11:50 CHINA EAST AIR<00670> - Announcement (5) Conditions, completion and delivery Conditions precedent The Acquisition Agreement is conditional upon fulfillment of the following conditions precedent: (i) the approval of the Proposed Acquisition by the Independent Shareholders being obtained at the AGM, at which CEA Holding and its associate(s), if any, will abstain from voting; and (ii) the results of the independent valuation as of 31st December, 2004 of the assets and liabilities to be acquired by the Company under the Proposed Acquisition being approved by the State-owned Assets Supervision and Administration Commission of the PRC State Council; and (iii) the transaction under the Proposed Acquisition being approved by the State-owned Assets Supervision and Administration Commission of the PRC State Council. As mentioned before, approvals from the State-owned Assets Supervision and Administration Commission of the PRC State Council in respect of the conditions numbered (ii) and (iii) above have been obtained, and these two conditions precedent have thereby been fulfilled. Completion After the above conditions are fulfilled (which is currently expected to occur on 30th June, 2005), the parties shall proceed with completion in accordance with the terms and conditions of the Acquisition Agreement. Completion of the Proposed Acquisition shall be deemed to take place on the Effective Date (i.e. the last date of the calendar month in which the above conditions are fulfilled), subject to all necessary third-party consents required to effect the transfers of the relevant assets and liabilities being obtained (including the consents mentioned in the paragraph headed "Proposed Acquisition - Consideration and payment terms - payment terms" above). Delivery Under the Acquisition Agreement, CEA Holding shall, within five business days from the Effective Date, deliver to the Company the relevant assets and liabilities relating to the aviation businesses of CEA Northwest and CEA Yunnan being acquired, including all documents evidencing or constituting ownership of such assets and liabilities. Further, CEA Holding shall, forthwith after the Effective Date, proceed with the required procedures to transfer to the Company all necessary business licences, permits and registrations associated with the airlines operations and businesses of CEA Northwest and CEA Yunnan. CEA Holding, CEA Northwest and CEA Yunnan shall also obtain consent from the Civil Aviation Administration of China for the transfer of the relevant air routes to the Company immediately after the Effective Date. Ownership of the assets and liabilities to be acquired Pursuant to the Acquisition Agreement, the ownership of the assets and liabilities to be acquired in relation to the aviation businesses of CEA Northwest and CEA Yunnan will pass from CEA Northwest and CEA Yunnan to the Company upon completion of the Acquisition Agreement. All gains and losses arising from and attaching to such assets and liabilities (including those occasioned prior to the Acquisition Agreement and subsisting at completion) will become gains and losses of the Company forthwith after completion of the Acquisition Agreement. In cases where the transfers of the assets and liabilities in relation to the aviation businesses of CEA Northwest and CEA Yunnan are subject to any necessary third-party consents (including, for example, the consents mentioned in the paragraph headed "Proposed Acquisition - Consideration and payment terms - payment terms" above) or can only be effected after appropriate amendments are made to the relevant contracts or after registration or filing procedures with the relevant PRC authorities are duly performed pursuant to the relevant PRC laws and regulations, and therefore cannot be fully effected immediately upon completion of the Acquisition Agreement, CEA Northwest and CEA Yunnan will hold and administer such assets and liabilities on behalf of the Company from the date of the Acquisition Agreement until such transfers are fully effected.