10:11 FAIRWOOD HOLD<00052> - Announcement & Resumption (3) Leaseback are fair and reasonable and the Disposal and the Leaseback are in the best interests of the Company and its shareholders as a whole. USE OF PROCEEDS The net proceeds from the Disposal is estimated to be approximately HK$27,000,000. Presently, the Board intends that the entire amount of the said net proceeds will be used for the expansion of the Group's investment in any new fast food restaurants and working capital. GENERAL The principal activity of the Group is the operation of a chain of restaurants in Hong Kong. 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 Independent Shareholders' approval requirements of the Listing Rules. In accordance with the Listing Rules, Mr. Dennis Lo and his associates will abstain from voting on the resolution to be proposed at the SGM in relation to the Disposal and the Leaseback. An independent committee of the Board comprising the independent non-executive Directors will be formed to advise the Independent Shareholders on how they should vote in relation to the Disposal and the Leaseback. An independent financial adviser will be retained to advise the independent committee of the Board and the Independent Shareholders on the Disposal and the Leaseback. 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. DEFINITIONS In this announcement, the following expressions have the meanings set out below, unless the context otherwise requires: "Agreement" the provisional agreement for sale and purchase dated 7 May 2005 between the Vendor, the Purchaser and an estate agent for the Disposal; "applicable ratio", each of them has the meaning ascribed to it under the Listing Rules; "associate" and "connected person" "Board" the board of Directors; "Company" Fairwood Holdings Limited, a company incorporated in Bermuda with limited liability and whose shares are listed on the Stock Exchange; "Completion Date" the date of completion of the Agreement, which shall be on or before 1 August 2005; "Consideration" HK$28,000,000, being the selling price for the Property; "Directors" the directors of the Company; "Disposal" the disposal of the Property contemplated under the Agreement; "Group" the Company and its subsidiaries; "Independent Shareholders other than Mr. Dennis Lo and his