palau asset management, inc asset management, inc registration no. t17uf2434h p.o. box 378 koror...

PALAU ASSET MANAGEMENT, INC Registration No. T17UF2434H

P.O. BOX 378

KOROR PALAU 96940

PRIVATE PLACEMENT MEMORANDUM

DATED Jun 20 , 2017

Fund Manager

PALAU ASSET MANAGEMENT Inc

The Debt will not be listed on any stock exchange.


P.O. BOX 378

KOROR PALAU 96940

IMPORTANT NOTICE

This Private Placement Memorandum shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The person to whom a copy of this Private Placement Memorandum is issued shall not circulate the copy to any other person. The Debt have not been approved or disapproved by any securities regulatory authority anywhere in the world nor has any such securities regulatory authority passed upon or endorsed the merits of the offering of the DEBT or the accuracy or adequacy of this Private Placement Memorandum. Any representation to the contrary is a criminal offence. Prospective lenders should also note that the investments are likely to be long term and of an illiquid nature. This document does not purport to identify, and does not necessarily identify, all of the risk factors associated with the proposed investment. . Accordingly, each prospective lender, prior to making any investment decision, must conduct and rely upon its own investigation of risk factors associated with the proposed investment, including, among others (a) risks faces by virtue of the market in which it operates, (b) risks that are specific to the borrower, and (c) risks that are specifically associated with the nature of the proposed investments. The value of the investments may fall as well as rise. Investment in the DEBT should therefore be regarded as long-term and should form only one part of an otherwise diversified investment portfolio. An investment in the DEBT requires the financial ability and willingness to accept for an indefinite period of time the risk and lack of liquidity inherent in the Fund. An investment in the DEBT involves an above average level of risk; prospective lenders should note the risk factors set out in Section entitled "RISK FACTORS" of this Private Placement Memorandum. Each prospective lender should carefully review the tax matters discussed under Section entitled "TAXATION CONSIDERATIONS" of this Private Placement Memorandum and is advised to consult its own tax advisor as to the tax consequences of an investment in the Fund. The invitation contemplated in this Private Placement Memorandum is not, and shall not under any circumstances be construed as, a public offering of DEBT. It should be noted that the DEBT are not readily disposable, as they are not and will not be listed on any stock exchange nor traded in any other securities market. If you are in any doubt about the contents of this Private Placement Memorandum, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser.


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KOROR PALAU 96940

This Private Placement Memorandum is distributed on a confidential basis and may therefore not be for use by or reproduced for any person other than the person to whom it is distributed. The recipient, by its acceptance of this Private Placement Memorandum, agrees to keep permanently confidential all information contained herein not already in the public domain, agrees not to reproduce or distribute this document to others without the prior written consent of the Fund Manager and agrees not to disclose the information contained herein. Each person receiving this document agrees to return it promptly to the Fund Manager upon request. This Private Placement Memorandum contains material provided to the Fund Manager by various sources. No representation or warranty is made or should be implied as to the accuracy or completeness of the material contained herein and no responsibility or liability will be accepted by the Fund Manager or the Fund for any loss or damage, howsoever arising, which results from an action or reliance in whole or in part on such material. The information in this Private Placement Memorandum is not complete and may be changed. In particular, various contracts referred to in this Private Placement Memorandum have not yet been executed. Prospective lenders should independently verify the material contained in this Private Placement Memorandum. No person has been authorised to give any information or to make any representations other than as contained in this Private Placement Memorandum and any representation or information not contained herein must not be relied upon as having been authorised by the Fund Manager. This Private Placement Memorandum is issued by the Fund Manager. The Private Placement Memorandum contains targeted returns, estimates, beliefs and similar information which can be identified by the use of terminology such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue" or "believe" or the negatives thereof or other variations or comparable terminology ("Forward Looking Information"). Forward Looking Information is subject to inherent uncertainties and qualifications and is based on numerous assumptions, in each case whether or not identified herein. Forward Looking Information is provided for illustrative purposes only and is not intended to serve as and must not be relied on by any Lender as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. The value of the Fund's investments may fluctuate and past performance provides no guarantee for the future. Actual events and circumstances are beyond the control of the Fund. Some important factors that could cause actual results to differ materially from those in any Forward Looking Information include changes in interest rates, or domestic and foreign business, market, financial, political and legal conditions. There can be no assurance that any particular Forward Looking Information will be realised and the performance of the investment program may be materially different from the Forward Looking Information. Any Forward Looking Information is qualified in its entirety by, and is subject to, the preceding paragraph. Neither the Fund Manager, nor their respective Associates guarantees the performance or the repayment of the investment or the payment of any particular return from the DEBT. Prospective lenders should pay particular attention to the risk factors and potential conflicts of interest in this Private Placement Memorandum. Investment in the Fund requires the


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KOROR PALAU 96940

financial ability and willingness to accept the high risks and lack of liquidity inherent in an. Prospective lenders in the DEBT must be prepared to bear such risks for the entire duration of the Fund's life. Except where otherwise indicated, the information contained in this Private Placement Memorandum has been compiled as of the date of this Private Placement Memorandum and the Fund Manager has no obligation to update this Private Placement Memorandum. This Private Placement Memorandum shall remain the property of the Fund Manager. The Fund Manager reserves the right to require the return of this Private Placement Memorandum (together with any copies or extracts thereof) at any time. Prospective lenders should not treat the contents of this document as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisers concerning the acquisition, holding or disposal of interests.

Other Jurisdictions This Private Placement Memorandum does not constitute and may not be used for the purposes of an offer or invitation to subscribe for or purchase any of the DEBT by any person in any jurisdiction in which such offer or invitation is not authorized or in which the person endeavouring to make such offer or invitation is not qualified to do so or to any person to whom it is unlawful to make such an offer or invitation. This Private Placement Memorandum will not be registered as a prospectus under any applicable securities legislation in any jurisdiction. The distribution of this Private Placement Memorandum in certain jurisdictions may be restricted and accordingly persons into whose possession this Private Placement Memorandum comes are required to inform themselves about and observe such restrictions including obtaining any requisite governmental or other consent and observing any other formality prescribed in such territory. No action has been taken or will be taken in any jurisdiction that would permit a public offering of the interests or possession or distribution of this information in any jurisdiction where action for that purpose is required.

All Jurisdictions The Directors have the right, without any prior notice, to redeem compulsorily or require the compulsory transfer of the DEBTS which is held by ( a) any person in breach of any law or requirement of any country or governmental authority, (b) any person or persons in circumstances which, in the opinion of the Directors, might result in the DEBT or the Associates or agents of the DEBT or any Member of the DEBT incurring any liability to taxation or suffering any other pecuniary disadvantage which the DEBT might not otherwise have incurred or suffered, (c) any person which may result in the DEBT being required to comply with any registration or filing requirement in any jurisdiction to which it would not otherwise be required to comply, or ( d) any person such as to be harmful or injurious to the business or reputation of the DEBT or any of its service providers.


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KOROR PALAU 96940

This Private Placement Memorandum does not purport to be complete and does not necessarily contain all information which a prospective lender would consider material. Accordingly, this document should not form the basis of any investment decision. In making an investment decision, prospective lenders should inform themselves as to (i) any possible tax consequences, (ii) any legal requirements, (iii) any financial and other consequences of an investment and the terms of the offering including the merits and risks involved; and (iv) any foreign exchange restrictions or exchange control requirements which they might encounter under the laws of the countries of their citizenship, residence, incorporation or domicile and which might be relevant to the subscription, holding, or disposal of DEBTS. No representation or warranty is made or implied as to the availability of taxation deductions or any other taxation implications in relation to the DEBT or in respect of the investment in or distributions from the DEBT.

EXPENSES OF THE FUND The Fund will bear certain expenses throughout the Term as described below which are necessary for the operation of the Fund, as follows: ( a) The incorporation and establishment expenses of the DEBT including incorporation charges, professional fees, expenses incurred in connection with the preparation of this Private Placement Memorandum and the documents and agreements referred to herein, legal, tax, secretarial, accounting advice or assistance in the setting up the Fund, fund raising cost, placement fees, out-of- pocket expenses and all other costs incurred by the Fund Manager in connection therewith, up to Singapore Dollar $200,000.00. (b) All costs and expenses associated with the Fund's operations including but not limited to:-

(i) the cost of acquiring, holding, monitoring and disposing the Fund's Investments, to the extent that these costs and expenses are not borne or reimbursed by the Portfolio Companies;

(ii) out-of-pocket expenses incurred by the Fund Manager or its consultants or

advisers (e.g. travel and accommodation in connection with due diligence evaluation, in investigating and evaluating investment or divestment opportunities, provided that the Fund will be responsible for, and will reimburse the Fund Manager for expenses of conducting due diligence and other expenses (including the cost of appointing third parties) in pursuing investment or divestment opportunities which do not eventually materialise, provided that such expenses were incurred or suffered after the in-principle terms of such investment or divestment opportunities had been agreed by or secured from or committed to by the relevant parties for the proposed transaction;

(iii) the Management Fee and the Carried Interest, including those in relation to

any Additional Co-Investment Amounts, including Singapore Goods and


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Services Tax (if applicable) or any other present or future tax of any nature that is imposed by any government or taxing authority in respect of such payment;

(iv) statutory, filing, legal, accounting, audit, tax, reporting, secretarial, custodian,

fund administration and nominee service fees and expenses, fees and expenses relating to general meetings of the Fund, stamp duty, fiscal charges, brokerage and similar fees; and

(v) expenses payable to the Advisors;

(c) the cost of any special audit (d) any agent fees required to be paid by the Fund Manager (e) costs and expenses related to any extension to the Term and the liquidation of the DEBT These expenses may be amortised over such period as the Directors may determine from time to time.

