10:35 TERN PROPERTIES<00277> - Announcement (2) and/or in aggregate exceed 8% of the applicable percentage ratios and thus would be required to be disclosed pursuant to Rule 13.16 of the Listing Rules. REASONS FOR AND BENEFITS OF THE ENTERING INTO OF THE CORPORATE GUARANTEE AGREEMENT Win Easy (which is a 50% associated company of the Company) had entered into the Legal Charge for securing the repayment of liabilities owing to the Bank by Win Easy, including liabilities arising from the provision of banking facilities by the Bank, which include a revolving loan of HK$100,000,000 and the term loan of HK$100,000,000 (which have a final maturity date of 5 years from the date of initial drawdown). The Loan will be utilized by Win Easy as general working capital. The Board (including the independent non-executive directors) considers that since Win Easy is a 50% associated company of the Company, support should be given on the several basis for the purpose of its raising financing. Given that both the Corporate Guarantee Agreement and the Share Mortgage were entered into on normal commercial terms, the terms thereof are fair and reasonable so far as the Company and the shareholders of the Company as a whole are concerned. GENERAL The Group is principally engaged in property investment and development. Win Easy is principally engaged in property investment. To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, the Bank and its ultimate beneficial owner(s) are Independent Third Parties. The entering into of the Corporate Guarantee Agreement constitutes a discloseable transaction of the Company under Chapter 14 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. DEFINITIONS In this announcement, the following expressions have the meanings set out below unless the context requires otherwise: "affiliated company(ies)" as such term is defined under the Listing Rules "associate(s)" as such term is defined under the Listing Rules "Bank" the licensed bank registered under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) who acts as the lender of the Loan and a party to, inter alia, the Corporate Guarantee Agreement, Legal Charge and the Share Mortgage "Board" the board of Directors "Company" Tern Properties Company Limited, a company incorporated in Hong Kong with limited liability, the Shares of which are listed on the Stock Exchange "Corporate Guarantee Agreement" the corporate guarantee agreement dated 1 April 2005 entered into between the Company and the Bank for the provision of the Guarantee by the Company to the Bank "Directors" the directors of the Company "Group" the Company and its subsidiaries "Guarantee" the corporate guarantee to be provided by the Company in respect of the Legal Charge, pursuant to the terms of the Corporate Guarantee Agreement "Hong Kong" the Hong Kong Special Administrative Region of the People's Republic of China "Independent Third Party(ies)" independent third party(ies) which is(are) not connected with the chief executive, directors and substantial shareholders of the Company or its subsidiaries or their respective associates "Legal Charge" the legal charge of interests in 4,932/7,498th parts of Kowloon Inland Lot No. 8437, Kowloon Inland Lot No. 8244 and Kowloon Inland Lot No. 10218 (the whole Basement to 6th Floor together with extension (if any), 8th Floor and 9th Floor, Tern Plaza, Kowloon, Hong Kong) dated 1 April 2005 entered into between Win Easy and the Bank for