09:33 MELCO INT'L DEV<00200> - Announcement (4) It is contemplated that according to the past business practice adopted under the former Equipment Lease Agreements, SJM will settle the relevant payment under the Service Arrangement in cash on or before the 10th day of each calendar month based on the aggregate gross income of all the electronic gaming machines in the Existing Sites generated during the immediate preceding month. Termination : During the service period, the Service Arrangement will be terminated on the occurrence of the following events whichever is earlier: (i) on the expiration of SJM's gambling license under the Gaming Concession Contract on 31 March 2020 or any earlier termination thereof; or (ii) winding up or cessation of business of either party. In addition, the Service Arrangement may be terminated by either party unilaterally giving not less than one year prior notice to the other; or by not less than six months prior notice if the termination is mutually agreed by both parties; or by either party giving immediate notice to the other who is in default of the terms of the Service Arrangement. Other terms : During the service period, the electronic gaming machines installed at the Existing Sites shall remain the property of Mocha Slot provided that the ownership, title and rights attached to such electronic gaming machines then installed as at the date of the termination of SJM's gambling license shall automatically vest in the Macau Government without compensation to Mocha Slot in accordance with the terms of the Gaming Concession Contract. PROPOSED ANNUAL CAPS As at the date of this announcement, there are altogether 647 electronic gaming machines supplied and installed by Mocha Slot at the Existing Sites with the average number of approximately 160 electronic gaming machines in each Existing Site. By taking into account the following factors: (i) the average net win per electronic gaming machine per day (during the period from 12 September 2003, being the date of opening of the first Existing Site, to 31 December 2004) according to the internal record of Mocha Slot Group Limited; (ii) the statistics obtained from the quarterly results of Las Vegas Sands, Inc., the operator of the Sands Casino in Macau, as at 30 September 2004 filed with the Securities and Exchange Commission in the United States, namely (a) there were a total of 667 electronic gaming machines installed in the Sands Casino in Macau as at 30 September 2004; and (b) during the three months ended 30 September 2004 (a total of 92 days), the total amount wagered on its electronic gaming machines was US$110 million (equivalent to approximately HK$855.80 million); (iii) assuming the Sands Casino in Macau has adopted the respective Hold Percentages of 5%, 10%, 15%, 20% and 25% and based on the number of electronic gaming machines installed therein, the said total wagered amount of approximately HK$855.80 million during the period cited represented a daily net win per machine of HK$697.31, HK$1,394.63, HK$2,091.94, HK$2,789.26 and HK$3,486.57 respectively; (iv) according to the market practice, the Hold Percentage varies from casino to casino in Macau depending on the relevant casino's internal policy and the types of electronic gaming machines and generally ranges from 5% to 25%; (v) as disclosed in various announcements and circular of Melco respectively dated 23 November 2004, 23 December 2004 and 5 January 2005, upon completion of the luxury hotel owned by the JV Group in Taipa, Macau in the fourth quarter of 2006, there would be an additional slot hall to be operated by SJM with Mocha Slot as the service provider (subject to the approvals of the Macau Government authorities). It is currently expected that such new slot hall will house approximately 1,300 electronic gaming machines; and