Esprit : DISCLOSEABLE TRANSACTION for SALE AND LEASE BACK OF HONG KONG OFFICES

Date:

21 December 2015 (after trading hours)

Parties:

The Vendor, a wholly owned subsidiary of the Company, and the Purchasers

Agreement:

The Vendor agreed to sell, and the Purchasers agreed to purchase, the Sale Assets.

Sale Assets:

1. The entire issued share capitals of the Target Companies which own the Properties comprising 41/F, 43/F, 45/F, 47/F and 49/F, 16 car parking spaces and the Signage Area of Enterprise Square Three, No. 39 Wang Chiu Road, Kowloon Bay, Kowloon, Hong Kong (the "Sale Shares"); and

2. the loans owing by the Target Companies to the Vendor (the "Sale Loans").

Purchase Price:

The purchase price is based on the aggregate net asset value of the Target Companies on Completion to be determined in accordance with the SPA. The net asset value will in effect be computed on the basis of attributing a value of HK$918 million to the Properties and disregarding the Sale Loans as a liability.

Payment of Final Purchase Price:

The Purchase Price shall be paid by the Purchasers to the Vendor as follows:

1. an initial deposit of HK$91,800,000 ("Initial Deposit") has been paid;

2. a further deposit of HK$45,900,000 ("Further Deposit") will be paid on or before 20 January 2016;

3. an amount equal to the balance of the Purchase Price computed on the basis of draft accounts of the Target Companies made up to the date of Completion will be paid at Completion; and

4. any adjustments to the Purchase Price as finally determined by the accounts of the Target Companies made up to the date of Completion, will be paid by the relevant Purchaser to the Vendor, or by the Vendor to the relevant Purchaser, as the case may be, within 5 business days after such final determination.

Completion:

Completion shall take place on 21 March 2016 or such other date as the Vendor and the Purchasers may agree in writing.

Lease Back of the Properties (save for the 41/F and 3 car parking spaces):

At Completion, four Leases will be concluded between Red Giant as tenant and the relevant Target Companies as landlords in respect of 43/F, 45/F, 47/F and 49/F, 13 car parking spaces and the Signage Area of the Building.

Red Giant will be granted a free of charge license period for 75 days from Completion during which it will pay rates, management and air-conditioning charges and all other outgoings of an annual or non-capital nature.

The Leases will commence immediately after the expiry of the license period ("Lease Commencement Date").

Guarantees:

The Company has agreed to guarantee certain obligations of the Vendor under the SPA and Red Giant (its wholly-owned subsidiary) as tenant under the Leases.

Parties:

Red Giant as tenant and the Target Companies as landlords

Properties involved:

The Properties except the 41/F and 3 car parking spaces of the Building

Duration:

Six years from the Lease Commencement Date (see the last paragraph in the section headed "Principal Terms of the SPA" above), subject to the tenant's right to surrender/terminate as described below

Rent:

For the first 3 years, the rent for each of the four Leases will be HK$607,605.50 per month, and (subject to the 43/F Lease being surrendered or terminated as described below) the aggregate rent for all Leases will hence be HK$2,430,422 per month, exclusive of rates, management and air-conditioning charges and other outgoings of an annual or non-capital nature.

For the second 3 years, the rent for each Lease will be HK$729,126.60 per month, and (subject to any Leases being surrendered or terminated by the tenant as described below) the aggregate rent for all Leases will hence be HK$2,916,506.40 per month, exclusive of rates, management and air-conditioning charges and other outgoings of an annual or non-capital nature.

Tenant's Option to

Surrender/Terminate:

Red Giant will have an option to surrender/terminate :

1. the 43/F Lease after the expiration of the first twelve months from the Lease Commencement Date without any penalty by serving not less than three months' prior written notice to the landlord;

2. any of the Leases, with effect on the day before the commencement of the 4th year of the lease term without