USA, N.A. Co-Trustee.......................................... HSBC Investment Corporation (Panama) S.A. Independent Engineer......................... The Louis Berger Group, Inc. Independent Appraiser........................ CB Richard Ellis, Inc. 13 Ratings ................................................ The Notes have been assigned a rating of "Ba3" by Moody's Investors Service, Inc., or "Moody's'', and a rating of "BB" by Fitch Ratings, or "Fitch." Sole Lead Manager and Bookrunner .. Bear, Steams and Co. Inc. Local Placement Agent..................... Mundial Asset Management. Listing ................................................. The Notes will be listed on the Panama Stock Exchange. The Notes will not be listed on any other exchange. Beneficial interests in the Regulation S global note may be held in Panama through Latinclear, a pmticipant in Clearstream. PORTAL. ............................................ We expect that the Notes will be eligible for trading in the PORTAL market. Risk Factors........................................ Investing in the Notes involves certain risks. See "Risk Factors" beginning on page 18 of this offering memorandum. 14 Distribution of our Cash Flows after Closing The following diagram illustrates the distribution of our cash flows after the closing of this offering: r Collection Account Newland .~ Urut Purchase I '-·mm ,• Trustee Buyers of Units Monthly Workmg Capital Requirement Engineer Independent Appraiser Certificatwn of Sallsfactory Construcllon Pursuant to Approved Plans and SpecificatJons 'i{~~:efe~~~~~hi~a1•:···· Payments id Noteholders Third ..... MalniaiD.R_e~ei-Ve (' HSBC Panama Account r< Construction Escrow Account (Cash Equivalents) Independent Engineer01 Funding Payment Released Proceeds Contractors ,,. Release Account (I) Request Newland t J Payment Request The Louis Berger Group, Inc. 1s the Independent Engineer responsible for certifymg the sat1sfact1on of construct10n conditions. 15 SUMMARY HISTORICAL FINANCIAL INFORMATION We were incorporated on March 28, 2006 and to date have conducted limited operations and obtained limited financial results. Accordingly, we do not believe that the historical financial infonnation included in this offering memorandum is indicative of our future results. The following table sets forth our smmnary financial infonnation for the periods indicated. We derived our summary financial information as of December 31, 2006 and for the period from March 28, 2006, our date of incorporation, to December 31, 2006 from our audited financial statements included elsewhere in this offering memorandum. We derived our smnmary financial information as of and for the six months ended June 30, 2007 from our unaudited interim financial statements included elsewhere in this offering memorandum. The results for the six months ended June 30, 2007 are not necessarily indicative of actual results for the full year. You should read the smmnary financial infonnation presented below in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Capitalization" and our financial statements and the accompanying notes thereto contained elsewhere in this offering memorandmn. As of Asof December 31, 2006 June 30, 2007 (in millions) Balance Sheet Data Assets: 24.4 Restricted cash........................................................................... US$ Pro1ects .................................................................................... . 3.5 Other assets ................................................................................ - - - - - -1.8 Total assets ...................................................................... . 29.7 Liabilities: Customer deposits ..................................................................... . Accounts payable and accrued expenses ................................... . US$ 45.5 7.2 0.3 53.0 27.2 Accounts payable - related parties............................................. - - - - - - 27.2 Total liabilities ................................................................. . Stockholders' equity: Common stock ......................................................................... . 2.5 Additional paid-in capital ......................................................... . Total stockholders' eqmty ................................................. _ _ _ _ _ _2_.:i_- 4 liobHfo Md •Mcoholdoo• oqwty ........................................... . US$ <. 16 29.7 39.3 34.8 10.l 84.2 31.2 31.2 US$ 84.2 SUMMARY OF FINANCIAL PROJECTIONS The tables below set forth possible cash flows and selected balance sheet items derived from our financial model and its assumptions for the six months ending December 31, 2007 and the seven years ending December 31, 2014. The financial projections are included in this offering memorandum to assist you in considering a possible investment in the Notes and provide you with an indication of the hypothetical funds available to pay our obligations under the Notes. However, actual future conditions can be expected to vary substantially from the assumptions used in our financial model, in tenns both of amount and timing. Conseguentlv, actual cash flows and balance sheet items may differ materially from those set forth in our financial projections. We make no representation as to the reasonableness, accuracy, adequacy or completeness of our financial model, financial projections, assumptions or calculations. You should read our smmnary financial projections in conjunction with "Annex C-Financial Projections." See "Risk Factors-Risks Related to our Business-Projections included in this offering memorandmn may turn out to be inaccurate." CASH FLOW DATA For the 6 months ending Dec. 31, For the year ending December 31, 2007 Cash Inflows: Collection of payments ........................ . 2008 US$ Construction Escrow Account .............. . Bond Proceeds (Excluding Construction Escrow) ........................... . 20.7 2009 US$ 37.3 US$ 33.8 7.l 73.2 44.4 - - 5.4 - 2010 US$ 375.l 2011 2012 2013 2014 US$- US$ US$- US$- 75.8 34.0 Bridge Loan .......................................... . Interest income ..................................... . 15.0 1.8 8.6 Total Cash Inflows ............................ . 78.7 119.1 Construction Costs and FF&E .............. . 21.8 Project Overhead .................................. . 7.8 Selling and Advertismg Expense .......... . 7.3 12.0 9.1 5.6 2.1 83.6 458.l 12.0 9.1 5.6 2.1 73.2 44.4 60.7 13.3 9.6 7.3 18.0 1.0 5.2 4.0 1.3 87.0 0.6 48.6 93.0 59.3 155.6 Operating Cash Outflows: Admmistrative and Other Expenses ...... . Total Operating Cash Outflows ......... . l.3 ------------ ---- ---- ~~~~~~~~~~~~ Project Cash Flow ................................. . 30.0 26.1 24.3 302.5 12.0 9.1 5.6 2.1 Interest Payments ........................... . 0.8 19.3 19.3 19.3 19.3 15.l 9.6 4.l BankFees ..................................... . 9.9 Total Other Cash Outflows ............... . 10.8 19.3 19.3 19.3 16.l 35.3 15. l 9.6 4.1 Cash Flow Before Debt Amort1zat10ns .. 19.3 6.8 5.0 283.3 (23.3) (6.0) (4.l) (2.l) 31.4 62.9 62.9 62.9 30.1 (2.8) (2.8) (34.2) (62.9) (62.9) (31.4) (2.7) (2.8) (2.7) Other Cash Outflows: Tax Payments ....................................... . Mandatory Amortizations/Escrows: 15.0 Bridge Loan Payment ........................... . Amortization ofNotes .......................... . Debt Service Reserve Requirements I (Excess) .......................................... . 9.6 Construction Escrow Account'n Investment Account Reqmrements I (Excess) ................................................ . Total Mandatory Amortizat10ns/Escrows .......... . 14.6 39.2 220.0 (62.9) 220.0 (1.4) --- Dividends............................... 37.5 Partners Reimbursement........ 31.2 Free Cash Flow ......................... . Imtial Unresctncted Cash ............ . Ending Unrestricted Cash ..................... . US$ (19.9) 6.8 5.0 39.3 19.4 26.2 31.2 19.4 US$26.2 US$31.2 US$ 94.5 63.3 (21.9) (3.3) 94.5 72.6 69.3 68.0 US$ 72.6 US$ 69.3 US$ 68.0 US$- (1.3) (1 )fReµ,·sents cash to be transferred from the HSBC Panama Account and the Bridge Escrow Account mto the Construction Escrow Account. y~ ... ,......- ~ 17 (68.0) SELECT BALANCE SHEET DATA Assets: Cash ......... ................................ Investment Account Cash ............ Construction Escrow Account .... Debt Service Reserve Account (DSRAJ .... Total Cash and Escrows ..... ·················· Certain Liabilities Total Debt ....................... ·························· Net Debt .......................................... Customer Deposits ....................... 2008 2009 US$ 19.4 US$ 26.2 US$ 31.2 193.5 9.6 222.4 120.3 9.6 156.l US$ 220.0 (2.4) US$ 220.0 63.9 104.7 67.5 RATIOS AND OTHER DATA Eligible Receivables ................... Investment Account Cash ............... x 1.25 ............................................. Eligible Receivables and Eqmvalents (Numerator)(!) ................................. Total Debt ....................................... Principal Portion of DSRA ............. Denominator (Collateralizat1on) ..... Construction Escrow Account ........ Denommator (Withdrawal) ............. Collateralization Ratio'21 •.•..•.....••.•.. Withdrawal Ratiol (1) (2) (3) 31 .............•......••..• As of December 31, 2010 2011 2007 2007 US$ 266.8 2008 US$ 309.9 2012 2013 US$ 94.5 220.0 US$ 72.6 157.l US$ 69.3 94.3 US$ 68.0 31.4 75.8 9.6 116.7 9.6 324.1 39.7 269.4 36.9 200.5 34.2 133.6 US$ 220.0 103.3 US$ 220.0 (104.1) US$ 188.6 (80.8) US$ 125.7 (74.8) US$ 62.9 (70.7) As of December 31, 2009 2010 2011 US$ 336.7 US$ 220.0 US$ 157.l 196.4 275.0 2012 2013 US$ 94.3 117.9 US$ 31.4 39.3 266.8 309.9 336.7 275.0 196.4 117.9 39.3 220.0 220.0 220.0 220.0 220.0 193.5 26.5 220.0 120.3 99.7 220.0 75.8 144.2 220.0 188.6 31.4 157.l 125.7 31.4 94.3 62.9 31.4 31.4 220.0 157.1 94.3 31.4 l.25x l.21x l.41x l.53x l.25x l.25x 1.25x 10.05x 3.llx 2.33x l.25x l.25x 1.25x Includes cash in Investment Account multiplied by 1.25x. Measured as the rat10 of (i) Eligible Receivables and Eqmvalents to (ii) Total Debt mmus the Prmcipal Port10n of the DSRA. Measured as the ratio of (i) Eligible Receivables and Eqmvalents to (ii) Total Debt mmus the Pnncipal Port10n of the DSRA mm us the Construction Escrow Account balance. Assumptions Underlying our Financial Projections For an explanation of the assumptions supporting these swnmary of financial projections, see "Annex C- ;rcojoction&--Fffiondfil ModoI A"umptions." /f 18 RISK FACTORS Investing in the Notes involves significant risk. Prospective purchasers of the Notes should consider carefully all of the information in this offering memorandum, including, in particular. the risk factors discussed below. Additional risks and uncertainties not currently !mown to us or that we currently deem immaterial also may materially and adversely affect our business, financial condition and results of operations. If any of the following risks actually occurs. our business, financial condition. operating results and prospects could be materially and adversely affected. which could, in turn. affect adversely our ability to make payments on the Notes offered hereby. Risks Related to Our Business There are significant risks associated with major construction projects that may prevent completion of Trump Ocean Club Oil budget and 011 time. We must contend with the risks associated with construction activities, including cost overruns, shortages of cement or other materials, shortages of labor, labor disputes, unforeseen environmental or engineering problems, work stoppages, natural disasters and the inability to obtain insurance or obtaining insurance at significantly increased rates, any of which could delay construction and result in a substantial increase in our costs. As with any construction project, we may also be subject to delays resulting from changes in legislation, governmental bureaucracy or unforeseen or force majeure events which could result in increased costs. Any delay in construction or increase in costs could disrupt our business and adversely affect our results of operations. If there are unforeseen events such as the bankruptcy of, or an uninsured or under-insured loss suffered by, our general contractors, we may become responsible for the losses or other obligations of the general contractors. Should such losses or the cost of such other obligations exceed our insured limits, our results of operations could be adversely affected. In addition, our results of operations could be negatively impacted in the event that a general contractor experiences significant cost overruns or delays, and we effectively are forced to absorb the impact of such costs or delays. Projections included in tltis offering memorandum may tum out to be inaccurate. The financial projections included in this offering memorandum should be considered speculative and are qualified in their entirety by the asswnptions, information and risks disclosed in this offering memorandwn. Our financial projections are based on numerous asswnptions about future events. It should be emphasized that actual future conditions can be expected to vary substantially from the assumptions used in our financial model, in tenns both of amount and timing. Variations in macroeconomic conditions and other matters that may affect our financial projections are inherently unpredictable, beyond our control and may not be foreseen at this time. Accordingly, actual cash flows and balance sheet items may vary substantially from our financial projections. No fonn of assurance can be given with respect to our financial projections, including whether or when they will be realized. As a result, you should not unduly rely upon our financial projections in making an investment decision with respect to the Notes. You should make your own assessment of our assumptions and financial projections. You are advised to consult with your legal, tax and business advisors concerning the validity and reasonableness of the factual, accounting and tax asswnptions. Except as may be required by law, we do not intend to update or otherwise revise our financial model or our financial projections to reflect circumstances existing after the date of this offering memorandwn or to reflect the occurrence of future events, even in the event our assumptions or the estimates underlying our assumptions are shown to be in error. We are exposed to credit risk relating to tlte potential 11011-performance of colltractual obligations by our customers. We presell our real estate product by entering into unit purchase agreements with our customers. Under these unit purchase agreements, prior to completion of construction of the related real property, our customers are required to make certain non-negotiable down payments. We are exposed to the credit risk of our customers to the extent they do not fulfill their contractual payment obligations. As of June 30, 2007, we had receivables from our ~~ 19 customers of approximately US$ 250.1 million under these unit purchase agreements. If a material number of our customers experience credit or financial problems resulting in their delay or failure to pay the balance of amounts due to us, it will adversely affect our financial position and results of operation. Our ability to collect our accou1Zts receivable depellds customers. Oil our ability to deliver real estate products to our Our ability to collect our accounts receivable depends on our ability to deliver real estate products to our customers. If we fail to deliver real estate products to our customers within the time period specified in their purchase and sales agreements, those customers may stop making payments due to us. In addition, under the laws of Panama, those customers could seek the tennination of their purchase and sales agreements, the reimbursement of amounts paid thereunder, and payment of damages and expenses (such as interest or attorneys' fees) resulting from our failure to timely deliver their real estate products. Construction projects suclt as Trump Ocean Club are capital intensive, and we cannot assure you tltat amounts on deposit i11 tlte Construction Escrow Account after giving effect to tltis offering and the application of the llet proceeds therefrom will be sufficiellt to fully develop Trump Oceall Club as currently planned. Construction projects of luxury developments, such as Trump Ocean Club, are capital intensive and typically are scheduled for full development over a long period of time. We have retained Opcorp, our affiliate, to construct the real estate products and infrastructure comprising Trump Ocean Club under a lump-sum construction agreement. The lump-sum price under the construction agreement includes the cost of all materials, supplies, tools, equipment, furniture and other items provided by Opcorp. As of the closing date of this offering, we estimate the remaining completion cost of Trump Ocean Club to be approximately US$ 268.9 million, excluding sales and administrative expenses and financial costs. However, we can give no assurance that actual completion costs will correspond to our estimates. The construction agreement with Opcorp provides for the adjustment of its lump-sum price upon the occurrence of certain unforeseen events. In the event we experience an increase in completion costs, amounts on deposit in the Construction Escrow Account may not be sufficient to fully develop Trump Ocean Club as currently planned. Accordingly, our ability to fund increased completion costs and service our indebtedness will depend on our ability to generate cash in the future and obtain capital at reasonable costs and terms. Our ability to generate cash and obtain capital is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. In addition, the Indenture limits our ability to incur additional indebtedness and issue certain equity interests. We cannot assure you that we will generate sufficient cash flow from operations, or that future borrowings or other capital infusions will be available to us at reasonable costs and tenns, to fund increased completion costs and other capital needs. Tltere are potential conflicts of interest in respect of our co1Zstructio11 contract witlt the construction compally chiefly respollsible for building Trump Oceall Club, alld we have significant transactions with other related parties. Opcorp, the contractor we have retained to construct the real estate products and infrastructure projects of Trump Ocean Club, is our affiliate. As a result, our construction contract with Opcorp was negotiated between related parties and its tenns, including fees payable, may be deemed to be less favorable to us as compared to tenns negotiated with an unaffiliated, third-party construction company. Additionally, conflicts of interest may arise between us and Opcorp in a number of areas relating to our ongoing relationship, including the nature, quality and pricing of construction services rendered by Opcorp to us. Our financial statements include a note regarding the number and value of our transactions with related parties. See note 8 of the notes to our financial statements for a description of the key transactions with related ~through June 30, 2007. 20 We are indirectly controlled by a small number of principal stockholders wlto may ltave diverging business interests. We are a wholly-owned subsidiary of Ocean, whose ownership is indirectly concentrated in a small group of stockholders that have a controlling interest. Ocean and its controlling stockholders control our management, business, affairs and policies. These controlling stockholders may have diverging interests that result in our taking, and refraining from taking, major business decisions. Our operating perfonnance depends largely on the interest and ability of our controlling stockholders to reach agreement on major business decisions. The disagreement of a controlling stockholder on a major business decision may have a material adverse effect on our ability to meet our own obligations. We ltave a limited operating ltistory, and we cannot assure you that we will be able to operate our business profitably. We were incorporated and commenced sales of our products in the first quarter of 2006. As a result, we have a limited operating history and cannot assure you that our planned development will attract the number and type of customers we desire to achieve our sales and profitability objectives. Moreover, our operations have been limited to early-stage construction of Trump Ocean Club. While our sponsor and affiliates have experience completing major construction projects, including condominiums, residential complexes and shopping malls, due to our limited operating history we have not yet demonstrated our ability to complete a large-scale construction project as planned for the period from fiscal year 2008 through 2010. Consequently, any predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history. We also will be subject to significant business, economic, regulatory and compet1t1ve uncertamt1es frequently encountered by new businesses in competitive environments, many of which are beyond our control. Because of our limited operating history, it may be more difficult for us to prepare for and respond to these risks and the other risks described in this offering memorandum, as compared with a more established business. As a result, you must evaluate our business prospects in light of the risks inherent in the establishment of a new business enterprise. We cannot assure you that we will be able to successfully develop or operate the Trump Ocean Club project or to manage these risks successfully or that we or the project will be profitable. We may be affected adversely by, and we may sustain losses from, natural disasters wlticlt are not fully insurable. The geographic region of Panama presents risks of natural disasters, including but not limited to hurricanes, floods and earthquakes, that may damage or destroy part or all of our property, and adversely affect our business. In addition, certain types oflosses resulting from natural disasters may not be insurable up to the full economic value of any affected property, and there can be no assurance that we will be able to obtain adequate insurance for all risks at reasonable costs and/or on suitable tenns. As a result, there can be no assurance that, in the event of a catastrophic or substantial loss, our insurance would be sufficient to pay the full market value or replacement cost of Trump Ocean Club. We are dependent on key personnel of our affiliates and the loss of any of their services could have an adverse effect on our operations. We have entered into various services agreements with our affiliates for the development of Trump Ocean Club, including a lump-sum construction contract with Opcorp. We depend upon the resources and perfonnance of Opcorp, other affiliates and their key employees, the loss of any of whom could have an adverse effect on our operations. We cannot assure you that we will be successful in retaining any of their services. Ifwe are unable to retain our key personnel and attract experienced officers and employees, we may not be able to implement our strategies and, accordingly, our results of operations, financial condition and business prospects may be affected adversely. We do not maintain key man life insurance for any of our key personnel. ~t 21 Failure to reach a final agreement with affiliates of Donald J. Trump regarding the management and operation of our hotel and casino could impact our ability to market and sell our products. We market Trump Ocean Club under the Trump brand name pursuant to a license agreement with Trump Marks Panama. See "Business-Principal Project Agreements-License Agreement." In addition, we are in the process of negotiating a hotel management agreement and a casino lease agreement with affiliates of Donald J. Trump. We believe that our use of the Trump brand name and the operation of our hotel and casino by