09:58 DENWAY MOTORS<00203> - Announcement (4) ordinary resolution to approve: (i) the Acquisition contemplated under the Acquisition Agreement and the Shareholder's Loan Assignment as required by the Listing Rules; and (ii) the allotment and issue of the Consideration Shares to City Achieve (or such other person(s) as may be directed by City Achieve in writing) under the Acquisition Agreement; (2) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Consideration Shares; (3) no notification from the Stock Exchange that trading in the Shares will be or may be suspended due to the Acquisition (excluding temporary suspension); (4) the obtaining of all necessary consents, authorisations or other approvals of any kind by City Achieve, Smartstate and the Company in connection with the Acquisition Agreement and the Shareholder's Loan Assignment; (5) Smartstate having obtained all necessary approval(s) from the PRC authorities in owning the Guangzhou Denway Interests; and produced evidence to show that the relevant transfer of the Guangzhou Denway Interests has been duly filed with the relevant governmental authorities; and (6) the confirmation of the Company that conditions (1) to (5) above have been fulfilled or waived (except that (1), (2) and (5) cannot be waived). If the above conditions are not fulfilled on or before the Longstop Date (unless otherwise agreed to be extended by the parties to the Acquisition Agreement), the Acquisition Agreement shall terminate and neither party shall have any liability thereunder save for any antecedent breach of the terms of the Acquisition Agreement. Completion Upon compliance with or fulfillment or waiver of all the conditions precedent, Completion shall take place on the Completion Date. Subject to the payment of the Expected Dividend as set out in the following paragraph, it is agreed between the parties that, upon Completion, the Company together with its wholly-owned subsidiary, Smartstate, shall be entitled to all the net profits or losses of Guangzhou Denway (as the case may be) and any dividends, bonus shares and warrants etc, declared and distributed by Guangzhou Denway for the period from 1 January 2005 onwards. Arrangement for the final dividend to be declared, if any, by Guangzhou Denway For the 6 months ended 30 June 2004, Guangzhou Denway has declared and paid an interim dividend to the then shareholders of Guangzhou Denway. Pursuant to the Acquisition Agreement, it is agreed that the Company shall procure Smartstate to pay to City Achieve, being the then sole shareholder of Smartstate immediately prior to Completion, a certain portion of the final dividend (the `Expected Dividend') of Guangzhou Denway for the year ended 31 December 2004 (the `Guangzhou Denway Dividend') to be declared after the date of this announcement, if any, within 7 days upon receipt of the said Guangzhou Denway Dividend by Smartstate. The amount of the Expected Dividend payable to City Achieve will be determined based on the following formula: Expected (Net profit x Guangzhou x 5% Dividend = [ for the year Denway ended 31 Dividend December 2004 of Guangzhou Denway - Net profit for the six months ended 30 June 2004 of Guangzhou Denway ) ] ------------------ Net profit for the year ended 31 December 2004 of Guangzhou Denway In this connection, it is the intention of Guangzhou Denway that any Guangzhou Denway Dividend to be recommended will be in line with its current dividend policy, which shall not be more than 50% of the Guangzhou Denway's distributable annual profits in any financial year.