09:28 SNP LEEFUNG<00623> - Announcement (3) On Completion, the Company shall procure that a shareholders' loan of an amount equal to 60% of the Shareholders' Loan less the Deduction, if any, and less any amounts owing from the Vendors and/or the Warrantors to Yau Yue as at the date of Completion shall be made to Yau Yue. Conditions Completion is conditional upon the following conditions: (a) the approval by the Shareholders of the Acquisition Agreement, the purchase of the Sale Shares, the acceptance of the Call Option and the grant of the Put Option, at a duly convened special general meeting (if necessary) or the obtaining of a written approval from SNP Corporation Ltd, being acceptable to the Stock Exchange, in lieu of holding a general meeting; (b) the Company undertaking a due diligence investigation in respect of Yau Yue including but not limited to the affairs, business, assets, results, legal and financing structure of Yau Yue and the Company being satisfied with the results of such due diligence investigation; (c) no event having occurred since the date of the Acquisition Agreement to Completion, the consequence of which is to materially and adversely affect the financial position, business or property, results of operations or business prospects of Yau Yue and such material adverse effect shall not have been caused; (d) the Company being satisfied that Yau Yue has no subsidiaries or interest in any other company and that its former subsidiary has been validly and effectively disposed of by Yau Yue; (e) the Company having despatched a circular to its shareholders in connection with the transaction contemplated in the Acquisition Agreement as required under Chapter 14 of the Listing Rules; and (f) the warranties given by Keep Happy, Winter Stars and the Warrantors in the Acquisition Agreement, which relate to, among others, the business and operations, properties, accounts, taxation, litigation and financial matters of Yau Yue, remaining true and accurate and not misleading at Completion and at all times between the date of the Acquisition Agreement and Completion. If any of the above conditions have not been fulfilled or waived by the Company (other than condition (a) which may not be waived) on or before 30 June 2005 (or such other date as the parties may agree), the Acquisition Agreement shall terminate. Subject to the fulfillment (or waiver) of the conditions on or before 30 June 2005 (or such other date as the parties may agree), Completion shall take place on the fifth business day after all the conditions have either been fulfilled or waived or at such other time as the parties shall agree. Profit undertaking Keep Happy, Winter Stars and the Warrantors have jointly and severally undertaken to the Company that in the event that the aggregate Net Profit for the Relevant Period shall be less than HK$60 million ("Attained Lower Profit"), Keep Happy and Winter Stars will pay to the Company an amount equal to 60% of the shortfall of the Attained Lower Profit bears to HK$60 million provided that the amount to be paid by Keep Happy and Winter Stars in total shall not exceed HK$68.4 million less 60% of the audited net asset value of Yau Yue as at 31 December 2007. The Options The Vendors have granted to the Company the option to require the Vendors to sell to the Company the Call Option Shares (which shall not be less than 40% of the issued share capital of Yau Yue) at an aggregate consideration ("Call Option Consideration") of (i) if the aggregate Net Profit for the Relevant Period is not less than HK$30 million, 40% of a price earnings multiple of 6 times on the yearly average Net Profit for the Relevant Period or 40% of the audited net asset value of Yau Yue (ex-Dividend) as at 31 December 2007 (whichever is the higher); or (ii) if the aggregate Net Profit for the Relevant Period is less than HK$30 million, 40% of a price earnings multiple of 6 times on the yearly average Net Profit for the period from 1 January 2005 to 31 December 2008 or 40% of the audited net asset value of Yau Yue (ex-Dividend) as at 31 December 2008 (whichever is the higher). The price earnings multiple of 6 times used for determining the Call Option Consideration has been agreed among the parties after arm's length negotiation. The Directors consider that such price earnings multiple