Suncity : (I) MEMORANDUM OF UNDERSTANDING IN RELATI…

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太陽城集團控股有限公司

(formerly known as "Sun Century Group Limited" " 太陽世紀集團有限公司 ")

(Incorporated in the Cayman Islands with limited liability)

1. MEMORANDUM OF UNDERSTANDING IN RELATION TO THE PROPOSED ACQUISITION OF THE ENTIRE EQUITY INTEREST IN AND SHAREHOLDER'S LOAN OWED BY STAR ADMIRAL LIMITED; AND
2. MEMORANDUM OF UNDERSTANDING IN RELATION TO THE PROVISION OF CONSULTANCY AND MANAGEMENT SERVICES

This announcement is made by the Company pursuant to Rule 13.09(2) of the Listing Rules and Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

On 22 June 2017 (after trading hours of the Stock Exchange), the Purchaser, a direct wholly- owned subsidiary of the Company, and the Vendor entered into the Acquisition MOU in relation to the proposed acquisition of the entire equity interest in and shareholder's loan to the Target. The Target (a company indirectly wholly owned by Mr. Chau) owns approximately 34% equity interest in the ProjectCo. The principal asset of the ProjectCo is an integrated resort project in Hoi An, Vietnam.

On 22 June 2017 (after trading hours of the Stock Exchange), the Management Company, an indirectly wholly-owned subsidiary of the Company, and the ProjectCo entered into the Service Provision MOU in relation to the proposed provision of consultancy and management services by the Management Company in respect of an integrated resort project in Hoi An, Vietnam.

On 22 June 2017, Mr. Chau and Mr. Lo, an executive Director, entered into the Consultancy Agreement, pursuant to which Mr. Lo shall provide advisory and consultancy services to Mr. Chau in respect of an integrated resort project in Hoi An, Vietnam.

This announcement is made by the Company pursuant to Rule 13.09(2) of the Listing Rules and Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

On 22 June 2017 (after trading hours of the Stock Exchange), (i) the Purchaser, a direct wholly- owned subsidiary of the Company, and the Vendor entered into the memorandum of understanding in relation to the proposed acquisition of the entire equity interest in and shareholder's loan to the Target (i.e. the Acquisition MOU); and (ii) the Management Company, an indirect wholly-owned subsidiary of the Company, and the ProjectCo entered into the memorandum of understanding in relation to the proposed provision of consultancy and management services by the Management Company in respect of an integrated resort project in Vietnam (i.e. the Service Provision MOU). Set out below are the key terms of the Acquisition MOU and the Service Provision MOU:

Date: 22 June 2017

The Vendor is wholly owned by Mr. Chau, the Chairman and an executive Director and a controlling shareholder of the Company, and is therefore a connected person of the Company.

Pursuant to the Acquisition MOU, the Purchaser intends to acquire, and the Vendor intends to sell, the Sale Shares and the Sale Loan. The Sale Shares represent the entire issued share capital of the Target and the Sale Loan represents all obligations, liabilities and debts owing or incurred by the Target to the Vendor and its associates on or at any time prior to the Completion.

Subject to the entering into of the Acquisition Agreement, the Vendor shall (i) sell the Sale Shares to the Purchaser free from all encumbrances together with all rights now and thereafter attaching thereto including but not limited to all dividends paid, declared or made in respect thereof at any time on or after the date of the Acquisition MOU; and (ii) assign the Sale Loan to the Purchaser free from all encumbrances together with all rights, title, benefits and interests of the Vendor in the Sale Loan with all rights now and thereafter attaching thereto.

The aggregate consideration payable for the Sale Shares and Sale Loan will be subject to further negotiations between the Purchaser and the Vendor. It is intended that the consideration shall be payable by the Purchaser by cash consideration, issuing promissory notes, procuring the Company to issue convertible bonds, with a maturity of two years, carrying rights to convert into new Shares at a conversion price of HK$0.9 per Share or a combination of any of the above or any other kind of consideration to the Vendor.

The Purchaser shall, and shall procure that its advisers and agents shall forthwith upon the signing of the Acquisition MOU, conduct such review of the assets, liabilities, operations and affairs of the Target Group and the Project as it may consider appropriate, and the Vendor shall provide and procure the Target Group and its agent to provide such assistance as the Purchaser and its advisers and agents may require in connection with such review.

The Acquisition Agreement will be prepared by the solicitors of the Purchaser and will contain, including but not limited to:

1. representations, warranties, undertakings and indemnities to be given by the Vendor which are usual for transactions similar to the sale and purchase of the Sale Shares and/or the Sale Loan as contemplated by the Acquisition MOU; and

2. such conditions as the parties to the Acquisition MOU may agree and set out in the Acquisition Agreement, including but not limited to the approval from the independent Shareholders.

An exclusivity period of three months from the date of the Acquisition MOU (or such longer period as the parties to the Acquisition MOU may agree) (the"Acquisition MOU Exclusivity Period") was granted to the Purchaser, during which the Vendor will not, and will procure that the Target and its directors, officers, employees, representatives and agents will not, directly or indirectly, (i) solicit, initiate or encourage inquiries or offers from; or (ii) initiate or continue negotiations or discussions with or furnish any information to; or (iii) enter into any agreement or statement of intent or understanding with, any person or entity other than the Purchaser with respect to the sale or other disposition of the Sale Shares and/or the Sale Loan or the sale, subscription or allotment of any part thereof or any shares of the Target. If the Target or the Vendor receives such any inquiry or offer, the Vendor will promptly notify the Purchaser.

The Purchaser may at its discretion assign its rights, obligations and/or benefits under the Acquisition MOU to one of its fellow subsidiaries and may nominate one of its fellow subsidiaries to enter into the Acquisition Agreement.

The Acquisition MOU contains certain legally binding obligations regarding, among other things, due diligence review and exclusivity. However, there are no binding obligations on the parties to the Acquisition MOU in respect of the execution of the Acquisition Agreement. The terms of the Acquisition Agreement have yet to be agreed between the Purchaser and the Vendor. The Acquisition MOU may or may not lead to the entering into of the Acquisition Agreement and the transactions contemplated thereunder may or may not be consummated.

If the Acquisition Agreement is not entered into upon the expiry of the Acquisition MOU Exclusivity Period, unless otherwise agreed by the parties to the Acquisition MOU in writing, the Acquisition MOU shall cease and terminate and neither party shall have any obligations and liabilities thereunder save for any antecedent breaches of the terms thereof.