RISK FACTORS Prospective lenders should carefully consider the risks involved in an investment in the Fund including but not limited to those discussed below and all the information contained . in this Private Placement Memorandum and the Articles. Prospective lenders should consult their own legal, tax and financial advisors as to all of these risks and an investment in the DEBT generally.

GENERAL RISKS The value of an investment in any investment fund may go up as well as down and involves various risks and investment considerations, some of which are highlighted below. There is a possibility of a total or partial loss of the invested capital. Lenders should not subscribe to or invest in the DEBT unless they can readily bear the consequences of such loss. No guarantee or representation is made that the Fund will reach their investment objectives, and investment results may vary substantially over time. In particular Lenders should evaluate the risk factors discussed below which, individually or in aggregate, could have a material adverse effect on the DEBT or its assets and may result in the loss of the invested capital or lower returns than those discussed herein. Additionally, the Fund is primarily designed as a long-term investment and not as a trading vehicle. Where the currency of the DEBT varies from the Lender's home currency, there is the prospect of additional loss (or the prospect of additional gain) to the Lender greater than the usual risks of investment.


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KOROR PALAU 96940

As such the DEBT faces the risks of interest rate and currency fluctuations and adverse changes in the various real estate markets during this period.

No Operating History The DEBT is newly formed and does not have an operating history. There is no guarantee that the DEBT will realise its investment objectives.

Reliance on the Fund Manager The Fund will be managed exclusively by the Fund Manager subject to the overall supervision of the Board. The performance of the Fund will therefore be entirely dependent on the ability of the Fund Manager to source for, evaluate and capitalise on investment and divestment opportunities, and to monitor the performance of that Portfolio Companies. There is no assurance that the Fund Manager will be able to perform its duties well enough to achieve the investment objectives of the Fund. The successful implementation of the Fund's investment program will also depend in large part upon the skill and expertise of certain real estate investment professionals employed by the Fund Manager. There can be no assurance that these investment professionals will continue to be associated with the Fund Manager throughout the life of the DEBT.

Past Performance The past performance of other funds or investments managed by the Fund Manager or its key personnel or in which the Fund Manager or its key personnel were involved with may not be construed as an indication of the future results of an investment in the Fund. The Fund's investment strategy should be evaluated on the basis that there can be no assurance that the Fund Manager's assessments of the assets will prove accurate or that the Fund will achieve its investment objective or Target Return.

Key Persons

The success of the investment will depend on the experience, relationships and expertise of the Directors and the key persons employed by the Fund Manager. The performance of the DEBT may be negatively affected if any of the key persons involved in the management or investment process of the DEBT would for any reason cease to be involved without suitable replacements. Furthermore, the key persons might be involved in other businesses, including in similar projects or investment structures, and not be able to devote all of their time to the investment. In addition the involvement in similar projects or investments may create a source for potential conflicts of interest.


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Liquidity Risk

An investment in the Fund represents a general liquidity risk. The DEBT may also be affected by restrictions on transfer and resale . The value of the DEBT will fluctuate based uponother relevant factors and any third party's assessment thereof. Accordingly, if an Lender transfers its purchased DEBT, the sale price may be lower than the original investment amount. The DEBT are not redeemable at the Lender's option. DEBT may, however, be redeemable at the option of the Fund Manager under certain circumstances. Upon redemption, the Fund may distribute cash, securities selected by the Directors, or a combination of cash and securities.

Conflicts of Interest It is expected that the Fund Manager will enter into a number of relationships with Connected Persons, the Fund Manager and/or their Associates which may give rise to conflicts of interest.. Although the Board intends to implement policies as necessary or appropriate to deal with conflicts of interest, there is no assurance that the resolution of the conflicts would not affect the performance or financial returns of the Fund.

Currency Fluctuations

The value of the investments may fall as a result of fluctuations in the value of the currency of the country of investment against the value of other currencies. Any risk related to the fluctuation in exchange rates shall be borne by the Lenders.

Restrictions on Transfer

There is currently no market for this DEBT which is not, and will not, be listed or quoted on any stock exchange. Furthermore, apart from a transfer or other disposal by an Lender of all or part of the DEBT to an Associate of that Lender (provided that in place of the Lender the Associate shall agree to be entitled and bound by the Subscription Agreement and subject always to the consent of the Board and any applicable laws), no Lender may transfer or dispose of its interest in the Fund. Lenders must be prepared to hold the DEBT until the end of the Term. Each Lender must therefore consider its interest in the Fund to be illiquid and that it is acquiring its interest in the Fund for investment and not with a view to transfer or distribution.

Illiquidity of Investments The eventual liquidity of the DEBT will be dependent upon the success of the realization strategy proposed for each Investment which could be adversely affected by a variety of risk factors. The period of time required to liquidate the DEBT cannot be predicted with certainty. Lenders have no right to request the Fund Manager to redeem their DEBT. Prospective lenders should be aware that they might be required to bear the financial risk of their investment for an indefinite period of time.


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KOROR PALAU 96940

RISKS RELATED TO INVESTMENTS

Risks relating to the Economies of the different Asian countries The investments to be made by the Lender will be located in the several countries in Asia, which exposes the Fund to economic and stock market conditions in these countries. In relation to certain Asian countries, there is the possibility of nationalisation, expropriation or confiscatory taxation, political changes, government regulation, social instability or diplomatic developments (including war) which could affect adversely the economies of such countries or the value of the Fund's Investments in such countries. In addition, it may be difficult to obtain and enforce a judgment in a court in a developing country. The economic and political risks described above may also adversely impact the value of securities that are linked to the performance of markets in such countries. Investment in the markets of such countries maybe subject to foreign exchange controls, governmental policy, and less transparency and regulation compared to the more established, major securities markets. The DEBT may be subject to foreign exchange controls which may adversely affect the ability to repatriate the income or proceeds of sale arising from the Lender's Investments. Repatriation of income, capital and the proceeds of sale by the Borrower may require governmental consents. Delays in or a refusal to grant any such approval, a revocation or variation of consents granted prior to the Investments being made, or the imposition of new restrictions may adversely affect the Lender’s Investments.

Risks relating to changes in tax legislation and/or accounting standards Any change in the taxation legislation and/or accounting standards in the countries which the DEBT issued/purchased could affect the value of Investments and revenue therefrom and the returns to Lenders. Representations made herein concerning taxation and/or accounting standards are based on current law and practice which may be subject to change.

Insolvency of and Misrepresentation by Borrowing Company All investments in a borrowing company are subject to the risk of non-disclosure or misrepresentation by the borrowing company or its officers or agents in relation to material facts that would be relevant for the purposes of an Investment. This may occur despite due-diligence and verification processes conducted by the Fund Manager and/or other professionals. Non-disclosure or misrepresentation in particular as to the solvency of the target company could have a material adverse effect on the Investment.

Reliance on Borrowing Company Management The Fund manager will monitor the performance of each Investment. However, it will primarily be the responsibility of the management of borrowing company to operate such company on a day-to-day basis. Although it is the intention of the Fund to invest in companies where the management has a successful track record ( or where such a management can be installed), there can be no assurance that the existing management, or any new management in the


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KOROR PALAU 96940

borrowing company, will be able to operate successfully. The Fund manager may not be able to effectively control or influence the business, management, strategy or affairs of such entities, which will remain primarily the responsibility of the investee company's management.

Investments of Interested parties The Fund Manager may invest in Persons or Portfolio Companies or projects in which the Associates of the Fund Manager or their shareholders, directors, officers and agents of the Fund Manager has an interest, and vice versa; provided, however, that, (i) in the case where such interests are held by the Fund Manager or its officers, directors or employees and (ii) in the case where such interests consist of shares or other ownership interests and are held by the Fund Manager or any fund managed by the Fund Manager (in each case, to the extent acting for its own account), (A) such interests are disclosed to the Board prior to any investment by the Fund Manager in such Person; (B) the Fund Manager invests in any such Person or project on terms no less favourable than those which would have been offered to third parties.

Provision of services to target or competing investments Subject only to limited exceptions expressly provided in the following paragraph, any Associate of the Fund Manager or their shareholders, directors, officers and agents of the Fund Manager may provide management assistance or other services for a fee to persons or projects in which the Fund Manager has invested or may prospectively invest, or to Persons or projects in the same industry as companies or projects in which the Fund has invested or may prospectively invest.

Other financial services and activities Any Associate of the Fund Manager or their shareholders, directors, officers and agents of the Fund Manager may contract or enter into any financial, banking, currency or other transaction with the Fund Manager or with any company or project in which the Fund Manager has invested, and shall not be obliged to account to the Fund Manager in respect of any benefit derived therefrom; provided that, in the case of any fund managed by the Fund Manager or the Associate of the Fund Manager or their shareholders, directors, officers and agents of the Fund Manager (in each case, to the extent acting for its own account), with respect to any such transaction with the Fund or any Person or project in which the Fund has a controlling management interest, the benefit so derived has been disclosed to, and approved in advance by the Board. The Fund Manager shall not act, or refrain from acting, so as to suffer or permit any default by such party under any contract approved (or which is required to be submitted for approval) by the Board as described above, without obtaining the approval of the Board.


