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License Contract of Macao Special Administrative Region for the Operation of Games of Fortune or Chance or Other Casino Games

On March 28, 2002, pursuant to Order No.216/2000 issued by the Principal Executive on November 8, I, Chu Iek Chong (朱奕聰), a Secondary Senior Technician with the Legal Support Center of this Department was appointed as the substitute notary at the Head Office of the Government of Macao Special Administrative Region located at Avenida da Praia Grande (澳門特別行政區南灣大馬路政府總部), on behalf of the notary of the Finance Department, I certified the contracting parties hereunder in my presence:

The First Contracting Party: Macao Special Administrative Region, represented by the Principal Executive Ho Hau Wah (何厚鏵); Ho Hau Wah (何厚鏵) is married and his office is located at the Head Office of the Government of Macao Special Administrative Region located at Avenida da Praia Grande (澳門特別行政區南灣大馬路政府總部). I, in accordance with the provisions as specified in Article 45 of the Basic Law of Macao Special Administrative Region, thereby verified his identification and authority.

The Second Contracting Party: Sociedade de Jogos de Macao, S.A (澳門博彩股份有限公司) head office at 9/F Hotel Lisboa, No. 2-4 Avenida Hotel Lisboa, Macao (澳門葡京路2至4號葡京酒店九樓) with its registration number at the Companies Registry Office nr. 15056. Its representatives are the members of the Administration, Stanley Hung Sun Ho (何鴻燊) and Rui José da Cunha; Stanley Hung Sun Ho (何鴻燊) is married and resides at No.15, Estrada da Penha, Macao (澳門西望洋馬路15號); Rui José da Cunha is married and resides in Macao, at Flat 5A, Rua de Santa Clara No. 7 (澳門家辣堂街7號五樓A). I, based on a certifying document issued by the said registry, thereby certified their qualification and powers of authority, and filed the document.

I verified the identity of the representatives of both Party A and Party B on the ground of my acquaintance with them.

The First Contracting Party made a statement as follows in its above capacity:

By Principal Executive Order No. 217/2001, I unveiled the public bidding for the concession of 3 (three) licenses of Games of Fortune or Chance or Other Casino Games;

The public bidding for the 3 (three) licenses of Games of Fortune or Chance or Other Casino Games started with the opening of bid in two phases—-first, open each seal from the envelopes marked with “document” and next open each seal from the envelopes marked with “tender documents”; hence, the consultation phase began with an introduction to and review of the tender documents; the procedure of public bidding ended with a written report explaining reasons and the Principal Executive, according the said report, temporarily granted the operation license of Games of Fortune or Chance or Other Casino Games public bidding;

By Principal Executive Order 26/2002, was provisionally granted one of the operation licenses for the Games of Fortune or Chance or Other Casino Games to Sociedade de Jogos de Macao, S.A (hereinafter referred to as the “Concessionaire”);

The Concessionaire has provided a deposit used to secure the execution of its legal or contractual obligations pursuant to the provisions in the first paragraph of Article 84 of Administrative Regulation No.26/2001;

The Concessionaire, according to the provisions as specified in the fifth paragraph of Article 82 of Administrative Regulation No.26/2001, has testified to the First Public Bidding Committee in charge of Games of Fortune or Chance in Casino that it has paid a sum of no less than two hundred million (MOP 200,000,000) Patacas, and the capital has been deposited in a local credit organization or the branch or subsidiary of a credit organization licensed to operate in Macao Special Administrative Region;

The Concessionaire has basically agreed with the draft of License Contract of Macao Special Administrative Region for the Operation of Games of Fortune or Chance or Other Casino Games.

The Concessionaire, the shareholders and directors with 5% or more of the capital of the Concessionaire have gone through the procedure to examine if they are adequately qualified. This procedure came to an end upon the finalization of relevant reports; the reports indicated the above entities are adequately qualified;

The Concessionaire has gone through the procedure to exam if it has the financial capacity to engage in the licensed Games of Fortune or Chance or Other Casino Games. This procedure came to an end upon finalization of relevant reports; the reports indicated that the Concessionaire has adequate financial qualification;

With the above qualification statements, both contracting parties hereby agree to reach an administrative contract of Games of Fortune or Chance or Other Casino Games governed by the following rules.

"Chapter I

Object, Type and Duration of the Concession

Article 1——Object

1. The object under this License Contract is the operation of Games of Fortune or Chance or Other Casino Games in the Macao Special Administrative Region of the People’s Republic of China (hereinafter referred to as “Macao Special Administrative Region” or “Grantor”).

2. The license herein excludes the following gaming activities:

(1) Mutual gaming;

(2) Gaming activities provided to the general public, less those that interfere with the application of provisions in the seventh paragraph of Article 7 of Law No.16/2001;

(3) Interactive gaming;

(4) Games of Fortune or Chance in Casino or other type of game, lottery or gaming services carried out on a ship or an aircraft, but all such shall not affect the application of provisions in Item (1) of the third and fifth paragraphs of Article 5 of Law No.16/2001.

Article 2——Concession Objectives

The Concessionaire shall assume the following obligations:

(1) To ensure the proper management and operation of Games of Fortune or Chance or Other Casino Games;

(2) To employ persons with adequate competence to hold such posts and assume liabilities as to the management and operation of Games of Fortune or Chance or Other Casino Games;

(3) To undertake and operate Games of Fortune or Chance or Other Casino Games in a fair and honest manner and free of criminal influence; and

(4) To uphold and safeguard the interest of Macao Special Administrative Region in levying tax on the operations in casinos and other gaming areas.

Article 3——Applicable laws and courts with jurisdiction

1. This License Contract is governed solely by the laws of Macao Special Administrative Region.

2. The Concessionaire shall recognize and comply with the exclusive jurisdiction of the courts in Macao Special Administrative Region to render their adjudication on any possible dispute or conflict of interest and thus waive their appeal in any court outside Macao Special Administrative Region.

Article 4——Abiding by the legislation of Macao Special Administrative Region

The Concessionaire must abide by the applicable laws of Macao Special Administrative Region and waive the citation of laws in any other places than Macao Special Administrative Region, especially for the purpose of relieving it from its compulsory obligations or actions or those imposed upon it.

Article 5——Participating in the operation of Games of Fortune or Chance or Other Casino Games in other jurisdictional areas

If the Concessionaire wishes to engage in Games of Fortune or Chance or Other Casino Games in any other jurisdictional area, inclusive of the participation in operations under the management contract, it must notify the Government of this intention; if the Concessionaire knows that any controlling shareholder or any shareholder or director who owns 10% or more of the above company’s capital has the aforesaid intention, it shall also inform the Government without delay.

 (no nr.2)

Article 6——Licensing rules

The licensing system is composed of a legal framework, which comprises the regulations prescribed by Law No.16/2001 governing the operation of Games of Fortune or Chance or Other Casino Games, Administrative Regulation No.26/2001, the implementing rules for Games of Fortune or Chance, especially the rules as specified in Article 55 of Law No.16/2001, other supplementary regulations of Law No.16/2001 and the present License Contract.

Article 7——Operating licensed services

The Concessionaire shall engage in the licensed services in accordance with the provisions and terms as specified in this License Contract.

Article 8——Licensed term

1. The period licensed under this License Contract is eighteen (18) years from April 1, 2002 to March 31, 2020.

2. The provisions as prescribed in the preceding paragraph shall not obstruct against the clauses under this License Contract that remain in effect after the expiration of the licensed period.

Chapter II

Place of Business and Operation for Casinos and Other Gaming Areas

Article 9——Place of operation for licensed services

1. While engaging in its business, the Concessionaire is only allowed to engage in Games of Fortune or Chance or Other Casino Games in the casinos and other gaming grounds licensed and classified by the Government in advance.

2. The allocation of any other places for operating the licensed services shall be subject to the approval of the Government.

Article 10——Type of Games, gaming tables and electric or mechanical gaming machines

1. The Concessionaire is licensed to conduct all forms of games as specified in the third paragraph of Article 3 of Law No.16/2001 and other forms of games licensed in accordance with the provisions in the fifth paragraph of the same article therein. The Concessionaire is also permitted to engage in gaming on any electric or mechanical gaming machine including “slot machines” as prescribed by law.

2. The Concessionaire must submit a list to the Gaming Inspection and Coordination Bureau each December. Such a list shall specify the number and location of the gaming tables and electric or mechanical gaming machines including “slot machines”, which the Concessionaire is intended to operate next year.

3. The Concessionaire may alter the number of gaming tables and electric or mechanical gaming machines including “slot machines” by an advance notice to the Gaming Inspection and Coordination Bureau.

4. The Concessionaire shall maintain and operate the minimum variety of games, as directed by the Gaming Inspection and Coordination Bureau (DICJ).

Article 11——Continuous casino operation

1. The Concessionaire as the obligation to open its casinos every day of each year.

2. Without affecting the application of the provisions as specified in the preceding paragraph the Concessionaire may set the time periods within each day to open to the general public, for its casino and related activities conducted in the casino.

3. The time periods of each day, specified by the said company for its casino and activities conducted in the casino open to the general public, shall be notified to the Government in advance and posted at the entrance of its casinos.

4. Any change to the time schedule shall be notified to the Government at least three (3) days in advance.

Article 12——Suspending operations in the casino and other gaming areas

1. If the Concessionaire is to suspend operations in one or more casinos and other gaming areas within a certain period of a single day or several days, it shall request the consent of the Government upon presentation of an application stating reasons at least three (3) days in advance.

2. In time of emergency or force majeure, especially in the event of a severe accident, disaster or national calamity etc that seriously endangers the personal safety, the licensing as specified in the preceding paragraph is exempted. In this case, the Concessionaire shall notify the Government as soon as possible of its suspension of operations in its casinos or other gaming areas.

Article 13 ——Electronic surveillance and control equipment

1. The Concessionaire must install electronic surveillance and control equipment verified by the Gaming Inspection and Coordination Bureau in its casinos and other gaming areas. For this purpose, the Concessionaire shall file an application in writing with the said bureau. The written application shall specify the facilities to be installed along with relevant technical specifications, while the Gaming Inspection and Coordination Bureau may request the said company to provide the prototype or sample product of the abovementioned at any time.

2. At request of the Gaming Inspection and Coordination Bureau, the Concessionaire shall install electronic surveillance and control equipment verified by the mentioned Bureau in other areas connecting its casinos and other gaming areas or other contiguous areas leading to or linking such casinos and other gaming areas.

3. Upon request of the Gaming Inspection and Coordination Bureau, the Concessionaire shall install new electronic surveillance and control equipment verified by the said bureau.

4.  If the Concessionaire has knowledge of any action or fact that constitutes a crime or administrative offence and any action or fact the Concessionaire deems as serious offence, it shall report to the competent public authorities as soon as possible.

Chapter III

The Concessionaire

Article 14——Company’s business scope, head office and form

1. The business of the Concessionaire is limited to Games of Fortune or Chance or Other Casino Games.

2. With consent of the Government, the Concessionaire may engage in business activities linked with Games of Fortune or Chance or Other Casino Games.

3. The Concessionaire is compelled to have its head office within Macao Special Administrative Region in the form of a limited liability company.

Article 15——Capital and shares of the Company

1. The Concessionaire is obliged to retain a corporate capital of no less than two hundred million Patacas (MOP200,000,000).