affiliates of Donald J. Trump will facilitate the branding of Trump Ocean Club as an exclusive, luxurious and high quality tower, and will enhance the marketing and sale of our real estate products to affluent individuals. In the event we are unable to reach a final agreement with affiliates of Donald J. Trump on the management and operation of our hotel and casino, the appeal of becoming an owner of one of our real estate units may diminish and our ability to market and sell our products could be adversely affected. A decrease ill the perceived prestige of the Trump brand name or any of our strategic partners or, more importa11tly, the quality of their work could adversely impact our ability to market and sell our products. A key element of our marketing and sales strategy has been to market our project under the Trump brand name and work with internationally recognized strategic partners to design, construct and/or operate many of our facilities, in order to achieve worldwide exposure for Trump Ocean Club and create greater appeal for our product offerings. Negative publicity concerning the Trump name, any of our strategic partners or, more importantly, the quality of their work could adversely impact our ability to market and sell our products. We may be unable to attract and retain sales executives or brokeragefimzsfor our real estate products. We must attract and retain productive sales executives or brokerage firms in order to sell our real estate products. We are currently dependent on our master broker, International Sales Group Latin America Ltda., or ISG Latin America, to expand and improve the efficiency and production of our network of sales executives and brokerage fmns. We cannot provide any assurance that the sales initiatives ofISG Latin America and Newland will succeed in attracting and retaining productive sales executives or brokerage fmns. We also cannot provide assurance that we will be able to find another master broker on favorable tenns if ISG Latin America does not perform its sales obligations. Sales of our real estate products, our cash flows and our financial condition could be affected adversely if ISG Latin America and Newland are unsuccessful in attracting and retaining productive sales executives or brokerage firms. Geopolitical risks and market disruptions could affect adversely our financial position, sales and cash flows. Geopolitical events could have a substantial adverse impact on the international economy and, more specifically, the luxury real estate industry. Moreover, international terrorism and other geopolitical risks have created many economic and political uncertainties, any of which could have material adverse effects on the U.S., Canadian, Latin American and Spanish economies-from where we derive a substantial portion of our buyers-and, in tum, on our financial position, sales and cash flows. Our operations are subject to extensive environmental and safety regulations, and our inability to comply with existing environmental and safety regulations or requirements or changes in these regulations or requirements may have an adverse effect 011 our financial position and cash flows. We are subject to extensive environmental, health and safety laws and regulations in Panama, which, among other things, require us to perfonn environmental impact studies, to obtain regulatory licenses, pennits and other approvals and to comply with the requirements of such licenses, pennits and regulations. On October 4, 2006, we received notice from the Direction of Evaluation and Environmental Order of the National Environmental Authority (Autoridad Nacional de! Ambiente), or ANAM, stating that Trump Ocean Club's Category 1 Environmental Impact Study complies with all applicable environmental requirements and that Trump Ocean Club does not generate significant environmental risks. However, failure to comply with applicable environmental standards, stricter new laws and regulations, or stricter interpretation of existing laws or regulations, may impose ,,g.ilitios on us, increase ow- costs of compliance oc cesult in the cevocation of ow- licenses and pennits, any m 22 all of which could result in the need for additional investments or may adversely impact our ability to complete Trump Ocean Club as currently contemplated. This may have an adverse effect on our business, financial condition and cash flows in the future. Risks Related to Our Industry Competition from other Panamanian developers could slow or decrease our sales and cash flows. The real estate industry in Panama is highly competitive and has experienced high growth rates over the last five (5) years, resulting in an abundant supply of real estate products. Our ability to maintain current sales levels depends to some extent on competitive conditions, including price competition and the volume of product offerings in the market. Competition is likely to continue or intensify, and may lead to the cancellation or substantial modification of current real estate projects in Panama. The cancellation of any competing projects could have an adverse effect on our ability to market our products as exclusive and secure investments in Panama. Accordingly, competitive conditions may result in a decrease in our sales and cash flows. Our business performance may be affected by the nature of our response to various operating risks typically faced by real estate developers. We face a number of operating risks applicable to real estate developers, including the supply and pricing of our raw materials. The primary raw material we use is cement. Consequently, we are vulnerable to fluctuations in prices of this and other raw materials. Factors such as supply and demand, freight costs and availability of transportation, inventory levels, the level of imports and general economic conditions may affect the price of the raw materials we use. Any increases in the costs of, or disruption in supply of, raw materials could have a material adverse effect on our ability to meet our construction c01mnitments and on our financial position and cash flows. As we are engaged only in the development and operation of a single real estate project, Trump Ocean Club, our financial position and cash flows may be exposed to a greater degree of fluctuation as compared to real estate developers that have more diversified operations. Risks Related to Panama An eco11omic dow11tum i11 Panama could adversely affect our sales and financial condition. Our only operations are in Panama. Consequently, any significant economic downturn in Panama could reduce nationwide real estate values, and in tum reduce the aggregate value of our real estate sales. In addition, the appeal of becoming an owner of one of our real estate units may diminish if potential purchasers do not regard Panama as an attractive primary home, second home or retirement destination. In February 2005, the Panamanian Government enacted a fiscal refonn package consisting of both revenue raising and expenditure reduction measures. The revenue raising measures include: an expansion of the definition of taxable income, covering certain individual income sources previously not fully taxable; a narrower definition of offshore income (which is tax exempt); the introduction of an alternative minimum tax for individuals and corporations; the elimination of a tax exemption on capital gains derived from public tender offers; and the elimination of certain tax incentives to manufacturing and construction activities. In addition, tax authorities were granted increased enforcement powers and tax evasion became a criminal offense. As part of this fiscal refonn effort, the Panamanian Government committed to reducing the public sector headcount to 1999 levels (which would involve reducing approximately 6,332 posts between 2005 and 2008) and promised to cap current expenditure growth at the rate of current sovereign revenue growth and extract savings from other fees and expenses of approximately US$ 25.0 million per year. Analysts estimate that this program, if fully implemented, may, among other things, reduce the nonfinancial public sector deficit from 5% of GDP in 2004 to approximately 1% in 2009. We cannot assure you that this fiscal refonn package will achieve its objectives or that additional revenue raising measures may not be J JJ4' ~; necessary to preserve or reestablish fiscal balance in the near future. Additional revenue raising measures may result in higher taxes and other obligations payable by us to the Panamanian Government. Higher fiscal obligations from us to the Panamanian Government may adversely impact us, including our ability to repay the Notes. A delay i11 the Pa11ama Canal's expa11sio11 may adversely affect the eco11omy a11d, as a result, our sales a11d fi11a11cial co11ditio11. On October 22, 2006, the Panamanian Government authorized an expansion of the Panama Canal to accommodate vessels that are too large to use the existing Canal. Expansion of the Canal is expected to preserve the Canal's competitive position as a key route for global shipping, thus enabling the Panama Canal Authority to sustain revenue growth and remain a significant source of income for the Panamanian Government. A delay in the implementation of, or a failure to implement, the expansion project, could result in lower levels of trade in Panama and could adversely affect the economy. Such delay, or failure, could adversely affect the market conditions that determine our construction costs and the prices for, and the returns on, Panamanian real estate investments, and could adversely affect our ability to repay the Notes. Political events in Panama could adversely affect our sales and financial condition. Panama has experienced different types of government and governmental policies. Prior to 1968, Panama generally had a constitutional democracy and a growing free market-based economy. In 1968, the military secured control over the government and military rule continued until 1989. A political crisis erupted in 1987 among the then ruling military dictator, General Manuel Antonio Noriega, and civilian organizations, political parties and the business community, all of which had been agitating for a return to democratic rule. In December 1989, General Noriega was deposed, largely as a result of U.S. military intervention, and Guillermo Endara, who had been elected by a majority of the Panamanian electorate in a popular vote earlier in the year, was sworn in as President. Since the end of 1989, the Panamanian Government has maintained political and economic stability under successive democratically elected governments, and favorable relations with the U.S. have been fully restored. Future political events which could destabilize the Panamanian government could reduce the appeal of owning real estate in Panama and adversely affect our financial condition and sales. We may be adversely affected by governmental policies. The Panamanian Government has exercised, and continues to exercise, significant influence over the Panamanian economy and land development policies. We depend on Panamanian land development policies remaining favorable so as to effectuate the construction of Trump Ocean Club. Through various statutory and other governmental initiatives, including enforcement of a rigid labor code, electricity subsidies related to the rise in fuel prices, tariff policies, regulatory policy, taxation and price controls, the Panamanian Government has had a significant impact on the economy. Accordingly, the Panamanian Government's actions regarding the economy, regulating certain industries and setting land development policies could have significant adverse effects on private sector entities in general and on us in particular, as well as on market conditions affecting our construction costs and the prices for, and returns on, Panamanian real estate investments. It is not possible to detennine what effect such plans or actions or the implementation thereof could have on the Panamanian economy, Panamanian real estate investments in general or on our financial condition, sales and cash flows. Any of these or other events could reduce the appeal of owning real estate in Panama and, in turn, reduce the appeal of becoming an owner of one of our real estate products, thereby adversely impacting our sales, as well as our ability to meet our obligations under the Notes. Compliance witlt applicable laws and regulations related to property developments such as Trump Ocean Club may subject us to additional costs and delays which could reduce our profits or business prospects. We are subject to a variety of Panamanian statutes, ordinances, rules and regulations governing developments such as Trump Ocean Club, any of which may subject us to additional costs and construction delays. In particular, we may be required to obtain the approval of various governmental authorities regulating matters such as pennitted land uses and the installation of utility services such as gas, electric, water and waste disposal. We also may be subject to additional costs or delays, building pennit allocation ordinances, construction moratoriums, ~ 24 restrictions on the availability of utility services or similar governmental regulations that could be imposed on us in the future. Any of these laws, ordinances, moratoriums or restrictions could cause our operating costs to increase as well as delay the development of our property, either of which would reduce our profits and the ability to grow our business. Because tile Pa11ama11ia11 monetary system is depe11de11t 011 tile U.S. dollar, any downtums in tile U.S. economy may adversely affect us. Since 1904, Panama has used the U.S. dollar as legal tender and its sole paper currency, using the Balboa only as coinage and as a unit of account with an exchange rate set. Panama's monetary system is limited in its ability to conduct a stimulative monetary policy and can finance public sector deficits only through borrowing. As a result of Panama's use of the U.S. dollar as legal tender, Panama has enjoyed low inflation c01mnensurate with levels of inflation generally prevailing in the United States. However, we cannot assure you that these relatively low rates of inflation will continue. In addition, given the relationship of the Panamanian monetary system to the U.S. dollar and, indirectly, Panama's dependence on the U.S. economy, we cannot assure you that the appreciation or depreciation of the U.S. dollar against other currencies or the existence of sustained higher levels of inflation in the U.S. economy (and the resultant effect on the value of the U.S. dollar) or increases or decreases in interest rates in the U.S. will not adversely affect the Panamanian monetary system or, indirectly, us. Adverse political and economic co11ditions in other Latin America11 countries a11d world markets may adversely affect us. From time to time, the economies of other Latin American countries, particularly those in Central America, Brazil, Mexico and Argentina, have suffered from high rates of inflation, currency devaluation and/or other developments that have had an adverse effect not only on their economies but also on the economies of other countries in the region. Although all of our activities are concentrated in Panama, since most of our buyers are located in the United States, Canada, Colombia, Venezuela and Panama, we may still be affected by adverse developments in other Latin American and world economies. Following the currency devaluation crises and the ensuing financial and economic crises in the 1990s in Mexico, Russia, Argentina and Asia, the economies of certain Latin American countries experienced reduced levels of economic activity. As a result, we cannot assure you that high inflation rates, volatility in exchange rates or declines in economic activity in other Latin American countries or world markets in general will not have an adverse effect on the Panamanian economy in general, the market conditions affecting our construction costs, the prices for, and returns on, Panamanian real estate investments, on our customers, on us or on the trading values of the Notes. Lack of sufficie11t air service to Pa11ama City, Panama could affect adversely our fina11cial position and sales. The majority of our property owners and prospective customers travel to Panama by air. Although we believe that the current level of air service to Panama City, Panama is more than adequate, any interruption or reduction of air service would prevent many prospective customers from visiting the project, reduce our sales, and prevent many property owners from easily accessing their property. These conditions could adversely affect our competitive position, as compared to similar projects in Central America and the Caribbean enjoying adequate air service. An unfavorable competitive position could adversely affect our financial position and sales. If the Pa11ama11ia11 Govemment were to impose exchange controls or other restrictions, our ability to meet our obligations u11der tlte Notes could be affected. Currently there are no exchange controls or other restrictions imposed by Panamanian law on payments in U.S. dollars by us. In the event that the Panamanian Government imposed foreign exchange or payment restrictions preventing remittances from Panama we may be unable to make interest and principal payments to you with respect to the Notes and your recourse would be limited to our assets and operations in Panama. 25 Risks Related to the Notes You may be subject to withholding for Panamaniall capital gains taxes upon a sale of the Notes, for which we will llot indemnify you. On June 19, 2006, Panama passed Law 18 (the "2006 Tax Law"), which adopted a number of changes to Panama's tax law. Under the 2006 Tax Law, if the Notes are not sold through an exchange or another organized market, (i) the seller will be subject to income tax in Panama on capital gains on the sale of the Notes at a fixed rate often percent (10%) and (ii) the buyer would be required to withhold from the seller and remit to the Panamanian fiscal authorities an amount equal to five percent (5%) of the aggregate proceeds of the sale by withholding from the capital gains tax of the seller. The seller may, at its option, consider the amount so withheld by the buyer as payment in full of the capital gains tax, or in the event of overpayment, claim a tax credit in respect of the excess amount. See "Taxation-Panamanian Taxation-Taxation of Dispositions." We will not indemnify you if you are subject to withholding for Panamanian capital gains taxes under the 2006 Tax Law upon a sale of the Notes. The ability to transfer the Notes may be limited by the absellce of all active trading market, alld we cannot assure you that any active trading market will develop or that you will be able to resell your Notes. The Notes are a new issue of securities for which there is no established public trading market. Although we have applied for listing of the Notes on the Panama Stock Exchange, and expect that the Notes will be eligible for trading in the PORTAL Market, we cannot assure you that the Notes will be or will remain listed on the Panama Stock Exchange or that active trading markets will develop for the Notes. The Panama Stock Exchange is a market with little liquidity, which could adversely affect your ability to sell the Notes on this stock exchange. The initial purchaser has advised us that it currently intends to make a market in the Notes as pennitted by applicable laws and regulations. However, the initial purchaser is not obligated to make a market in the Notes, and it may discontinue any such market-making activities at any time without notice. Therefore, an active market for the Notes is not likely to develop or, if developed, it may not continue. We have not registered, and will not register, the Notes under the Securities Act or any other applicable U.S. securities laws. Accordingly, the offering of the Notes in the U.S. will be made pursuant to exemptions from, and in transactions not subject to, the registration provisions of the Securities Act and from state securities laws that limit who may own the Notes. The Notes are subject to certain restrictions on resale and other transfers in the U.S., and you may be required to bear the risk of your investment for an indefinite period of time. See "Notice to Investors." Consequently, a holder of Notes and an o-wner of beneficial interests in those Notes must be able to bear the economic risk of their investment in the Notes for the tenn of the Notes. Historically, the market for non-investment grade, emerging market debt has been subject to substantial volatility, which could affect adversely the price at which you may sell Notes you own. In addition, subsequent to their initial issuance, the Notes may trade at a discount from their initial offering price, depending on prevailing interest rates, the market for similar Notes, our operating perfonnance and other factors. Therefore, we cannot assure you will be able to sell your Notes at a particular time or the price that you receive when you sell will be favorable. See "Plan of Distribution." Our ability to access a significant porlioll of the proceeds from this offering depends Oil our ability to gellerate a requisite amount of receivables alld to obtaill certifications from an independent engineer regarding the progress of construction. Our failure to meet the Collateralization Ratio Requirement within the first six months after closing or for any 30-day period thereafter will constitute an event of default under the Indenture. In addition, pursuant to the Indenture, a significant portion of the net proceeds from this offering will be held in an escrow account, and our withdrawal of part of the funds from this account will be subject to our ability to generate a requisite amount of receivables and to obtain certifications from an independent engineer regarding the progress of construction. To the extent that we fail to generate a requisite amount of receivables and to obtain such certifications, we will be unable to withdraw funds from these accounts, which would impair our ability to complete construction of Trump Ocean Club. ~i I 26 We may not be able to generate sufficient cash flows to meet our debt service obligations and operating expenses. Our ability to make payments on the Notes, and to fund debt service obligations and operating expenses will depend on our ability to generate future sales and collect on our receivables. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Our future sales and collections on our receivables may not generate sufficient cash flows and future sources of capital may not be available to us in an amount sufficient to enable us to pay the Notes or to fund our other liquidity needs. We may need to refinance or restructure all or a portion of our financial obligations, including the Notes, at or before final maturity. We may not be able to refinance our financial obligations on commercially reasonable tenns, or at all. If we cannot service the Notes or fund our other financial obligations and operating expenses, we may have to take actions such as seeking additional equity or reducing or delaying capital expenditures and investments. We may not be able to effect such actions, if necessary, on c01mnercially reasonable tenns, or at all. Our substantial indebtedness could affect adversely our financial condition and prevent us from fulfilling our obligations under the Notes. As of June 30, 2007, we would have had approximately US$ 220.0 million of outstanding indebtedness after giving effect to this offering and the application of the net proceeds therefrom. This level of indebtedness could prevent us from fulfilling our obligations under the Notes, since it will limit our ability to borrow additional money or sell stock to fund any increase in our working capital needs and capital expenditures. In addition, our substantial indebtedness may make us more vulnerable to a downturn in our business or the Panamanian or international economy, and may limit our flexibility in planning for, or reacting to, such a downturn. The Indenture restricts our financial and operating flexibility. The Indenture contains various covenants intended to benefit the interests of the noteholders, including limitations on our ability to incur additional indebtedness, issue certain equity interests, issue or sell capital stock of any future subsidiaries, create liens on assets, or enter into certain transactions with affiliates or related persons. These restrictive covenants could limit our ability to pursue our plan for the development of Trump Ocean Club, restrict our flexibility in planning for, or reacting to, changes in our business and industry and increase our vulnerability to general adverse economic and industry conditions. See "Description of Notes" for more information on the limitations provided for in the Indenture. The proceeds of a foreclosure sale of the collateral may not be sufficient to pay all or any portion of the Notes. The market value of the real estate collateral securing the Notes is subject to fluctuations based on factors that include, among others, the value of real estate in Panama, the ability to sell the collateral in an orderly sale, general economic conditions, the availability of buyers and other similar factors. The amount to be received upon a sale of the collateral would depend on numerous factors, including but not limited to the actual market value of the collateral at the time of the sale as well as the timing and the manner of the sale. Because the collateral consists primarily of real property, portions of the collateral may be illiquid and may have no readily ascertainable market value. In the event of a foreclosure, liquidation, bankruptcy or similar proceeding, we cannot assure you that the proceeds from any sale or liquidation of the collateral will be sufficient to pay all our obligations under the Notes and the Indenture. Accordingly, there may not be sufficient collateral to pay all of the amounts due on the Notes. Any claim for the difference between the amount, if any, realized by holders of the Notes from the sale of the collateral securing the Notes and our obligations under the Notes will rank equally in right of payment with all of our other unsecured, unsubordinated indebtedness and other obligations, including trade payables. 27 Panamania11 bankruptcy laws are not as developed as U.S. i11solvency and bankruptcy laws and their application may be subject to significant discretion of Panamanian courts. Because we conduct substantially all of our business in Panama, Panamanian courts would have jurisdiction in any insolvency proceeding involving us and would apply the laws of the Republic of Panama in any such insolvency proceeding. Panamanian bankruptcy law does not provide for reorganization similar to that provided under Chapter 11 of the U.S. Bankruptcy Code. Under Panamanian law, in the event we fail to duly pay any of our financial obligations, an affected creditor could request that a Panamanian bankruptcy court declare our bankruptcy. An affected creditor will not be required to prove our insolvency, as is required in other jurisdictions. The bankruptcy court will detennine the effective bankruptcy date, which could be set retroactively up to four (4) years in the past. Any payments made or obligations incurred by us after the effective date of bankruptcy may be declared null and void by the bankruptcy court. Upon declaration of bankruptcy or liquidation, all of our existing contractual obligations and liabilities will be iimnediately deemed enforceable and collectable. We may redeem the Notes before the maturity date. Under the Indenture, we may, at our option, redeem up to 35% of the Notes with the proceeds of certain sales of our equity or redeem the Notes at any time at a price equal to 100% of the principal amount of the Notes plus a "make-whole" premiwn. In addition, beginning on the third anniversary of the Closing Date, we may, at our option, redeem the Notes at a price equal to 100% of the outstanding principal amount of the Notes plus a special premiwn declining over tiine. We may also redeem the Notes at par in the event of certain changes in law related to withholding taxes. See "Description of Notes - Redemption - Optional Redemption." We may not be able to obtain the funds required to repurchase the Notes upon a change of control Under the Indenture, we are required to offer to purchase the Notes at a price equal to 101 % of the aggregate outstanding principal amount of Notes repurchased plus any accrued and unpaid interest to the date of purchase in the event of a change of control. If a change of control were to occur, we might not have sufficient funds available, or may not be able to obtain the funds needed, to pay the purchase price for all of the Notes tendered by holders deciding to accept the purchase offer. Investors in our Notes may not receive the same level and type of disclosure that they would receive from public issuers in the U.S. We will be required to submit to the CNV infonnation that must be made available to all holders of the Notes, specifically, audited financial statements on an annual basis accompanied by the report of independent accountants and an annual report of our activities and developments, and unaudited financial statements on a quarterly basis along with a quarterly report of our activities and developments. However, Panama's securities laws governing publicly-traded debt securities impose disclosure requirements that differ from those in the U.S. in certain important respects. As a result, investors in the Notes may not obtain infonnation equivalent to that which is generally available from issuers subject to U.S. securities laws. The ratings assigned to the Notes may not accurately reflect the risks and uncertainties of owning the Notes. The ratings assigned to the Notes by rating agencies attempt to assess the likelihood that holders of the Notes will receive full and timely payment of all accrued interest and repayment of the principal on the maturity date of the Notes. A rating is not a recommendation to purchase, hold or sell the Notes, and a rating is not an assessment of the marketability of the Notes, any market price of the Notes or the Notes' suitability for any particular investor. We cannot assure you that any rating of the Notes will not be lowered or withdrawn by the statistical rating agency assigning such rating. If any rating assigned to the Notes is lowered or withdrawn, the market value or liquidity of the Notes may be adversely affected. 28 Other Risks We may also be affected by market risks in addition to those risks described in this document, including risks relating to liquidity, interest rates, customer credit, foreign currency and inflation. /(!/_} l. 29 USE OF PROCEEDS The net proceeds of this offering will be approximately US$ 210.6 million, after deducting fees and cormnissions paid to the initial purchaser and expenses relating to this offering. The following table sets forth the estimated sources and uses of funds in connection with this offering: US$ (in millions) Semor Secured Notes ................................................................ . Uses Fund Construction Escrow Account............................................ Fund Debt Service Reserve Account........................................... Repay existing bridge loan facilitycn.......................................... Transaction fees and expenses.................................................... Total uses................................................................................... (l) % of Total US$ 220.0 100.0 % US$ 186.0 9.6 15.0 9.4 84.5 % 4.4 6.8 4.3 =U=S=$====2=20=.0= 100.0 % Our bridge loan facility is a short-term credit facility with Bear Stearns Commercial Mortgage, Inc. We entered mto our bndge loan facility on July 16, 2007. Accordingly, the financial obligations incurred under our bndge loan facility are not reflected in the j:Z,'~"oocifil '1<>trmrn• ind"'"" d<~h= '" ilii< offori"g momo=d=. ........................... =====1=0=4=5 585 87 672 Office lofts ......................................... . Private beach club memberships ....... .. (I) 5 10 9 7 Excludes private beach club memberships. Our total sales (excluding private beach club memberships) for the period from March 28, 2006, our date of incorporation, through December 31, 2006 amounted to US$ 224.3 million. Of those total sales, residential co~dfinium unit sales accounted for US$ 158.4 million, or 71%, and hotel condominium unit sales accounted for y/ r ( 34 US$ 65.9 million, or 29%. Our total sales (excluding commercial units) for the six months ended June 30, 2007 amounted to US$ 42.1 million. Of those sales, residential condominium unit sales accounted for US$ 27. 7 million, or 66%, and hotel condominium unit sales accounted for US$ 14.3 million, or 34%. Under our current pricing strategy, we bundle our products into groups which are launched into the market in separate project phases to maximize value. Before launching a new project phase, we analyze market demand for our products during the previous phase. Based on this analysis, we detennine the price, type and number of products that will be launched into the market in the following phase. See "Business - Sales and Marketing Sales." As a result of high market demand for our products in the period from March 28, 2006 to December 31, 2006, we approached our breakeven sales level at a more rapid pace than expected, accordingly, we increased the price of our products and reduced the number of units launched into the market in the six months ended June 30, 2007. The sales pace and pricing realized during the six (6) months ended June 30, 2007 are consistent with our value maximization strategy at this stage of our development. Revenue Recognition We generally recognize revenue from the sale of condominium units when all legal documentation is completed, title is delivered to the customer and final payment has been received or financed, which is when risk of loss is substantially transferred to the buyer, and the revenues and costs can be measured reliably. Because of this revenue recognition policy, as of the date of this offering memorandum, we have not recognized any sales as revenue. In addition, costs and expenses attributable to the Project are deferred until the corresponding revenue is recognized. Accordingly, we have not prepared income statements for the year ended December 31, 2006, or for the six months ended June 30, 2007. Based on our construction program, we estimate that we will complete and deliver our finished products, and collect their purchase price in full, in 2010. Performance Indicators and Industry Trends Our management reviews and analyzes several key performance indicators in order to manage our business and assess the quality and potential variability of our sales, revenues and cash flows. These key perfonnance indicators include the following: • monthly data on actual units sold and the corresponding unit prices as compared to budget; • monthly data on the actual average sale price per square meter for each unit type as compared with budget; • number of customer defaults with respect to their scheduled payment of deposits or down payments; • marketing expenses as a percentage of sales, as an indicator of the effectiveness of our marketing and sales efforts; • cost perfonnance index, measured as the ratio of the budgeted cost of work perfonned to the actual cost of work perfonned; • schedule perfonnance index, measured as the ratio of the budgeted amount of work perfonned to the budgeted amount of work scheduled; • cost variance, measured as the difference between the budgeted cost of work perfonned and the actual cost of work perfonned; • schedule variance, measured as the difference between the budgeted amount of work perfonned and the budgeted amount of work scheduled; and • monthly data on actual indirect and administrative costs as compared to budget. J ~r 35 In addition, the development of the Project and related sales of real estate products are affected by various factors including principally the following: • payment and financing tenns that are available to our customers to purchase our products; and • our fmancing costs (after deducting the return on our pennitted investments) and debt service obligations. Our revenues and profitability are sensitive to major trends and uncertainties specific to our business as well as those relating to the luxury real estate industry in general. In particular, we believe that our business may be affected by: • delays or unexpected casualties in construction; • the effectiveness of our marketing and sales programs; • Panamanian and international economic conditions; and • the cost of compliance with governmental regulations. These factors might have an impact on our sales and revenue and might also influence our business and financial condition in the future. Critical Accounting Policies Basis ofPresentation This "Management's Discussion and Analysis of Financial Condition and Results of Operations" is based on our financial statements, which have been prepared in accordance with IFRS. Our financial statements were prepared on a historical cost basis and expressed in U.S. Dollars. The preparation of our fmancial statements in confonnity with IFRS requires that our management make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities. Although these estimates are based on the best infonnation available to our management, actual results may ultimately differ from those estimates. We believe the following accounting policies are the most important to the presentation of our fmancial condition and results of operations. Projects We measure projects under construction at cost less impainnent losses, if necessary. Costs that are not directly attributable to projects are expensed when incurred. Costs directly attributable to projects include, personnel expenses, construction materials and transportation costs. We register a loss on projects under construction when it is likely that the total cost of completing a product will exceed the total revenues that will be generated by the sale of the product. Revenue Recognition We generally recognize revenue from the sale of condominium units when all legal documentation is completed, title is delivered to the customer and final payment has been received or fmanced, which is when risk of loss is substantially transferred to the buyer, and the revenues and costs can be measured reliably. No revenue has been recognized from the sale of condominium units from March 28, 2006, our date of incorporation, through June ;:r· 36 Restricted Cash Restricted cash represents the down payments received on the sale of our real estate products and held in escrow in the HSBC Panama Account. Under the escrow agreement that we entered into with HSBC Investment Corporation (Panama), for the establishment of the HSBC Panama Account, restricted cash can only be used for the development of the Trump Ocean Club project when certain conditions are met, including, obtaining certain licenses, legal pennits, a financing commitment for the construction of the project, and achieving a certain level of sales. On May 22, 2007, we met the conditions necessary to use customer deposits for our development activities. Customer Deposits Customer deposits represent the total amount received from clients as deposits for the future purchase of units at Trump Ocean Club. Commission Expenses Under our current accounting policies, costs and expenses attributable to Trump Ocean Club are deferred until the corresponding revenue is recognized. Accordingly, commissions earned by third party brokerage firms in connection with the sale of our real estate products are initially capitalized as deferred c01mnissions and subsequently charged to expense in the period in which the related sale is recognized as revenue. See "-Sales and Revenue Recognition-Revenue Recognition". Amounts earned by third party brokerage finns but not yet paid are reflected as a commissions payable liability on our balance sheet. Results of Operations Six Months Ended June 30, 2007 On May 11, 2007, our stockholders contributed the land where we are developing the Trump Ocean Club tower into Newland in a transaction valued at US$ 25.0 million. In addition, our stockholders made additional contributions to Newland amounting to US$ 3.8 million. These contributions increased our total stockholders' equity from approximately US$ 2.5 million in the beginning of the period to approximately US$ 31.2 million as of June 30, 2007. During this period, we also received additional customer deposits, with respect to future purchases ofreal estate products amounting to US$ 18.3 million, of which US$ 14.8 million was retained as restricted cash and held in escrow in the HSBC Panama Account. As of June 30, 2007, amounts on deposit in the HSBC Panama Account amount to US$ 39.3 million. Umestricted customer deposits, and the cash contributions from our stockholders, were mainly used to fund construction of Trump Ocean Club. As of June 30, 2007, we had invested US$ 34.8 million in the development of the Trump Ocean Club, including US$ 25.0 million in land acquisition costs, US$ 1.0 million in direct construction cosrs, US$ 3.8 million in project overhead and US$ 4.9 million in administrative and sales expenses. Additionally, we have invested US$ 0.9 million in land acquisition costs under a contract for promise of purchase for the real property where we will develop our private beach club. Additionally, during the six month period ended June 30, 2007, we paid US$ 1.2 million in license fees and royalties in connection with our use of the Trump brand name. As of June 30, 2007 deferred cormnissions related to our real estate agents and brokerage finns amounted to US$ 8.0 million, of which US$ 7.2 million were registered as commissions payable. We paid off these liabilities in August 2007. Year ended December 31, 2006 We were incorporated on March 28, 2006 for the purpose of developing the Trump Ocean Club International Hotel & Tower in Panama City, Panama. In the year ended December 31, 2006, cash contributions from stockholders amounted to US$ 2.5 million and the total amount received from clients as deposits for the future purchase of real estate products amounted to US$ 27.2 million, including US$ 24.4 million retained as restricted cash and held in escrow in the HSBC Panama Account. In 2006, US$ 3.5 million from our customer deposits and stockholder contributions was invested in the development of our project, and US$ 0.9 million was paid to Roger in connection with the purchase of a real estate property in Contadora Island, Panama, where we intend to J:fl c/ , r < I 37 develop our private beach club. We also paid approximately US$ 0.9 million in sales commissions to our real estate agents and brokerage firms. Outlook We broke ground on the construction of the Trump Ocean Club on May 5, 2007, and c01mnenced our sales activities during the first quarter of 2006. Through June 30, 2007, we have presold approximately 64% of the building's units, amounting to approximately US$ 278.7 million or 54% of our estimated gross sellout. Assuming the Panamanian and international economic environments remain stable, we believe that our total available inventory will be sold by 20 I 0. See "Business - Marketing and Sales - Sales." As a result of the foregoing and our revenue and cost recognition policies, we expect that all of our revenues and expenses from the sale of real estate products will be recognized in 20 I 0. Upon completion and delivery of our units, our customer deposits liability will be satisfied and all receivables related to real estate sales are expected to be collected. Additionally, subsequent to completion of the building, we expect to recognize recurring revenue from the operation of Trump Ocean Club's international casino, luxury hotel, restaurants, wellness spa, private beach club and yacht club. Liquidity and Capital Resources As of the date of this offering, the primary use of our liquidity has been to fund construction of the project (mainly, foundations and earthworks), commissions to brokers, advertising expenses, legal and design fees and other project related soft costs. Through May 22, 2007, our principal source of liquidity was equity contributions from our stockholders in the amount of US$ 6.2 million and unrestricted customer deposits in the amount of US$ 2.8 million. Our customers are required, under their respective unit purchase agreements, to make a series of up to four down payments, aggregating 30% of the purchase price of each acquired residential or hotel condominium unit, or 50% of the purchase price of each acquired commercial unit, prior to completion of Trump Ocean Club. Customers must pay the balance of the purchase price upon completion of and transfer oftitle to the acquired unit. Until May 22, 2007, most of our customer deposits were restricted deposits held in escrow on the HSBC Panama Account. Those restrictions were released on May 22, 2007, upon compliance with all pre-established conditions, including the ground breaking of the Project on May 5, 2007. Accordingly, for the period from May 22, 2007 to June 30, 2007, our main source of liquidity has been the use of customers deposits held in the HSBC Panama Account, under the tenns and conditions of our escrow agreement with HSBC Investment Corporation (Panama), S.A. In addition, on July 16, 2007, we entered into a bridge loan facility with Bear Stearns Commercial Mortgage, Inc. to assure us the ability to fund a portion of the construction costs associated with Trump Ocean Club. ;7 We expect that if current market conditions prevail, cash flows from the sale of our products, the proceeds of this offering and available cash on hand will be sufficient to fund our operating needs, debt service obligations, oapitol roquITemento and oapital expenditum for construction and completion of the Tnunp Ocean Club. 38 Contractual Commitments The following table summarizes our contractual obligations as of June 30, 2007. Payments Due by Period Through December For the three years ending 31,2007 December 31, 2010 Total Contract Value Construct10n contract (Opcorp) .... License agreement (Trumpp>...... Plans and Specifications Purchase Agreement (Upper Deck) ..... .. .. .. .. US$ Total.................................... US$ 228.3 75.4 US$ (in millions) 27.0 l.2 US$ 4.4 9. l 312.8 US$ 32.6 201.3 74.2 4.7 US$ 280.2 (!) Under the Trump License agreement, we are required to pay variable license fees and royalties to Trump Marks Panama. Accordingly, the values provided above are based on our current projections and actual values for the penods mdicated can be expected to vary from our current estimates. In addition to the obligations set forth above, we have assumed construction obligations under the unit purchase agreements related to the sale of real estate products to our customers prior to the date of this offering memorandum. Off-Balance Sheet Transactions As part of our ongoing business, we do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes, such as entities often referred to as structured finance or special purpose entities. Quantitative and Qualitative Disclosures about Market Risk We are exposed to a variety of risks. The most important of these risks are market risks and credit risk. Market Risk We are subject to real estate market risk, which is comprised of real estate investment and real estate construction risk originating from changes in real estate market prices and drivers of the real estate development process, respectively. Credit Risk We are exposed to credit risk from our various customers that purchase condominium units of the Project. Management requires certain level of deposits from such customers in order to secure the sale of a specific condominium unit. Our cash and restricted cash is also exposed to credit risk, which arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. Management deposits its cf;p and restricted cash in reputable international financial institutions in order to mitigate credit risk. ./4' 7~/. 