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KOROR PALAU 96940

Fadamas Resources Pte Ltd Debt FUND

NG PEY PEY

(“the Subscriber”)

SUBSCRIPTION AGREEMENT

.../...

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P.O. BOX 378

KOROR PALAU 96940

Fadamas Resources Pte Ltd Debt Fund

(the "Fund")

Subscription Agreement

To: Palau Asset Management Inc

We (the "Subscriber") hereby acknowledge that we have received and read the Private

Placement Memorandum dated July 2017 with respect to the Fund (the "PPM"). We

also acknowledge that we have read this Subscription Agreement.

Unless otherwise defined in this Subscription Agreement, expressions defined in the

PPM shall bear the same meanings herein.

We hereby irrevocably offer to subscribe for the bond and equal to the commitment set

out below (the "Commitment") and to become a creditor in the Fund on the terms

and conditions contained in the PPM and this Subscription Agreement.

The total amount of our Commitment is SGD30,000.00 .

Subscription on behalf of NG PEY PEY

....................................................………………………

Full name(s) of Subscriber(s) for registration purposes

Date: 19 JULY 2017

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1. The Subscriber represents, warrants and undertakes to and with each of

the Fund and the Fund Manager that:

(i) it is duly incorporated, organised, operating, validly existing and in

good standing under the law of the jurisdiction in which it is resident

with full power and authority to acquire Debt and to execute this

Subscription Agreement and to exercise its rights and perform its

obligations hereunder;

(ii) it is empowered, authorised and qualified to execute this Subscription

Agreement, to subscribe for Debt, to commit capital to the Fund and to

become a creditor in and, to make its capital contributions to the Fund,

and the person signing this Subscription Agreement on behalf of the

Subscriber has been duly authorised by the Subscriber to do so;

(iii) this Subscription Agreement (when executed by the Subscriber and

upon acceptance by the Fund) constitutes a valid and binding obligation

upon it enforceable in accordance with its terms;

(iv) its entry into and exercise of its rights under this Subscription

Agreement and the performance or compliance of its duties and

obligations under this Subscription Agreement do not conflict with or

result in a breach of any obligation (including any statutory, contractual

or fiduciary obligation) or constitute or result in any default under any

provision of its constitution or any material provision of any agreement,

arrangement, deed, writ, order, injunction, judgment, law,

authorisation, directive, rule or regulation to which it is a party or is

subject or by which it is bound;

(v) the Subscriber is not Insolvent. A person is "Insolvent" if:

(a) it is or is presumed or deemed to be unable to pay, or admits

inability to pay, its debts as they fall due, suspends making

payments on any of its debts or, by reason of actual or

anticipated financial difficulties, commences negotiations with

one or more of its creditors with a view to rescheduling any of its

indebtedness.

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KOROR PALAU 96940

(b) a moratorium is declared in respect of any of its indebtedness.

(c) any corporate action, legal proceedings or other procedure or

step is taken in relation to:

(1) the suspension of payments, a moratorium of any

indebtedness, winding up, dissolution, administration or

reorganisation (by way of voluntary arrangement, scheme

of arrangement or otherwise) of that person other than a

solvent liquidation or reorganisation on terms approved

by the other parties to this agreement;

(2) a composition, assignment or arrangement with any of its

creditor;

(3) the appointment of a liquidator, provisional liquidator,

receiver, administrator, administrative receiver,

compulsory manager or other similar officer in respect of

that person or any of its assets; or

(4) any analogous event occurs in any jurisdiction;

(vi) the Subscriber is not in default (nor has any event occurred which with

notice, lapse of time, or both, would constitute a default) under any

representation or warranty, or in the performance of any obligation,

agreement or condition contained in this Subscription Agreement, or

any indenture, mortgage, contract, agreement, instrument applicable to

the Subscriber, nor to the knowledge of the Subscriber is it in violation

of any statute, regulation, rule, order, judgment or decree to which it is

subject, which default or violation would materially adversely affect the

business or financial condition of the Subscriber or impair the

Subscriber's ability to carry out its obligations under this Subscription

Agreement;

(vii) there is no litigation, proceeding or investigation pending or, to the

knowledge of the Subscriber, threatened against the Subscriber or its

Associates (as such term is defined in the PPM) which, if adversely

determined, would have a material adverse effect on the business or

financial condition of the Subscriber or the Subscriber's ability to

perform its obligations under this Subscription Agreement;

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(viii) the Subscriber has sufficient knowledge and experience in financial and

business matters, is capable of evaluating the merits and risks of, and is

able to bear the economic risks of its investments in the Fund (including

his/its class Commitment ("Class Commitment") and holding Debt)

including the risk of complete loss;

(ix) the Subscriber has the financial capability and means to make all

contributions to the Fund, as may be necessary pursuant to this

Subscription Agreement, in order to meet and fulfil the Class

Commitment and the relevant capital calls at any point in time;

(x) the Subscriber has reviewed the PPM and has read and understood the

risks of, and other considerations relating to, a purchase of Debt and the

Fund's investment objectives, policies and strategies; and

(xi) the Subscriber has received, read, understood and agrees to the terms,

conditions and other provisions set out in the PPM and this Subscription

Agreement (and each other agreement and other document referred to

herein in the PPM), that the Subscriber has been given the opportunity

to ask questions of, and receive answers from, the Fund Manager, its

Associates (as such term is defined in the PPM) and/or their respective

personnel relating to the Fund, concerning the terms and conditions of

the offering of Debts and other matters pertaining to this investment,

and has had access to such financial and other information concerning

the Fund as considered necessary to make a decision to invest in the

Fund and has availed itself of this opportunity to the full extent desired,

has carefully considered and, to the extent it believes such discussion

necessary, discussed with its legal, tax, accounting and financial advisors

the suitability of an investment in the Fund in light of the Subscriber's

tax and financial situation, and has determined that the Debt which it

has applied to subscribe for is a suitable investment for the

Subscriber.

2. The Subscriber hereby:

(i) acknowledges that the Fund will not accept the investment of

funds by natural persons or entities acting, directly or indirectly,

in contravention of any applicable anti-money laundering or

other regulations or conventions of the Republic of Palau,

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Singapore or other jurisdictions, or on behalf of terrorists,

terrorist organisations or narcotics traffickers, including those

persons or entities that are included on any relevant lists

maintained by the United Nations, the North Atlantic Treaty

Organization, the Organization for Economic Cooperation and

Development, the Financial Action Task Force, all as may be

amended from time to time ("Prohibited Investment");

(ii) represents and warrants that the proposed subscription for Debt

in the Fund, whether made on the Subscriber's own behalf or, if

applicable, as an agent, trustee, representative, intermediary,

nominee, or in a similar capacity on behalf of any other

person or entity, nominee account or beneficial owner,

whether a natural person or entity (each an "Underlying

Beneficial Owner"), is not derived from illegal or illegitimate

activities and is not a Prohibited Investment, and further

represents and warrants that the Subscriber will promptly

notify the Fund Manager of any change in its status or the status

of any Underlying Beneficial Owner with respect to its

representations and warranties regarding Prohibited

Investments.

(iii) to the extent to which the Fund is, or may in the future become

subject to, anti-money laundering statutes, regulations and

conventions of the United States, the Republic of Palau or other

jurisdictions, agrees to execute instruments, provide information

or perform any other acts as may reasonably be requested by the

Fund or the Fund Manager, or other authorised representative of

the Fund or the Fund Manager, for the purpose of: (a) carrying

out due diligence as may be required by applicable law to

establish the identity of (1) the Subscriber, (2) any Underlying

Beneficial Owner of the Subscriber and (3) any investors,

partners, members, directors, officers, beneficiaries or grantors of

the Subscriber, and any Underlying Beneficial Owner of such

investors, partners, members, directors, officers, beneficiaries or

grantors, as applicable; (b) maintaining records of identities, or

verifications or certifications as to identities; and (c) taking any

other action as may be required to comply with and remain in

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compliance with anti-money laundering or related statutes,

regulations or conventions applicable to the Fund;

(iv) represents and warrants that the information provided by the

Subscriber herein, and in the schedules and attachments hereto

and the documents provided as requested herein, is correct and

not misleading in any material respect. If there should be any

change in any such information, representation or warranty

prior to or after the Subscriber's admission as a debtholder to

the Fund, the Subscriber will use reasonable endeavours to

furnish accurate and complete information concerning such

change to the Fund Manager as soon as reasonably practicable;

and

(v) agrees that it will promptly provide to the Fund and the Fund

Manager any additional documentation that it or they may

require to verify the Subscriber's identity in accordance

with their know-your-client and current anti-money laundering

procedures. The Subscriber acknowledges that any delay by the

Subscriber in providing such documentation may result in

delayed processing of the Subscriber's application for

subscriptions and redemptions and/or delayed payments and/or

processing of any requests in respect of the Debts.

3. Each of the representations and warranties in Section 1 and Section 2 is

correct and not misleading in any material respect as at and from the date

of this Subscription Agreement, the Initial Closing Date, the Final Closing

Date (as such terms are defined in the PPM), each closing on which the

Subscriber increases its Commitment and the dates on which any capital calls

are made by the Fund (as the case may be), unless the Subscriber has notified

the Fund and the Fund Manager in writing to the contrary on or before the

closing for which this subscription is made.