2. Once the Executive Chief orders the company to increase its corporate capital as a result of subsequent needs, the Concessionaire must increase its capital.

3. All the corporate capital of the Concessionaire shall be represented exclusively in registered share scripts.

4. To increase its corporate capital through public subscription, the Concessionaire needs to obtain prior consent from the Government.

5. The issuance of preferential shares by the Concessionaire needs prior consent from the Government.

6. In establishing or issuing a certain type or category of shares to denote the corporate capital of the Concessionaire and transfer such shares, the said company shall obtain the approval from the Government and this shall not affect the application of provisions as specified in the preceding paragraph.

7. The Concessionaire shall take measures to ensure that all the corporate capital of the legal persons that hold the shares of the Concessionaire, all the corporate capital of legal persons that hold the corporate capital contributions of the above legal persons and even all the corporate capital in the possession of the natural persons or legal persons of final holders of subsidiary corporate capital contributions are expressed in registered shares scripts. However, for the legal persons that are licensed to be listed on the stock exchange, the buying and selling of shares in their possession on the stock exchange is an exception.

Article 16——Transfer of shares and stated encumbrance

1. The inter vivos transfer or stated encumbrance of the ownership or other rights regarding the shares expressing the corporate capital of the Concessionaire or company, under any name, and any action of assigning their voting power or any other shareholder right to any person other than the original owner of these rights shall be subject to the approval of the Government.

2. Under any of the above circumstances, the Concessionaire shall be obligated to refuse to make relevant record of any entity that obtains or owns the shares expressing the corporate capital in violation of this License Contract or legal provisions, refuse to recognize the status as a shareholder of any such entity and refuse to recognize, whether acquiescently or expressly, the effectiveness of the inter vivos transfer or stated encumbrance as described in the preceding paragraph.

3. To transfer the ownership and other relevant rights shares expressing the corporate capital of the Concessionaire as result of death, the Concessionaire shall notify the Government as soon as possible and take measures simultaneously to record related transfers in the shares registration book.

4. With the approval as specified in the first paragraph, an owner in possession of the shares expressing the corporate capital of the Concessionaire or other rights regarding such shares, who is to transfer or state liability for such ownership or rights or assign the related voting rights or other shareholder rights to another person, shall notify the Concessionaire of the relevant facts without delay; the Concessionaire shall, within thirty (30) days after making a relevant record in his shares registration book or going though an equivalent procedure, notify the Gaming Inspection and Coordination Bureau, deliver to the latter the copies of standard documents relating to legal acts and provide details on any other provisions, terms and conditions it has prescribed.

5.  The concessionaire undertakes to submit for the Government’s approval any transfers in any manner between entities of ownership of, or any other rights in, the holdings of 5% or more in the concessionaire’s share capital, whether such shareholders be natural persons or corporations, and in the share capital of shareholders of those that are corporations, whether such shareholders be natural persons or corporations, and so on successively to the ultimate shareholders, where such shareholding corresponds, directly or indirectly, to 5% or more of the share capital of the concessionaire, except in the case of corporations whose shares are listed on the stock exchange.6. Knowing any of the following acts, the Concessionaire shall notify the Government as soon as possible: to conduct a transfer of the ownership or the related rights 5% or more of the company contributions denoting the corporate capital of the shareholders of the Concessionaire in the possession of the natural persons or legal persons as a result of death; conduct a transfer of the corporate capital in the possession of the natural persons or legal persons, who hold 5% or more of the capital contributions in the possession of the above-named legal persons as a result of death; by analogy, conduct a transfer of the corporate capital in the possession of the natural persons or legal persons who hold the capital contributions of the company’s subsidiaries as a result of death.

7. Knowing any of the flowing acts, the Concessionaire shall notify the Government without delay: state encumbrance in any name, towards the capital contributions expressing the corporate capital in the possession of the Concessionaire shareholders; state encumbrance, in any name, towards the capital contributions of the company contributors of the above shareholders; by analogy, state encumbrance, in any name, towards the capital contributions in the possession of the final holders of the capital contributions of the subsidiaries, but limited to relevant capital contribution indirectly tantamount to 5% or more of the corporate capita of the Concessionaire; however, as for the capital contributions denoting the corporate capital in the possession of the legal person who is licensed to go listed on the stock exchange, the buying and selling of stocks of this legal person on the stock exchange is an exception.

8. The provisions of the preceding paragraph shall also apply to any act of assigning voting rights or other shareholder rights to anyone other than the original owner of these rights; but the buying and selling of shares in the possession of a legal person, who is licensed to go listed on the stock exchange is an exception.

9. Upon proper adjustment, the provisions of the fourth paragraph shall apply to any act of transferring the ownership of capital contributions or other rights related to such contributions as specified in the fifth paragraph.

(No nr. 10)

Article 17——Issuance of bonds

To issue bonds, the Concessionaire shall obtain prior consent of the Government.

Article 18——Listed on the stock exchange

1. Unless otherwise authorized by the Government, the Concessionaire or a company where the Concessionaire is the principal shareholder shall not be listed on the stock exchange.

2.  The Concessionaire shall have the obligation to take measures to keep its controlling shareholders as legal persons, who primarily engage directly or indirectly in the projects attached to the investment plan under this License Contract, from applying for listing or doing any act for the purpose of being admitted to go listed on the stock exchange without the prior consent of the Government.

3. The authorization as specified in the above two paragraphs shall be presented by the Concessionaire and shall be attached to all necessary documents. However, this shall not preclude the Government from requesting additional documents, data or information.

4. The Government authorization may be subject to a required compensation.

Article 19——Structure of the shareholders and corporate capital

1. The Concessionaire must submit the structure of its shareholders and the structure of the legal persons in possession of 5% or more of corporate capital of the Concessionaire, especially the structure of the company’s corporate capital, the structure of corporate capital in the possession of the legal persons who possess 5% or more of corporate capital of the above legal persons, and by analogy, the structure of corporate capital in the possession of the natural persons and legal persons of the final shareholders or deliver a statement evidencing that there is no change in such shareholder structures or capital structures, to the Government each December.

2. The Concessionaire shall take further measures to obtain and present to the Government an adequately certified statement signed by each shareholder of the Concessionaire and the above-named persons dedicated to documenting the quantity of capital contributions they have declared and registered contributions accompanied by copies of the share certificates indicating relevant capital contributions; upon delivery, the latest data or statements as mentioned in the preceding paragraph shall be presented simultaneously.

Article 20——Forbidden to serve concurrently in the company’s statutory body

1. The concessionaire undertakes not to appoint as a member of the board of directors, or as an officer of the general meeting, or as a member of the statutory audit committee or other governing body, any person who is a member of any governing body of any other concessionaire within Macao Special Administrative Region or in a Concessionaire management company in Macao Special Administrative Region.

2. The Concessionaire undertakes to notify the Government, as soon as possible, of the fact that it appoints anyone to assume a post in its board of directors, presidium of shareholders’ meeting, supervisory council or other company statutory body.

3. The Government shall notify the Concessionaire of the fact that another Concessionaire appoints any person to assume a post in the board of directors, presidium of the shareholders’ meeting, supervisory council or other company statutory body in this Concessionaire.

Article 21——Management

1. The Concessionaire board of directors must grant the management right of the Concessionaire to an executive director.

2. The executive director referred to in the preceding paragraph herein must be a permanent resident in Macao Special Administrative Region, who possess at least 10% of the corporate capital of the Concessionaire.

3. The authorization of the management right of the Concessionaire, covering the appointment of the executive director, the scope of authority of the executive director, the authorized term and any change to such authorization, especially interim substitute or decisive replacement of the executive director, shall remain subject to the approval of the Government. For this purpose, the Concessionaire must present to the Government a draft of the resolution of the Concessionaire’s board of directors, which carries the proposal for the authorization of the management right of the Concessionaire, inclusive of the ID information, scope of authority and authorized term of the executive director, any explanation regarding the fact the executive director fails to assume office for some reason thus necessitating a substitute and any resolution on the interim substitute or decisive replacement of the executive director; unless upon the approval of all particulars with respect to the authorization of management right by the Government, the authorization of the management right of the Concessionaire  shall be in no effect.

4. In the event that the Government of Macao does not approve any of the appointments referred to in the preceding paragraph, the Concessionaire shall, as soon as possible from the date of notice, submit a new draft of resolution to the Government.

5. Except otherwise approved by the Government, the Concessionaire shall be obligated to render any appointment or authorization in order to grant the right of concluding legal acts relating to the business operation of the enterprise in the name of the Concessionaire of within its limit of authority of the board of directors on the basis of a stable relationship; but such authorization is not limited to the rights of doing an act purely in the nature of business, especially the rights of such acts in public departments or public authorities.

Article 22——Articles of association and would-be company agreements

1. Any amendment to the articles of association of the Concessionaire shall be subject to the approval of the Government.

2. The revised draft of the articles of association of Concessionaire must be referred to the Government for approval at least thirty (30) days before the date of the shareholders’ meeting of deliberating on relevant amendments.

3. The Concessionaire shall, within thirty days after signing the certifying document of any amendment to the articles of association, present the counterpart of the certified document to the Government.

4. The Concessionaire shall notify the Government of any would-be company agreements it knows. For this purpose, in addition to other measures it may or is supposed to take, the Concessionaire shall, within fifteen (15) days before the shareholders’ general meeting or when an interim shareholders’ general meeting without being convened in advance is in session, inquire its shareholders about whether there is any would-be company agreement, especially one regarding the execution of voting rights or other shareholder rights, and advise the Government of the results of the above measures.

(no nr. 5)

Article 23——Obligation to provide information

In addition to the obligation to provide other information as specified in Article 6, the Concessionaire is otherwise under an obligation to:

1. Notify the Government, as soon as possible, of any information that might affect the proper operation of the Concessionaire, such as the capacity for payment or payment liquidation on the part of the Concessionaire; any legal proceedings filed against the Concessionaire, any of its directors, any shareholder in possession of 5% or more of its corporate capital and any principal employee who holds an important post in the casino; any act or fact that constitutes a crime or administrative offence committed within its casinos and other gaming grounds known to the Concessionaire; or any hostile act against the Concessionaire or any bearer in its department by any bearer or employee in the public administration of Macao Special Administrative Region, inclusive of the personnel in the security force or public order authorities;

2. Notify the Government of the following events as soon as possible: all events that might affect or hinder the punctual and complete execution of any obligation arising from this License Contract, all events that might heavily encumber or cause enormous trouble to the punctual and complete execution of any such obligation or all events that might result in license cancellation as provided in Chapter XIX; or

3. Notify the Government of any of the following facts or events as soon as possible:

(1) The pay, salary, wage, service charge paid to the directors of the Concessionaire, financial investors and principal employees with relevant positions in the casino or fixed or incidental, regular or special remunerations in any other name as well as the mechanism, if any, of the distribution of profits of the Concessionaire among the foregoing entities;

(2) Existing or prospective fringe benefits inclusive of the method for profit distribution;

(3) Existing management contracts and work contracts or those proposed by the Concessionaire.

4. Present the certified copies of the following documents to the Government as soon as possible:

(1) The certificate of any of the remunerations as described in the foregoing paragraph (1) or the contract or other documents that specify such remunerations;

(2) The certificate of the existing or prospective fringe benefits or profit distribution method or the contact or other documents that specify such fringe benefits or distribution method;

(3) Existing management and work contract or those proposed by the Concessionaire.

