11:02     MELCO INT'L DEV<00200> - Announcement (10)                          

    If the legally binding long term lease in respect of                      
    the Land is not formally granted to Melco Hotels by 31st                  
    December 2006, then Great Respect is required to                          
    transfer the Convertible Loan Notes to Melco for                          
    cancellation, and Melco is required to pay the proceeds                   
    received by it from Great Respect on subscription of                      
    the Convertible Loan Notes to Melco Entertainment, by                     
    way of refund in full of the purchase price for the                       
    acquisition of Great Respect's interest in the Joint                      
    Venture.                                                                  
                                                                              
    The following diagrams illustrate the structure of                        
    Melco's gaming, entertainment and hospitality                             
    businesses in Asia Pacific and Greater China before and                   
    after completion of the acquisitions described above:                     
                                                                              
    Before Completion                                                         
                                                                              
                                                                              
                                                                              
                                                                              
    Notes:                                                                    
                                                                              
    (1)   Melco Entertainment currently holds 70% of Great                    
    Wonders, but has agreed to acquire the remaining 30%                      
    from STDM pursuant to the arrangements described in                       
    Melco's announcement dated 22nd March 2005.                               
                                                                              
    (2)   Great Respect is a company controlled by a                          
    discretionary family trust of Dr. Stanley Ho.                             
                                                                              
    (3)   Melco Hotels is a wholly-owned subsidiary of                        
    Melco Leisure.                                                            
                                                                              
    After Completion                                                          
                                                                              
                                                                              
    Notes:                                                                    
                                                                              
    (1)   Melco Entertainment currently holds 70% of Great                    
    Wonders, but has agreed to acquire the remaining 30%                      
    from STDM pursuant to the arrangements described in                       
    Melco's announcement dated 22nd March 2005.                               
                                                                              
    (2)   Holds the right to apply to the Macau Government                    
    to be granted a long term lease in respect of the Land,                   
    for the construction and development of a hotel complex,                  
    derived from the Joint Venture.                                           
                                                                              
    The First Agreement                                                       
    Date   :   11th May 2005                                                  
                                                                              
    Parties   :   Great Respect, as assignor                                  
                                                                              
    Melco Entertainment, as assignee                                          
                                                                              
    Melco, as issuer of the Convertible Loan Notes                            
                                                                              
    Interest to be acquired   :   49.2% interest in the                       
    Joint Venture held by Great Respect                                       
                                                                              
    Consideration   :   HK$1,175 million                                      
                                                                              
    Terms of Payment   :   The consideration of HK$1,175                      
    million is payable in cash on completion. However,                        
    Great Respect has agreed to immediately apply the                         
    entire amount of the consideration received by it on                      
    completion of the First Agreement to subscribe for the                    
    Convertible Loan Notes                                                    
                                                                              
    Other Terms   :   If the legally binding long term lease                  
    in respect of the Land for the construction and                           
    development of an integrated entertainment resort is                      
    not formally granted by the Macau Government on or                        
    before 31st December 2006, Great Respect is required                      
    to surrender the entire amount of the Convertible Loan                    
    Notes to Melco for cancellation, and Melco is required                    
    to pay the proceeds received by it from Great Respect                     
    on subscription of the Convertible Loan Notes to Melco                    
    Entertainment, by way of refund in full of the purchase                   
    price for the acquisition of Great Respect's interest                     
    in the Joint Venture