4. The Subscriber hereby:

(i) agrees that its offer to subscribe is not binding on the Fund until it is

accepted by the Fund and agrees and acknowledges that the Fund

(or the Fund Manager on its behalf) may reject the offer to subscribe

in whole or in part in its sole discretion for any reason whatsoever

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and further agrees and acknowledges that the offer to subscribe

shall be deemed to be accepted only after this Subscription

Agreement has been signed by an authorised representative acting for

and on behalf of the Fund;

(ii) agrees that unless and until its offer to subscribe is rejected by the

Fund, the Subscriber shall not be entitled to cancel, terminate, or

revoke its offer to subscribe and that if the Fund rejects the offer to

subscribe, this Subscription Agreement and all related documents

executed by the Subscriber in connection with it may be retained by

the Fund;

(iii) that the Fund reserves the right, in its sole discretion, to reject

this subscription for the Debt in whole or in part, at any time prior

to the closing for which this application is made, notwithstanding

execution by or on behalf of the Subscriber of this Subscription

Agreement or notice from the Fund of its conditional acceptance of the

Subscriber's subscription for Debt;

(iv) if this subscription is rejected in full, this Subscription Agreement shall

thereafter have no force or effect and any subscription proceeds

received shall be returned to the account from which they were

received;

(v) agrees that the Class Commitment shall be drawn down by the Fund by

way of capital calls on the Subscriber's Debt by serving a duly

completed Funding Notice in the form attached as Appendix A on the

Subscriber not less than 14 Business days before the capital call must be

funded; and

(vi) agrees that after the expiry of the Investment Period, the Subscriber

shall be obligated to provide funds, up to its Class Commitment, in the

circumstances described in the PPM;

(vii) the Subscriber will be subject to the default provisions set forth in the

PPM in the event the Subscriber fails to make capital contributions or

otherwise meet drawdown requests as required under the PPM;

- 8 -


P.O. BOX 378

KOROR PALAU 96940

5. The Subscriber further agrees, acknowledges and is aware:

(i) that the Subscriber is acquiring Debt upon the terms and conditions set

forth in this Subscription Agreement, the PPM (and the other

agreements or other documents referred to herein or in the PPM);

(ii) no government agency has passed upon Debt or made any finding

or determination as to the fairness of this investment. Neither the

M&A nor the PPM nor any Subscription Agreement has been filed

with any regulatory authority;

(iii) that the Subscriber is acquiring Debt for investment purposes only and

not with a view to the re-sale or distribution thereof;

(iv) there are substantial restrictions on the transferability of the Debt under

applicable law; there is no established market for the Debt and no public

market for the Debt will develop; and it may not be possible for the

Subscriber to liquidate its investment in the Fund;

(v) with respect to the tax and other legal consequences of an investment in

the Fund (including the Class Commitment and the holding

Debts), the Subscriber is relying solely upon the advice of its own tax

and legal advisors;

(vi) the Fund Manager and its Associates (as such term is defined in the

PPM) will receive management fees in connection with the Fund

irrespective of the success of its operation;

(vii) that there are substantial penalties upon default by the Subscriber of any

capital call issued under a Funding Notice;

(viii) that in each drawdown, the Fund and the Fund Manager have the right

and the absolute discretion to make capital calls which are not pro rata to

the Subscriber' Commitments, and each Subscriber may be asked to

make payment of a percentage amount of his/its Commitment which is

a different percentage amount from other Subscribers;

(ix) that Debtholders may be delivered an additional Funding Notice to

make up any shortfall of a Defaulting Investor (not to exceed each

Debtholder's Unfunded Commitment) and new Investors may be

- 9 -


P.O. BOX 378

KOROR PALAU 96940

admitted by the Board, in its discretion, for the purpose of making

contributions in place of the Defaulting Investor;

(x) that the Fund and the Fund Manager are entering into this Subscription

Agreement on the basis of, and in full reliance upon the agreements,

acknowledgments, representations and warranties made and given by

the Subscriber under this Subscription Agreement and the Fund and the

Fund Manager shall be entitled to treat the same as conditions of this

Subscription Agreement;

(xi) that the Subscriber represents and warrants to the Fund and the Fund

Manager that each of the representations and warranties given by the

Subscriber under this Subscription Agreement shall survive and

continue to have full force and effect after the execution of this

Subscription Agreement and shall be deemed to be repeated on the

Initial Closing Date and each subsequent Closing Date, as the case may

be, with reference to the facts then existing and the Subscriber further

represents and warrants to the Fund and the Fund Manager that each of

its representations and warranties given by the Subscriber in this

Subscription Agreement will be true and accurate on closing as though

the same were made on the Initial Closing Date or each subsequent

Closing Date, as the case may be;

(xii) that the Subscriber shall, to the fullest extent permitted by applicable

law, indemnify the Fund, the Fund Manager, the Fund Manager’s

Associates (as such term is defined in the PPM), and the respective

debtholders, partners, members, managers, advisors, directors, officers,

employees, agents and representatives of the Fund Manager and its

Associates (collectively the "Indemnified Parties" and each an

"Indemnified Party"), from and against (a) any and all losses, expenses,

claims, demands, proceedings, judgements or regulatory investigations

("Claims") including the costs of negotiating or settling any Claim, any

legal or other expenses incurred by any Indemnified Party, and any

expenses incurred in connection with any investigation of any Claim;

and (b) any and all losses (including any consequential or indirect

losses, damages or liabilities), damages, costs, charges, liabilities,

interests and expenses ("Losses") of whatever nature and in whatever

jurisdiction related to or arising out of or based upon any false

- 10 -


P.O. BOX 378

KOROR PALAU 96940

representation or warranty, or breach of or failure by the Subscriber to

comply with any covenant or agreement, made by the Subscriber herein

or in any other document furnished to the Indemnified Parties

specifically supplementing the information in this Subscription

Agreement (but excluding the M&A) by the Subscriber in connection

with the subscription for Debts, in each case caused by the Subscriber's

bad faith, default or negligence. The Subscriber shall reimburse each

Indemnified Party for its reasonable legal and other expenses

(including the cost of any investigation and preparation) as they are

incurred in connection with any such claim, action, proceeding or

investigation. The reimbursement and indemnity obligations of the

Subscriber under this paragraph shall survive the closing applicable

to it (or, if this Subscription Agreement is terminated) and shall be in

addition to any liability which the Subscriber may otherwise have

(including, without limitation, liabilities under the M&A), and shall

be binding upon and inure to the benefit of any successors, assigns,

heirs, estates, executors, administrators and personal representatives

of the Indemnified Parties;

(xiii) that this Subscription Agreement, the PPM, and the other agreements or

documents referred to in the PPM contain the entire agreement of

the parties, and there are no representations, covenants or other

agreements except as stated or referred to herein and in such other

agreements or documents;

(xiv) that neither this Subscription Agreement nor any provision hereof shall

be waived, modified or varied except by an instrument in writing

signed by the party against whom any such waiver, modification or

variation is sought;

(xv) that this Subscription Agreement is not transferable or assignable by the

Subscriber;

(xvi) that this Subscription Agreement shall be governed by and construed in

accordance with the laws of the Republic of Palau and that the

Subscriber submits to the non-exclusive jurisdiction of the courts of the

Republic of Palau in respect of any claim or matter arising under or in

connection with this Subscription Agreement;

- 11 -


P.O. BOX 378

KOROR PALAU 96940

(xvii) that this Subscription Agreement is irrevocable by the Subscriber and

shall not be affected by the subsequent dissolution, bankruptcy or

insolvency of the Subscriber, whether or not notification of acceptance of

the Subscription Agreement by the Fund or the Fund Manager has been

delivered to the Subscriber, provided however, that the Subscriber shall

have no obligation under this Subscription Agreement if its subscription

is for any reason wholly rejected or the offering is for any reason

cancelled or terminated by the Fund; and

(xviii) that, if at any time, any other subscriber fails to pay all or any portion of

its Commitment in accordance with a contribution request made by the

Fund, the Subscriber may, at the sole discretion of the Fund, be required

to make up, on a pro rata basis, any shortfall due to such default,

provided that the Subscriber shall not be required to contribute to the

Fund an aggregate amount greater than its Commitment.

6. The Subscriber shall bear its own costs and expenses in respect of

this Subscription Agreement, the Commitment and its subscription of Debt.

7. All notices, consents, requests, demands, offers, reports and

other communications required or permitted to be given pursuant to

this Subscription Agreement shall be in writing in the English language and

shall be considered properly given and received when personally delivered to

the party entitled thereto, or when sent by email upon successful transmission

thereof, or when sent by facsimile 24 hours after receipt of confirmation of its

transmission in full, or seven days after being sent by first class prepaid mail

(or airmail if overseas), in a sealed envelope addressed:-

(i) to the Fund Manager:

Palau Asset Management Inc

PO Box 378

Koror

Palau 96940

the Fund Manager and the Subscriber may change their respective address

by giving notice to the other.

- 12 -


P.O. BOX 378

KOROR PALAU 96940

8. This Subscription Agreement may be executed in multiple counterpart

copies, each of which shall be considered an original and all of which

constitute one and the same instrument binding on all the parties,

notwithstanding that all parties are not signatories to the same counterpart.