5. Notify the Gaming Inspection and Coordination Bureau, as soon as possible, of any imminent or foreseeable major change to the economic and financial conditions concerning the Concessionaire and any of the following entities:

(1) The controlling shareholders of the Concessionaire;

(2) Any entity in close connection with the Concessionaire, especially the entities that promise or pledge to finance necessary investments or obligations of the Concessionaire under the contract;

(3) According to the provisions of Item (2) in the first paragraph of Article 18 of Law No.16/2001, any shareholder in possession of 5% or more of the corporate capital of the Concessionaire who promises or pledges to finance the necessary investments or obligations of the Concessionaire under the contract;

6. Notify the Gaming Inspection and Coordination Bureau (DICJ), as soon as possible, if the annual average business volume between the Concessionaire and a third party reaches or exceeds two hundred and fifty million (250,000,000) Patacas;

7. Present to the Gaming Inspection and Coordination Bureau each December all documents that carry bank accounts and relevant balance of the Concessionaire;

8. Produce the supplementary or additional information as required by the Government as soon as possible; and

9. Provide the Gaming Inspection and Coordination Bureau and Finance Services Bureau with data and information necessitated for the smooth execution of their respective functions.

Chapter IV

Management Company

Article 24——Obligation of prior notice and Government approval

1. The Concessionaire undertakes to notify the Government, at least ninety (90) days in advance, of its intention of signing a contract with a management company.

2. When the Concessionaire wants to celebrate a contract with a management company that will empower the management company to run the Concessionaire, it must request the Government for an approval.

3. For application of the provisions in the preceding paragraph, the Concessionaire must submit the certified copy or equivalent document of the articles of association of the management company and the draft of relevant management contract along with the written application for approval.

(no nr. 4) (no nr. 5) (no nr. 6) (no nr. 7) (no nr. 8)Chapter V

Idoneity

Article 25——Idoneity of the Concessionaire

1. The Concessionaire must remain idoneous during the license period.

2. For the application of the provisions of the preceding paragraph, the Concessionaire shall subject itself to continuous and long-term supervision and control of the Government according to the law.

(no nr. 3)

Article 26——The idoneity of shareholders, directors and principal employees of the Concessionaire

1. The shareholders who possess 5% or more of the corporate capital of the Concessionaire, directors of the Concessionaire and principal employees who assume important positions in the casinos shall remain idoneous during the license period according to law.

2. For the application of the provisions of the preceding paragraph, the shareholders who possess 5% or more of the corporate capital of the Concessionaire, the directors of the Concessionaire and principal employees who assume important positions in the casinos shall subject themselves to the continuous and long-term supervision and control of the Government according to law.

3. The Concessionaire shall take necessary actions to ensure the shareholders who possess 5% or more of the corporate capital of the Concessionaire, the directors of the Concessionaire and principal employees who assume important positions in the casinos remain idoneous during the license period and are fully aware that the adequate qualifications of such shareholders, directors and principal employees reflect the idoneity of the Concessionaire.

4. The Concessionaire shall request the shareholders who possess 5% or more of the corporate capital of the Concessionaire, the directors of the Concessionaire and principal employees who assume important positions in the casinos, once they become aware of any fact of possible importance to the idoneity of the Concessionaire or their respective idoneity to notify the Government as soon as possible.

5. For the application of the provisions of the preceding paragraph, the Concessionaire shall, every six (6) months, inquire the shareholders who possess 5% or more of the corporate capital of the Concessionaire, the directors of the Concessionaire and principal employees who assume important positions in the casinos as to whether they are aware of any fact of possible importance to the idoneity of the Concessionaire or their respective idoneity; such inquiry shall not preclude the Concessionaire from notifying the Government as soon as possible of any important fact within its knowledge.

6. The Concessionaire shall, once it knows any fact possibly important to the idoneity of the shareholders who possess 5% or more of the corporate capital of the Concessionaire, the directors of the Concessionaire and principal employees who assume important positions in the casinos, shall notify the Government as soon as possible.

(no nr. 7)

(no nr.8)

Article 27——Special obligations for cooperation

Apart from the general cooperation obligations as specified in Article 67, the Concessionaire shall assume the obligation to provide the Government with any document, information or data that it deems necessary for the examination of whether the Concessionaire is idoneous without any delay.

Article 28——Special obligation for notification

1. If the Concessionaire becomes aware of licensing or termination of license of the operation of Games of Fortune or Chance or Other Casino Games in the charge of any shareholder in possession of 5% or more of the corporate capital of the Concessionaire, it shall notify the Government as soon as possible.

2. If the Concessionaire knows any investigation made by any organization responsible for the administration of the business activities of Games of Fortune or Chance or Other Casino Games within another jurisdictional area into any fact that might cause the organization to impose sanctions thereupon or terminate or affect, in any form, the acquisition of operation permit or license by any shareholder in possession of 5% or more of the corporate capital of the Concessionaire required for Games of Fortune or Chance or Other Casino Games within the said jurisdictional area, it shall notify the Government as soon as possible.

Chapter VI

Financial Capacity and Financing

Article 29——The financial capacity of the Concessionaire

1. The Concessionaire shall retain its financial capacity to engage in the licensed services and pursuant to the provisions of this License Contract, especially the provisions as specified in the investment plan attached to this License Contract, punctually and completely fulfill any obligation in connection with its business and any necessary investment and obligation under the contract.

2. For the application of the provisions of the preceding paragraph, the Concessionaire shall be subject to the continuous and long-term supervision and control by the Government according to the law.

Article 30——Loans and similar contracts

1. The Concessionaire shall have the obligation to notify the Government of any loan or similar contract worth over thirty million (30,000,000) Patacas to any third party.

2. The Concessionaire shall have the obligation neither to provide any loan or similar contract to its directors, shareholders or principal employees in its casinos, except otherwise approved by the Government.

3. The Concessionaire shall have the obligation neither to enter into any contract with a commercial business owner that entitles the latter to manage or participate in the management of the Concessionaire, including “step in rights” contract, except otherwise approved by the Government.

Article 31——Risk assumption

1. The Concessionaire shall state expressly its commitment to bear all debts and fully assume related liability for any and all risks intrinsic in the license or arising from its financial capacity and financing; but whatsoever shall not impede the application of the provisions of Article 40 and Article 75 of this License Contract.

2. The Grantor shall be free and clear of any of the foregoing obligations or responsibilities or risks towards the financing by the Concessionaire.

Article 32——Financing acquisition

1. The Concessionaire shall acquire the necessary funds so as to punctually and completely fulfill any obligation in connection with its business and any necessary investment and obligation under the contract in accordance with the provisions of this License Contract, especially the provisions of the investment plans attached herewith.

2. Neither deraignment nor defence arising from the contractual relationship established by the Concessionaire with a third party, including an entity and a shareholder of the Concessionaire in order to acquire funds as specified in the preceding paragraph, shall be used against the Grantor.

Article 33——Statutory reserve fund

The Concessionaire shall keep a sum of reserve fund as required by law.

Article 34——Special obligations for cooperation

1.Except for the general cooperation obligations as prescribed in Article 67, the Concessionaire shall have the obligation to furnish the Government, without delay, with any document, information or data the latter deems necessary to examine if the Concessionaire remains with the adequate financial capacity.

2. The Concessionaire shall notify the Government, as soon as possible, of the declaration of any loan, mortgage and debt, guaranty or any debt the Concessionaire bears or will bear in order to obtain funds raised for any of its business operation.

3. The Concessionaire shall present to the Government as soon as possible the certified copies of any documents in relation to declaration of any consumption loan, mortgage and debt, guaranty or any debt the Concessionaire bears or will bear in order to obtain funds raised for any of its business operations.

4. The Concessionaire shall take actions to obtain and present to the Government a statement signed by each controlling shareholder of the Concessionaire, including the final controlling shareholder, to the effect that they agree to be bound by the foregoing special obligations for cooperation; for this purpose, upon request of the Government, they must provide any document, information, data or certification and grant any necessary permission.

Chapter VII

Investment Plan

Article 35——Investment plan

1. The Concessionaire shall implement the plans according to the provisions of the investment plan attached to this License Contract.

2. In particular, the Concessionaire shall assume the following obligations to:

(1) Employ qualified work force in the execution of all projects;

(2) While engaging enterprises and workers to carry out the projects under the investment plan attached herewith, give priority to the enterprises or local enterprises, which have been in business in Macao Special Administrative Region for a long time, and local workers in Macao Special Administrative Region;

(3) While working out any engineering project relating to the projects as specified in the investment plan attached to this License Contract, observe the current technical criteria and rules in force in Macao Special Administrative Region, especially the Technical Rules for Civil Works verified by Decree No.47/96/M on August 26 and the Rules for the Safety and Load of Housing & Bridge Structures sanctioned by Decree No.56/96/M on September 16, and official specifications and approval documents as well as the instructions given by the producer or the entity entitled to a patent;

(4) In delivering the projects as described in the investment plan attached to this License Contract to the Lands, Public Works and Transport Bureau for approval, enclose therewith a quality control manual complied by an entity recognized as technically qualified and experienced in the identical and similar work by the Lands, Public Works and Transport Bureau, a work plan and a sequential record of relevant finance and work, samples of important documents as well as the curriculum vitae of the person in charge of each construction project in addition to the ordinances in force, especially the documents as prescribed in Decree No.79/85/M promulgated on August 21; in case the Concessionaire fails to present the quality control manual or the manual it has submitted is rejected, the said Company shall abide by the quality control manual complied by a professional entity then designated by the Lands, Public Works and Transport Bureau;

(5) Carry out the verified engineering projects strictly according to the provisions of the laws and rules in force and the internationally recognized standards and guild regulations on the project as well accordingly to art regulations;

(6) Observe the construction period and the time limit of the public biding for the projects as described in the investment plan attached to this License Contract;

(7) While implementing the projects as described in the investment plan attached to this License Contract, use the materials, systems and equipment certified and verified by the approving entities in compliance with international criteria and universally recognized as to enjoy top quality internationally;

(8) Guarantee the quality of all the projects as described in the investment plan attached to this License Contract in line with the high international quality standards;

(9) Make sure its commercial areas within its premises are in line with high international quality standards;

(10) Maintain modern, efficient and quality management in accordance with the high international quality standards;

(11) Notify the Government of anything, as soon as possible, through a detail report elaborating on and explaining reasons in the event of anything during the construction period of the facilities of the Concessionaire or during the course of any business operation in any field that causes or might cause major changes to the proper work progress or in case of any abnormalities that occur to the structure of facilities of the Concessionaire or any other anomaly; the report shall specify the assistance offered by any entity recognized as qualified and reputed other than the Concessionaire, if any, and indicate clearly the measures taken or to be taken to resolve the relevant problems.

3. The Concessionaire shall be liable to the Grantor and any third party for the damage, for which the Concessionaire is held accountable, as a result of defect, mistake or serious neglect with respect to the design and scope of the project, the execution of construction project and maintenance of the buildings under the investment plan attached to this License Contract.

4. The Government may permit a change to the time limit as referred to in Item (6) of the second paragraph without any amendment to this License Contract.

5. The Grantor shall pledge to enable the Concessionaire to carry out directly or indirectly the projects as described in the investment plan attached to this License Contract according to law.

Article 36——Projects alterations listed under the investment plan

1. During the execution of the investment plan attached herewith, the Government may request any document or any compulsory change with regard to a project listed under the investment plan, so as to ensure that the current technical criteria and rules are observed as well the standard level of quality demanded.

