10:34 TERN PROPERTIES<00277> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. TERN PROPERTIES COMPANY LIMITED (Incorporated in Hong Kong with limited liability) (Stock Code: 277) DISCLOSEABLE TRANSACTION AND DISCLOSURE PURSUANT TO RULE 13.16 OF THE LISTING RULES On 1 April 2005, Win Easy (which is a 50% associated company of the Company) entered into the Legal Charge with the Bank for securing the repayment of liabilities by Win Easy from time to time commencing from the date of the Legal Charge, including liabilities arising from the provision of banking facilities of up to HK$200,000,000 by the Bank to Win Easy, and under which the Company agreed to enter into the Corporate Guarantee Agreement. The Guarantee to be provided by the Company is on a several basis in accordance with the percentage equity interests of the Company in Win Easy of up to the lower of (i) 50% of the liabilities of Win Easy owed to the Bank from time to time commencing from the date of the Corporate Guarantee Agreement; or (ii) HK$100,000,000 (plus interest and other charges). Pursuant to the Legal Charge, the Company has also entered into the Share Mortgage in respect of its shareholding in Win Easy. The entering into of the Corporate Guarantee Agreement by the Company constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Bank is an Independent Third Party. In addition, as the amount of the Guarantee exceeds 8% of the applicable percentage ratios, the Company is also required to disclose details of the Corporate Guarantee Agreement pursuant to Rule 13.16 of the Listing Rules. A circular containing further details of the Corporate Guarantee Agreement and other information as required by the Listing Rules will be despatched to the shareholders of the Company as soon as practicable. CORPORATE GUARANTEE AGREEMENT On 1 April 2005, Win Easy (which is a 50% associated company of the Company) entered into the Legal Charge with the Bank for securing the repayment of liabilities by Win Easy from time to time commencing from the date of the Legal Charge, including liabilities arising from the provision of banking facilities of up to HK$200,000,000 by the Bank to Win Easy, and under which the Company agreed to enter into the Corporate Guarantee Agreement. The current open market value of the properties subject to the Legal Charge is HK$400 million as at 24 January 2005 (based on a report prepared by a professional valuer (who is an Independent Third Party) appointed by the Bank). The Guarantee to be provided by the Company pursuant to the Corporate Guarantee Agreement is on a several basis in accordance with the percentage equity interests of the Company in Win Easy, of up to the lower of (i) 50% of the liabilities of Win Easy (for the purpose of the facility of Win Easy to which the Guarantee relates, shall be HK$100,000,000 together with interests and costs) owed to the Bank from time to time commencing from the date of the Corporate Guarantee Agreement; or (ii) HK$100,000,000 (plus interest and other charges). The Loan carries an interest rate of 0.54% over Hong Kong Interbank Offered Rate (HIBOR) per annum. No fee or commission is payable by Win Easy to the Company for the provision of the Guarantee. As at the date of this announcement, as far as the Board is aware, Win Easy has not yet utilized any of the Loan as guaranteed by the Company (on a several basis). Pursuant to the Legal Charge, the Company has also agreed to enter into the Share Mortgage, under which the Company agreed to mortgage, charge and assign to the Bank its 1 share in Win Easy (representing 50% of the entire issued share capital of Win Easy) as a continuing security. The entering into of the Corporate Guarantee Agreement by the Company constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. In addition, as the amount of the Guarantee exceeds 8% of the applicable percentage ratios, the Company is also required to disclose details of the Corporate Guarantee Agreement pursuant to Rule 13.16 of the Listing Rules. As at the date of this announcement, save as disclosed above, there is no other financial assistance and/or corporate guarantee provided by the Company to any of its affiliated companies that would individually