9. Except as otherwise provided herein, this Subscription Agreement and all of

the terms and provisions hereof shall be binding upon and ensure to the

benefit of the parties and their respective heirs, executors, administrators,

successors, trustees and legal representatives.

10. Each of the representations and warranties in Section 1, the undertakings

and acknowledgements in Section 2 and the provisions of Sections 3 through 9

shall, in the event this subscription is accepted, survive such acceptance, the

issue and allotment of Debt in the Fund to the Subscriber and the dissolution

of the Fund.

11. The Subscriber hereby appoints the Fund and/or its authorised officers

and agents as its true and lawful attorney-in-fact with full power and authority

in its name to complete, execute (as a deed or otherwise), sign and deliver all

instruments which the Fund deems necessary to effect the Subscriber's

admission as a debtholder of the Fund pursuant to the terms of this

Subscription Agreement.

12. The Subscriber agrees that the Subscriber shall not disclose, duplicate

or provide copies of the PPM or this Subscription Agreement to any persons

other than:-

(i) to the Subscriber's employees, Associates, investment and tax advisers,

accountants or legal counsel who have a specific need for such

information for the purposes of the Subscription Agreement and who

have been made aware of the terms of this Section and who have

agreed to be bound by the same; and

(ii) where such disclosure is required by any applicable law or order of any

court of competent jurisdiction or pursuant to any direction, request or

requirement (whether or not having the force of law) of any central

bank, governmental or other regulatory or taxation agency authority

Provided That in such event or if the Subscriber anticipates or has

cause to anticipate that it may be required to make such disclosure, the

Subscriber shall forthwith notify the Fund and the Fund Manager

- 13 -


P.O. BOX 378

KOROR PALAU 96940

of such actual or anticipated requirement and use its best endeavours to

delay and withhold such disclosure until the Fund and the Fund

Manager have had a reasonable opportunity to oppose such

disclosure by lawful means or to seek such other protective measures

as the Fund and the Fund Manager may deem fit, and the

Subscriber shall co- operate fully with the Fund and the Fund

Manager in any such opposition or in seeking such protective measures.

13. The Subscriber understands and agrees that:

(i) the Fund and the Fund Manager shall be entitled to retain any

information it receives, whether within or outside the Republic of

Palau, in such manner as it shall, in its absolute discretion,

consider appropriate; and

(ii) the Fund and the Fund Manager reserves the right to engage

such agents, whether within or outside the Republic of Palau as, in its

absolute discretion, it shall consider appropriate for the purpose of

complying with its obligations pursuant to any applicable laws and

regulations.

14. Confidentiality

The Subscriber agrees that the Fund and the Fund Manager, or any other party

on behalf of the Fund, shall be entitled to, and shall, supply all and any

information regarding the Fund and the Subscriber's investment in the Fund to

each other, their delegates and affiliates, or other service provider appointed by

the Fund. Further, the Subscriber acknowledges and accepts that the Fund and

the Fund Manager may be required to and shall be entitled to reveal

any information regarding the Fund and the Subscriber's investment in the

Fund, including details of my/our identity, to their regulators and/or any other

government agency within their respective jurisdictions, which the Fund or the

Fund Manager shall, in their sole discretion, consider appropriate.

This Section 14 shall survive termination of this Subscription Agreement.

- 14 -


P.O. BOX 378

KOROR PALAU 96940

IN WITNESS WHEREOF, the parties hereto have executed this

SUBSCRIPTION AGREEMENT as a deed this day of .

For Individuals:

Executed as a deed by:

Name:

For Corporations:

The common seal / company stamp of the Subscriber was affixed in the presence of:

Director

Director/Secretary

Permanent Address(es) for registration purposes:

Contact Person:

Facsimile:

Email :

Executed as a deed by:

for and on behalf of the Fund Manager

Name:

Title:

- 15 -


P.O. BOX 378

KOROR PALAU 96940

PART I

TO BE COMPLETED BY CORPORATIONS, LIMITED LIABILITY COMPANIES,

PARTNERSHIPS, TRUSTS AND OTHER ENTITIES

A. General Information

1. Are you subscribing for the Debt as agent, nominee, trustee or otherwise on

behalf of, for the account of or jointly with any other person or entity?

Yes No 2. Will any other person or persons have a beneficial interest in the Debt

acquired (other than as a debtholder, partner, member, trust beneficiary or other

beneficiary owner of equity interests in the investor)?

Yes No 3. Do you control, or are you controlled by or under common control with, any

other existing or prospective investor in the Fund? Yes No

Note: If any of the above questions were answered "Yes," please provide identifying information or contact the Fund Manager.

4. Please confirm your legal form:

5. Please provide details of the non-United States jurisdiction in which you were incorporated or formed:

6. Please provide the date of incorporation or formation:

7. Please provide details of the Authorised Individual who is executing this Subscription Agreement and Questionnaire on your behalf:

Name:

Current position or title:

- 16 -


P.O. BOX 378

KOROR PALAU 96940

Telephone number:

Facsimile number:

Email address:

B. Investor Qualification

Please indicate your status below.

If you are a corporation, limited liability company, trust, partnership or other

legal entity, you are:

(i) organized under the laws of:

(ii) have your principal place of business in :

C. Supplemental Data

Were you organized for the specific purpose of acquiring the Debt?

Yes No

D. Tax Information

Please provide your foreign country of residence for tax purposes:

- 17 -


P.O. BOX 378

KOROR PALAU 96940

PART II

DECLARATION OF INVESTOR

A. For Individual

1. I hereby attached all my supporting document for Know-Your-Customer process check.

* Supporting documents are attached

2. I confirm that all my particulars, information and documents provided to the

Fund/ Fund Manager are true and correct to the best of my knowledge and you

may rely on the accuracy thereof. I undertake to promptly inform the Fund/ Fund

Manager if I cease to be an accredited investor at any time. I also understand and

agree that I may be required to renew this declaration periodically upon request

from the Fund/ Fund Manager.

3. I agree to hold the Fund/ Fund Manager and its directors, officers, agents and

affiliates harmless and keep each party fully and effectively indemnified from and

against any and all losses, costs (including legal costs on a full indemnity basis),

claims, damages and expenses whatsoever which any of them may incur (directly

or indirectly) as a result of your relying on the information and documents

furnished by me with regards this declaration.

4. I am fully aware of the risks involved in investing and am purchasing the Debt on my own accord.

Signature:

Name:

NRIC No./Passport No.:

Date:

- 18 -


P.O. BOX 378

KOROR PALAU 96940

B. For Corporate

I/We declare that my/our company’s total NET assets (ie. assets minus

liabilities) exceed S$2 million (or equivalent in foreign currency) as determined by the

most recent audited balance-sheet* of the company.

* Supporting documents are attached

I/We confirm that all my/our company’s particulars, information and

documents provided to the Fund/ Fund Manager are true and correct to the best of

my/our knowledge and you may rely on the accuracy thereof. I/We undertake to

promptly inform the Fund/ Fund Manager if I cease to be an accredited investor at

any time. I/We also understand and agree that I/We may be required to renew this

declaration periodically upon request from the Fund/ Fund Manager.

I agree to hold the Fund/ Fund Manager and its directors, officers,

agents and affiliates harmless and keep each party fully and effectively indemnified

from and against any and all losses, costs (including legal costs on a full indemnity

basis), claims, damages and expenses whatsoever which any of them may incur

(directly or indirectly) as a result of your relying on the information and documents

furnished by me with regards this declaration.

I am fully aware of the risks involved in investing and am purchasing the Debt on my own accord.

Authorised Signatory:

Name:

Designation:

NRIC No./Passport No.:

Date:

- 19 -


P.O. BOX 378

KOROR PALAU 96940

PART III

Documents to accompany this Application:

Know Your Client (KYC)

Application Form

(For Individuals / Non-Individuals)

Please fill in this form in ENGLISH and in BLOCK LETTERS.

(All information as applicable in Sections A, B and C below is MANDATORY) A. Identity Details (For Individual) 1. Name of Applicant

Title ___________________________________________

Name ___________________________________________

2. Date of Birth .

3. Nationality ______________________________________

4. Status Please tick ( √ ) Resident Individual

Non-Resident

5. NRIC / Passport Number (MANDATORY) ____________________

- 20 -


P.O. BOX 378

KOROR PALAU 96940

A. Identity Details (For Corporation)

1. Name of Applicant (Please write complete name as per Certificate of

Incorporation / Registration. Please do not abbreviate the Name).

___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _

___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ 2. Date of Incorporation/Registration DD/MM/YYYY

3. Company Registration Number (MANDATORY) _____ _ _ __ __

Copy of ACRA

- 21 -


P.O. BOX 378

KOROR PALAU 96940

B. Address Details

1. Address for Correspondence

__________________________________________________________________________________________

__________________________________________________________________________________________

City / Town _____________________________ Postal Code _________________________________

State _____________________________ Country _________________________________

2. Contact Details

Tel. (Off) ____________________________ Tel. (Res) _________________________________ Mobile ____________________________ Fax _________________________________ Email ID _____________________________________________________________________________

3. Proof of address to be provided by Applicant. Please submit ANY ONE of the following valid

documents & tick (√) against the document attached.