2. The Government shall not impose any change on the foregoing projects resulting in an increase of the aggregate amount as specified in Article 39.

Article 37——Supervision

1. The Government, especially through the Lands, Public Works and Transport Bureau, shall, according to the particulars included in the investment plan attached to this License Contract and in line with the provisions of applicable legislation, follow up and supervise the implementation of the project, especially the implementation of work plan and the quality of materials, systems and equipment.

2. Lands, Public Works and Transport Bureau shall notify the Concessionaire of the representative designated by the said bureau on its behalf to follow up and supervise the implementation of project; if more than one representative is responsible for such work, one of them shall be designated as the person in charge.

3. For the application of the provisions of the first paragraph, the Concessionaire shall present a detail report on the progress of the investment plan attached to this License Contract on a monthly basis. Such monthly report shall specify at least the following:

(1) Important events, number of persons, quantity of relevant materials, systems and equipment;

(2) Information regarding the progress of work plan (schedule control);

(3) Latest data on the sequential record of finance and work;

(4) Demand for the project, supply, applied methods, materials, system and equipment;

(5) Major measures taken to ensure the implementation of work plan; and

(6) Work required for correcting deviations.

4. When necessary, especially when the proper schedule of the execution of the investment plan attached to the present License Contract is affected, the Concessionaire shall present an additional detail report in writing.

5. At request of the Government, the Concessionaire shall, within the specified time limit, present any document, especially the words and drawings with respect to the investment plan attached to this License Contract.

6. The Concessionaire shall provide any explanation and information required as complement to the documents set forth in the preceding paragraph.

7. Should the Government have any question about the work quality, it may enforce any test other than the tests planned by the Concessionaire, and, if necessary, consult the Concessionaire on the decision rules to be adopted.

8. The Concessionaire shall cover the expenses required by the tests or defect correction as specified in the preceding paragraph.

9. Any order, announcement and notice relating to the techniques for the execution of project may be issued directly to the technical director of the project.

10. The technical director of the project shall devote himself to following up relevant work. Once summoned, he must be present at the construction site.

11. Where it is found that the project under way is inconsistent with the verified project or violates applicable laws, regulations or provisions under the contract, the Government, especially through the Lands, Public Works and Transport Bureau, may terminate and prohibit the execution of the project according to law.

12.The right of supervision over the performance of obligations arising from this License Contract shall not cause any liability to the Grantor for the execution of the construction project; the Concessionaire shall be solely liable for any imperfection or defect in respect of the design, execution or operation of such project, except for those as a result of the decision made by the Grantor.

Article 38——Subcontract

The contracting and subcontracting to a third party shall not relieve the Concessionaire from its legal obligations or contractual obligation.

Article 39——Appropriation of the remaining funds under the investment plan

Upon completion of the projects as listed under the investment plan attached to this License Contract, if the total amount of expenditure spent by the Concessionaire is less than the total sum of four billion seven hundred and thirty-seven million and forty-eight thousand (MOP4,737,480,000,00) Patacas as described in the tender documents for the first public bidding for operation 3 (three) licenses for Games of Fortune or Chance or Other Casino Games and specified in the above investment plan, the Concessionaire shall earmark the remaining funds thereof for either projects relative to the business of the Concessionaire specified by it with the approval of the Government or projects designated by the Government involving important public interest of Macao Special Administrative Region.

Article 40——Insurance

1. The Concessionaire shall conclude and update necessary insurance contracts, so as to guarantee effective and complete issuance against the intrinsic risks arising from the development of licensed services; relevant insurances shall be underwritten with insurance companies permitted to do business within Macao Special Administrative Region; in case it is infeasible to effect insurances with such insurance companies or such insurances might otherwise cause an heavy economic burden to the Concessionaire, with the permission of the Government, the related insurance contracts may be underwritten with an insurance company in another place.

2. The Concessionaire shall, in particular, enter into the following insurance contracts and ensure their force:

(1) Insurance for work accident and occupational disease in favor of employees of the Concessionaire;

(2) Civil liability insurance for the vehicles under the ownership of the Concessionaire;

(3) Civil liability insurance for the watercrafts, aeroplanes or other aircrafts either in the possession of the Concessionaire or leased by the Concessionaire in line with financing lease system;

(4) Civil liability insurance for installing advertising materials;

(5) General civil liability insurance for anything in connection with the operation of Games of Fortune or Chance or Other Casino Games in Macao Special Administrative Region and the development of other services included in the license but not insured by any other insurance contract;

(6) Insurance against damage to the building, furniture, equipment and other property used for business operation;

(7) Building insurance against the execution of any engineering project for the buildings related to the licensed services or the execution of any engineering project inside such buildings (all-risks insurance, including civil liability insurance).

3. The insurance as referred to in Item (5) of the preceding paragraph is against all risks, inclusive of the following items at least:

(1) Fire, thunder and lightning or explosion (in whatever nature);

(2) Pipe burst; leakage or overflow of water storage tank, boiler, pipeline, underground tank, lavatory or other water feeders;

(3) Flood, typhoon, tropical storm, volcano eruption, earthquake or other natural disasters;

(4) Crash or collision of aeroplanes or other aircrafts, or the drop or throw of objects from the aeroplanes or other flying aircrafts;

(5) Vehicle collision;

(6) Theft or robbery;

(7) Strike, raid, riot, disturbance of public order or other events in the same nature.

4.  The insured amount or minimum insured amount of various insurances as referred to the second paragraph is handled as follows:

(1) The insurances as described in Items (1)~(4) shall be handled in accordance with the provisions of the laws in force;

(2) The insured amount for the insurances as described in Item (5) shall be specified after the Government considers the business volume of the services included in the license and the risk index in the previous year along with other indexes;

(3) The insured amount of the insurances as described in Item (6) shall be equal to the net value of the specified property; net value is the gross value minus accumulated depreciation;

(4) The insured amount of the insurances as described in Item (7) amounts to the total value of the project.

5. The Concessionaire shall still have to ensure the entities that enter into a contract with it have covered effective work accident insurance and occupational disease insurance.

6. The Concessionaire shall testified to the Government it has entered into an insurance contract with full effect; in concluding or renewing insurance contracts, the Concessionaire shall submit the copies of such insurance contracts to the Government.

7. Prior to the delivery of the copies as referred to in the preceding paragraph to the Government, the Concessionaire shall have the obligation not to carry out any engineering project or work.

8. Unless approved by the Government, the Concessionaire shall not rescind, terminate, alter or replace any insurance contract, except for a replacement of risk bearing entity. In this case, the Concessionaire shall notify the Government of the relevant facts as soon as possible.

9. Should the Concessionaire refuse to pay insurance premium, the Government may appropriate the deposit for the purpose of securing the execution of legal or contractual obligations on the part of the Concessionaire to directly calculate and pay insurance premiums on behalf of the Concessionaire.

Chapter VIII

Property

Article 41——Property of Macao Special Administrative Region

1. The Concessionaire shall, according to the instructions issued by the Gaming Inspection and Coordination Bureau, take perfect care of or replace its property within Macao Special Administrative Region gained or to be gained for its licensed services by way of temporary transfer of ownership, proceeds and use.

2. The Concessionaire shall ensure the land and natural resources in the charge of the Government according to the provisions of Article 7 of Basic Law of Macao Special Administrative Region, gained or to be gained for the operation of licensed services through leasing or licensing, are kept in prefect condition.

Article 42——Other property

1. The equipment and appliances used in casinos and for gaming services shall be placed within the premises of the real estate in the possession of the Concessionaire. It is not allowed to impose any encumbrance on the casinos, equipment and appliances, except with the approval of the Government.

2. Despite the approval as described in the preceding paragraph, the Concessionaire shall, upon expiration of this License Contract, relieve equipment and appliances used in casinos and for gaming services, including the equipment and appliances outside the casinos from any encumbrance.

3. Casinos shall not be housed within any real estate, the use and proceeds of which rely on a lease contract in whatever nature or a contract of any other type whereby the full ownership of the real estate is not assigned to the Concessionaire, even though the real estate is designated under a non-typical contract; except as approved by the Government.

4. Once adequately approved, the Concessionaire shall refer the copies of the contracts as specified in the preceding paragraph and the copies of all contract amendments and alterations to the Government, even though such amendments and alterations remain with retroactive effect.

5. The Concessionaire shall house all its casinos in a building or building complex with ownership assigned depending on different floors, such a building or building complex serves as an economic and functional area, so that such casinos form one or more separate unit, whose floor space should be identified and defined precisely.

6. For the application of the provisions of the preceding paragraph, the Concessionaire shall, as soon as possible, present to the Government the property registration certificate relative to determination of ownership assigned depending on different floors, which shall illustrate all separate units and enclose therewith a drawing used to determine and delimit relevant floor areas.

7. The Concessionaire shall register any change to the certificate used to determine ownership assigned depending on different floors, and deliver relevant property registration certificates to the Government, through the Finance Department, as soon as possible.

8. The Concessionaire shall refer the rules concerning the storied building with ownership assigned depending on different floors to the Government for approval.

Article 43——Ownership of the equipment and appliances in casinos and for gaming services

1. At the expiration of the license term as specified in Article 8, the equipment and appliances in casinos and for gaming services, including the equipment and appliances in places other than the casinos, shall be placed under the ownership of the Grantor automatically without any compensation, except for cancellation of the license prior to the foregoing date; upon delivery of the aforesaid property, the Concessionaire shall keep such property in good condition, except for normal wear arising from the use of such property in accordance with the provisions of this License Contract; in addition, the Concessionaire shall make sure such property is free and clear of any encumbrance

2. The Concessionaire shall deliver the property as specified in the preceding paragraph without delay.

3. Should the Concessionaire fail to deliver the property as mentioned in the first paragraph, the Government shall possess such property by administrative means without delay. The deposit used to guarantee the execution of the legal obligations or contractual obligations of the Concessionaire shall cover the expenses incurred therefrom.

4. At expiration of the license, the Government shall examine the property mentioned in Article 41 and Article 42 so as to check the conservation and maintenance conditions regarding such property and draw up a inspection deed; during the course of the inspection, the representatives of the Concessionaire may be present.

5. Upon dissolution or liquidation of the Concessionaire, if the Government does not certify the returnable property is kept in good condition through the compulsory procedure of detailed listing as set forth in the article hereunder or the property or there is no sign of any assurance that the Government can pay any sum of money payable to the Grantor arising from damage compensation or in any other name against any surety accepted by the Government, in no event shall the property of the Concessionaire be divided up.

6. The provisions set forth in the last part of the first paragraph shall not hinder the proper update of the equipment and appliances intended for gaming services.

Article 44—— Property Inventory attached to the Grant of the License

1. The Concessionaire shall prepare a detailed list in triplicate of all the property and rights under the ownership of Macao Special Administrative Region but used for the licensed services and all property belonging to Macao Special Administrative Region, and update the data contained in the detailed list; for this purpose, the Concessionaire shall, no later than May 31, each year, update the relevant lists in case of any change, and present them to the Gaming Inspection and Coordination Bureau and Finance Department.

2. During the year of expiration of the license, the above-named detailed list shall be worked out sixty (60) days prior to expiration.

3. In other cases where the License Contract is cancelled, the detailed list described in the first paragraph shall be made at a date and time as specified by the Government.

