09:09 HERITAGE INT'L<00412>-Announcement&Resumption of Trading(4) each shareholders' loan shall be repaid at the same time so that no part of shareholders' loan shall be repaid unless a like proportion of each of the shareholders' loan is simultaneously repaid. As at the date of this announcement, the form of repayment has not been decided. Termination of the Shareholders Agreement The Shareholders Agreement will terminate upon the earlier of:- (1) a written agreement to terminate by all parties to the Agreement; or (2) the liquidation, dissolution or winding up of Found Macau; or (3) Found Macau raising HK$500 million (inclusive of the Found Macau Loan and the shareholders' loans from Vision Gate and Alpha Aim) as contemplated under the Shareholders Agreement (as the Founders should no longer be shareholders of Found Macau by then). The shareholders of Found Macau have agreed to use reasonable endeavours to locate new Investors to invest in the form of loans of HK$500 million by 31st March, 2005 (or such other date as the shareholders of Found Macau may agree).l New Issue of FM Shares The shareholders of Found Macau will agree that once HK$500 million of shareholders loans (in whatever form) is raised by Found Macau, Found Macau shall issue 2 new FM Shares at the par value of US$1.00 each to such persons (currently intended to be a company held by employees, directors of Found Macau etc. but who have not been identified at the date of this announcement) as the board of Found Macau shall approve. When the shareholders' loans (in whatever form) of HK$500 million is repaid in full, the holders of the 2 new FM Shares shall be entitled to share in dividends of Found Macau pro-rata to their shareholding and such 2 new FM Shares shall in all respects rank pari passu to all other FM Shares. Based on the terms of the Shareholders Agreement for such issue of 2 new FM Shares, the dilution effect is expected to be minimal. The reason for this arrangement is to provide incentives to the employees and directors of Found Macau to locate new investors, to source new investment projects and manage such projects for Found Macau and generally to contribute towards the success of Found Macau. This arrangement however will allow them to reap returns only when the shareholders' loans are repaid. FOUND MACAU LOAN Subject to approval by Shareholders at the SGM, the Found Macau Loan in the amount of HK$100,000,000 to be made by Rightmind to Found Macau shall be satisfied as to a minimum of HK$50,000,000 in cash (to be funded from the net proceeds of the Placing) and as to the balance by the issue by the Company of the FM Convertible Note as described in the section headed `FM Convertible Note' below. The Found Macau Loan will be unsecured, interest free and repayable after 8 years from the date of drawdown on demand and will be evidenced by the Promissory Note to be executed by Found Macau in favour of Rightmind once the shareholders loans in the amount of HK$500 million have been advanced to Found Macau. Once advanced, the Found Macau Loan constitutes an advance to an entity under Rule 13.13 of the Listing Rules. The Company intends to fund the Found Macau Loan with the net proceeds of the Placing of the New Convertible Notes or the issue of the FM Convertible Note. GENERAL INFORMATION Found Macau: Found Macau is an investment holding company and it intends to invest in gambling, entertainment and related businesses (currently expected to be businesses including but not limited to the operation of hotels, food and beverage facilities etc.) in Macau through its subsidiaries. Found Macau is intended to act as a holding company and will make investments through subsidiaries to be formed. Found Macau is in the process of incorporating subsidiaries for future investments. Found Macau has presently identified two investment targets in Macau and expects to enter into preliminary agreements shortly but no assurance is given that they will be entered into or as to their terms. One of the identified targets is a vacant piece of land in Macau of approximately 260,000 square feet, the acquisition consideration of which is expected to be in the region of HK$240 million to HK$300 million. Found Macau currently intends to build a hotel housing a casino on the land. The second identified target relates to the lease of a property of approximately 10,000 to 15,000 square feet hotel already in operation in Macau and then renovating, decorating, preparation and delivery of this property to a casino or slot machine operator on terms to be agreed. The cost of this investment is expected to be in the region of HK$150 million. The terms and exact details of such investments are subject to negotiation and finalisation. Based on information provided to the Company by Found Macau, Found Macau has no current right or intention to directly engage in the operation of casinos. To the best of the knowledge of the Company, the owners of the vacant pieces of land and the lease are not Connected Persons of the Company.