09:23 LAI SUN DEV<00488> - Announcement (2) The Sellers have agreed to sell the FIHL Shares, representing the entire issued share capital of FIHL to Vina. The Sellers have agreed to assign the Shareholder Debt, being the amount outstanding on the Closing Date under the two loan agreements, both dated 7 December 2004, between the Sellers (as lenders) and FIHL (as borrower) to Vina. The Sellers have also agreed to procure the assignment of the Outstanding Fee to Vina. The Outstanding Fee is the amount actually outstanding on the Closing Date and owed by IBHJV, a 62.63% indirect subsidiary of the Company and the owner of the Furama Resort, to FHRI, a wholly owned subsidiary of the Company, under the Operation and Management Agreement. The amount of the Shareholder Debt and Outstanding Fee assigned to Vina will be determined on the Closing Date which is expected to be on 8 July 2005 or such other date as the Sellers and Vina shall agree in advance of 8 July 2005, in writing. Price The aggregate purchase price for the FIHL Shares, Shareholders Debt and Outstanding Fee (together the Assets) is US$16,800,000 (being approximately HK$131 million) (the Price). The Price is payable in several instalments. Vina paid the first instalment of US$4,000,000 (being approximately HK$31 million) to the Escrow Agent on signing of the Sale and Purchase Agreement on 8 April 2005. On 9 May 2005, Vina is required to pay the Escrow Agent a further instalment of US$4,700,000 (being approximately HK$37 million) to be held by the Escrow Agent in accordance with the terms of the Escrow Agreement. On 8 June 2005, Vina is required to pay the Escrow Agent a further instalment of US$4,700,000 (being approximately HK$37 million) to be held by the Escrow Agent in accordance with the terms of the Escrow Agreement. On Closing, Vina is required to pay the balance of the Price, which is the sum of US$3,400,000 (being approximately HK$27 million), to the Escrow Agent. On Closing, the money paid to the Escrow Agent by Vina will be released by the Escrow Agent to Law Debenture Corporation (H.K.) Limited acting as security trustee of HK$266,058,100 zero coupon bonds due 31 December 2005 issued by Lai Sun International Finance (2004A) Limited and guaranteed by the Company and constituted by the trust deed dated 7 December 2004 (the Series A Bonds). The terms of the Series A Bonds were set out in the Company's circular dated 15 September 2004. The Price and other terms and conditions of the Sale and Purchase Agreement were negotiated with Vina following an invitation made by the Company through its professional property advisers to prospective purchasers of the Assets. The bidding process including, without limitation, the negotiations were conducted on an arm's length basis. The assignment of the Outstanding Fee will be the amount of fees outstanding from IBHJV to FHRI under the terms of the Operation and Management Agreement as at 8 July 2005 or such other date as the Sellers and Vina shall agree as the Closing Date in advance of 8 July 2005, in writing. In the Sale and Purchase Agreement, the Sellers warrant to Vina, amongst other things, that on Closing the total amount of the Shareholder Debt will not be less than HK$ 187,423,806 and the Outstanding Fee will not be less than US$300,000 (being approximately HK$2.3 million). There will be no adjustment of the Price to reflect the actual amount of Shareholder Debt and Outstanding Fee on Closing and therefore, the Sellers' warranty was an estimate of the minimum amount of the Outstanding Fee as at Closing, which will include the management fees that FHRI accumulates from 28 February 2005 to Closing under the Operation and Management Agreement, which Vina has found acceptable. Guarantee The Company as Guarantor has unconditionally and irrevocably guaranteed to Vina as a continuing obligation the proper and punctual performance by the Sellers of all their obligations under or pursuant to the Sale and Purchase Agreement and related Transaction Documents. Management Extension The Furama Resort is owned by IBHJV and is currently managed by FHRI under the Operation and Management Agreement. Vina intends the Furama Resort to be managed by FHRI and to keep its name after Closing. As the existing Operation and Management Agreement between IBHJV and FHRI expires on 31 March 2006, Vina has agreed to procure IBHJV to extend the Operation and Management Agreement for a further two years after Closing