Article 45—— Improvements

In no event shall the fees used for amelioration, in any name, of the property as described in Article 41 and the property that may belong to the Grantor be entitled to any reparation or damage compensation.

Article 46——Licensing land for the use by the Concessionaire

1. The licensing rules, especially the rules of licensing land for the use by the Concessionaire to engage in the licensed services, shall be specified in relevant land license contracts.

2. The terms and conditions under the land license contract concluded between the Government and the Concessionaire shall be governed by the applicable provisions of this License Contract.

Chapter IX

Premium

Article 47——Premium

1. The Concessionaire shall pay an annual premium to Macao Special Administrative Region during the license term as compensation for one licensing for operation of Games of Fortune or Chance in Casino.

2. The amount of premium payable by the Concessionaire is composed of a fixed portion and a variable portion.

3. As prescribed by Chief Executive Order No.215/2001, the fixed portion of premium payable by the Concessionaire shall be a sum of thirty million (MOP30,000,000) Patacas subject to adjustment as per the average commodity price index of Macao Special Administrative Region.

4. The variable portion of the premium payable by the Concessionaire shall be calculated based on the number of the gaming tables and electric or mechanical gaming machines inclusive of “slot machines” operable by the Concessionaire.

5. For the application of the provisions of the preceding paragraph:

(1) The Concessionaire shall pay an annual sum of three hundred thousand (MOP300,000) Patacas for each gaming table dedicated to special gaming or gamblers, especially each table in operation in a special gaming hall or area;

(2) The Concessionaire shall pay an annual sum of one hundred and fifty thousand (150,000) Patacas for each gaming table not dedicated to special gaming or gamblers; and

(3) The Concessionaire shall pay an annual sum of one thousand (MOP1,000) Patacas for each electric or mechanical gaming machine, “slot machine” inclusive, operated by the Concessionaire.

6. Notwithstanding the number of gaming tables the Concessionaire is running at any time, the variable portion of premium shall not be less than the combined sum payable by it for the long-term operation of one hundred (100) gaming tables dedicated to special gaming or gamblers, especially those in the special gaming halls or areas and the long-term operation and one hundred (100) gaming tables not dedicated to special gaming or gamblers.

7. The Concessionaire shall, no later than the tenth of January in the respective year, pay the fixed portion of premium; the Government may prescribe a payment by installment on a monthly basis.

8. The Concessionaire shall, no later than the tenth of the month following the respective month, pay the variable portion of premium for the operation of the gaming tables and electric or mechanical gaming machines including “slot machines” in the previous month.

9. The calculation of the variable portion of premium as referred to in the preceding paragraph shall take account of the number of days, during which the Concessionaire operates each gaming table and each electric or mechanical gaming machine including “slot machines” in the month concerned.

10. The payment of premium shall be effectuated upon presentation of relevant payment vouchers to the Finance Department Treasury Office of Macao Special Administrative Region.

 Chapter X

Contributions Prescribed in Items (7) and (8) of Article 22 of Law No.16/2001

Article 48——Contributions prescribed in Item (7) of Article 22 of Law No.16/2001

1. The Concessionaire shall pay to the Grantor a sum of funds tantamount to 1.6% of its gross income from gaming business as its contribution. This sum of contribution shall be delivered to a public foundation designated by the Government for its use with the objectives of promoting, developing or studying culture, society, economy, education, science, academic and charity activities.

2. The Concessionaire shall pay the contribution as described in the preceding paragraph on a monthly basis no later than the tenth of the month following the respective month upon presentation of relevant payment vouchers to the Finance Department Treasury Office of Macao Special Administrative Region.

3. The Grantor shall budget and record the contributions as described in the first paragraph.

Article 49——Contribution Prescribed in Item (7) of Article 22 of Law No.16/2001

1. The Concessionaire shall pay to the Grantor a sum of funds tantamount to 1.4% of its gross income from gaming business as contribution earmarked for developing urban construction, promoting tourism and providing social security in Macao Special Administrative Region.

2. The Concessionaire shall pay the funds as described in the preceding paragraph on a monthly basis no later than the tenth of the month following the respective month upon presentation of relevant payment vouchers to the Finance Department Treasury Office of Macao Special Administrative Region.

3. The Grantor shall budget and record the contributions as described in the first paragraph.

4. The Government may designate one or more entity as beneficiaries to gain part or the whole of the paid-up contributions; the Government may permit the Concessionaire to assign funds directly to the entities concerned. In this case, the sum of contributions payable to the Finance Department Treasury Office of Macao Special Administrative Region set forth in the first paragraph may be reduced accordingly.

Chapter XI

Tax Liability and Documents Submission

Article 50——Special tax on gaming

1. The Concessionaire shall pay special tax on gaming as prescribed by law to Macao Special Administrative Region. Such tax shall be paid at a rate of one twelfth (1/12) and shall be paid to the Government on a monthly basis no later than the tenth of the month following the respective month.

2. The special tax on gaming may be paid in Patacas or in any other currency acceptable by the Government.

3. Without prejudice to the preceding paragraph, the payment of the special tax on gambling shall only be paid in Patacas once the acquisition of the majority chips takes place in Patacas and with Government authorization.

4. The payment of special tax on gaming in Patacas shall be carried at the Finance Department Treasury Office of Macao Special Administrative Region.

5. Should the special tax on gaming be paid in a currency other than Patacas, acceptable to the Government, the said sum of money shall be delivered to Monetary Authority of Macao, which converts the money into Patacas and refers it to the Finance Department Treasury Office of Macao Special Administrative Region.

Article 51——Tax withholding at the source

1. The Concessionaire shall collect and pay statutory taxes on commission and other remunerations for the gaming agents by way of determinative source-based withholding. The related taxes shall be paid to the Finance Department Treasury Office of Macao Special Administrative Region on a monthly basis no later than the tenth of the month following the respective month according to law.

2. The Concessionaire shall, by means of determinative source-based withholding, collect the professional tax as prescribed by law for the employees of the Concessionaire. The related taxes shall be paid to the Finance Department Treasury Office of Macao Special Administrative Region according to law.

Article 52——Payment of other payable taxes, tributes, expenses and fees

The Concessionaire shall pay the taxes, tributes, expenses or fees payable and but not exemptible as prescribed by the laws of Macao Special Administrative Region.

Article 53——Documentation certifying no debt owed to the Finance Department Treasury Office of Macao Special Administrative Region

The Concessionaire shall, on an annual basis and no later than March 31, present to the Government certificates issued by the Finance Department to certify the Concessionaire, its executive directors and bearers in its members of its governing bodies do not owe to the Finance Department Treasury Office of Macao Special Administrative Region any duty, tax, fine or additional payment. The additional payment herein shall refer to a total sum of money comprising compensatory interest, deferred interest and 3% of the debts.

(no nr. 2)

Article 54—— Certifying documentation of no debt to the Macao Special Administrative Region Social Security.

The Concessionaire shall, on an annual basis and no later than March 31, present to the Government documents issued by the Social Security Fund of Macao Special Administrative Region certifying that the supply of funds by the Concessionaire is compliance with the criterion in terms of social security in Macao Special Administrative Region.

Article 55——Providing information

1. The Concessionaire shall, on a quarterly basis but no later than the last day of the month following the end of respective quarter, present the trial balance of the previous quarter to the Government. The said company shall however submit the trial balance of the last quarter of each year no later than the last day of February of the next year.

2. The Concessionaire shall, prior to the annual shareholders’ general meeting intended to verify the accounts and at least thirty (30) days in advance, present to the Government the following data:

(1) All accounting statements and statistics for the previous business year;

(2) Full names of the persons who used to be members of the board of directors or board of supervisors, or assignees or principals of the accounting departments during the business year concerned and various possible documentations that carry such names; and

(3) A report and account book of the board of directors accompanied by comments of the board of supervisors and external auditors.

Article 56——Accounting and internal auditing

1. The Concessionaire shall have its own accounting system, a complete administrative organization and appropriate internal auditing procedure and comply with the directives issued by the Government in this regard, especially those given via the Gaming Inspection and Coordination Bureau or Finance Department.

2. In terms of accounting compilation and delivery, the Concessionaire shall adopt the criteria for public accounting format in force in Macao Special Administrative Region; such fact shall not preclude the Principal Executive, at recommendation of the Director of the Gaming Inspection and Coordination Bureau or the Director of Finance Department from stipulating the required account books, accounting files or other accounting data and specifying the criterion the Concessionaire is required to adopt in accounting during its business operation and special rules it shall comply with in terms of accounting compilation and delivery.

Article 57——Annual external auditing of the accounts

The Concessionaire shall deliver its accounts annually to an external independent entity recognized as internationally reputed, with prior approval of the Gaming Inspection and Coordination Bureau and the Finance Department for auditing and shall furnish the entity with all documents as required in advance, especially the documents as set forth in Article 34 of Law No.16/2001.

Article 58——Special auditing

The Concessionaire shall, whether or not upon advance notice, subject itself to special auditing by an external independent entity or any other entity recognized as internationally reputed at any time, provided the Gaming Inspection and Coordination Bureau or the Finance Department deems it necessary or appropriate to do so.

Article 59——Compulsory announcement

1. The Concessionaire shall, no later than April 30 each year, promise to publish in Gazette of Macao Special Administrative Region and two newspapers with the most readers in Macao Special Administrative Region, one in Chinese and the other in Portuguese, the data hereunder regarding the previous business year up to December 31:

(1) Balance sheet, profit and loss statement and appendixes therewith;

(2) Comprehensive business report;

(3) Comments by the supervisory council;

(4) Comprehensive comments by external auditors;

(5) Name list of principal shareholders in possession of 5% or more of the corporate capital of the Concessionaire within any period throughout the year with their respective percentages specified; and

(6) Names of the bearers in the members of its governing bodies.

2. The Concessionaire shall, prior to the date of announcement, submit the copies of all data as specified in the preceding paragraph and the copies of other data necessary for publication prescribed by the licensing rules as set forth in Article 6, to the Government at least ten (10) days in advance.

Article 60——Special obligation for cooperation

Apart from the general obligations for cooperation set forth in Article 67, the Concessionaire is still obligated to cooperate with the Government, especially with the Gaming Inspection and Coordination Bureau and the Finance Department, to provide data and information required for special auditing, assist the said departments in analyzing or auditing the accounting system of the Concessionaire and perform all obligations as stipulated in the licensing rules set forth in Article 6.

Chapter XII

Guaranty

Article 61——Deposit paid by the Concessionaire to secure the execution of its statutory obligations and contractual obligations

1. The deposit of the Concessionaire to secure its performance of statutory obligations and contractual obligations may be paid in any way acceptable to Government prescribed by law.

2. The Concessionaire shall reserve a sum of autonomous bank guarantee (“first demand”) issued by Seng Heng Bank S.A.R.L. in favor of the Government, to guarantee:

(1) To properly and punctually fulfill legal obligations and contractual obligations binding upon the Concessionaire;

(2) To correctly and punctually pay the premium set forth in Article 47 payable by the Concessionaire to Macao Special Administrative Region;

(3) To pay the fines or other pecuniary penalties possibly imposed on the Concessionaire prescribed by law or as provided in the clauses under this License Contract; and

(4) To pay damages as a result of the failure by Concessionaire in part or in whole to perform it’s compulsory obligations under this License Contract and any compensation for damages arising from the contractual liability for loss of interest.

