10:10 FAIRWOOD HOLD<00052> - Announcement & Resumption (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. FAIRWOOD HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 52) DISCLOSEABLE AND CONNECTED TRANSACTION CONTINUING CONNECTED TRANSACTION DISPOSAL AND LEASEBACK OF PROPERTY The Board announces that on 7 May 2005, the Vendor, an indirect wholly-owned subsidiary of the Company, entered into the Agreement with the Purchaser, pursuant to which the Vendor conditionally agreed to sell the Property to the Purchaser at a consideration of HK$28,000,000. Upon the completion of the Agreement, the Vendor will enter into the Tenancy Agreement with the Purchaser to lease back the Property at a monthly rental of HK$163,800 for a term of two years and six months. The Tenancy Agreement will grant to the Vendor two options to renew the tenancy for an aggregate term of 3 years and 6 months after the expiry of the initial term. The Company will comply with the applicable requirements of the Listing Rules in exercising the aforesaid options to renew the Tenancy Agreement. The Disposal constitutes a discloseable transaction for the Company under the Listing Rules. As the ultimate beneficial owners of the Purchaser are Mr. Lo Hoi Chun and his associate, a cousin of Mr. Dennis Lo (the Chairman and Chief Executive of the Company), the Disposal constitutes a connected transaction, and the Leaseback will constitute a continuing connected transaction, for the Company under the Listing Rules. As the Consideration for the Disposal is more than HK$10,000,000 and the applicable ratio is more than 2.5%, the Disposal as well as the Leaseback are subject to the reporting, announcement and the Independent Shareholders' approval requirements of the Listing Rules. A circular containing, among other things, (i) further details of the Disposal and the Leaseback; (ii) the advice of the independent financial adviser to the independent committee of the Board and the Independent Shareholders in relation to the Disposal and the Leaseback; (iii) the recommendation of the independent committee of the Board to the Independent Shareholders in relation to the Disposal and the Leaseback; and (iv) a notice convening the SGM, will be despatched to the Shareholders as soon as practicable. Trading in the shares of the Company on the Stock Exchange has been suspended from 9:30 a.m. on 9 May 2005 at the request of the Company pending the issue of this announcement. Application has been made to the Stock Exchange for the resumption of trading of the shares of the Company on the Stock Exchange from 9:30 a.m. on 10 May 2005. THE AGREEMENT DATED 7 MAY 2005 Parties Vendor: Fairwood Fast Food Limited, an indirect wholly-owned subsidiary of the Company. Purchaser: Front Land Properties Limited, the ultimate beneficial owners of which, to the best of the knowledge of the Directors, are Mr. Lo Hoi Chun and his associate, a cousin of Mr. Dennis Lo (the Chairman and Chief Executive of the Company). According to the knowledge of the Board, the Purchaser is a property holding company. Estate Agent: an independent third party. The Directors confirm that to the best of the Directors' knowledge, information and belief and having made all reasonable enquiry, the estate agent and its ultimate beneficial owner are not connected persons of the Company. PROPERTY TO BE DISPOSED Unit No. 6 on Ground Floor and the whole of Mezzanine Floor, Galaxy Plaza, No. 2 Mong Lung Street, Shaukeiwan, Hong Kong, which has been acquired by the Vendor for more than 1 year. The Group operates a fast food restaurant at a majority portion of the Property, and has leased out a small portion of the Property to an independent third party at a monthly rental of HK$13,800 for a term of 2 years commenced from 1 August 2004, subject to the tenant's option to renew the said tenancy for a further term of two years thereafter. CONSIDERATION