Land Purchase Transaction

The initial document that secured the Company’s interest in the land parcel at the end of the Fongkue Peninsula in the Penghu Islands, Taiwan, was a simple Heads of Agreement signed with the village chief and village elders on 28th May 1999, by MaiDor Ltd., an Isle of man company beneficially owned by Tim Potter and Ian Irvin. MaiDor’s interests in the transaction were then assigned to Amazing Ltd., as part of an agreement that was entered into between MaiDor Ltd. and Bayside Development Corporation Ltd., the latter, also an Isle of Man company, becoming the initial investor into Amazing Ltd.

The Company subsequently acquired Amazing Ltd., by means of a share for share transaction, on 2nd September 2002. There were some 102 individual pieces of land collectively owned by some 287 different land owners within the 27 acre site, whose purchase the Company has since concluded. The Company, through its subsidiaries, had to initially secure a Power of Attorney from each of the individual landowners in order to facilitate the rezoning process. The rationale for rezoning was that the land was agricultural land and the purchase was conditional upon the Company being able to use that land for commercial purposes. In addition to a Power of Attorney being given to enable the rezoning to commence, a Power of Attorney was also given by the individual landowners to the Penghu County Government, in order that he could complete the Land Purchase Agreement for, and on behalf of, each individual landowner.

The initial Land Purchase Agreement was prepared by Baker and McKenzie, Attorneys in Taipei, and it took over a year for each of the respective Power of Attorneys to be obtained, thereby securing the transaction, and, at the same time, allowing the rezoning process to commence. The involvement of the Governor meant, at that time, that the transaction could be completed as a single legal purchase rather than as a multiple transaction.

The Company had to deal with, in addition to the complexities surrounding the rezoning process, and the relocation of a considerable number of family graves. The land being acquired is ancestral land belonging to the village, and, in many cases, had been used as family burial sites for many years. This resulted in the Company becoming involved in assisting the authorities to secure a mausoleum elsewhere in the Penghu Islands and, over time, the graves were all relocated, with due family ceremony.

The rezoning process itself took considerably longer that had been envisaged, mainly because no such transaction of this nature had ever been undertaken before, but it was also an extremely thorough process and it did include a full Environmental Impact Study. All requirements for the rezoning had been met by 23rd of April 2002 and the Company was in a position, technically, to complete the land acquisition at that time. However, the final re zoning of the land from agricultural to commercial use could only be transacted when the Company had placed its Taiwanese subsidiary in funds to the extent that the land completion could commence.

It has always been the case that the Company would not complete the land transaction unless, and until, it had a commercial venture to take forward, and the Company’s ability to progress in that regard had been affected, to a greater or lesser extent, by decisions taken by the authorities in Taipei regarding the possibility of Gaming being enabled in the Penghu Islands. This issue, which was running in parallel with the Company’s land completion process, came to a head in December 2003 when the authorities in Taipei decided to hold a Referendum in the Penghu Islands regarding the issue of Gaming. The Referendum was positive in favour of Gaming but the landowners approached the Company, ahead of that Referendum, suggesting that the Company should make a partial payment on the land purchase in order to secure their position, as well as the Company’s position. This was agreed and in September 2003 the Company set about putting in place funds sufficient to enable a 10% purchase of the land to be completed and, as a result, a revised Land Purchase Agreement was prepared.

The signing of this revised Land Purchase Agreement meant that, for all practical purposes, the Company had secured the site.

In April 2005 the Company remitted funds to its Taiwanese subsidiary to commence the land completion process. By this time the Company had encountered a minor completion issue on three plots of land at the periphery of the Site, and it was necessary to have these handled by an arbitration service.

The government was required to give final approval to the land rezoning being enabled, which it could not do until the Company had sufficient funds available in Taiwan, but because of these three problem plots this meant that the Site, for approval purposes, was slightly different from the original plan, and, as such, certain documentation had to be resubmitted so that the government approval could be granted in two stages, one for the bulk of the site, and one for the remaining three problem plots of land, once the arbitration process had been successfully completed. This process was a formality but it could have resulted in a delay in settlement given that it would be illegal for the Company to buy agricultural land, and so to avoid any further delay in settlement with the land owners the Company was advised to enter into an agency contract with Mrs. Mai Potter, the wife of one of the Company’s founding Directors, in order that the Company could transact the land purchase. Since foreign nationals are also not permitted to buy agricultural land, this was deemed to be the most expedient short term solution to avoid delay until such time as title could be transferred to the Company once rezoned for commercial use.

The land purchase itself consisted of 18% government land and 82% private land. Consolidation and purchase of our 26 acre site was completed on August 29th 2007. The final transaction of the land marked the culmination of an extremely complex and arduous process commencing with the initial ‘Heads of Agreement’ between into the founders of the Company, and some 300 landowners, on 28th May 1999. The entire site was re-zoned to a commerical designation specifically assigned to Amazing (Taiwan) Ltd. under a sub-category for leisure, tourism and recreation. . .