3. The Concessionaire shall reserve a maximum of seven hundred million (MOP700,000,000) Patacas with a guarantee period from the date of concluding this License Contract to March 31, 2007 and a maximum sum of three hundred million (MOP300,000,000) Patacas with a guarantee period from April 1, 2007 till the date of the termination of this License Contract as autonomous bank guarantee set forth in the preceding paragraph in favor of the Government.

4. The Concessionaire shall take any necessary action and perform any requisite obligation so as to reserve the autonomous bank guarantee as specified in the second paragraph in effect.

5. Should the Concessionaire fail to perform its compulsory legal obligation or contractual obligation or correctly and punctually pay the premium payable or pay the fine or other pecuniary penalties imposed upon it pursuant to the provisions of law or the clauses as specified in this License Contract and fail to lodge an objection within the legal time limit, whether or not a prior judicial adjudication is rendered, the Government may use the autonomous bank guarantee specified in the second paragraph; the Government may, if necessitated by the payment of damages as a result of the failure by Concessionaire in part or in whole to perform its compulsory obligations under this License Contract and any compensation for damages arising from the contractual liability for loss of interest, use the autonomous bank guarantee specified in the second paragraph.

6. In case the Government uses the autonomous bank guarantee set forth in the second paragraph, the Concessionaire shall, within fifteen (15) days of receiving the notice on the use of such autonomous bank guarantee, take any necessary action to restore the full effect of the surety.

7. Unless with approval of the government, the autonomous bank guarantee set forth in the second paragraph shall not be cancelled.

8. The Government may permit either an amendment to the provisions or terms as set forth from the third to sixth paragraph or a substitute in any other form prescribed by law for the autonomous bank guarantee specified in the second paragraph, so as to secure the execution of its legal obligations or contractual obligations by the Concessionaire.

9. All expenses incurred arising from the issuance, maintenance and cancellation of the deposit used to secure the execution of legal obligations or contractual obligations by the Concessionaire shall be borne by the Concessionaire.

10. The autonomous bank guarantee as referred to in the second paragraph shall include the surety set forth in the third paragraph of Article 20, Item (2) of Article 22 of Law No.16/2001 and the first and second paragraphs of Article 84 of Administrative Regulation No.26/2001.

Article 62——Specific bank guarantee for the payment of special tax on gaming

1. In case the Government request in accordance with the provisions of the fifth paragraph of Article 27 of Law No.16/2001, the Concessionaire shall make available an autonomous bank guarantee (“first demand”) in favor of the Government in line with the time limit, provisions, terms and amount as specified by the Government, so as to secure its estimated monthly payment of special tax on gaming.

2. Unless approved by the Government, in no event the provisions and terms governing the autonomous bank guarantee set forth in the preceding paragraph shall be altered. The Concessionaire shall, strictly pursuant to the provisions set forth in time of surety, perform all or possible obligations caused to the Concessionaire as result of upholding the effect of such surety.

3. Should the Concessionaire fail to pay special tax on gaming payable to the Grantor according to the provisions prescribed by law and this License Contract, whether or not a prior judicial adjudication is rendered, the Government may put to use the autonomous bank guarantee specified in the first paragraph.

4. In case the Government uses the autonomous bank guarantee specified in the first paragraph, the Concessionaire shall, within fifteen (15) days of receiving the notice on the use of such autonomous bank guarantee, take any necessary action to restore the full effect of the surety.

5. Unless at lapse of one hundred and eighty (180) days upon termination of the license and with approval of the Government, the Concessionaire shall not cancel the security as specified in the first paragraph.

6. Any and all expenses incurred arising from the issuance, maintenance and cancellation of the autonomous bank guarantee set forth in the first paragraph shall be borne by the Concessionaire.

Article 63——Guaranty provided by the controlling shareholders or shareholders of the Concessionaire

1. The Government may request one controlling shareholder of the Concessionaire to provide surety acceptable to the Government to secure its commitments and obligations of the Concessionaire; in absence of such controlling shareholder, the Government may request a shareholder of the Concessionaire to provide such surety.

2. In particular, when there is a reason to believe the inability of the Concessionaire to fulfill its compulsory legal obligations or contractual obligations, the Concessionaire shall be required to provide surety as referred to in the preceding paragraph.

3. The surety set forth in the first paragraph may be made available in cash deposit, bank guarantee, surety insurance or in any form as provided in Article 619 of the Civil Code in accordance with the time limit, provisions, terms and amount specified in the Chief Executive Order.

4. Should the Concessionaire fail to fulfill its commitments and obligations according to the provisions prescribed by law and this License Contract, whether or not a prior judicial adjudication is rendered, the Government may put to use the surety specified in the first paragraph.

5. In case the Government is to use the surety specified in the first paragraph, the Concessionaire shall, within fifteen (15) days of receiving the notice on the use of such surety, take any necessary action to restore the full effect of the surety.

6. Any and all expenses incurred arising from the issuance, maintenance and cancellation of the surety set forth in the first paragraph shall be borne by the controlling shareholder or shareholder Concessionaire, who provides the above surety.

Chapter XIII

Supervising the Execution of Obligations by the Concessionaire

Article 64——Inspection, supervision and control by the Government

1. The right to inspect, supervise and control the execution of obligations by the Concessionaire shall be vested in the Government, especially through the Gaming Inspection and Coordination Bureau and the Finance Department.

2. For the purpose of appropriate force, without advance notice, the Concessionaire shall, if requested by the Government, grant the Government or any other specific identified entity properly entrusted by the Government free access to any part of the Concessionaire and freedom to consult and audit the accounting or bookkeeping of the Concessionaire, including any transaction record, accounting book, minutes of meetings, accounts as well as other records or documents and management accounting data and records; besides, the Concessionaire shall provide the Government or the entity designated by the Government with photocopies of the materials they think necessary.

3. The Concessionaire shall abide by and implement any decision made by the Government within its scope of authority in respect of examination and supervision, including a decision, if any, to suspend its casinos and other gaming areas.

4. The operation of licensed services shall remain subject to the continuous supervision and examination by he Gaming Inspection and Coordination Bureau accordingly to the applicable law.

Article 65——Day-to-day supervision of gross income from gaming operations

The Concessionaire shall subject itself to the supervision of gross income from gaming operations on a day-to-day basis by the Government through the Gaming Inspection and Coordination Bureau according to law

Chapter XIV

Cooperation General Obligations

Article 66——General obligations for cooperation of the Government

The Government shall cooperate with the Concessionaire so that the Concessionaire can fulfill its contractual obligations.

Article 67——General obligations for cooperation of the Concessionaire

For the application of provisions specified in this License Contract, the Concessionaire shall cooperate with the Government. For this purpose, at request of the Government, the said Company shall provide any documents, information, data or evidence and grant any consent.

Chapter XV

Other Obligations of the Concessionaire

Article 68——Operating casinos and other grounds

The Concessionaire shall ensure all accessory facilities of its casinos and other branches and adjacent areas used for operating licensed services are in proper operation for their original purpose or for a permitted purpose.

Article 69——General obligations of the Concessionaire

1. The Concessionaire shall be liable for special obligations to urge and request all entities engaged in the services development included in the license to observe any and all rules, so as to ensure sound organization and operation, and the special security measures dedicated to the customers, employees in the casinos and other gaming areas of the Concessionaire and other persons who work there.

2. For the development of the services included in the license, the Concessionaire shall engage entities, which obtain adequate license and approval, and have adequate professional and technical skills in relevant fields.

Article 70—— Government other approvals

The replacement, cancellation or change of certifying documents and record files relating to the services of the Concessionaire or the acquisition of gaming equipment and gaming material shall remain subject to the approval of the Government.

Article 71——Approval and ratification of the Government

Neither approval and ratification granted by the Government nor its refusal to grant such approval and ratification shall relieve the Concessionaire from the punctual execution of its obligations under the present License Contract or issue in any liability for the Government, except that the act of the Government has exerted encumbrance on the Concessionaire or caused particular and unusual loss thereto.

Chapter XVI

Liability of the Concessionaire

Article 72——Assuming civil liability to the Grantor

The Concessionaire shall be liable to the Grantor for any damage as a result of its failure in part or in whole to perform contractual obligations arising from any matter, for which the Concessionaire is held accountable.

Article 73——Relieve the Grantor from any non-contractual liability of the Concessionaire to a third party

1. Grantor shall neither assume nor share any possible liability, for which the Concessionaire shall be held accountable, arising out of any act by the Concessionaire or any act in its interest involving or possibly involving civil liability or any other liability.

2. The Concessionaire shall, according to the general provisions governing the relationship between the client and assignee, assume liability for the loss incurred by the entities engaged by the Concessionaire for the development of services included in the license.

Chapter XVII

Change of Subjects of the License

Article 74——Assignment, stated encumbrance, invite purchase and transfer of contract title

1. The Concessionaire undertakes not to, either explicitly or tacitly, formally or informally, assign, transfer, alienate or state encumbrance in any form to part or the whole of the operation of a casino or gaming area nor conduct any legal act with the objective of attaining the same result except as otherwise approved by the Government.

2. Each violation of the provisions set forth in the preceding paragraph shall be subject to the payment of damages in the following amounts, subject to other applicable sanctions or penalty provisions:

One billion (MOP1.000,000,000) Patacas for the cession, transfer or alienate of the whole of the operation of casinos or gaming areas;

Five hundred million (MOP500,000,000) Patacas for the cession, transfer or alienate in part of the operation of casinos or gaming areas; or

Three hundred million (MOP300,000,000) Patacas for the stated encumbrance in whole or in part on the operation of casinos or gaming areas;

3. The application for the license as specified in the first paragraph shall be accompanied by all the required documents and specify all details on any intended legal act of the Concessionaire; any such matter shall not preclude the Government from requesting additional documents, data or information.

Article 75——Sub-concession

1. The Concessionaire is forbidden to sublet, part or the whole, of its license nor do any legal act for the purpose of the same result, except as approved by the Government.

2. Each act in violation of the provisions set forth in the preceding paragraph shall be subject to the payment of damages in the following amounts, subject to other applicable sanctions or penalty provisions:

Five hundred million (MOP500,000,000) Patacas for sublet the whole of the license; or

Three hundred million (MOP300,000,000) Patacas for sublet part of the license.

3. In order of obtain a license set forth in the first paragraph, the Concessionaire shall advise the Government of its intention of sublet, and furnish the Government with all the materials the latter thinks necessary, including all correspondences between the Concessionaire and its entities, with which it is intended to sign a contract.

4. Sub-concession shall not release the concessionaire from the legal or contractual obligations by which it is bound.

Chapter XVIII

Non-compliance

Article 76——Non-compliance

1. The Concessionaire shall be subject to statutory or contractual sanctions or penalty provisions for its failure to perform a liability or obligation under this License Contract or prescribed by the Government, for which the Concessionaire is held accountable; such matter shall not affect the application of provisions of Article 77 and Article 78 herein. 

2.  In the event of force majeure or in any other circumstance, for which the Concessionaire is verified unaccountable, the Concessionaire may be exempt from the liability as specified in the preceding paragraph, but such exemption is limited to cases where the Concessionaire performs it liability punctually and completely or its obligation is otherwise obstructed.

