10:22 CHINA VELOCITY<00149>-Announcement&Resumption of Trading(2) at 31 December 2004. In determining the Consideration, the fact that the Vendor is disposing of the controlling interest in More Cash together with the Sale Loans under the Agreement has also been taken into accounts. The Directors consider that the terms of the transaction are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole. HK$1,000,000 will be paid by the Purchaser to the Vendor as deposit and part payment of the Consideration within 7 business days after the date of the Agreement. The Purchaser is obliged to pay or procure the payment of the balance of the Consideration of HK$89,000,000 to the Vendor on the Completion Date. Conditions Precedent: Completion is conditional upon satisfaction of the following conditions: (i) the representations, warranties and undertakings or indemnities made or given by the Vendor to the Purchaser in the Agreement remaining true and accurate and not misleading in any material respect at Completion; (ii) the Vendor having complied fully with its pre- completion undertakings stipulated in the Agreement; and (iii) each of the Purchaser, the Vendor and the Company having obtained all necessary consents and approvals from third parties (including governmental or official authorities or agencies) required under applicable laws and the Listing Rules. If the condition precedents are not fulfilled on or prior to the date immediately before the Completion Date, the Agreement shall terminate and none of the parties shall have any claim of any nature against the other party except for any claim for rights and liabilities accrued prior thereto (save in respect of the deposit referred to in the section headed "Consideration" above which shall be refunded to the Purchaser). Other Terms: Additional terms include in summary the following: (i) the Vendor shall deliver a deed of tax indemnity in favour of the Purchaser on Completion to cover any tax incurred by More Cash and its subsidiaries before Completion, and the Vendor will be bound by the indemnity for 6 years; and (ii) the shareholders deed to be entered pursuant to the First Agreement the details of which were announced in the First Announcement will not be delivered at Completion. Principal activities of the Company, the Vendor, More Cash and the Purchaser The Company is principally engaged in property development in the PRC. The Vendor, More Cash and the Purchaser are investment holding companies. Information on More Cash and Sale Loans More Cash is a wholly owned subsidiary of the Vendor, subject to the interest disposed under the First Agreement and the Vendor is a wholly owned subsidiary of the Company. After completion of the Disposal, the Company will have no further interest in More Cash. More Cash derives its profits and turnover mainly from its operating subsidiary, Jiang Nan Property, while the principal source of income of Jiang Nan Property is rental income from the Property. More Cash recorded profit before and after tax of HK$970,000 for the year ended 31 December 2003, based on its consolidated management accounts for the same year. The loss of More Cash and its subsidiaries before and after tax as recorded in its consolidated management accounts for the year ended 31 December 2004 was HK$195,000,967. The loss arose as a result of provision made to reflect the decrease in value of the Property and hence More Cash's investment value in Jiang Nan Property. More Cash and its subsidiaries recorded turnover of approximately HK$9,185,000 and HK$8,942,096 respectively for the years ended 31 December 2003 and 2004, based on its consolidated management accounts for the two years. The total expenses of More Cash and its subsidiaries as recorded in its consolidated management accounts for the year ended 31 December 2004 was approximately HK$3.8 million. More Cash has not prepared any audited accounts since it is not a requirement to do so under the laws of BVI where it is incorporated.