Latest Telephone Bill Passport

Latest Bank Passbook

Latest Electricity Bill Driving License Latest Bank Account Statement

4. Permanent Address of Resident Applicant if different from B1 above OR Overseas Address

(MANDATORY) for Non-Resident Applicant

__________________________________________________________________________________________

__________________________________________________________________________________________

City / Town _____________________________ Postal Code _________________________________

State _____________________________ Country _________________________________

5. Proof of address to be provided by Applicant. Please submit ANY ONE of the following valid

documents & tick ( √ ) against the document attached.

Latest Telephone Bill Passport

Latest Bank Passbook

Latest Electricity Bill Driving License Latest Bank Account Statement

- 22 -


P.O. BOX 378

KOROR PALAU 96940

C. Other Details

1. Gross Annual Income Details Please tick (√ )

Upto S$30,000 S$30,001 to S$50,000 S$50,001 to S$100,000

S$100,001 to S$500,000 S$ 500,001 and above

2. Occupation Details Please tick (√ ) any one

Private Sector Service Public Sector / Government Service

Business Professional

Retired Others (Please specify) ___ _ _ _ _ _ _ _

3. Mandatory Certified Documents to be submitted, as applicable (Please tick (√) against documents attached)

i. Company / Body Corporates Certificate of Incorporation Memorandum &

Articles of Association (M&A)

Resolution of the Board of Directors

Authorised Signatory List with specimen signatures

List of shareholders who hold more than 10% of the

share capital or interests of the entity

ii. Partnership firms Certificate of Registration

Partnership Deed Documents evidencing

authority to invest

Authorised Signatory List with specimen

signatures

List of the limited partners who hold more than 10%

of the share capital or interests of the entity

iii. Scheduled Commercial Banks and

Registered Financial Institutions /

Regulatory Bodies / Army /

Government Bodies / Any other

bodies created / incorporated /

statutorily registered or being eligible

to invest in funds

Copy of Constitution / registration documents

Documents evidencing authority to invest

List of authorized signatories

- 23 -


P.O. BOX 378

KOROR PALAU 96940

KY

C R

ef.

DECLARATION SIGNATURE (S) OF AUTHORISED

PERSON (S)

I hereby declare that the particulars given herein are true, correct

and complete to the best of my knowledge and belief, the

documents submitted along with this application are genuine and

I am not making this application for the purpose of contravention

of any Act, Rules, Regulations or any statue or legislation or any

Notifications, Directions issued by any governmental or statutory

authority from time to time. I hereby undertake to promptly

inform Palau Asset Management Inc of any changes to the

information provided hereinabove and agree and accept that

Palau Asset Management Inc are not liable or responsible for any

losses, costs, damages arising out of any actions undertaken or

activities performed by them on the basis of the information

provided by me as also due to my not intimating such changes. I

hereby authorize Palau Asset Management Inc to disclose, debt,

remit in any form, mode or manner, all / any of the information

provided by me to Palau Asset Management Inc in which I may

transact and / or to their authorised agents and

representatives (“Authorised Parties”) including all changes,

updates to such information as and when provided by me. I

hereby agree to provide any additional information /

documentation that may be required by the Authorised Parties, in

connection with this application.

Place: _____ _ _ _ _ _ _ _ _ _ _

Date: _____ _ _ _ _ _ _ _ _ _ _

For

Office

Use

(Originals Verified) Self Certified Document copies received

(Attested) True copies of documents received

- 24 -


P.O. BOX 378

KOROR PALAU 96940

APPENDIX A

FUNDING NOTICE

Date:

To:

Dear Sir / Madam,

We refer to the Subscription Agreement in respect of the Debt in the Fund between

you and the Fund Manager, and the Private Placement Memorandum of the Fund (as

amended from time to time) ("PPM"). Terms defined in the PPM shall have the same meanings in this Notice.

We hereby give you notice, requiring you to pay the following principal amount

Amount to be Paid (S$):

We request that payment be made by electronic transfer (being within 14 Business

days from the date of this Funding Notice) to the following account:

Bank Name : Industrial and Commercial Bank of China Ltd, Singapore Branch

Bank Address : 6 Raffles Quay #12-01, S(048580)

Bank Swift Code : ICBKSGSG

Account Name : Palau Capital Pte Ltd

Account Number : 0103010001000774160

Yours faithfully

For and on behalf of PALAU ASSET MANAGEMENT INC.

……………………………………………

CHAN CHEH SHIN

CHIEF INVESTMENT OFFICER

DATED THE 19

TH DAY OF JULY 2017

Between

Fadamas Resources Pte Ltd (The Principle)

AND

DERIC KHOR (The “Financier”)

********************************************************************

LOAN/INVESTMENT AGREEMENT

********************************************************************

LOAN / INVESTMENT AGREEMENT

THIS AGREEMENT made the 19th of July 2017

BETWEEN

Fadamas Resources Pte Ltd (Company Registration 201429858H) of 334 Ayer Kreta Road,

#01-07 Singapore 080334 (hereinafter referred to as “the Principle”) of the first part;

AND

Deric Khor (IC or Passport No. 750123-08-5413 ) of No

Endpoint, 30000 Ipoh, Perak.

(referred to as the “Financier”) of the second part. WHEREAS:

(1) The Principle hereby covenants that the company Fadamas will undertake to do Oil

and Gas trading activities and other activities that is within the company capacity.

(2) The Principle is seeking a loan/investment for the company to proceed to finance for

the activities.

(3) The agreed purpose of the loan/investment is to support and/or assist the Principle to

commence, proceed and/or complete the activities.

NOW IT IS HEREBY AGREED as follows:-

(4) In consideration of the loan/part investment of the sum of Singapore Dollar Thirty

Thousand Only ( SGD ) (hereinafter referred to as “the said

Loan/Investment”) for a period of thirty-six (36) months granted by the Financier to

the Principle.

(5) The parties hereby agree that this loan/investment shall commence upon the Date 31

August 2017.

(6) The parties hereby agree that this loan/investment agreement shall only commence on

31 August 2017. No profit sharing is accrued before that date.

(7) The Principle would use the profit (if any) earned to service the loan.

(8) The Principle will pay

I. a maximum of 40% on the Financier initial capital for the first year

II. maximum 40% on the Financier initial capital for the second and third year

(9) The Principle can exercise an early call back only after the first year. If called, the

Principle may pay out a compensation on pro rata basis.

(9) For the avoidance of doubt, it hereby agreed that the said loan/investment is for the

limited tenure/period of thirty-six (36) months subject to the following conditions :

(i) For the first 365 days from 31 Aug 2017, both Palau Asset Management Inc

(the Fund Manager) and Financier cannot terminate this agreement.

(ii) After the first 365 days from 31 Aug 2017, this agreement can be terminated,

by a written notice, either Palau Asset Management Inc OR the Financier.

(10) In the event that Principle shall:-

(a) default in payment of the said Loan/Investment or any part thereof; or

(b) fail to observe or perform any of the agreements covenants stipulation terms

and conditions on the part of the Principle herein contained; or

(c) a petition is presented or an order is made or an effective resolution is passed

or a meeting is convened to consider the passing of a resolution for the

winding up of the Principle; or

(d) a notice of bankruptcy and/or a petition for bankruptcy is presented to the

Principle; or

(e) The Principle allows any legal suit or any judgment against the Principle to

remain unsatisfied or outstanding for a period of more than seven (7) days;

then and in any of such cases the said Loan/Investment for the time being owing

shall immediately become payable by the Principle to the Financier and the

Financier shall forthwith become entitled to recover the same without previous

notice to or concurrence on the part of the Principle.

(11) The Principles has appointed Palau Asset Management Inc for this loan exercise.

(12) Monies raised by Palau Asset Management Inc will be safe guard into ::

NAME : Palau Capital Pte Ltd

ACCOUNT NO. : 0103010001000774160

BANK NAME : Industrial and Commercial Bank of China Ltd,

Singapore Branch

SWIFT CODE : ICBKSGSG

(13) The Financier may at any time and without in any way affecting the security created:

(a) grant to the Principle or to any other surety or guarantor any time or

indulgence.

(14) The Principle shall and hereby undertakes to pay and/or bear all and/or whatsoever

costs, charges, registration and other fees including stamp duty and other

disbursements in any way connected with or arising out of this Agreement including

all costs, charges, legal fees and other disbursements incurred by the Financier in

enforcing its rights hereunder.

(15) This Agreement shall be binding upon the executors and assigns of the Principle and

the successors-title and assigns of the Financier.

(16) GOVERNING LAW – This Agreement shall in all respects be governed by and

construed and interpreted in accordance with the Laws of Singapore and subject to

clause 20 here of the parties agree to submit to the jurisdiction of the Malaysian

Courts and to accept service of any proceedings issued out of the said courts,

notwithstanding that the subject matter of such proceeding may be outside the

jurisdiction of the said Courts.

(17) ASSIGNMENT – Neither of the party shall have the right to assign the whole or any

part of their rights, benefits or liabilities under this Agreement or sublet any of their

obligations to any other company, firm person.

(18) NOTICE - All notices pursuant to this Agreement shall, except as otherwise provided,

be in writing and delivered by hand, by courier, or sent by first class prepaid mail,

facsimile or telex to the respective addresses specified at the commencement of this

Agreement.