3. Any foreseeable and unpreventable event outside the Concessionaire, the effects of which is not determined by the intention or staffing of the Concessionaire, especially acts of war, terrorism, disturbance of public order, epidemics, nuclear radiation, fire, lightning, serious flood, cyclone, tropic storm, earthquake or other natural disaster that affects the services included in the license shall be deemed as an event of force majeure and shall incur the activities as defined in the license.

4. In the event of force majeure, the Concessionaire shall notify the Government without delay and indicate as soon as possible which obligation the Concessionaire thinks results from such event and the action, if any, the Concessionaire intends to take in order to minimize the effect of the above event and/or regularize the execution of those obligations.

5. Should any of the events described in the third paragraph occur, the Concessionaire shall, as soon as possible, restore the damaged property or restore it to its original state, so as to resume appropriate business operations in Games of Fortune or Chance or Other Casino Games; if the Concessionaire lacks economic interest in rebuilding the above property and/or restoring the state of the above property, it shall transfer the insurance premium to the Grantor.

Chapter XIX

Cancellation and Termination of License

Article 77——Cancellation through mutual agreement

1. The Government and the Concessionaire may rescind this License Contract upon mutual agreement.

2. The Concessionaire shall be fully liable for termination of the effect of any contract to which it is a contracting party, while the Grantor shall be free of any liability thereto, except as otherwise agreed expressly.

Article 78——Redemption

1. As of the seventh year of the license, the Government may deliver a registered letter provided with a return receipt and notify the Concessionaire to redeem the license at least one (1) year in advance, except as otherwise provided by law.

2. The Grantor shall undertake and assume any and all rights and obligations of the Concessionaire arising from the legally effective acts prior to the date of notice as specified in the preceding paragraph as a result of redemption.

3. In the event of any obligation of the Concessionaire stated in a contract concluded after the notice described in the first paragraph, unless with prior approval of the Government of such contract before its conclusion, the Grantor shall not assume such obligation.

4. The obligation stated by the Concessionaire, for which the Grantor is liable, shall not affect the right of recourse against the obligation imposed upon the Concessionaire but beyond the proper management of the licensed services.

5. In the event of redemption of the concession, the concessionaire shall be entitled to fair and reasonable compensation for damages. The amount of compensation damage shall be in compliance with the standards prescribed by the administrative regulations.

6. Any compensation for damage, abnormal depreciation or damaged property and impaired rights as a result of redemption shall not be calculated.

7. The compensation for damages set forth in the fifth paragraph shall be used to offset the debts arising from the fine imposed upon the Concessionaire, make up the loss, if any, and any other payment payable by the Concessionaire.

Article 79—— Sequestration

1. In case the Concessionaire terminates or discontinues the licensed services in whole or in part neither with prior consent and nor because of an event of force majeure or such matter is impending or severe disturbances or defect occurs to the organizing and operating or the overall status of the facilities and equipment of the Concessionaire that might affect the proper operation of licensed services, the Government may, during the period when the above termination or discontinuity lasts or the above disturbance and defect subsists, replace directly or via a third party the Concessionaire, make sure the licensed operations and urge it to take necessary measures to guarantee the object of this License Contract.

2. During the sequestration the expenses needed to maintain and for the normal operation of licensed services shall be paid by the Concessionaire. For this purpose, the Government may put to use the deposit or the surety provided by the controlling shareholder of the Concessionaire intended to guarantee the performance of legal obligations or contractual obligations of the Concessionaire.

3. Once the cause resulting in the sequestration disappears, the Government may, if it thinks appropriate, notify the Concessionaire to resume its licensed operations within a specified time limit.

4. In case the Concessionaire does not wish to or cannot resume the licensed operations or severe disturbances or defect continues in respect of its organization and operation notwithstanding its resumption of licensed services, the Government may unilaterally declare the cancellation of the contract on the ground of the nonfulfilment of this License Contract.

Article 80——Unilateral cancellation due to nonfulfilment

1. In the event the Concessionaire fails to perform its basic obligations prescribed by law or the contract, the Government may terminate the license by unilaterally rescinding the present License Contract on the ground of nonfulfilment.

2. Unilateral cancellation of this License Contract may be largely attributed to the causes hereunder:

(1) To depart from the licensed object as a result of running unlicensed gaming or services beyond the scope of business of the Concessionaire;

(2) To abandon licensed services or suspend licensed services without justified reasons;

(3) To shift temporarily or definitely operations in part or in whole in violation of the provisions of the licensing rules set forth in Article 6;

(4) To default taxes, premium, duties or other compensation set forth in the licensing rules of Article 6 payable to the Grantor but fail to refute within the statutory time limit;

(5) The Concessionaire refuses to or cannot obtain the license according to the provisions of the fourth paragraph of the preceding article or the circumstance resulting in administrative intervention remains notwithstanding the sequestration of the license;

(6) To object repeatedly to inspection and supervision or failing to comply with the decision by the Government;

(7) To frequently fail to comply with the licensing rules as specified in Article 6;

(8) To fail to provide or replenish the deposit or surety as specified in this License Contract in accordance with the provisions and time limit;

(9) The Concessionaire goes bankrupt or insolvent;

(10) To commit any serious defraud to the detriment of the public interest; and

(11) To violate seriously the implementing rules for Games of Fortune or Chance or Other Casino Games or impair the fairness of the Games of Fortune or Chance or Other Casino Games.

(no nr.12)

3. In the event of no obstruction to the provisions of Article 83, if any event set forth in the preceding paragraph takes place or any other event occurs that may result in the unilateral cancellation of the License Contract due to nonfulfilment as provided in this Article, the Government shall notify the Concessionaire to fully perform its obligations and correct or offset the results arising from its act within a specified time limit, except for an irreparable violation.

4. Should the Concessionaire fail to perform its obligation, correct or offset the results arising from its act according to the provisions prescribed by the Government, the Government may unilaterally cancel this License Contract with a notice delivered to the Concessionaire and notify such intention in writing to the entities, which finance the investment and obligations of the Concessionaire according to and for the application of the provisions in the licensing rules as specified in Article 6 in respect of financial capacity.

5. The notice issued to the Concessionaire with regard to the decision to rescind the contract set forth in the preceding paragraph shall take effect immediately subject to no other formalities.

6. If the Government is intolerant of the slow progress in correcting the nonfulfilment set forth in the third paragraph in time of well-founded emergency, the Government may temporary seize the license contract without any obstruction against the execution of such progress and the provisions of the fourth paragraph herein.

7. The amount of damage compensation for the unilateral cancellation of this License Contract due to nonfulfilment according to the provisions of this Article, thus resulting in the obligation for the Concessionaire to pay such compensation, shall be calculated in accordance with general legal provisions.

8. The unilateral cancellation of this License Contract due to nonfulfilment shall result in immediate transfer of relevant casinos and the equipment and appliances, notwithstanding outside the casinos, to the ownership of the Grantor without compensation.

Article 81—— Forfeit

1. This License Contract shall cease at the expiration of the license term as specified in Article 8. The contractual relationship between the contracting parties to the contract shall be annulled consequently; such matter shall not affect the application of provisions under this License Contract that remain in force after the expiration of the license term.

2. In case of invalidation as provided in the preceding paragraph, the Concessionaire shall be fully liable for termination of the effect of any contract to which it is a contracting party, while the Grantor shall be free of any liability thereto.

Chapter XX

Revision and Contract Modification

Article 82——Revision of the License Contract

1. This License Contract may be revised according to the law.

2. The revision of and any appendix to this License Contract shall be in compliance with the formalities set forth in Article 91 of Administrative Regulation No.26/2001.

Chapter XXI

The Phases Prior to a Lawsuit

Article 83——Consultation prior to a lawsuit

1. Any issue or discrepancy arising from such matters as the effectiveness, application, implementation, construction or amendment of the governing rules between both contracting parties to this License Contract shall be subject to consultation.

2. Such issues shall neither relieve the Concessionaire from performing the provisions of this License Contract punctually and thoroughly and the decision of the Government notified to the Concessionaire according to the provisions of this License Contract nor in any event allow the Concessionaire to discontinue the development of any of its services. In this case, the relevant development shall proceed in accordance with the provisions in effect on the date of such issues.

3. The provisions of the preceding paragraph that the Concessionaire shall execute the decision of the Government shall apply to the consecutive decisions on an identical matter, even though such decisions are given after the date of the start of consultation, provided that the first of such decisions has been notified to the Concessionaire prior to the date of consultation.

Chapter XXII

Final Arrangements

Article 84——Obtaining permits, licenses or authorizations

1. This License Contract shall exempt the Concessionaire from neither obligations such as filing an application, paying fees and/or taking actions in order to obtain permits, licenses or authorizations needed by the operation of any service or the execution of obligations as provided in this License Contract nor any and all essentials required for the Company to comply with or conform to so as to obtain the above permits, licenses or authorizations and uphold their effectiveness.

2. Should any of the permits, licenses or authorizations set forth in the receding paragraph be withdrawn, nullified, discontinued or revoked or otherwise cease to be in force for whatever reason, the Concessionaire shall notify the Government promptly and indicate the measures it has taken or will take to retrieve such permit, license or authorization or revalidate them.

3. No clause under this License Contract shall be understood as a replacement for the need of obtainment of any license, permit or legal authorization as foreseen by the contract.

Article 85——Industrial and intellectual property rights

1. In its business activities, the Concessionaire shall, according to the current laws in force in Macao Special Administrative Region, respect industrial and intellectual property rights and shall be solely accountable to any consequence as a result of infringement upon any such rights.

2. Unless the Concessionaire respects all industrial and intellectual property rights, the Concessionaire shall not be granted a permit, license and authorization, especially those relating to the implementation of the investment plan attached to this License Contract.

3. The Concessionaire shall assign to the Grantor without compensation any research, draft, plan, drawing, document or other materials necessary or useful for the execution of duties or rights vested in the latter according to the provisions of this License Contract.

4. Upon request of the Grantor, the Concessionaire shall work out any documents or statements in order to ascertain or register the rights as specified in the preceding paragraph.

5. In case the industrial or intellectual property rights, assigned or to be assigned to the Grantor as provided in the present article, is infringed upon but the Concessionaire has failed to resolve any dispute with a third party arising from such infringement, the Grantor may intervene to uphold the above property rights. The Concessionaire is committed to any assistance required for this purpose.

Article 86——Summon, circular, notice, authorization and ratification

1. Unless as otherwise provided, the summon, circular, notice, authorization and ratification as referred to in this License Contract shall be made in writing and delivered in the following manners:

(1) Delivery by hand, subject to protocol;

(2) Facsimile, subject to receipt of delivery message; or

(3) Registered letter with acknowledgment of receipt.

2. The license of the Government shall be granted in advance.

3. The refusal to render a reply to the application filed by the Concessionaire for approval and ratification or other requests shall be treated as disapproval.

4. For the application of the provisions under this License Contract, the following address and the place for receiving facsimiles shall be deemed the domicile of both contracting parties:

The Government of Macao Special Administrative Region:

Gaming Inspection and Coordination Bureau

21/F, China Plaza building, No.762-804, Avenida da Praia Grande, Macao

 (澳門南灣大馬路762-804號中華廣場21樓)

Facsimile: 370296

Concessionaire: Sociedade de Jogos de Macao, S.A

Head Office: 9/F, Hotel Lisboa, Avenida de Lisboa, Macao

 (澳門大堂區葡京路葡京酒店九樓)

Facsimile: 570082

5. Upon prior notice to the other party, either contracting party may change the address and place for receiving facsimiles as specified in the preceding paragraph.