64 Ejecutivos de Empresas) (1999-2000, and 2000-2001) and the Presidential Committee against Money Laundering (Member 1996, and 1999-2004). Mr. Sucre is also a member of the International Bar Association, the American Bar Association, and the National Attorney Chapter (Colegio Nacional de Abogados) where he serves as a member on the Honor Tribunal. Carlos Alberto Saravia (Chief Operating Officer and Chief Financial Officer). Mr. Saravia graduated from the University of Los Andes in 1972. In 1991 he obtained a Degree in Management from Bogota's Management Institute where he undertook coursework in strategic management, finance, business policy and marketing. Since 1999 he has been the Project Manager for Conceptualization, Structure and Management of real estate and hotel projects at Arias Serna & Saravia. He has acted as Professor of Strategic Management at La Universidad de la Sabana in Colombia. He was the developer and President of Brink's de Colombia, Domesa de Colombia and Procesos & Canje, and also acted as Chief Financial Officer of Skandia Insurance of Colombia, Chief Financial Officer of Grancolombiana Financial Group, Economic Attache of the Colombian Embassy at Gennany, Assistant to the President of Owens Coming Fiberglass Colombia and the Assistant to the Budget Director of the National Department of Economy. He has been a member of the following board of directors: International Financial Corporation, Skandia Life Insurance Company, Skandia Trust Company, Tequendama Insurance Company, Popular Trust Company, Colmena Insurance and Financial Company, Domesa de Colombia S. A., Brink's Chile S.A., Procesos & Canje S. A., Bankers Club, Spring Industrial Group, Colmena Health Care Company, Caja Social Bank, Colmena Savings and Loan Corp and Colombia M6vil Colombian Telecommunication Cp. Rodrigo Rubio Vollert (Executive Vice President of Architecture and Design). Mr. Rubio graduated from Los Andes University in 1989 as an Architect and obtained a Master's Degree in Design Studies from Harvard University- Graduate School of Design in 2003. Mr. Rubio was in charge of the design division of Rubio y Gomez between 1990 and 1994. In 1994, Mr. Rubio opened his own architectural practice at R.O.M. (Rubio, Ortiz y Mazzanti), where he obtained four prizes in architectural competitions. In 1998, Mr. Rubio was appointed as assistant professor of the Architecture School Los Andes University, where he developed an academic career that includes the inception of a housing research group (acknowledged and ranked as "group A" by the Colombian research authority), a number of consultancy and research activities that had an impact on recent urban and housing policies, and the foundation of the Housing Policy Roundtable. In 2001, Mr. Rubio was appointed as associate professor at Los Andes University and in 2002 he was appointed head of the Department of Architecture. Between 1999 and 2002, Mr. Rubio was appointed member of the National Seismic Code Co1mnission. In 2006, :Mr. Rubio was selected for the Colombian biennale of architecture with his project "Chico 102". He is a member of the Colombian Architects Society and the Colombian Association of Seismic Engineering. Mr. Rubio joined Arias Serna Saravia in November 2006 as its Executive Vice President of Architecture and Design. Jenaro Echeverri (Executive Vice President of Construction). Mr. Echeverri graduated from the Facultad de Minas of the Universidad Nacional de Colombia at Medellin in 1982 as a Civil Engineer. He has partial postgraduate studies in Mathematics and numerous other courses related with Engineering, Construction and Management of civil projects. He has wide experience on structural design, construction, management and administration of civil engineering projects (infrastructure, concrete buildings, urban works and others) and experience on personal management at all company levels. He was the Construction Manager for AIA S.A., HA Engineering, Constructora Pedro Gomez, Amarilo, RE Ingenieria S.A. and is the current Construction Manager of Trump Ocean Club. He has managed civil projects in Colombia, Panama and Dominican Republic. James Thomas Dunne (Construction Services Director). Mr. Dunne obtained a Bachelor's Degree in Civil Engineering in 1977 from Villanova University and a Master's Degree in Civil Engineering (Structural) from Cornell University in 1978. He is a license engineer in Panama, and before coming to Panama, was a licensed engineer in the United States of America in the States of California, Texas and New Jersey. Mr. Dunne is certified by the American Concrete Institute (ACI), a member of American Institute of Steel Construction (AISC) and a member of the board of directors of Diaz y Guardia in Panama City. He is an Engineer and Construction Manager specialized in major commercial and industrial projects with over 30 years of hands-on experience, well versed in all phases of construction including contract negotiation, estimating, scheduling, QA/QC, document control, project execution, building code compliance, safety implementation, purchasing, expediting and site management. In addition, Mr. Dunne is a nationally recognized structural engineer specialized in both concrete and steel design with successful projects completed in both Panama and throughout the United States. For the Trump Organization :Mr. ~Dfe completed the Figali Convention Center (2002), and inspected and modified host facilities in Ecuador (2003) / {/'/' ' < 65 and Thailand (2004). Mr. Dunne is Executive Construction Manager at Diaz y Guardia in Panama City. He previously owned an engineering company, Axiom Engineering in Houston, Texas, and worked for S&B Engineering and Construction in Houston, Texas and Earthquake Engineering Systems in San Francisco, California. Ruben Arias (Financial Director). Mr. Arias graduated from Universidad de! Quindio, Colombia in 2002 as a Civil Engineer and in 2006 as a specialist in Construction Management from Pontificia Univerisidad Javeriana in Bogota, Colombia. He has worked for Arias Serna & Saravia since 2006 and is currently the Financial Director of Trump Ocean Club. He was previously the Technical and Financial Coordinator of this project. He worked as the Director of the Cost Department of Constructora Bolivar perfonning the economic feasibility studies and finance control for the construction projects of the company for more than 4 years, as Resident Engineer in the construction of the police's building in the city of Annenia, Colombia, and worked for the FES Foundation in the Presidential program "Empleo en Acci6n" developing several technical and economic feasibility studies and construction of infrastructure projects. Rosella Violi Franceschini (Sales Director). Mrs. Violi graduated from Pontificia Universidad Javeriana in 1995 as Architect and obtained a post graduate degree in Construction Management from the same university in 1996. In 2002 she obtained a degree in Finance at Universidad Externado de Colombia. Mrs. Violi is Sales Coordinator of the Trump Ocean Club. She worked for Constructora Urbana San Rafael S.A as Procurement and Contracting Manager, was the Logistc Manager NPR (Non product related) of Industrias Philips de Colombia S.A., and architect for Corporaci6n Grancolombiana de Ahorro y Vivienda GRANAHORRAR as well as for Inmobiliaria CHARS.A Johana Alvarez Botero (General Counsel). Mrs. Alvarez graduated from Pontificia Universidad Javeriana Law School in 2001, in the same year she obtained a graduate degree in Insurance Law from the same Law School. She practiced law and insurance law as counsel of Holguin, Neira & Pombo and Sanclemente, Fernandez & Hernandez, well-known Colombian law fmns. She was general counsel at the Federaci6n Nacional de Cafeteros de Colombia, managing its trademark portfolio, and attorney of the legal division ofComcel S.A. and of Grupo Luxus. Our registered offices are located in Plaza 53, Building 53 Street, Obarrio, Ground Floor, City of Panama, Republic of Panama. Our telephone/facsimile number is 507-223-0225, and our corporate website is www.trumpoceanclub.com. The infonnation on our website is not a part of or incorporated by reference in this offering memorandum. Our charter permits us to have offices or branches anywhere world-wide. 66 PRINCIPAL SHAREHOLDERS Certain infonnation with respect to (i) each beneficial owner of more than 5% of our common shares, (ii) each of our directors, (iii) each of our executive officers and (iv) all current directors and executive officers, as a group, as of the date of this offering memorandum, is set forth below: Name of principal shareholders of Newland: Type of Share Ocean Point Development Corp ................ . Name of principal shareholders of Ocean Point Development Corp. Roger Khafif .............................................. . Upper Deck ................................................ . Shares Percentage of ownership in such share type 100% Type of Share Shares Percentage of ownership A B 315 70% 30% 135 Pursuant to the current articles of incorporation of Ocean, series A shareholders are entitled to elect one director of the corporation and series B shareholders are entitled to elect two directors of the corporation. Both series A and series B shares enjoy the same economic power, with economic benefits accruing to shareholders based on their percentage ownership of the corporation. Name of principal shareholders of Upper Deck Type of Share Arias, Serna & Saravia............................... . Espacios Urbanos ....................................... . Shares Percentage of ownership in such share type 50% 50% As shown in the table above, we are indirectly controlled by Roger K.hafif, Arias, Serna & Saravia, and Espacios Urbanos. The shareholders of Arias Serna & Saravia have equal participation and voting rights in the company. Accordingly, there is no controlling shareholder. Carlos Alberto Serna is the controlling shareholder of Espacios Urbanos. The following family ties exist between the shareholders of Arias Serna & Saravia and Espacios Urbanos: Luis Fernando Serna, legal representative of Arias, Serna & Saravia, is the brother of Carlos Alberto Serna and Rodrigo Serna, both shareholders ofEspacios Urbanos. :1 67 Our ownership structure is outlined in the graph below: ARIAS, SERNA & SARAVIA Colombia i ESPACIOS URBANOS, S.A. Colombia i 50% ~-----,+,----~ ROGER KHAFIF Panama UPPER DECK PROPERTIES, S.A. Costa Rica 70% 30% OCEAN POINT DEVELOPMENT CORP. Panama 100% NEWLAND INTERNATIONAL PROPERTIES, CORP. Panama r 68 50% CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS We hm1e engaged in, and we expect that we will continue to engage in, transactions with our principal shareholders, directors. officers and their respective qffiliates, including without limitation, the transactions described below, Except as described below, we believe that these arrangements generally are on terms at least as favorable as those which we could obtain ji-om an unaffiliated third party, to the extent there are third parties which could provide comparable services. For more information regarding our relationships and transactions with related parties, see the notes to our financial statements included elseivhere in this offering memorandum. Opcorp On August 27, 2007, we executed a lump-sum price construction agreement with Opcorp. Pursuant to the terms of the lump-sum price construction agreement, Opcorp has agreed to complete construction of the Trump Ocean Club for a fixed price of US$ 228.3 million, and Opcorp must perform all work to the satisfaction of an inspector appointed by us. Failure by Opcorp to complete the construction of the Trump Ocean Club as specified in the Opcorp Contract will result in monetary damages owed by Opcorp to us. For more infonnation regarding the terms of this agreement, see "Business-Principal Project Agreements-Lump-Sum Construction Agreement." Upper Deck On August 30, 2005, Upper Deck and Arias Serna & Saravia, our affiliates, executed a master contract for architectural design to develop the plans and specifications of Trump Ocean Club. On February 3, 2006, we executed a plans and specifications purchase and sale contract with Upper Deck to acquire the basic scheme, preliminary project and architectural project for Trump Ocean Club for a total price of approximately US$ 9.1 million. The plans and specifications were prepared by Arias Serna & Saravia under a master contract for architectural design with Upper Deck, dated August 30, 2005. For more infonnation regarding the tenns of the purchase agreement, see "Business-Principal Project Agreements-Plans and Specifications Purchase Agreement." Roger Khafif On January 2, 2007, we entered into a Contract of Promise of Purchase to acquire the real estate property where we are currently developing Trump Ocean Club's private beach club. The property consists of 0.76 acres (3,100 square meters) of land located on the island of Contadora, Panama. We paid Roger Khafif, our affiliate, US$ 0.9 million, equivalent to 100% of the purchase price, in complete satisfaction of our obligations under the Contract of Promise of Purchase. Sucre, Arias & Reyes Mr. Carlos Sucre C, founder partner of Sucre, Arias & Reyes, is Deputy Secretary of Newland. Sucre, Arias & Reyes is our legal advisor in Panama and has been advising Newland in all matters related to Trump Ocean Club. Komco We retained Komco, our affiliate, as an international sales and marketing consultant for Trump Ocean Club under a Consulting Agreement dated May 23, 2006. Komco's services include the initiation and coordination of advertising, public relations and promotions in the international market, as well as facilitating the sale of units in the international market by co-brokers. 69 DESCRIPTION OF NOTES You can find the definitions of certain terms used in this description under the subheading "Certain Definitions." Certain defined tenns used in this description but not defined below under "-Certain Definitions" have the meanings assigned to them in the Indenture. In this description, the phrase "Newland" refers to Newland International Properties, Corp. Newland will issue notes (the "Notes") under an Indenture dated November 7, 2007 (the "Indenture"), between itself and HSBC Bank USA, N.A., as trustee (in such capacity, the "Trustee"), in a transaction that is not subject to the registration requirements of the Securities Act. See "Notice to Investors." The following description is a summary of the material provisions of the Indenture, the Co-Trustee Agreement, the Construction Completion Support Agreement and the Mortgage. It does not restate these agreements in their entirety. We urge you to read these agreements because such agreements, and not this description, define your rights as holders of the Notes. Copies of these agreements are available as set forth below under "-Notices and Reports; Available Infonnation." The registered holder of a Note (each, a "Noteholder") will be treated as the owner thereof for all purposes. Only registered holders will have rights under the Indenture. The Notes will be secured by the Collateral as described below under"- Collateral and Security." Brief Description of the Notes The Notes will be: (1) senior secured obligations of Newland; and (2) secured by a first priority security interest in or first mortgage on the Collateral. Principal, Maturity and Interest Newland will issue US$ 220 million in aggregate principal amount of Notes in this offering. The Notes will be senior obligations of Newland, and will be secured by a first priority security interest in or first mortgage on the Collateral as described herein. The Notes will be issued in minimum denominations of US$ 10,000 and integral multiples ofUS$ 1,000 in excess thereof. Interest on the Notes will accrue at the rate of 9.50% per annum and will be payable semi-annually in arrears on May 15 and November 15, commencing on May 15, 2008 (each, a "Payment Date"). Newland will make each interest payment to the holders of record on the immediately preceding May 1 and November 1 respectively. Interest on the Notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Principal of the Notes will be repaid in seven equal, semi-annual payments, on the Payment Dates occurring on November 15, 2011, May 15, 2012, November 15, 2012, May 15, 2013, November 15, 2013, May 15, 2014, and November 15, 2014. Listing The Notes will be listed on the Balsa de Valores de Panama. SA. (the Panama Stock Exchange), a Panamanian company (sociedad an6nima) duly registered and authorized by the National Securities Cormnission of Panama to maintain and operate (1) facilities where individuals can trade securities; or (2) a system, either electronic, mechanic or otherwise, which allows the trade of securities through the matching of purchase and sale offers. f :( 70 The Notes will not be listed on any other exchange outside of Panama. Beneficial interests in the Regulation S Global Note may be held in Panama through Latinclear, a participant in Clearstream. Debt Service Reserve Account On the Closing Date, the Debt Service Reserve Account will be established in the name of the Trustee for the benefit of the Noteholders. An initial deposit therein (the "Debt Service Reserve Account Initial Deposit") will be made by Newland from the net proceeds of the offering of the Notes equal to the amount of interest due on the Notes on the next Payment Date. After the Closing Date, cash will be deposited in the Debt Service Reserve Account as described herein in amounts required to maintain the amount on deposit in the Debt Service Reserve Account at the Reserve Requirement, and will be invested in specified Cash Equivalents upon the prior written direction by Newland to the Trustee. Income on amounts invested in the Debt Service Reserve Account will be transferred to the Collection Account by the Trustee on a monthly basis, provided that no Default or Event of Default has occurred and is continuing. On each Payment Date, the Trustee will make withdrawals from the Debt Service Reserve Account to make payments of interest on and principal, if any, of the Notes due on such Payment Date to the extent funds on deposit in the Collection Account and the Investment Account are insufficient to make such payments. Construction Escrow Account On the Closing Date, Newland will deposit the sum of the net proceeds of the offering (after deduction of underwriting discounts, offering expenses, the Bridge Loan Repayment Amount and the Debt Service Reserve Account Initial Deposit) and, from amounts remaining on deposit in escrow in the HSBC Panama Account and an escrow account relating to the Bridge Loan Agreement ("Escrow Amounts"), into the Construction Escrow Account, an amount sufficient such that the amount on deposit in the Construction Escrow Account exceeds the remaining direct costs (as certified on the Closing Date by the Company to the Trustee) of construction and furniture, fixtures and equipment as of the Closing Date by US$ 15.l million. Any remaining Escrow Amounts will be transferred to Newland. See "Use of Proceeds." Funds held in the Construction Escrow Account will be invested by the Trustee upon the prior v.lfitten direction by Newland to the Trustee in Eligible Investments pending withdrawal; provided that the Trustee will as of any date maintain, in the form of Cash Equivalents, an amount at least sufficient to pay for construction of the Project for which disbursements will be required during the six (6) months following such date. Income on amounts invested in the Construction Escrow Account will be transferred to the Collection Account by the Trustee on a monthly basis, provided that no Default or Event of Default has occurred and is continuing. Newland will grant the Trustee, for the benefit of the holders of the Notes, a first priority security interest in the Construction Escrow Account and all amounts on deposit therein to secure the obligations of Newland under the Indenture and the Notes. Upon receipt from Newland of an Eligible Escrow Withdrawal Request that complies with the requirements of the Indenture, the Trustee will transfer cash in the requested amount from the Construction Escrow Account to the Co-Trustee for payment by the Co-Trustee by check to the related contractors. The Support Parties may, pursuant to the Construction Completion Support Agreement, be required from time to time to transfer funds to the Construction Escrow Account, as described herein under "-Construction Completion Support Agreement". In addition, both Newland and each Construction Completion Support Party may from time to deposit additional amounts into the Construction Escrow Account pursuant to, and in accordance with the conditions set forth in, the Indenture. Any amounts remaining in the Construction Escrow Account upon Construction Completion will be transferred to the Collection Account for application in accordance with the Priority of Payments. Construction Completion Support Agreement Mr. Roger Khafif, Mr. Carlos A. Serna and Mr. Eduardo Saravia (the "Construction Completion Suppmi Parties") will enter into a construction completion support agreement with the Trustee, dated November 6, 2007 (the ;i:( 71 "Construction Completion Support Agreement"). Pursuant to the Construction Completion Support Agreement, the Completion Support Parties jointly and severally agree to pay on each Escrow Top-Up Date the related Construction Shortfall, if any, to the Construction Escrow Account. With respect to each Escrow Top-Up Date, the obligations of the Completion Support Parties shall be deemed to be satisfied if, on or before such Escrow Top-Up Date, Newland shall deposit the related Construction Shortfall into the Construction Escrow Account pursuant to, and in accordance with the conditions set forth in, the Indenture, and the Trustee shall have received written notice from Newland to such effect on or before such Escrow Top-Up Date. The Construction Completion Support Agreement will not be a guarantee of payment of the Notes, and Noteholders will have recourse only to Newland and the Collateral for repayment of their Notes. Collateral and Security The Collateral will include (i) the Subject Properties, (ii) the Receivables, (iii) the Accounts and all Eligible Investments on deposit therein, (iv) the Plans and Specifications, (v) the Trump License Agreement, (vi) Newland's rights to all other revenues arising from the operation of the Project, including, without limitation, revenues arising from the operation of the Casino and the hotel, restaurants and spa, and any leases relating thereto; (vii) Newland's rights under the Construction Contract, and (viii) all proceeds of the foregoing. Newland will grant the Trustee a first priority security interest in or first mortgage on the Collateral under the Indenture and the Security Documents to secure the payment of all obligations of Newland under the Indenture and the Notes. Except as otherwise pennitted by the Indenture, Newland will not be permitted to sell, encumber, lease or transfer any Collateral. The Subject Properties The Subject Properties will be subject to the Mortgage in the name of the Co-Trustee. The "as is" development value of the Subject Properties has been detennined by the Independent Appraiser to be US$ 113.6 million as of September 14, 2007. Subject Properties will from time to time give rise to Receivables. To the extent a Subject Property gives rise to a Receivable under a Unit Purchase Agreement, the Co-Trustee will release such Subject