Any such notice or communication shall be deemed to have served:

i. if delivered by hand, at the time of delivery ; or

ii. if sent by courier, at the expiration of the delivery period quoted by the couriers

company for the destination concerned; or

iii. if posted by first class post for delivery within the same country, at the expiration

of two days after the envelope containing the same shall have been put into the

post ; or

iv. if sent by facsimile upon receipt of the confirmation of transmission

printed by the transmitting equipment ; or

v. if sent by telex, upon receipt of the confirmed answer back, at the beginning and

end message.

In providing such service it shall be sufficient to prove that delivery by hand was

made or that the envelope containing such notice or document was properly

addressed and posted as a prepaid first class letter or that the courier company have

obtained a signed airway bill or that the facsimile confirmation confirms transmissions

to the correct number or that the telex bears the correct answer back at the beginning

and end message, as the case may be.

(19) CONFIDENTIAL INFORMATION - No party hereto shall disclose to any other party

or persons any secret and confidential information of the other parties of the Business

which may have come to their knowledge through the negotiation or operation of this

agreement or their association with the JV Company. This obligation shall survive

termination or information which at the time or receipt by a receiving party or

thereafter was or become public knowledge otherwise than by the fault of the party

causing such disclosure.

(20) FORCE MAJEURE - Nothing herein contained shall be construed to require any of the

parties to comply with any provision hereof if and so long as perverted from

complying by force majeure which for the purpose of this Agreement shall mean any

cause beyond the reasonable control of the party upon whom it operates and which

could not reasonably have been anticipated by that party before the signing of this

Agreement or its after signing of this Agreement could not reasonably have been

avoided by it.

(21) In the event any such external occurrence however the parties shall consult each other

with a view to deciding whether to continue in the venture or to terminate the

Agreement.

IN WITNESS WHEREOF the parties hereto have hereunto set their hands the day and year

first above written.

SIGNED by )

the said Financier )

in the presence of: ) ….………………..…………………………………

) Name : Deric Khor

) IC / Passport : 750123-08-5413

SIGNED by )

the said Witness )

in the presence of: ) ….………………..…………………………………

) Name : Wong Xiao Ming

) IC / Passport : 891225-01-1234

Deric Khor

Wong XM

Official Distributor List from Lake Asphalt of Trinidad and Tabago

(Note the number 10)

1

FORM NO: MK-080/96

Lake Asphalt

of Trinidad and Tobago (1978) Limited

INTERNATIONAL DISTRIBUTOR APPLICATION

GENERAL INFORMATION:

Company Name: FADAMAS RESOURCES PTE LTD

Address: 334 KRETA AYER ROAD, #01-07, SINGAPORE 080334

Phone: +65 62213656

Fax: +65 62243263

1. Please list the owners of your company. (List any individual or company that owns 5% or more. If your are owned by a parent company - list the parent and the owners of the parent company).

Year Ownership

Owner Name % Owned was established

NG HOI KONG 80 2015

__________________________________________________________________

CHAN CHEH SHIN 10 2015

__________________________________________________________________

TAN KAH HOCK 10 2015

__________________________________________________________________

2. Please provide the following information about the accounting firm that audits your company’s

financial records.

Firm Name: OUR COMPANY IS PRESENTLY EXEMPTED FROM AUDIT, SO NO

AUDITORS IS APPOINTED BY END OF YEAR.

Contact: PricewaterhouseCoopers Singapore Pte. Ltd.

Address: 8 Cross Street #17-00

PWC Building

Singapore 048424

Phone: [65] 6236 3388

Fax: [65] 6236 3715

3. Please provide the following information about the legal firm used by your company.

Firm Name: PINNACLE LAW LLC

Contact: MR. AQBAL SINGH

Address: 1 NORTH BRIDGE ROAD, #06-34 HIGH STREET CENTRE,

SINGAPORE 179094

Phone: (65) 62360100

Fax:

International Legal

Advisor

(65) 65121904

Dr Rui Botica Santos

[email protected]

4. Please provide the following information about the bank that your company uses.

Bank Name: OCBC BANK LIMITED

2

Contact: SAM LIN

Address: 65 CHULIA STREET, #11-01, OCBC CENTRE EAST,

SINGAPORE 049514

Phone: +65 67222138

Fax: +65 65381111

5. Please list the total number of full-time employees in your company. (Do not include your parent company).

Also, provide a breakdown, in percentage terms, of your employees by major functional areas.

Functional Area No. of Employees % of Employees

Management 5 3

Marketing and Sales 20 19

Engineering 10 9.6

Sales Agents in Asia 70+ 67

6. Please provide a brief profile of the top five (5) managers within your company. (You should include their: Name, title, age, number of years with your company, number of years in the computer industry and a brief

description of their job functions).

1) Name: NG HOI KONG Age: 52

Title: Chairman and CEO Years in Company: 5

Previous Company: FADAMAS MARKETING SDN BHD

Years in Industry: 15+

Job Description: OVERALL IN CHARGE OF OPERATION

2) Name: _CHAN CHEH SHIN Age: 48

Title: DIRECTOR Years in Company: 3

Previous Company: QUANTUM ASSET MANAGEMENT PTE LTD

Years in Industry: 15+

Job Description: DIRECTOR AND BANKER

3) Name: TAN KAH HOCK Age: 69

Title: Director Years in Company:3

Previous Company: China National Chemical Engineering Co., Ltd. Years in Industry: 10

Job Description: Project Management and Engineering and Construction

7. Please provide the following information about the products you are currently selling. Please list emulsions/road paving related companies only, and rank them by your sales of their products).

1. Company Name: PETROLEUM AND PALM OIL

Products Sold: OIL AND PLAM OIL

3

Number of years you have been selling their products: 10+

Sales in last twelve (12) months: USD500+ Million

Expected sales in next twelve (12) months : USD1+ Billion

2. Company Name: Petroleum Crude Oil

Products Sold: Shanghai Changluen Oil Holding Co Limited

Number of years you have been selling their products: 3+


Expected sales in next twelve (12) months : USD500+ Million

3. Company Name: Oriental (Wuhan) Petrochemical Trading Platform Products Sold: Petrochemical Products and Lubricants Number of years you have been selling their products: 3+


Expected sales in next twelve (12) months : USD1+ Billion

FINANCIAL INFORMATION:

1. Please fill out the following chart by providing the sales of your company for the

last three (3) years. (Provide sales figures in US$ and specify the exchange rate used in the calculations. Estimate sales figures for 1997-1998 as appropriate. Do not include sales from your parent company).

Year Qtr. 1 Qtr. 2 Qtr. 3 Qtr. 4 TOTAL

2015 USD2 Billion

2016

(Asphalt) USD2.8

Billion

2017 (Asphalt) (Asphalt) (Asphalt) (Asphalt) USD3.5

Billion

Exchange Rate: US$=

2. Please specify the percent of your last twelve (12) months' sales that came from the following

area:

% of Sales

Dried Asphalt 5

Bitumen 10

Bitumen Emulsion 5

Paint, Underbody Coating 15

Others 35

4

3. MARKET INFORMATION:

Please provide a breakdown of the major market sectors to which you provide products and services.

% of Sales

Corporate 20

Government 45

Contractors 30

Small Business 5

Individual >1

Other 0

BUSINESS PLAN: (Please find the attached)

In addition to the Lake Asphalt distributor application, we request that you submit a comprehensive

business plan. The purpose of the business plan is to provide Lake Asphalt with specific information on your

country, company and competition. Your business plan should also describe how you would manage the

business of Lake Asphalt if you are appointed a Lake Asphalt distributor. This business plan will become the

starting point from which we will discuss the opportunities for us to work together, and will be an important factor in

helping us to determine who should be appointed as distributors.

Below is an outline listing topics which we want you to include in your business plan. We would encourage you to

involve the various departments (Marketing, Finance, sales, Service, etc.) within your organization as you develop

this business plan. Each section requires information that is best provided from people within that department.

The outline is intended only as a guideline, so please include any additional topics you feel would be helpful.

The business plan should be provided to Lake Asphalt of Trinidad and Tobago (1978) Limited as soon as possible.

1. Country Overview

1.1 Demographics

1.2 Economic Outlook

1.3 Competitive Environment:-

1.3.1 Market Share of top ten (10) Emulsions companies in domestic market

1.3.2 Pricing of products (Asphalt Cement/bitumen) in domestic market

1.3.3 Information on Tariffs/Duties/Taxes

2. Company Background

2.1 Business Structure (Parent Company, Divisions, Departments etc.)

2.2 Legal Structure

2.3 Ownership Structure

3. Financial

3.1 Provide 12-month sales forecast for Lake Asphalt business.

3.2 Attach two (2) years audited Income Statement & Balance Sheet for your company or parent

company.

5

4. Marketing

4.1 Proposal for launching the Lake Asphalt distributorship

4.2 Provide a two (2) year marketing plan.

4.3 Discuss the distribution channels which you will utilize.

4.4 Please provide examples of marketing materials which are currently being used by your company to

market products.

4.5 Provide a pricing analysis for positioning Lake Asphalt products in your market.

5. Service and Support

5.1 Outline service and support programs including the extent of geographic coverage.

5.2 Provide examples of service and support programs currently offered by your organization.

6. Distribution

6.1 What channels of distribution do you use?

6.2 Do Lake Asphalt products complement or compete with your existing products?

6.3 What changes (if any) would you make to your existing product lines if you are appointed as a Lake

Asphalt distributor?