Property from the Mortgage once the Trustee and the Co-Trustee receive an officers' certificate from Newland certifying that the property relating to such Receivable has been purchased or financed by the obligor in accordance with the Unit Purchase Agreement and such Receivable will be pledged to the Trustee as security for the Notes. Upon any casualty relating to the Subject Properties, any Insurance Proceeds will, subject to any provisions in the related Unit Purchase Agreements, be deposited into the Construction Escrow Account and disbursed, for completion of Construction, subject to the provisions herein under "--Construction Escrow Account". The Receivables Newland will pledge to the Trustee, as security for the Notes, all Receivables owned by it on the Closing Date and all Receivables arising from time to time thereafter. Tne Receivables will arise under Unit Purchase Agreements pursuant to which the related obligor will be required, prior to completion of the related unit, to make a series of up to four payments collectively consisting of (a) 30% of the purchase price (for hotel or residential condominium units) or (b) 50% of the purchase price (for c01m11ercial units) and the obligor will be required to pay the remaining balance of the purchase price of the unit upon delivery by Newland of the completed unit. The Accounts Upon execution of a Unit Purchase Agreement, payments by the related obligor will be made directly into the HSBC Panama Account. All such payments (after the deduction of the amount of the fee due to licensor in respect of such unit in accordance with the Trump License Agreement) will be transferred into the Release Account twice weekly. Such amounts will then be held in the Release Account during each Monthly Collection Period and 72 released to Newland on a weekly basis until the full amount of the Monthly Working Capital Amount has been so released (or, if the full Monthly Working Capital Amount is not accumulated during such Monthly Collection Period, the amount so accumulated as of the end of such Monthly Collection Period), and all remaining collections, if any, in the Release Account during such Monthly Collection Period will be transfeITed to the Collection Account on the frrst Business Day in the calendar month in which the related Disbursement Date shall occur. Amounts on deposit in the Collection Account will be invested in specified Cash Equivalents upon the prior written direction by Newland to the Trustee. If any payment made by an obligor under a Unit Purchase Agreement is received by Newland rather than the related account to which payment should have been made, Newland will be required to transfer such payment into the account into which such payment should have been made, promptly upon receipt. The Release Account, the Debt Service Reserve Account, the Investment Account, the Collection Account and the Construction Escrow Account will constitute Accounts comprising the Collateral. Application of Amounts on Deposit in the Collection Account and the Investment Account On the 15th day of each month or, if such day is not a Business Day, the next succeeding Business Day (each, a "Disbursement Date"), the following amounts will be applied by the Trustee in the following order of priority (the "Priority of Payments"): (1) if such Disbursement Date (A) is not a Payment Date, to retain on deposit in the Collection Account up to an amount sufficient to pay the fees, expenses and indemnities of the Trustee, the Co-Trustee, the Independent Appraiser and the Independent Engineer on the Payment Date next succeeding such Disbursement Date, or (B) is a Payment Date, from the Collection Account (or, if amounts on deposit therein are insufficient, from the Investment Account) to pay the fees, expenses and indemnities of the Trustee, the Co-Trustee, the Independent Appraiser and the Independent Engineer; (2) (A) if such Disbursement Date is not a Payment Date, to retain on deposit in the Collection Account, up to an amount sufficient (together with any amount so retained pursuant to this clause (2) on a prior Disbursement Date and not yet released) to pay interest and principal, if any, due on the Notes on the next Payment Date, and (B) if such Disbursement Date is a Payment Date, (i) from the Collection Account, (ii) if amounts on deposit therein are insufficient, from the Investment Account, and (iii) if such amounts in (i) and (ii) herein are insufficient, from the Debt Service Reserve Account, to pay interest and principal (if any) due on the Notes on such Payment Date; (3) if such Disbursement Date (A) is not a Payment Date, to transfer from the Collection Account to the Debt Service Reserve Account, up to an amount sufficient to maintain the Reserve Requirement as of such Disbursement Date, or (B) is a Payment Date, to transfer from the Collection Account (or, if amounts on deposit therein are insufficient, from the Investment Account) to the Debt Service Reserve Account, up to an amount sufficient to maintain the Reserve Requirement as of such Disbursement Date; if the Collateralization Ratio Requirement is not met or if a Default or an Event of (4) Default shall have occUlTed and be continuing, to transfer all remaining amounts from the Collection Account to the Investment Account, for investment in Eligible Investments as specified in writing by Newland to the Trustee; (5) if the Collateralization Ratio Requirement is met and no Default or an Event of Default shall have occUlTed and be continuing, to transfer from the Debt Service Reserve Account to Newland all amounts in excess of the Reserve Requirement after application of amounts on deposit therein on such Disbursement Date in accordance with the Priority of Payments; and J]' (6) with respect to any amounts remaining after the application of clauses (1) through (5) to transfer such 'unounts from the Colle:~on Account ondio< the Investment Account, os the case may be, to Newland. To the extent amounts on deposit in the Collection Account (or, if applicable, the Investment Account) are insufficient to pay the amounts due and payable on any Payment Date according the Priority of Payments, Newland will be required to pay any such shortfall to the Trustee in order to make such payments on such Payment Date. In addition, Newland may, at any time and from time to time, contribute further amounts to the Investment Account. Except in connection with any liquidation of the Collateral following an Event of Default, amounts will not be pennitted to be withdrawn from the Construction Escrow Account to make payments on the Notes on any Payment Date. Upon any acceleration of the Notes or the failure to pay principal on any Payment Date or upon any redemption in full of the Notes, amounts on deposit in all Accounts will be applied by the Trustee, first, to pay the fees, expenses and indemnities of the Trustee, the Co-Trustee, the Independent Appraiser and the Independent Engineer, and, second, to repay principal of and any accrued interest on the Notes and any other amounts owing to the holders of the Notes pursuant to the Indenture. Any remaining amounts will be distributed to Newland. Additional Amounts All payments made by Newland under or with respect to the Notes will be made free and clear of and without withholding or deduction for or on account of any present or future taxes, levies, imposts, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the Republic of Panama or any political subdivision or taxing authority of or in the Republic of Panama ("Taxes"), unless Newland is required to withhold or deduct any amount for or on account of Taxes by law or by the interpretation or administration of law. If Newland is so required to withhold or deduct any amount for or on account of Taxes from any payment made by Newland under or with respect to the Notes, Newland will pay such additional amounts ("Additional Amounts") as may be necessary so that the net amount (including Additional Amounts) received by each holder of Notes after withholding or deduction will not be less than the amount the holder would have received if Taxes had not been withheld or deducted. However, no Additional Amounts will be payable by Newland with respect to a payment made to a holder of Notes with respect to any Tax which would not have been imposed, payable or due: (1) in the case that the holder or a Beneficial Owner of a Note is or was a domiciliary, national or resident of, or engages or engaged in business, maintains or maintained a pennanent establishment or is or was physically present in the Republic of Panama, or otherwise has some present or former connection with the Republic of Panama other than the mere holding or enforcement of the Notes or the receipt of principal, premium, if any, or interest in respect of the Notes; (2) in the case that the holder or Beneficial Owner of Notes fails to comply with a request by Newland to satisfy any certification, identification or other reporting requirements which such holder or Beneficial Owner is legally entitled to satisfy, whether imposed by statute, treaty, regulation, administrative practice or otherwise, concerning the nationality, residence or connection with the Republic of Panama of such holder or Beneficial Owner; (3) if, where presentation by the holder is required to receive payment under the Notes, the presentation for payment had occurred within 30 days after the date such payment was due and payable or was provided for, whichever is later; The obligation of Newland to pay Additional Amounts in respect of Taxes will not apply with respect to: (4) any estate, inheritance, gift, sales, transfer, personal property or any similar Tax; or (5) any Tax which is payable otherwise than by deduction or withholding from payments made under or with respect to the Notes. 74 Newland will be required to: (6) make any required withholding or deduction; (7) remit the full amount deducted or withheld to the relevant authority (the "Taxing Authority") in accordance with applicable law; (8) obtain certified copies of tax receipts evidencing the payment of any Taxes so deducted or withheld from each Taxing Authority imposing such Taxes; and (9) promptly send the certified copies of such tax receipts to the Trustee (if the Trustee acts as the paying agent) or, if different, to the paying agent, in each case solely for the purpose of forwarding such receipts to any holder that has made a written demand for the ce1tified copies to the Trustee or the paying agent, as the case may be. If the receipts are not obtainable, Newland will be required to provide to the Trustee or the paying agent, as the case may be, such other evidence of the payments as Newland may reasonably obtain. At least 30 days prior to each date on which any payment under or with respect to the Notes is due and payable (unless Newland's obligation to pay Additional Amounts arises after the 30th day prior to that date, in which case it will be promptly after Newland's obligation to pay Additional Amounts arises), if Newland will be obligated to pay Additional Amounts with respect to the payment, Newland will deliver to the Trustee and each paying agent an officers' certificate stating the fact that the Additional Amounts will be payable and the amounts so payable and will set forth other infonnation necessary to enable the Trustee and each paying agent to pay the Additional Amounts to holders of Notes on the payment date. Each officer's certificate will be relied upon until receipt of a further officers' certificate addressing these matters. Whenever in the Indenture or in this "Description of Notes" there is mentioned, in any conte:>..1, the payment of amounts based upon the payment of principal, premium or interest or of any other amount payable under or with respect to any Note, such mention will be deemed to include mention of the payment of Additional Amounts as are, were or would be payable in respect of the payment of principal, premium or interest or of any other amount. Interest payable on the Notes will be exempt from income tax or withholding requirements in Panama, provided that the Notes are registered with the Panamanian National Securities Co1mnission and, in addition, are placed through a securities exchange or through an organized market in Panama. The Notes are in the process of being registered with the Panamanian National Securities Commission and will be initially placed on the Panama Stock Exchange. Accordingly, interest payments made on the Notes will be exempt from income tax or withholding requirements in Panama. Should the Notes not be initially placed on the Panama Stock Exchange, interest payments will be subject to a 5% income tax, which would have to be withheld by the Newland. See "Certain Republic of Panama Tax Considerations." Currency Indemnity Newland will pay all sums due under the Indenture and the Notes solely in U.S. Dollars. Any amount that Newland pays in a currency other than U.S. Dollars in respect of any sum due under the Indenture (the "Foreign Currency Payment Amount") will only constitute a discharge to Newland to the extent of the U.S. Dollar amount that the holder would be able to purchase on the Payment Date with the Foreign Currency Payment Amount. If the Foreign Currency Payment Amount is less than the U.S. Dollar amount due under the Indenture, Newland will indemnify such holder for the difference between the U.S. Dollar amount due and the U.S. Dollar amount which the holder is so able to purchase with the Foreign Currency Payment Amount (the "Foreign Currency Payment Amount Loss"). In the event a holder of a Note purchases U.S. Dollars on the Payment Date with all of the Foreign Currency Payment Amount, Newland will indemnify such holder for the reasonable transaction costs incurred in connection with such purchase of U.S. Dollars. For the purposes of this paragraph, it will be ~~?t for' holder to certify in wdting th•t rnch holder suffered 'Foreign Currency P•yment Amount Loss; ~l 75 provided that such written certification is accompanied by documentation reasonably evidencing such Foreign Currency Payment Amount Loss. Paying Agent and Registrar for the Notes; Transfer and Exchange The Trustee will initially act as paying agent and registrar for the Notes. The office of the Trustee is currently located at HSBC Bank USA, National Association, Corporate Trust and Loan Agency, 452 Fifth A venue, New York, New York 10018-2706. A holder may transfer or exchange Notes in accordance with the provisions of the Indenture. The registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents in connection with a transfer of Notes. Noteholders will be required to pay all taxes due on transfer. Newland is not required to transfer or exchange any Note selected for redemption. Also, Newland is not required to record the transfer or exchange of any Note for a period of 15 days prior to the date ofredemption thereof Redemption Optional Redemption Newland may on any one or more occasions redeem up to 35% of the aggregate initial principal amount of Notes issued under the Indenture, less any regularly scheduled payments of principal of the Notes, at a redemption price of 109 .500% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date, with the net cash proceeds of one or more Equity Offerings; provided that: (i) at least 65% of the aggregate initial principal amount of Notes under the Indenture (excluding Notes held by Newland and its Affiliates), less any regularly scheduled payments of principal of the Notes, remains outstanding irmnediately after the occurrence of such redemption; and (ii) the redemption occurs within 45 days of the date of the closing of such Equity Offering. In addition, beginning on the third anniversary of the Closing Date, Newland may at any time, upon not less than 35 or more than 65 days' prior notice, redeem all or a portion of the outstanding principal amount of Notes at a redemption price in accordance with the following schedule ifredeemed during the periods set forth below, plus any accrued and unpaid interest as of the time of such redemption: Redemption Price 104.750% 102.375% 100% Periods November 15, 2010 - November 14, 2011 November 15, 2011 - November 14, 2012 November 15, 2012 and thereafter Newland may also redeem all or part of the Notes, upon not less than 30 or more than 60 days' prior notice, at a redemption price equal to 100% of the outstanding principal amount of Notes redeemed plus the Applicable Make-Whole Premium as of, and accrued and unpaid interest to, but excluding, the redemption date, subject to the rights ofNoteholders on the relevant record date to receive interest due on the relevant Payment Date. Other than as provided herein with respect to repayment and redemption, Newland will not be required to make mandatory redemption payments or sinking fund payments with respect to the Notes. Newland may acquire Notes by means other than a redemption, whether by tender offer, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws, so long as such acquisition does not violate the tenns of the Indenture and provided that any Note so acquired by Newland will be cancelled. Redemption For Changes in Withholding Taxes The Notes may be redeemed at the option of Newland, in whole but not in part, at any time prior to the final maturity date of the Notes upon not more than 60 nor less than 30 days' notice to the holders of the Notes (with copies to the Trustee and the paying agent) at a redemption price equal to 100% of the outstanding principal amount Jr /j /~. 76 of the Notes (together with accrued and unpaid interest, if any, to (but excluding) the date fixed for redemption, plus any Additional Amounts), if, as the result of certain changes in or amendments to the tax laws of the Republic of Panama, Newland has or will become obligated to pay Additional Amounts in excess of the Additional Amounts that Newland would be obligated to pay if Taxes were imposed with respect to payments of principal, premium or interest at a rate in excess of 10%. Prior to the giving of any notice of such a redemption of the Notes as described herein and as a condition to any redemption, Newland will deliver to the Trustee (1) an Officers' certificate stating that Newland is entitled to effect such a redemption and setting forth in reasonable detail a statement of facts relating to the redemption and (2) a written opinion of counsel to that effect based on the statement of facts. Redemption at Option ofNoteholders upon Change of Control If a Change of Control occurs, each holder of Notes will have the right to require Newland to repurchase all or any part of that holder's Notes pursuant to a Change of Control Offer on the tenns set forth in the Indenture. In the Change of Control Offer, Newland will offer a Change of Control Payment in cash equal to 101 % of the outstanding principal amount of Notes repurchased plus accrued and unpaid interest, if any, on the Notes repurchased, to, but excluding, the date of purchase, subject to the rights ofNoteholders on the relevant record date to receive interest due on the relevant Payment Date. Within 30 days following the date on which Newland becomes aware that a Change of Control has occurred, Newland will mail a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the Indenture and described in such notice. Newland will comply with tl1e requirements of Rule l 4e- l under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the Indenture, Newland will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the Indenture by virtue of such compliance. On the Change of Control Payment Date, Newland will, to the extent lawful: (1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; (2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and (3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an officers' certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by Newland. The paying agent will promptly mail to each holder of Notes properly tendered the Change of Control Payment for such Notes. Newland will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. The provisions described above that require Newland to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that pennit the holders of the Notes to require that Newland repurchase or redeem the Notes in connection with a Change of Control. _/ /!Af~ / \ 77 The Change of Control repurchase feature is a result of negotiations between Newland and the initial purchaser. Newland's management has no present intention to engage in a transaction involving a Change of Control, although it is possible that Newland will do so in the future. Subject to certain covenants described below, Newland could, in the future, enter into transactions including acquisitions, refinancings or other recapitalizations that would not constitute a Change of Control under the Indenture, but that could increase the amount of debt outstanding at such time or otherwise affect Newland's capital structure or credit ratings, if any. Newland will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by Newland and purchases all of the Notes not validly tendered and not withdrawn under such Change of Control Offer. The definition of Change of Control includes a phrase relating to the direct or indirect sale, transfer, conveyance or other disposition of"all or substantially all" of the prope1iies or assets of Newland. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of Notes to require Newland to repurchase its Notes as a result of a sale, transfer, conveyance or other disposition of less than all of the assets of Newland to another Person or group may be uncertain. Redemption at Option ofNoteholders -Asset Sales Newland will not consummate an Asset Sale unless: (1) Newland receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and (2) at least 85% of the consideration received in the Asset Sale by Newland is in the fonn of cash or Cash Equivalents. For purposes of this provision, each of the following will be deemed to be cash: (a) any liabilities of Newland (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of any such assets and as a result of which Newland is unconditionally released from further liability; (b) any securities, notes or other obligations received by Newland from such transferee that within 90 days are converted into cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion; (c) in connection with the sale of a business, accounts receivable of the business being sold which are retained by Newland following the Asset Sale; provided that at the time of such sale such accounts receivable are not past due more than 60 days and do not have a payment date more than 90 days from the date of the related invoice; and (d) covenant. any assets of the kind referred to in clause (5) of the next paragraph of this Within 270 days after the receipt of any Net Proceeds from an Asset Sale, Newland may apply those Net Proceeds at its option: 1}/;f') y (l) to repay Pari Passu Debt; (2) to acquire all or substantially all of the assets of another Pennitted Business; (3) to make a capital expenditure in a Pennitted Business; (4) ifthe Collateralization Ratio shall not be met, to deposit into the Investment Account; or • ,.r- 78 (5) to acquire other assets that are not classified as current assets under IFRS and that are used in a Pennitted Business; or enter into a binding commitment regarding clauses (2), (3) or (5) above, provided that such binding cmmnitment shall be treated as a pennitted application of Net Proceeds from the date of such cmmnitment until and only until the earlier of (x) the date on which such acquisitions or expenditures are consummated and (y) the l 80tl1 day following the expiration of the aforementioned 270 day period. If such acquisition or expenditure is not consummated on or before such 180tl1 day and Newland shall not have applied such Net Proceeds as described in clause (2), (3) or (5) of this paragraph on or before such 180th day, such commitment shall be deemed not to have been a pennitted application of Net Proceeds. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds US$ 5 million, Newland will make an Asset Sale Offer to all holders of Notes to purchase the maximum outstanding principal amount of Notes that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest, if any, to, but excluding, the date of purchase, and will be payable in cash (subject to the right of holders to receive interest due on the relevant Payment Date). If any Excess Proceeds remain after consununation of an Asset Sale Offer, Newland may use those Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the Notes to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero. The Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any. Newland will comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the e:>..1:ent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the Indenture, Newland will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by viiiue of such compliance. Notice of Redemption If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption on a pro rata basis. Newland will provide notice of redemption to the Trustee by courier at least 35 days but not more than 65 days before, and the Trustee will mail notices ofredemption by first class mail at least 30 days but not more than 60 days before, the redemption date to each holder of Notes to be redeemed at its registered address, except that redemption notices may be mailed by the Trustee more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of the Indenture. Notices of redemption may not be conditional. If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount of that Note that is to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the holder of Notes upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption. Certain Covenants Restricted Payments Newland will not directly or indirectly: (l 1 79 (1) declare or pay any dividend or make any other payment or distribution on account of Newland's Equity Interests or to the direct or indirect holders of Newland's Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of Newland and other than dividends or distributions payable to Newland); (2) purchase, redeem or otherwise acquire or retire for value any Equity Interests of Newland or any direct or indirect parent of Newland (other than in exchange for Capital Stock of Newland (other than Disqualified Stock)); (3) make (i) any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of Newland that is contractually subordinated to the Notes, except a payment of interest or principal at the Stated Maturity thereof or (ii) any Consulting Excess Payment; or (4) make any Restricted Investment; (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment: (1) Construction Completion shall have occurred; (2) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; and (3) the Restricted Payment Ratio Requirement shall be met. So long as no Default or Event of Default has occurred and is continuing or would be caused thereby, the preceding provisions will not prohibit: (1) the making of any Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale of, Equity Interests of Newland (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to Newland; and (2) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of Newland issued on or after the date of the Indenture in accordance with the requirements herein. The amount of any Restricted Payment (other than cash) will be the Fair Market Value on the date of such Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Newland pursuant to such Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued hereby shall be detennined by resolution of the Board of Directors of Newland, and Newland shall deliver a copy of such resolution to the Trustee. The Board of Directors' determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing if the Fair Market Value exceeds US$ 5 million. Incurrence ofIndebtedness Newland will not be pennitted to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or othenvise, with respect to (collectively, "incur") any Indebtedness; provided, however, that Newland may incur up to an aggregate of US$ 20 million of Indebtedness (other than the Indebtedness evidenced by the Notes) at any time outstanding for general corporate purposes. t2~. (/>; 80 No Layering ofIndebtedness Newland will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is contractually subordinate or junior in right of payment to any senior Indebtedness of Newland and pari passu in right of payment to the Notes. Liens Newland will not directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind on any asset owned on the date of the Indenture or thereafter acquired, except Pennitted Liens. Sale and Leaseback Transactions Newland will not enter into any sale and leaseback transaction unless: (1) Newland could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under the covenant described above under the caption "- Incurrence of Indebtedness" and (b) incmTed a Lien to secure such Indebtedness pursuant to the covenant described above under the caption "-Liens"; and (2) the sale and leaseback transaction is made in compliance with the covenant described above under the caption"- Redemption at the Option of Holders -Asset Sales." Merger. Consolidation or Sale ofAssets Newland may not, directly or indirectly: (1) consolidate or merge with or into another Person; or (2) sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to another Person; unless: (1) either: (a) Newland is the surviving corporation; or (b) the Person fonned by or surviving any such consolidation or merger (if other than Newland) or to which such sale, assignment, transfer, conveyance, lease or other disposition has been made is a corporation organized or existing under the laws of the Republic of Panama, the United States, any state of the United States or the District of Columbia; (2) the Person fonned by or surviving any such consolidation or merger (if other than Newland) or the Person to which such sale, assignment, transfer, conveyance, lease or other disposition has been made assmnes by written agreement all the obligations of Newland under the Notes and the Indenture and the other Security Documents; (3) i1mnediately after such transaction, no Default or Event of Default exists; and (4) the Person fonned by or surviving any such consolidation or merger or the Person to which such sale, assignment, transfer, conveyance, lease or other disposition is made, shall have a Consolidated Net Worth not less than Newland's Consolidated Net Worth immediately prior thereto. Transactions with Affiliates Newland will not make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Newland (each, an "Affiliate Transaction"), unless: (1) such Affiliate Transaction is on tenns that are not materially less favorable to Newland than those that would have been obtained in a comparable transaction by Newland with an unrelated Person; and 81 (2) Newland delivers to the Trustee: (a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$ 1 million, a resolution of the Board of Directors set forth in an officers' certificate certifying that such Affiliate Transaction complies with this covenant; and (b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$ 5 million, (i) an opinion as to the fairness to Newland of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking fmn of international standing or (ii) with respect to any construction-related Affiliate Transaction (or any pennitted successor thereto), a certification from the Independent Engineer to the Trustee to the effect that such Affiliate Transaction is on tenns that are not materially less favorable to Newland than those that would have been obtained in a comparable transaction by Newland with an unrelated Person. The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph: (1) any employment agreement, employee benefit plan, officer and director indemnification agreement or any similar arrangement entered into by Newland in the ordinary course of business; (2) payment ofreasonable directors' fees; (3) any issuance of Equity Interests (other than Disqualified Stock) of Newland to Affiliates of Newland; (4) Restricted Payments that do not violate the provisions of the Indenture described above under the caption "-Restricted Payments"; (5) transactions with any Person solely in its capacity as a holder of Indebtedness or Capital Stock of Newland where such Person is treated no more favorably than any other holder ofindebtedness or Capital Stock of Newland; and (6) transactions effected pursuant to agreements in effect on the date of the Indenture (including, without limitation, the Agreements in effect as of the Closing Date), and any amendment, modification, renewal, extension or replacement to such agreement provided that such amendment, modification, renewal, extension or replacement is not disadvantageous to the holders of the Notes in any respect. Business Activities Newland will not engage in any business other than Pennitted Businesses. Subsidiaries Newland does not have and will not be pennitted to create or acquire any Subsidiaries. Payments for Consent Newland will not directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the tenns or provisions of the Indenture or the Notes unless such consideration is offered to be paid and is paid to all holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such nt, waiver or agreement. r y~ , ,,,,--: ' 82 Notices and Reports; Available Information Notices shall be deemed to have been given on the date of publication as aforesaid or, if published on different dates, on the date of the first such publication. In addition, notices will be mailed to holders of Notes at their registered addresses. Receivables Reports Newland will provide the Trustee with monthly reports in the form set forth in an exhibit to the Indenture, setting forth, among other things, the identity and amount of each Receivable generated since the last such report, whether such Receivables are Eligible Receivables, the calculation of the Collateralization Ratio and whether or not the Collateralization Ratio Requirement has been met as of the end of the relevant reporting period, with each related Unit Purchase Agreement attached thereto. Available Information Newland will provide to the Trustee and the Trustee will make available to the holders: (1) annual financial statements audited by an internationally recognized finn of independent public accountants within 120 days of the end of each fiscal year, and quarterly financial statements within 60 days of the end of each of the first three fiscal quarters of each fiscal year, in each case for Newland. Such annual and quarterly fmancial statements will be prepared in accordance with IFRS and such annual financial statements be accompanied by a smmnary management discussion on the results of operations of Newland for the periods presented; and (2) copies (including English translations of docwnents in other languages) of all public filings made by Newland with any stock exchange or securities regulatory agency within ten days after filing. Newland has agreed in the Indenture that it will host a quarterly conference call for holders of the Notes to be held within a reasonable time, but in no event later than 30 days, after the delivery of the quarterly financial statements referred to above (or, in the case of the annual audited financial statements, within 90 days after the end of the fiscal year) by placing a notice and dial-in conference number on its website (www.trumpoceanclub.com) at least 72 hours in advance of the conference call. Newland shall take all action necessary to provide infonnation to permit resales of the Notes pursuant to Rule 144A under the Securities Act, including furnishing to any holder of a Note or beneficial interest in a global Note, or to any prospective purchaser designated by such holder, upon request of such holder, financial and other infonnation required to be delivered under Rule 144A(d)(4) (as amended from time to time and including any successor provision) unless, at the time of such request, Newland is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act or is exempt from such requirements pursuant to Rule 12g3-2(b) under the Exchange Act (as amended from time to time and including any successor provision). Anyone who receives this offering memorandmn may obtain a copy of the Indenture, the Co-Trustee Agreement, the Construction Completion Support Agreement and the Mmtgage without charge, by directing a request therefor to Newland by mail at Plaza 53, Building 53, Ground Floor, Obarrio Street, Republic of Panama, or by telephone at (507) 223-0225. Events of Default and Remedies Each of the following is an "Event of Default" under the Indenture: (1) default for 5 days in the payment when due of interest on the Notes; 83 (2) failure to maintain the amount on deposit in the Debt Service Reserve Account at or above the Reserve Requirement for a period of 60 successive days; (3) failure to meet the Collateralization Ratio Requirement (i) within nine (9) months of the Closing Date or (ii) for a period of30 successive days at any time thereafter; (4) default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the Notes; (5) failure by Newland to comply with the provisions described under the captions " Redemption at the Option of Holders - Change of Control," or "- Certain Covenants - Merger, Consolidation or Sale of Assets"; (6) failure by Newland to comply with the provisions described under the captions Certain Covenants - Restricted Payments" or"- Certain Covenants - Incurrence of Indebtedness"; (7) failure by Newland for 30 days after notice to comply with any of the other agreements of Newland in the Indenture or any of the other Security Documents; (8) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness of Newland whether such Indebtedness now exists or is created after the date of the Indenture, ifthat default: is caused by a failure to pay principal of, or interest or premium, if any, on such (a) Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default; or (b) results in the acceleration of such Indebtedness prior to its final date of maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default described in (a) above or the maturity of which has been so accelerated, aggregates US$ 2 million or more; (9) failure by Newland to pay final judgments aggregating in excess of US$ 2 million, which judgments are not paid, waived, satisfied, discharged or stayed for a period of 60 days; (10) any default under the Construction Completion Support Agreement; (11) certain events of moratorium in the Republic of Panama or bankruptcy or insolvency of Newland or any Construction Support Party, as described in the Indenture; and (12) any Security Document or any Lien purported to be granted thereby is held in any judicial proceeding to be unenforceable or invalid, in whole or in part, or ceases for any reason (other than pursuant to a release that is delivered or becomes effective as set forth in the Indenture) to be fully enforceable and perfected, or Newland shall so assert. In the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to Newland or any Construction Support Party, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee, by written notice to Newland or the holders of at least 25% in aggregate principal amount of the then-outstanding Notes, by written notice to Newland and the Trustee, may declare all the Notes to be due and payable immediately. In addition, if an Event of Default occurs and is continuing, the holders of at least 25% in aggregate principal amount of the then-outstanding Notes may instruct the Trustee to discontinue honoring requests to withdraw funds from the Construction Escrow Account until such Event of Default is cured or waived. ~ ~1 84 Subject to certain limitations, holders of a majority in aggregate principal amount of the then-outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from holders of the Notes notice of any continuing Default or Event of Default if it detennines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal or interest. Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any holders of Notes unless such holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest, if any, or when due, no holder of a Note may pursue any remedy with respect to the Indenture or the Notes unless: (1) continuing; such holder has previously given the Trustee notice that an Event of Default is (2) holders of at least 25% in aggregate principal amount of the outstanding Notes have requested the Trustee to pursue the remedy; (3) such holders have offered the Trustee reasonable security or indemnity satisfactory to it against any loss, liability or expense; (4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and (5) holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. The holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may, on behalf of the holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium on, or the principal of, the Notes. In the event of a declaration of acceleration of the Notes because an Event of Default described in clause (8) above under "Events of Default and Remedies" has occurred and is continuing, such declaration shall be automatically annulled if, within 20 days after such Event of Default arose, the event triggering such Event of Default pursuant to such clause (8) shall be remedied or cured by Newland or waived by the holders of the relevant Indebtedness. Newland is required to deliver to the Trustee annually a statement regarding compliance with the Indenture. Upon becoming aware of any Default or Event of Default, Newland is required to deliver to the Trustee a statement specifying such Default or Event of Default. Legal Defeasance and Covenant Defeasance Newland may at any time tenninate all of its Obligations with respect to the Notes ("Legal Defeasance"), except for certain Obligations, including those regarding any trust estabiished for a Defeasance, to replace mutilated, destroyed, lost or stolen Notes and to maintain agencies in respect of the Notes. In addition, Newland may at any time tenninate all of its Obligations with respect to the Notes with respect to the covenants described above under "-Certain Covenants" (other than the covenant described under "-Certain Covenants -Merger, Consolidation or Sale of Assets"), and any omission to comply with such Obligations shall not constitute a Default with respect to the Notes issued under the Indenture ("Covenant Defeasance"). In order to exercise either Legal Defeasance or Covenant Defeasance, Newland must irrevocably deposit in trust, for the benefit of the holders of the Notes, cash in U.S. dollars or U.S. government obligations, or a combination thereof, in such amounts as will be sufficient to pay the principal of and interest on such Notes to the redemption date specified by fl < /' 85 Newland in accordance with the tenns of the Indenture and comply with certain other conditions, including the delivery of an opinion as to certain tax matters. Amendment, Supplement and Waiver Except as provided in the ne:i.1: three succeeding paragraphs, the Indenture or the Notes may be amended or supplemented with the consent of the holders of at least a majority in aggregate principal amount of the Notes then outstanding, and any existing Default or Event of Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the holders of a majority in aggregate principal amount of the then outstanding Notes. Without the consent of each Noteholder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting holder): (1) reduce the principal amount of Notes whose holders must consent to an amendment, supplement or waiver; (2) reduce the principal of or change the final maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than provisions relating to the covenants described under the captions above "-Redemption at Option of the Holders of the Notes Upon Change of Control" and"Redemption at Option of Holders of Notes -Asset Sales"); (3) reduce the rate of or change the time for payment of interest on any Note; (4) waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on the Notes (except a rescission of acceleration of the Notes by the holders of at least a majority in aggregate principal amount of the then-outstanding Notes and a waiver of the payment default that resulted from such acceleration); (5) make any Note payable in money other than that stated in the Notes; (6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of Notes to receive payments of principal of, or interest or premium, if any, on the Notes; (7) waive a redemption payment with respect to any Note; (8) release any Construction Support Party from its obligations under the Construction Completion Support Agreement; (9) effect any release of Collateral other than as provided in the Indenture; or (10) make any change in the preceding amendment and waiver provisions. Notwithstanding the preceding, without the consent of any holder of Notes, Newland and the Trustee may amend or supplement the Indenture or the Notes: (1) to cure any ambiguity, defect or inconsistency; (2) to provide for the assumption ofNewland's obligations to holders of Notes in the case of a merger or consolidation or sale of all or substantially all of Newland' s assets; (3) to make any change that would provide any additional rights or benefits to the holders of Notes or that does not adversely affect the legal rights under the Indenture of any such holder; /:f 86 (4) to confonn the text of the Indenture or the Notes to any provision of this Description of Notes to the extent that such provision in this Description of Notes was intended to be a verbatim recitation of a provision of the Indenture or the Notes; (5) to provide for the appointment of a successor Trustee; provided that the successor Trustee is otherwise qualified and eligible to act as such under the tenns of the Indenture; or (6) to add a new fonn of Unit Purchase Agreement in accordance or to make an amendment to a fonn of Unit Purchase Agreement in accordance with the Indenture. In addition, any amendment, waiver or supplement to the Indenture or the Notes, with or without consent of the holders of a majority of the aggregate principal amount of the Notes then outstanding, may be subject to prior approval or filing requirements of the Panamanian National Securities Commission pursuant to Agreement 4-2003. The consent of the holders of the Notes is not necessary to approve the particular fonn of any proposed amendment. It is sufficient if such consent approves the substance of such proposed amendment. After an amendment becomes effective, Newland is required to mail to each registered holder of the Notes a notice briefly describing such amendment. However, the failure to give such notice to all holders of the Notes, or any defect therein, will not impair or affect the validity of the amendment. Satisfaction and Discharge The Indenture will be discharged and will cease to be of further effect as to all Notes issued thereunder, when: (1) either: (a) all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in trust and thereafter repaid to Newland, have been delivered to the Trustee for cancellation; or (b) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and Newland has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, non-callable U.S. government obligations, or a combination of cash in U.S. dollars and non-callable U.S. government obligations in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premimn, if any, and accrued interest to the date of maturity or redemption; (2) Newland has paid or caused to be paid all sums payable by it under the Indenture; and (3) Newland has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case maybe. In addition, Newland must deliver an officers' certificate and an opinion of counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied. Concerning the Trustee If the Trustee becomes a creditor of Newland, the Indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. v{ ~ t' 87 The holders of a majority in aggregate principal amount of the then-outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any holder of Notes, unless such hoider has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. Pursuant to the Indenture, the Trustee may at any time appoint one or more Persons to act as separate trustees or co-trustees. Such an appointment will not relieve the Trustee of any of its obligations, duties or responsibilities under the Indenture. In accordance with a co-trustee agreement to be dated as of the Closing Date (the "Co-Trustee Agreement"), among the Trustee, Newland, and HSBC Investment Corporation (Panama) S.A., as co-trustee (in such capacity, the "Co-Trustee"), the Co-Trustee will be the mortgagee of record under the Mortgage and will perform certain other duties as set forth therein. Copies of the Indenture and the Co-Trustee Agreement are available as set forth above under "-Notices and Reports; Available Infommtion." Book-Entry, Delivery and Form The Notes are being offered and sold to "qualified institutional buyers" within the meaning of Rule 144A that are also "qualified purchasers" within the meaning of the U.S. Investment Company Act of 1940, as amended, and the rules and regulations thereunder in reliance on Rule 144A ("Rule 144A Notes"). The Notes also may be offered and sold in offshore transactions in reliance on Regulation S ("Regulation S Notes"). Except as set forth below, the Notes will be issued in registered, global fonn in minimum denominations of US$ I 0,000 and integral multiples of US$ 1,000 in excess thereof. The Notes will be issued on the issue date free of payment. Rule 144A Notes initially will be represented by one or more Notes in registered, global fonn without interest coupons (collectively, the "Rule 144A Global Notes"). Regulation S Notes initially will be represented by one or more Notes in registered, global fonn without interest coupons (collectively, the "Regulation S Global Notes" and, together with the Rule 144A Global Notes, the "Global Notes"). The Rule 144A Global Notes will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company ("DTC"), in New York New York, and registered in the name of DTC or its nominee, in each case, for credit to an account of a direct or indirect participant in DTC as described below. The Regulation S Global Notes shall be registered in the name of a nominee or common depository ofEuroclear System ("Euroclear") or Clearstream Banking, S.A. ("Clearstream"). Beneficial interests in the Rule 144A Global Notes may not be exchanged for beneficial interests in the Regulation S Global Notes at any time except in the limited circumstances described below. See "- Exchanges between Regulation S Notes and Rule 144A Notes." Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for definitive Notes in registered certificated fonn ("Certificated Notes") except in the limited circumstances described below. See "-Exchange of Global Notes for Certificated Notes." Except in the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of Notes in certificated fonn. Rule 144A Notes (including beneficial interests in the Rule 144A Global Notes) will be subject to certain restrictions on transfer in the United States and will bear a restrictive legend as described under "Notice to Investors." Regulation S Notes will also bear the legend as described under "Notice to Investors." In addition, transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time. Beneficial interests in the Regulation S Global Note may be held in Panama through Latinclear as a participant in Clearstream. Subject to the procedures of Latinclear and the other clearing systems discussed below, transfers of beneficial interests in the Regulation S Global Note may be made (i) among Latinclear participants or (ii) from a Latinclear participant to a non-Latinclear participant through Clearstream. (!/ /;( 88 Deposito1y Procedures The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. Neither we nor the initial purchaser take any responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters. DTC has advised us that DTC is a limited-purpose trust company created to hold secunt1es for its participating organization (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between the Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the initial purchaser), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf ofDTC are recorded on the records of the Participants and Indirect Participants. DTC has also advised us that, pursuant to procedures established by it: (1) upon deposit of the Global Notes, DTC will credit the accounts of the Participants designated by the initial purchaser with portions of the principal amount of the Global Notes; and ovmership of these interests in the Global Notes will be shown on, and the transfer of (2) ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes). So Jong as DTC, Euroclear or Clearstream or their nominee are the registered owner or holders of any Global Notes, DTC, Euroclear or Clearstream or such nominee will be considered the sole owner or holder of the Notes represented by the Global Notes for all purposes under the Indenture and the Notes. No beneficial owner of an interest in any Note will be able to transfer such interest except in accordance with the applicable procedures of DTC, Euroclear, Clearstream or Latinclear, in addition to those provided for under the Indenture. Investors in the Rule 144A Global Notes who are Participants may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear, Clearstream and Latinclear) which are Participants. All interests in a Global Note, including those held through Euroclear, Latinclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear, Latinclear or Clearstream may also be subject to the procedures and requirements of such systems. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they ovm. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of the Participants, which in turn act on behalf of the Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests. Except as described below, owners of interests in the Global Notes will not have Notes registered in their names, will not receive physical delivery of Notes in certificated form and will not be considered the registered owners or "holders" thereof under the Indenture for any purpose. Payments in respect of the principal of, and interest and premium, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered holder under the Indenture. Under the tenns of the Indenture, Newland, the Trustee and any Paying Agent will treat the persons in whose names the Notes, including the Global Notes, are registered as the owners of the Notes for the purpose of receiving payments and for all other purposes. Consequently, none of Newland, the Trustee, any Paying Agent, the initial .~f o; ""Y agent of the foregofilg ha. o; will have:: responsibility o; liability fo; (1) any aspect ofDTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Notes; or (2) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. DTC has advised that its current practice, upon receipt of any payment in respect of securities such as the Notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe that it will not receive payment or such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial mvners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or us. None of Newland, the Trustee or any Paying Agent will be liable for any delay by DTC or any of the Participants or the Indirect Participants in identifying the beneficial owners of the Notes, and Newland, the Trustee and any Paying Agent may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes. Subject to the transfer restrictions set forth under "Notice to Investors," transfers between the Participants will be effected in accordance with DTC's procedures, and will be settled in same-day funds, and transfers between participants in Euroclear, Latinclear and Clearstream will be effected in accordance with their respective rules and operating procedures. Subject to compliance with the transfer restrictions applicable to the Notes described herein, cross-market transfer between the Participants, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC's rules on behalf ofEuroclear or Clearstream, as the case may be, by their respective depositaries; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with nonnal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream. DTC has advised us that it will take any action pennitted to be taken by a holder of Notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given such direction. However, ifthere is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated fonn, and to distribute such Notes to its Participants. Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Rule 144A Global Notes and the Regulation S Global Notes among participants in DTC, Euroclear and Clearstream, they are under no obligation to perfonn or to continue to perfonn such procedures, and may discontinue such procedures at any time. None of Newland, the Trustee, the Co-Trustee, any Paying Agent, the initial purchaser and any of their respective agents will have any responsibility for the perfonnance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations. Exchange of Global Notes for Certificated Notes A Global Note is exchangeable for Certificated Notes if: A TOWER project. Included in other assets as of December 31, 2006 and June 30, 2007 are c01mnissions paid to outside brokers in the amount ofBl.861,440 and Bl.8,024,287 (unaudited). These cormnissions will be expensed as a selling-related cost upon the recognition ofrevenue from the sale of units. On March 16, 2006, a related party entered into a license agreement (the "License Agreement") for the use of the trademark "Trump" in connection with the TRUMJ> TOWER project. The license fee includes an initial payment ofUSD$1,000,000 upon execution of the agreement, plus a USD$200,000 commission, a base license fee equal to 4% of the gross sales value of each condominium unit, parking space or other unit sold and 12% of the rental income from cormnercial units. The license fee also includes incentive fees for the sale of residential or hotel condominium units ranging from 5% - 50% of gross sales price in excess of a certain price per square foot. The initial payment is included in other assets and will be expensed upon the sale of units together with other selling related costs such as license fees and incentive fees. The original contract tenn for the license agreement was for one year. On June 5, 2007, the related party assigned the License Agreement to NEWLAND and on June 19, 2007, the License Agreement was amended to extend the right to the License Agreement in perpetuity. 7 Accounts payable and accrued expenses The detail of accounts payable and accrued expenses at December 31, 2006 and June 30, 2007 is as follows: December 31, 2006 Bl. C01mnissions payable .................................. . Other payables ............................................. . . ·~ Bl. ,_....-I F- 9 19,204 19,204 June 30, 2007 (Unaudited) 7,162,847 156 7,200,003 8 Related party transactions On January 2, 2007, NEWLAND entered into an agreement with one of its stockholders for the purchase of land located at Contadora Island in the Republic of Panama for the purpose of developing a beach club (BEACH CLUB) near the TRUMP TOWER project. Included in other assets is the total payment towards the purchase of the land in the amount ofBl.900,000. On February 3, 2006, NEWLAND entered into a purchase and sales agreement with a related party for the design and architectural plans of the TRUMP TOWER project and the BEACH CLUB located at Contadora Island in the Republic of Panama (see note 6). The total contract fee for both projects is Bl.9,115,000. The amount payable as of June 30, 2007, and the amount paid since inception of the TRUMP TOWER project to the related party amounted to Bl. 153,600 (unaudited) and Bl. 2,776,000 (unaudited), respectively. There was no fee during 2006. On November 15, 2006, NEWLAND entered into a construction contract with a related party for the construction of the TRUMP TOWER project and the BEACH CLUB. The total estimated cost for both projects is USD$228,310,000. Construction cost payable as of June 30, 2007, and total construction costs paid since inception of the TRUMP TOWER project to the related party amounted to Bl.147,596 (unaudited) and Bl.l,599,652 (unaudited), respectively. There were no construction fees during 2006. The detail of the accounts and transactions with the related party as of June 30, 2007 is a follows: Accounts payable as of June 30, 2007 (unaudited) Upper Deck - Architectural Services .......... . Opcorp International, Inc. - Construction ... . 153,600 147,596 301,196 Bl. Bl. 9 Transactions Since inception of the project (unaudited) 2,776,000 1,599,652 4,375,652 Share Capital As of December 31, 2006, the Company has a total of 500 shares authorized, issued and outstanding. The capital structure as of December 31, 2006 for NEWLAND is comprised of the following ownership and share capital structure: Majority Owner Class A ........................................................ . 315 Class B ........................................................ . Class C ........................................................ . 35 350 Minority Owner 135 15 150 Total Shares 315 135 50 500 Bl. Bl. Par Value 6,300 2,700 1,000 10,000 Pursuant to the Stockholder Agreement dated February 22, 2006, profits from the sale of condominium units of the TRUMP TOWER project will be distributed 63% to Class A shares, 27% to Class B shares and 10% to Class C shares and profits from the sale of the BEACH CLUB (See note 6) will be distributed 67 .5% to Class A shares, 22.5% to Class B shares and 10% to Class C shares. Total estimated pre-operating costs for the development of the TRUMP TOWER of USD$9,300,000 will be funded initially by a USD$3, 700,000 commitment by the minority owner. Pre-operating costs in excess of the USD$3,700,000 will be funded 70% by the majority owner and 30% by the minority owner. F-10 On May 11, 2007, OCEAN contributed to NEWLAND its only assets consisting of land located at Punta Pacifica, County of San Francisco, District and Province of Panama, with an area of one hectare and 1,177.45 mtsz of land and a book value of B/.25,000,000 at the date of contribution, and received in exchange 100% of the capital shares of NEWLAND. On the same day, NEWLAND changed the par value of its common stock from B/.20 to non par value shares. On June 30, 2007, the composition of shares of NEWLAND was divided into 500 common shares with non par value consisting of 315 Class A shares, 13 5 Class B shares and 50 Class C shares. Each share was assigned an issuance value ofB/30,000. As of June 30, 2007, OCEAN is the only stockholder of NEWLAND. 10 Financial risk NEWLAND is subject to real estate market risk, which is comprised of real estate investment and real estate construction risk originating from changes in real estate market prices and drivers of the real estate development process, respectively. Management perfonns periodic risk assessments ofreal estate market risk in order to mitigate such risk. The main risks arising from NEWLAND'S financial instruments are credit risk and liquidity risk. Management reviews and agrees policies for managing each of these risks which they are summarized below: Liquiditv risk Liquidity risk is generated by the difference between the size and maturity of assets and liabilities. NEWLAND'S objective with regards to liquidity risk is to maintain sufficient and continuous funding for construction costs through Stockholder loan cmmnitments, capital calls and by securing financing from a reputable financial institution for the funding of such costs. Credit risk NEWLAND is exposed to credit risk from it various customers that purchase condominium units of the TRUMP TOWER project. Management requires certain levels of deposits from such customers in order to secure the sale of a specific condominium unit. NEWLAND'S cash and restricted cash is also exposed to credit risk, which arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. Management deposits its cash and restricted cash in reputable international financial institutions in order to mitigate credit risk. 11 Subsequent events On July 16, 2007, NEWLAND entered into a Bridge Loan Agreement with a U.S.-based cmmnercial lender for the funding of the construction cost related to the development of the TRUMP TOWER project. The Bridge Loan Agreement provides NEWLAND with a USD$ l 5 million bridge loan until pennanent financing is secured. ~( ' I F-11 TRUMP OCEAN CLUB PANAMA CITY ADDENDA Annex A CB Richard Ellis Appraisal Report (x f, Annex Executive Summary of Independent Engineer Report of Louis Berger 47?- ANNEXC FINANCIAL PROJECTIONS Overview Due to our limited operating history, we have prepared a financial model to estimate possible cash flows and selected balance sheet items for the six months ending December 3 I, 2007 and the seven years ending December 31, 2014, or Model Period. In this offering memorandum, we have included cash flow and selected balance sheet projections to assist you in considering a possible investment in the Notes. Our fmancial projections may provide you with an indication of the hypothetical funds available to pay our obligations under the Notes. However, our projections are not a promise or representation as to the future. Our financial projections are based on a set of assumptions, including assumptions regarding macroeconomic conditions, sales, construction costs, and selling, advertising and administrative expenses. We prepared our fmancial model and assumptions in good faith and based on data that we deemed reliable and which was primarily available to us as of June 30, 2007. In this offering memorandum, we have included a description of the significant assumptions underlying our fmancial model to help you understand some of the variables that could affect our cash flow and balance sheet projections during the Model Period. It should be emphasized that actual future conditions can be expected to vary substantially from the assumptions used in our financial model, in tenns both of amount and timing. Variations in macroeconomic conditions and other matters that may affect our financial projections are inherently unpredictable, beyond our control and may not be foreseen at this time. Accordingly, actual cash flows and balance sheet items can be expected to vary substantially from our financial projections. No fonn of assurance can be given with respect to our fmancial projections, including whether or when they will be realized. In addition, our financial projections and assumptions do not purport to be all-inclusive or to contain all the infonnation that you may desire in evaluating Newland, Trump Ocean Club or an investment in the Notes. Neither Newland nor the Sole Manager nor any of their respective affiliates or advisors makes any representation or warranty (actual or implied) or assumes any responsibility as to the reasonableness, accuracy, adequacy or completeness of our financial model, fmancial projections, assumptions or calculations. You should make your own assessment of our assumptions and fmancial projections. We do not intend to update or otherwise revise our fmancial model or our fmancial projections to reflect circumstances existing after the date of this offering memorandum or to reflect the occurrence of future events, even in the event our assumptions or the estimates underlying our assumptions are shown to be in error. IN MAKING AN INVESTMENT DECISION, YOU SHOULD NOT RELY. AND WILL BE DEEMED NOT TO HAVE JIBLIED. ON OUR FINANCIAL MODEL OR OUR FINANCIAL PROJECTIONS. SEE "RISK FACTORS - RISKS JIBLATED TO OUR BUSINESS - PROJECTIONS INCLUDED IN THIS OFFERING MEMORANDUM MAY TURN OUT TO BE INACCURATE." Our financial projections are based on a fmancial model that has been reviewed by our independent financial advisor, KPMG KPMG has reviewed the integrity and mathematical accuracy of our financial model, confinned the reasonableness of the assumptions by comparing them to the underlying supporting infonnation, and confirmed that the resulting financial projections have been derived correctly from our fmancial model. The financial projections included in this offering memorandum have been prepared by, and are the responsibility of, our management. KPMG conducted only a limited review of our projections and provides no assurances regarding the accuracy of the infonnation used by our management to prepare our financial projections. C-1 In addition, certain assumptions regarding Trump Ocean Club's construction costs and construction program were reviewed by Louis Berger, our independent construction and engineering consultant. Louis Berger issued a report dated September 2007, in respect of its review. See "Annex B - Executive Summary oflndependent Engineer Report of Louis Berger." Grant Thornton, has neither examined nor compiled our financial projections. Accordingly, Grant Thornton does not express an opinion or any other fonn of assurance with respect to our financial projections. The Grant Thornton report included in this offering memorandum relates to our historical financial infonnation. It does not extend to our financial projections and should not be read to do so. Basis of Presentation We prepared our cash flow projections based on the direct method of measuring and reporting cash flows and our balance sheet projections in accordance with IFRS. Our financial model was not intended to, and does not, comply with the published guidelines of the U.S. Securities and Exchange Co1mnission or the American Institute of Certified Public Accountants regarding assumptions or forecasts or accounting principles generally accepted in the United States. Significant differences exist between IFRS and accounting principles generally accepted in the United States, which might be material in relation to the financial projections included in this offering memorandum. We have not identified or quantified the effects of any of these differences. In making an investment decision, you must rely upon your own examination of the financial infonnation included in this offering memorandum. Panama has enjoyed low inflation commensurate with the levels of inflation generally prevailing in the United States and IFRS does not require that companies adjust financial statements for the effects of inflation. We can give no assurance as to what level of inflation, if any, will occur during the Model Period. Our functional currency is the U.S. dollar, as this is the currency in which all of our significant transactions are conducted. Accordingly, the financial projections included in this offering memorandum are presented in U.S. dollars. Since 1904 the U.S. dollar is also legal tender in and the functional currency of Panama. References to the "Balboa" are to the official currency of Panama, which serves only as coinage, and has been pegged at parity with the U.S. dollar since 1904. Financial Model Assumptions We used the following principal assumptions in preparing our financial model. Macroeconomic Assumptions Our perfonnance will be closely linked to certain macroeconomic factors affecting Panama and Latin America generally. As a result, to develop our fmancial model, we have made certain assumptions about the future macroeconomic environment in Panama and Latin America. Our assumptions concerning these macroeconomic factors are surmnarized below. Absence of a Global or Regional Recession We have assurned that there will be no global or regional recession during the Model Period. A regional or global recession could have an adverse impact on prices of, and demand for, real estate products in Panama which, in tum, would adversely affect our ability to sell our products and generate our projected cash flows. Absence ofRaw Material Scarcity We have also assurned that there will be no shortage of raw materials, concerted actions by raw material suppliers or any other actions which may cause prices for raw materials to increase significantly during the Model Period. Any significant shortage or increase in prices ofraw materials could adversely affect the demand for real estate products in Panama, with resulting adverse effects on our business. JV/. /1 C-2 Other A1acroeconomic Assumptions We have also assumed, among other things, that Panama will experience economic and political stability during the Model Period and that neither our contractors nor we will experience any type of labor disputes that might negatively affect our construction program, costs or sales. We have also assumed that the Panamanian Government will maintain its current monetary and economic policies during the Model Period. Furthennore, we have assumed that the development of Trump Ocean Club and the sale of our products will not be interrupted or adversely affected by natural disasters or any other event out of our control. See "Risk Factors - Risks Related to Our Business - Delays or unexpected casualties related to the construction of the project could result in substantial increases in cost and could disrupt our business and adversely affect our results." Business Assumptions The financial projections derived from our financial model rely on business assumptions about sales, construction costs, and selling, advertising and administrative expenses. These business assumptions are discussed below. Sales The following table sets forth historical sales data as of June 30, 2007, as well as the estimated future sales that we assume will be achieved during the Model Period and the estimated value of all assets that we assume will be retained by Newland: Sales by Real Estate Product Offering and Value of Retained Assets Residential condom1111um units: One bedroom units ......................... Two bedroom units ................................... Three bedroom units .................................. Curve units ................................................ Three bedroom combo units ...................... Penthouse units ......................................... Baylofts ............................ ........................ Subtotal. ........................................ Hotel condonumum units: One bedroom smte units ............................ Curve umts ................................................ Studio units ............................................... Subtotal. ................................................. Pnvate Beach Club Memberships: Residential condominium units Hotel condominium umts Subtotal. ......................................... Commerczal units: Boutiques and Shops ................................ Office Lofts .............................................. Subtotal .................................................. Total Sales(ll ·························· Assets retamed by Newland: Restaurants ................................................ Casmo ....................................................... Spa ................................................. Subtotal. ................................................. Total Sales and Retained Assets ...... Number of Units 156 200 74 65 13 1 118 627 A.s of June 30, 2007 US$ 53.6 70.7 38.5 8.3 11.9 Estimated Estimated Gross Future Sales Sellout Value (dollar amounts 111 millions) US$ US$ 3.0 186.1 5.2 48.9 14.9 31.3 11.4 6.7 59.2 177.6 10 39 320 369 3.4 8.1 68.7 80.2 1.7 12.5 17.4 31.6 5.1 20.6 86.l 111.8 627 369 996 4.6 4.7 9.3 3.5 1.1 4.6 8.2 5.6 13.9 29 20 49 3.1 17.6 20.7 2.1 1045 2.2 3.1 US$ 278.7 19.8 US$ 233.6 US$ 11.8 29.2 3.6 44.6 278.2 4 1 6 1051 US$ 278.7 58.8 119.6 53.4 39.7 23.3 6.7 62.2 363.7 US$ 512.3 11.8 29.2 US$ 44.6 556.9 (1) Pursuant to our umt purchase agreements, we may mcrease the pnce of umts m an amount up to 6% of the sale pnce to reflect equivalent mcreases m construction costs, the cost of salaries, manual labor, worker's compensatwn, tax related liabilities and the pnce of 7.:lr':' I C-3 The estimated future sales described above are primarily a function of further assumptions regarding the timing of our sales, the sales price for each of our products and Trump Ocean Club's completion date. These assumptions are discussed in further detail below. Through June 30, 2007 we have presold approximately 65% of the building's units, excluding office lofts. We estimate that we will presell substantially all of our real estate products prior to completing construction of Trump Ocean Club, and will have received significant cash payments from our customers to repay the principal of and any accrued interest on the Notes. Accordingly, we do not anticipate our post-completion operating activities, including casino and hotel operations, to be a necessary source of funds for the repayment of the Notes. Neither our financial projections nor the assumptions underlying our financial model present or include any estimation of possible future cash flows from post-completion operating activities. Timing of Sales. We have assumed that we will sell our products at particular times during the Model Period, based on historical sales data for products launched into the market in the nine-months ended June 30, 2007, and on certain market infonnation provided by ISG Latin America, our master real estate broker. As of June 30, 2007, we have sold approximately 64% of all products launched into the market. The following table sets forth historical data and assumptions regarding the timing of our sales for each of the products and periods described below. Units Sold by Product Offering Total Units As of June30, 2007 For the year ended December 31, 2005 2006 For the six months ended June30, 2007 For the six months ending December 31, 2007 For the year ending December 31, 2009 2008 2010 (number of umts) Reside11tial co11domi11ium units: One bedroom units ...................... Two bedroom units ..................... Three bedroom units ................... Curve umts .................................. Three bedroom combo um ts ....... Penthouse units ........................... Baylofts ...................................... 156 200 74 65 13 1 118 146 130 56 18 7 141 120 47 11 4 Subtotal .............................. 627 366 323 10 39 320 369 8 18 274 300 8 5 249 262 29 20 49 1045 6 9 5 5 10 5 4 6 9 7 3 l l 5 25 8 15 3 25 3 16 2 15 3 10 9 30 42 24 13 43 52 98 70 41 13 5 6 4 25 38 19 25 1 6 12 19 6 4 6 6 87 4 81 6 123 Hotel co11do111illium units: One bedroom suite units ............. Curve units .................................. Studio umts ................................. Subtotal ................................... 8 7 14 11 6 10 16 100 7 10 17 69 Other real estate products: Commercial units ........................ Office Lofts ................................ Subtotal ................................... Total ... ································ 6 672 585 Sales Prices. We have assumed that we will charge certain prices for our products based on historical sales data for products launched into the market in the nine months ended June 30, 2007. Our prices take into account the premier amenities and luxury characteristics of our products, as well as the international prestige and name recognition associated with the "Trump" brand name in the real estate industry. Unit price estimates on a per square meter basis are applied to the different net-sellable areas identified for each of our different real estate products. In the case of residential and hotel condominium units, these areas are the enclosed areas of the units and any terrace or other complementary areas. In addition, under our standard unit purchase agreement, the buyers of a hotel and residential condominium unit are also required to purchase a Trump Ocean Club meJnbership entitling the buyers to use any available amenities and common areas, including the pier facility and yacl~t club, the pool deck and the private beach club on the island of Contadora. d ~ C-4 Under our current pricing strategy, we bundle our products into groups which are launched into the market in separate project phases. Before launching a new project phase, we adjust the price of our products in response to market demand for the previous phase. We launched our first project phase and commenced the sale of our real estate products (except for bay lofts or the office lofts) in the first quarter of2006. We launched and c01mnenced the sale ofbaylofts in June 2007. The sales price of our hotel condominium units has increased 70% since we launched our products in the first quarter of2006, from US$ 4,380 per square meter in our first phase to US$ 7,467 per square meter in our current phase. Similarly, the sales price of our residential condominium units increased 73% during that same period, from US$ 2,800 per square meter in our first phase to US$ 4,842 per square meter in our current phase. Our financial model assumes that our product inventory will be sold at the sales price used in our last project phase, except for commercial units. We believe that commercial units will be sold over an extended period oftime, since most investors will have to wait up to 3 years until their units are completed and delivered. Taking into account this long-tenn sales outlook, prices for conunercial units are expected to increase along our construction time-frame. Although sales prices for our other product offerings are also expected to rise in the future, they were assumed to remain constant in our financial model. The following table sets forth historical and future estimated base sales prices for each of our main type of products. The actual price per square meter that we charge for each of our hotel and residential condominium units varies according to floor level and type of view of each unit. Sales Prices by Product Offering Total Number of Units Average Area per Unit (in square meters) Base Sales Price per Square Meter(!) Estimated Average as of As of June 30, As of Product Launch Date Sellout Date 2007 Residelltial colldomillium Ullits: One bedroom units ........................... . Two bedroom units ............................. . Three bedroom units ........................... . Curve units .......................................... . Three bedroom combo umts ................ . Penthouse units ................................... . Baylofts ............................................... . 156 200 74 65 13 I 118 Subtotal................................................ 627 98 153 183 136 395 1376 93 US$ 2,800 2.800 2,800 2,800 2,800 US$ US$ 4,700 4,842 4,842 4,842 4.842 4,842 4,842 5,700 4,842 4.842 4,842 4,842 4,842 4,842 5.700 4,380 4,380 4.380 7,467 7,467 7,467 7,467 7,467 7,467 9,000 9,000 10,000 Hotel condominium Ullits: One bedroom smte units ..................... . One bedroom curve units .................... . Studio units ......................................... . 10 39 320 Subtotal................................................ 369 103 76 49 Total .................................................... ==9=9=6 Other areas Commercial Umts ............. . (1) 29 Our current pricmg methodology establishes base pnce per square meter for each type of umt using the price of such umt as though located m the middle of the building. A .: I C-5 Sales Collections. We have assumed that cash collections from our sales will occur as set forth in our standard unit purchase agreement: • I 0% upon execution of a unit purchase agreement. • I 0% on thirty days following execution of the unit purchase agreement. 1 • 5% on six months following execution of the unit purchase agreement. • 5% on twelve months following execution of the unit purchase agreement. • 70% upon completion and delivery of a condominium unit to a customer. Construction Costs We entered into a construction contract with Opcorp, our affiliate, for the construction of Trump Ocean Club, including: (i) construction of all real estate products included in Trump Ocean Club; (ii) supply of the work force, materials, and mechanical, electrical and technical equipment required to construct Trump Ocean Club; (iii) detailed review and comments on Trump Ocean Club's technical specifications; (iv) supply of furniture, fa.'tUres and equipment for the residential and hotel condominium units; and (v) management of the project. Pursuant to the tenns of the construction contract, Opcorp has agreed to complete construction of the Trump Ocean Club for the Jump-sum price of $ 228.3 million. Opcorp must perfonn all specified work to the satisfaction of Newland and Louis Berger, the independent engineer designated under the construction agreement to certify construction completion. The lump-sum price includes all direct and indirect costs associated with the construction of Trump Ocean Club, including US$ I 0.9 million in project management fees and US$ 16.2 million in construction fees. We developed our construction budget based on construction cost estimates received from Opcorp. Louis Berger reviewed the construction cost estimates prepared by Opcorp for Trump Ocean Club and issued a report dated September 2007, in respect of its review. See "Annex B - Executive Summary of Independent Engineer Report of Louis Berger." To prepare this report, Louis Berger visited the work site, reviewed our plans and specifications, and verified the quotations and supporting docwnentation used by Opcorp as the basis for its construction cost estimates. Based on the Louis Berger report, the construction cost estimates prepared by Opcorp and the lump-swn price established under the construction contract appear to be adequate and therefore are used as part of the assumptions underlying our financial model. We have also assumed that we will incur indirect costs amounting to US$ 2.5 million, in connection with the development of Trwnp Ocean Club and the sale of our products, representing the following: • US$ 0.4 million to comply with Panamanian horizontal property regulations; • US$ 0.7 million to create, modify and release mortgages over our real estate property as described in this offering memorandum; and • US$ 1.4 million to cover insurance premiums. We broke ground on May 5, 2007. Prior to our ground breakmg, our customers were reqmred to pay an m1t1al deposit of 10% of the purchase price upon execution of a umt purchase agreement, an additional 10% of the purchase pnce upon ground breakmg at Trump Ocean Club; an additional 5% one year from the date of groundbreak.mg; and 5% two years from the date of groundbreakmg. C-6 The following table sets forth the total breakdown of the Opcorp Contract. Construction Budget Items Amount (in millions) Direct. Co11Struction Costs General Requirements............. ... ...................... Site Work............................................. .................. Concrete........................................................................... Masonry........................................................................... Metals.............................................................................. Carpentry......................................................................... Thermal & Moisture Protect10n ... .. ... ... .. ... ... ....... ... .... .. ... . Doors, Windows & Glazing............................................. Finishes............................................................................ Specialties........................................................................ Eqmpment (Hotel Kitchen).............................................. Furn1shmgs ...................................................................... Special Construction........................................................ Conveying Systems ......................................................... Mechanical (A/C, plumbmg, etc)..................................... Electrical (incl. 5 generators)........................................... Other Cost (Beach Club, Marine, Heliport) ..................... Indirect Cost (Staff, Operation, Etc.)............................... Unforeseen and Renewable Fund..................................... US$ 0.7 0.7 49. 7 1.0 5.0 15.0 I. 0 4.6 37.1 2.6 1.7 0.4 2.0 5.0 11.2 12.4 8.1 4.9 10.0 Subtotal.......................................................................... . 173.0 Project. Overhead: Construction Fees ........................................................... . Project Management Fees ............................................... . 16.2 10.9 Subtotal. ......................................................................... . 27.1 Fumiture, Fvctures and Equipment: Res1dent1al Condominmm Units ..................................... . Hotel Condominium Umts .............................................. . 10.4 17.8 Subtotal. ......................................................................... . 28.2 Total................................................................................ US$ 228.3 The following table sets forth our estimation of the remaining hard cost to complete Trump Ocean Club as of the date of closing of this offering: Construction Costs Amount (in millions) Direct Construction Costs ............................................. . US$ Construct10n Fees (Project Overhead) ........................... . Project Management Fees (Project Overhead) .............. . Subtotal Opcorp Contract ....................................... . 173.0 28.2 16.2 10.9 228.3 Architectural and Technical Design Fees (Project Overhead) ...................................................................... . Licenses, Rights and Inspector (Project Overhead) ....... . Indirect Costs (Project Overhead) ................................. . Total Construction Costs...................................... . 3.1 2.5 243.0 Land Costs ..................................................................... . Total Costs ......................................................... . 25.9 268.9 Less Project Overhead ................................................... . Total Hard Costs ............................................... . 41.9 227.1 FF&E ............................................................................. . C-7 9.1 26.9 200.2 Less Hard Costs to date ....................................... . Hard Costs ................................................... . Less Estimated Hard Costs through Closmg Hard Costs Remaining.............................................. US$ 14. 7 185.5 On the closing date of this offering, amounts on deposit in the Construction Escrow Account will exceed our remaining hard costs by US$ 15.l million, and we anticipate that such amounts on deposit will amount to approximately US$ 200.6 million. Completion Timeline We entered into a construction contract with Opcorp for the construction of Trump Ocean Club. Opcorp prepared and delivered to us a construction work program that includes completion date estimates for each development item. Louis Berger reviewed the Trump Ocean Club construction program and completion date estimates, and issued a report entitled "Independent Engineer Report", dated October 29, 2007, in respect of its review. See "Annex B -Executive Summary ofindependent Engineer Report of Louis Berger." Based on the Louis Berger report, the Trump Ocean Club construction program appears to be accurate and therefore is used as part of the assumptions underlying our financial model. As of June 30, 2007, Opcorp has met all material benchmarks included in the construction program. The following table sets forth the semi-annual construction program and completion time estimates prepared by Opcorp for each principal development phase. i Tenn (daysl --------------~· !General Program 1716 Architectural and Technical Designs 1716 ·General Project ~--:--.:;7~3o~IJ.;;;;;+;;;;;;;;j;;;;;j;;;;;;;;j;;;;ll-ll-lll 730 'Details 'Construction 1640 ·---------·-------------------··-;---r--i---t--t--r-t--r---i--r---t-t--r--1 f_~~-~i!J.~-~~g(;!_________________ ________ ------·-····--L._.!9-5__ ' Pemlits and Licences 547 -+lll-t;;;J;;;;;;;;;t;;;;;;;j;;;;-J-11-111 :~~~~~~~-~~1ii~~~~i.~~--.~==--=-=----==~-==I=}ii.~·111-11-;;;;~;;+;;;;;;;J-11-111 ··-···-···-················-····-·······-·-··-···········-··-·-···········-·· ·········-···-····· · 220 S..11.:P~E~.!!!:1-~!1:11:~--- _ ... ....... s20 !Foundations .!.:.~~~---··· -·· · · · · · · · · · · · ··-················11111-i-~~;;;;;;;;;;;;;i-11 -~-~=~~.-.~00··111-11-11~;;;;;;;;;;j;;;;;;;j;;;;;;;;;;j;;;;;;;;;;t;;-I Selling and Advertising Expenses We have assumed that we will incur certain selling and advertising expenses during the Model Period, including fees to the master broker and co-brokers, fees under our license agreement with Trump Marks Panama LLC, and advertising and warranty expenses. These assumptions are discussed below. ()4(7 ./ I y ( C-8 Fees to .Master Broker and Co-Brokers. We entered into a master broker agreement with ISG Latin America for the cmmnercialization of our residential and hotel condominium units. Pursuant to the tenns of the master broker agreement, ISG Latin America has agreed to market our condominium units in exchange for a broker fee equivalent to up to 8%0) of the sales price of each unit sold through ISG Latin America and an ISG Latin America co-broker. We agreed to pay broker fees in installments and per unit, as follows( 2): • 10% upon execution of a unit purchase agreement by the buyer; • 80% upon payment by the buyer of the second 10% down payment, as required under the unit purchase agreement; and • 10% upon collection of the full sales price from the buyer. Trump Fees. We entered into a license agreement with Trump Marks Panama LLC to acquire the right to use the "Trump" brand name to identify and market our luxury tower, products and services. We paid an initial fee of US$ 1.2 million upon execution of the license agreement, and agreed to subsequently pay the following license fees and royalties: • A base license fee of 4% on all gross revenue generated by the sale of hotel, residential, office and retail units, parking spaces and boat slips at Trump Ocean Club. • Variable incentive fees based on the selling price of individual residential and hotel condominium units. • A base license fee of 12% on all consideration received from the lease of commercial space at Trump Ocean Club. • Royalties on our sale of products or services offered in connection with the operations of Trump Ocean Club, in an amount equivalent to 15% of the gross proceeds derived from wholesales and 12% of the gross proceeds derived from retail sales. Based on our sales price assumptions described in this Annex C, we estimate that our aggregate liability for all license fees and royalties paid and payable in the future to Trump Marks Panama LLC under the license agreement will be US$ 75.4 million. We used this estimate as part of the assumptions underlying our financial model. Advertising Expenses. We have assumed that we will incur advertising expenses during the Model Period equivalent to 0.5% of total cash sales. Based on our sales price assumptions described in this Annex C, we estimate aggregate advertising expenses to amount to US$ 2.5 million. Warranty Expenses. We have assumed that we will pay aggregate warranty expenses during the Model Period of US$ 6.1 million, to pay for repairs to condominium units at Trump Ocean Club following completion and delivery to our customers. This amount is in excess of the Construction Completion Support Agreement and insurance policies. (1) As of the date of this offering memorandum, we estimate the average fee to be 7% of the sales smce co-brokers have not been used for all sales. ~ oolli•I p')mool •cl>edole (20% dm" poymoot), 90% of ilio oomm""oo ;, p•id opoo ~~'"°" of• '"" p0