Please return your completed Distributor Application to:

Leary A. Hosein

Chief Executive Officer

Lake Asphalt of Trinidad and

Tobago (1978) Limited

Brighton

Trinidad and Tobago. W.I.

Tel.No.: (868) 648-7555/6 Ext. 201

Direct Line: (868) 648-7449

Fax No.: (868) 648-7433

Email: [email protected]

mailto:[email protected]

6

BUSINESS PLAN

1) Country Overview

China is the largest consumer and importer of asphalt in Asia. In China, the total bitumen

production proportion of the three big companies China National Petroleum Corporation

(Petro China), China Petroleum and Chemical Corporation (SINOPEC), and China National

Offshore Oil Corporation (CNOOC) is more than 80%. By the national policy support since 2012,

the asphalt demand is increasing significantly due to road construction nationwide. By the end of

2013, the total length of the road is 4.35 million km and the highway mileage reached 104

thousand km. In the next 30 years, the static investment of highway network planning is 2 trillion

RMB. From 2010 to 2010, the average annual investment is about 100 billion on road traffic

construction.

From Jan to Jun 2014, the total asphalt output of top ten companies is about 4.59 million ton 51%

of national total output as shown in the Table 1. Among them, SINOPEC has four affiliated

companies, Petro China has four affiliated companies, CNOOC has two affiliated companies.

Table 1- The main domestic production of asphalt

Ranking

Province Subordinate companies

Company name Production of the first half of

2014

Structure ratio %

Production of the first half of

2013

Structure ratio %

Year on year (ten thousand tons)

Year on year %

1

Liaoning

CNPC LIAOHE

PETROCHEMICAL COMPANY

82.48

9

83.47

9

-0.99

-1

2 Zhejiang SINOPEC ZHENHAI REFINERY & CHEMICAL COMPANY

54.80 6 61.00 7 -6.20 -10

3 Shandong CNOOC CHINA OFFSHORE BITUMEN CO.,LTD

47.98 5 50.80 5 -2.82 -6

4 Guangdon

g

SINOPEC MAOMING


45.80

5

52.40

6

-6.60

-13

5

Xinjiang

CNPC KARAMAY


44.24

5

55.00

6

-10.76

-20

6

Jiangsu

SINOPEC JINLING

PETROCHEMICAL CO., LTD.

43.20

5

37.40

4

5.80

16

7 Guangdon

g CNPC

ZHONGYOU GAOFU PETROLEUM CO., LTD.

39.50 4 49.70 5 -10.20 -21

8

Shandong

SINOPEC

SHANDONG QILU PETROCHEMICAL

ENGINEERING CO. LTD

36.50

4

22.40

2

14.10

63

9

Jiangsu

CNOOC CNOOC TAIZHOU

PETROCHEMICAL CO., LTD

34.20

4

23.10

2

11.10

48

10 Jiangsu CNPC ALPHA 30.60 3 30.73 3 -0.13 0

Subtotal of the above ten companies: 459.30 51 466.00 50 -6.70 -1

Total of the country: 899.31 100 932.22 100 -32.91 -4

From Jan to Oct 2015, the apparent consumption of domestic asphalt is about 22.46 million ton in

China, increased 1.64 million ton compared with last year, and the growing rate is about 7.89%.

The asphalt import volume is about 3.92 million ton at the same period. While the exports have

remained low is only about 0.22 tons.

7

Pricing of products (Asphalt Cement/bitumen) are different due to various types and specifications

of products in domestic market and information on Tariffs/Duties/Taxes can be seen in Table 2-

Table 5 for you information.

Table 2-Asphalt import tariffs

Product Name Preferential

Duty (%) Ordinary Customs

Duty (%) VAT (%)

Consumption Tax (%)

Asphalt macadam 3.0 50.0 17.0 0.0

Asphalt 7.0 35.0 17.0 0.0

Pitch coke 6.0 11.0 17.0 0.0

Petroleum asphalt 8.0 35.0 17.0 0.0

Tar shale, oil shale and tar sands 6.0 20.0 17.0 0.0

Natural bitumen (asphalt) 8.0 35.0 17.0 0.0

Emulsified asphalt 0.0 20.0 17.0 0.0

Asphaltite 3.0 20.0 17.0 0.0

Asphalt mixture (basic ingredients is natural asphalt)

8.0 35.0 17.0 0.0

Table 3 - Import and export statistics data of petroleum asphalt from 2009 – 2013

D)

Table 4 -Average price of asphalt import and export from 2009 – 2013

Year Average price of import (USD/Ton) Average price of export (USD/Ton)

2009 365.09 505.88

2010 494.56 561.78

2011 555.36 686.93

2012 640.72 921.16

2013 622.50 802.64

Table 5 –Main imports and exports country data in 2014

Country Import quantity

(Ten thousand tons) Import unit price

(USD/Ton) Export quantity

(Ten thousand tons) Export unit price

(USD/Ton)

Korea 224.90 560 0.00 727

Singapore 71.07 608 0.00 -

Thailand 12.68 601 0.38 887

Malaysia 6.42 596 0.00 720

Japan 2.64 534 1.50 600

Iran 1.10 469 0.00 -

The United Arab Emirates

0.44 522 0.00 -

Kuwait 0.26 447 0.00 -

Saudi Arabia 0.14 480 0.00 -

Russian Federation 0.12 455 0.00 -

Bahrain 0.06 305 0.00 -

Year Export (kg, thousand USD)

Quantity Amount Quantity A mount

2009 81,743,453 41,352 3,334,455,168 1,217,378

2010 149,931,516 84,228 4,098,671,223 2,027,023

2011 238,472,948 163,815 3,190,163,755 1,771,680

2012 95,665,487 88,123 2,731,489,547 1,750,118

2013 168,725,990 135,426 3,320,093,786 2,067,335

8

2) Company Background

Fadamas Resources Pte. Ltd. was founded in 2015 with the registered office in

Singapore and new subsidiary shareholder under China National Chemical Engineering

Co., Ltd. (CNCEC) Group in Asia. The management team has rich experience on

petrochemical and international trading experience. The company group mainly deals

with crude oil, refined oil, fuel oil, gas, coal, nonferrous metal, all kinds of scrap metal,

chemical products of renewable resources, import and export of goods and technology,

project investment, energy investment, financial investment and the diversification of

integrated service-oriented enterprises. Business region of our company range all over

the world. (Please refer to the brochure of CNCEC.

3) Financial and Marketing

We proposed the 24-month sales forecast for Lake Asphalt business as shown in

Table 6. And the audited Income Statement & Balance Sheet for our group see the

attachments.

Market Target 2016.12-2017.11

(Ten thousand tons)

2017.12-2018.11

(Ten thousand tons)

Proportion (%)

Highway 105 175 35

Municipal roads 60 100 20

Bridge and tunnel 45 75 15

Airfield runway 30 50 10

Civil architecture 36 60 12

Chemical materials 24 40 8

Total 300 500 100

Within our group and direct sales and regional authorized agents. W e can authorize

distributor agents in each cities in Asia to develop the market by using the resources of

all distributors, co n t r ac t o r s as well as conduct positive cooperation with local road

construction department. We can also directly sale to end customers in other Asian

countries and regions as the exclusive distribution to ensure the sales performance.

The sales forecast of 2016.12-2017.11 is 300 million ton and 2017.12-2018.11 we can

reach 500 million ton a year.

4) Service and Support (refer to our CNCEC Group)

Outline service and support programs including the extent of geographic coverage.

Provide examples of service and support programs currently offered by your organization

5) Distribution

What channels of distribution do you use?

Petrochemical Products Selling Platform in Singapore, Malaysia, Indonesia, Taiwan, Thailand and

Shanghai, and also contractors and Government Corporation and sub-contractors and advisory.

9

6) Do Lake Asphalt products complement or compete with your existing products? NA

What changes (if any) would you make to your existing product lines if you are appointed as a

Lake Asphalt distributor?

Lake of Asphalt is the highest quality of natural asphalt in the world. Under the “one belt one road” project

in Asia, the rapidly increasing on consumption on asphalt to end user (Government) . The existing under

the petrochemical processing, the quality cannot fulfill the international standard on highway or runway

infrastructures. TLA has a proven history of successful asphalt mix modification, backed up by exhaustive test data

from around the globe. TLA has proved to be particularly effective in heavy duty pavements which must demonstrate

cost-effectiveness and high performance. These applications advantages on race tracks, container handling facilities,

highways, bridges and airports. Especially TLA can be stored with no detrimental effect, in marked contrast to many

polymers. TLA can easily be added to any asphalt mixture, in any quantity, at any time and mixed at elevated

temperatures with no degradation or loss of performance. Also in recent years, TLA has demonstrated that it is

particularly well suited to use in modern thin surfacing systems. It is routinely used in Stone Mastic Asphalt (SMA),

Asphaltic Concrete, Gus asphalt and Mastic Asphalt materials. For SMA, replacing 20 to 30% of the binder with TLA

is normally specified, which produces an economical alternative to polymer modification, with the added benefits of

easy storage and addition.

New Technologies and improvement on products development, as appointed as a Lake Asphalt Distributor, we will do

our best on sales and marketing and promotion on “Quality Products and Quality Work” on Lake Asphalt.

Thank you for your kind attention.

Yours Sincerely,

For and on behalf of FADAMAS RESOURCES PTE LTD

Francis Ng Hoi Kong CEO and Chairman