(no nr. 6)

Article 87—— Prohibit any limitation of competition

1. The Concessionaire shall engage its business in compliance with the intrinsic principles of market economy on a basis of sound and fair competition.

2. The Concessionaire shall be obligated not to reach any agreement in any form with another Concessionaire or companies subordinate to the concerned consortiums, nor practice any agreed act likely to obstruct, restrict or distort competition.

3. The Concessionaire shall assume the obligation not to abuse the leading position it has secured on the market or the majority of the market likely to obstruct, limit or impair competition.

Article 88——Gaming promoters

The Concessionaire shall be held accountable to the Government for the activities conducted by the gaming promoters registered with the company, their directors and partners in its casinos and other gaming areas; for this purpose, the Concessionaire shall supervise of their activities.

Article 89——Promoting the enterprises of the Concessionaire

1. The Concessionaire shall be under the obligation to carry out advertising campaigns and market promotion of its enterprises, especially its casinos, within and outside Macao Special Administrative Region.

2. The Government and the Concessionaire shall have the obligation to coordinate its advertising and market campaigns in promoting Macao outside.

3. Without approval of the Government, the Concessionaire shall be obligated not to use images or large text remarks regarding its casinos, enclosure or continuous annex area on any Internet dotcom or website or any other place intended to promote interactive gaming.

Article 90—— Elements included in the License Contract

Any part in the tender documents presented by the Concessionaire as a tendering company for the first competitive bidding for 3 (three) licenses for Games of Fortune or Chance or Other Casino Games under Principal Executive Order No.217/2001, provided it does not contradict this License Contract expressly or implicitly, shall be treated as an integral part of this License Contract.

Article 91——Casino chips used for business operation

1. Prior to the issuance and put into circulation of casino chips of any kind or nature, the Concessionaire shall comply with the guidance of the Government.

2. The quantity issued and in circulation of casino chips shall be subject to the approval of the Government.

3. Upon request by the Concessionaire, the Concessionaire shall guarantee the cashing of casino chips in circulation in cash, cheque or equivalent credit voucher.

4. The Concessionaire shall use cash or vouchers with high solvency against all casino chips in circulation to maintain the solvency rate, prepare reserve fund and observe the cautious rules specified by the Government at different times, so as to honour the casino chips anytime.

Article 92——Confidentiality

1. All documents produced by either the Government or the Concessionaire for the execution of laws or the provisions of this License Contract shall be kept confidential and shall not be made available to any third party without permission of the other party.

2. Both the Government and the Concessionaire shall take any necessary measures so to ensure that both the Macao Special Administrative Region public administrative staff and the Concessionaire employees, respectively, are bound to the confidentially of information.

3. Both the Government and the Concessionaire shall make sure other persons who have obtained or are likely to obtain the confidential documents, especially those through a consultant contract, work contract or any other contract, abide by the obligation for confidentiality.

Article 93——Complaint book

1. The Concessionaire shall prepare a complaint book and ensure that such book is available to the customers of its casinos and other gaming areas.

2.  The Concessionaire shall post a notice at a conspicuous place in its casinos and other gaming areas, announcing the presence of the complaint book.

3. The Concessionaire shall, within forty-eight hours, present to the Government the copy of a complaint as specified in the complaint book accompanied by the report of the Concessionaire regarding such complaint.

Chapter XXIII

Interim Provisions

Article 94——Professional training schedule

1. The Concessionaire shall, within the time limit prescribed by the Government, draw up a professional training plan for its employees, who hold a post in service activities included in the license.

2. The Concessionaire shall, within a specified time limit, present to the Government any other document or information in regard to the plan set forth in the preceding paragraph.

Article 95——Deposit of the corporate capital

The Concessionaire shall keep its corporate capital deposited at a local credit organization or the branch or affiliate of a credit organization authorized to do business in Macao Special Administrative Region. In no event shall such capital be transferred elsewhere before the Concessionaire commences its business. The date expressly ratified by the Government through the order of Secretary for the Economy and Finance Department as the date of starting business shall be deemed as the date on which the Government starts its business.

Article 96——Designated executive director

1. Government shall, no later than April 15, 2002, notify the Concessionaire whether to permit the person specified in Appendix I to Administrative Regulation No.26/2001 presented by the Concessionaire in the capacity of a tendering company for the first competitive bidding for 3 (three) licenses for Games of Fortune or Chance or Other Casino Games to serve as the executive director of the Concessionaire.

2. In case the designated person is not accepted by the Government, the Concessionaire shall, within fifteen (15) days of receiving the notice from the Government concerning its refusal of the person selected, designate another candidate for executive director and attach therewith the form set forth in Appendix II to Administrative Regulation No.26/2001 completed by the designated executive director.

3. The provisions of the third and fourth paragraphs of Article 21 herein shall be applicable to the act of granting the management right of the Concessionaire to the executive director for the first time upon conclusion of this License Contract.

4. Should the Government refuse to approve one or more particulars as described in the preceding paragraph, the Concessionaire shall present the new draft resolution as soon as possible upon receiving the notice of disapproval from the Government.

Article 97——Bank accounts

The Concessionaire undertakes to submit to the Government all bank accounts and balance-related documents under the name of the Concessionaire on April 30, 2002 at the latest.

Article 98——Statements regarding obligation for cooperation

The Concessionaire shall take actions to obtain a statement signed by each shareholder in possession of 5% or more of the corporate capital of the Concessionaire, each director of the Concessionaire and principal employees, who hold important posts in the casinos, to the effect that they agree to be committed to the special obligation for cooperation with the Government. For this purpose, they shall, at request, provide any document, information, data or evidence and grant any permission; the Concessionaire shall, no later than April 30, 2002, refer this statement to the Government.

Article 99——Premium for 2002

1. The concessionaire undertakes to submit to the Government, no later than April 5, 2002, a list stating the number of gaming tables and electric or mechanical machines, including “slot machines”, that it intends to operate that year, together with their location.

2.  The Concessionaire undertakes, no later than April 10, 2002, to pay the fixed portion of the premium for 2002 in the amount of twenty-two million and five hundred thousand (MOP22,500,000) Patacas.

Article 100——Dredging

1. The Concessionaire shall be severally and jointly liable for its obligation in favor of Sociedade de Turismo e Diversões de Macao, S.A.R.L. in Macao Special Administrative Region, towards dredging and necessary marine operations especially in the following places:

(1) Maritime Terminals located in Macao, Taipa island (氹仔島) and Coloane Island (路環島) often for the regularly use of enterprises or organizations of public interest in Macao Special Administrative Region;

(2) Access canals to the inner and outer port as well as adjacent areas;

(3) Access canals to the inner port and the area between “Macao Maritime Navigation School” (澳門航海學校) and No.17 Wharf;

(4) Access canals between the inner port and Patane North dock berths (Typhoon shelter) and South Patane (dry dock berth)

 (北沙梨頭船塢(避風塘)及南沙梨頭船塢(幹塢));

(5) Access canals to Ports "CEM" (發電廠碼頭) in the outer Port, Coloane (路環) and contiguous area

(6) Access canals to Airport Fuel Terminal (機場燃油碼頭) and contiguous area;

(7) Access canals to Port of Ká-Ho(九澳港);

(8) Contiguous area to the Fuel Terminal of the Port of Ká-Ho(九澳油庫碼頭);

(9) Access canals to Containers Terminal of the Port of Ká-Ho (九澳貨櫃碼頭) and contiguous area; and

(10) Other areas specified by the Government according to the practical need of Macao Special Administrative Region, where the expenses on dredging or other necessary marine operations will not apparently exceed the average cost for the identical work in each place as described above.

2. Dredging referred to in the preceding paragraph shall be implemented in accordance with the plan worked out by the Government after soliciting opinions from the Concessionaire and Sociedade de Turismo e Diversões de Macao, S.A.R.L. The Government shall be obligated to ensure the vessels or obstacles within the areas intended for the abovementioned work are cleared away.

3. The liability of the Concessionaire set forth in the first paragraph is limited to the extent of an annual dredging volume of 4.800.000 m3 (four million, eight hundred thousand cubic meters) every three (3) years.

4.The Concessionaire shall be held severally and jointly liable for the obligations of Sociedade de Turismo e Diversões de Macao, S.A.R.L. hereunder:  pursuant to its agreement with the Government, carry out dredging in the areas within Macao Special Administrative Region specified by the Government according to the practical need of Macao Special Administrative Region, where the expenses on dredging or other necessary marine operations apparently exceed the average cost for identical work in each place set forth in Items (1)~(9) of the first paragraph.

Article 101——Articles of association approval

The Government shall, no later than June 30, 2002, give a notice to the Concessionaire as to whether shall approve the articles of association of the Concessionaire.

Article 102——Insurance

The Concessionaire undertakes to present to the Government, no later than May 31, 2002, the copies of the insurance contracts as specified in Article 40.

Article 103——Licensed places for games of fortune or chance

1. The Concessionaire is allowed to engage in Games of Fortune or Chance or Other Casino Games in the following places:

(1) “Casino Lisboa” (葡京娛樂場), located at Avenida de Lisboa (葡京路), Macao;

(2)  “Casino Jai Alai”(回力球娛樂場), in Macao Jai Alai Building (澳門回力球場);

(3)  “Casino Oriental” (東方娛樂場), in Mandarin Oriental Macao (澳門文華東方酒店);

(4)  “Casino Kingsway” (金域娛樂場), in Kingsway Hotel Macao (澳門金域酒店);

(5)“Casino Diamante” (鑽石娛樂場), in Macao Holiday Inn Hotel (澳門假日酒店);

(6)“Casino Taipa”(海島娛樂場), in Hyatt Regency Macao Hotel on the island of the Taiga (氹仔澳門凱悅酒店),

(7)“Club VIP Legend” (勵駿會), in Macao Landmark Building (澳門置地廣場);

(8)“Casino Marina” (遊艇會娛樂場), in the "Marina Infant” Inn South Marina of the Taipa in Aterro Cotai (路氹填海區氹仔南部遊艇俱樂部皇庭海景酒店);

(9) “Casino New Century”(新世紀娛樂場), in the "New Century” Hotel on the island of the Taipa(氹仔新世紀酒店);

(10)“Casino Kam Pek”(金碧娛樂場), in Macao "San Kin Yip" Commercial Centre (澳門新建業商業中心);

(11)“Casino Macao Palace”(澳門皇宮娛樂場), in Macao Old Maritime Terminal, Exterior Port (澳門舊外港碼頭).

2. The provisions of the preceding paragraph shall be revised by the Government five (5) years after the conclusion of this License Contract.

3. The provisions of the preceding paragraph shall not preclude the Concessionaire from requesting the replacement of any place as described in the first paragraph.

4.  The Concessionaire shall, no later than May 15, 2002, execute the provisions as provided in the fourth paragraph of Article 42 with respect to the places as specified in Items (2)~(11) of the first paragraph.

Article 104—— Casino chips issued or put into circulation by. Sociedade de Turismo e Diversões de Macao, S.A.R.L.

1. The Concessionaire is allowed to use casino chips issued or put into circulation by. Sociedade de Turismo e Diversões de Macao, S.A.R.L.

2.The Concessionaire shall guarantee the cashing of casino chips issued or put in circulation by Sociedade de Turismo e Diversões de Macao, S.A.R.L. in cash, cheque or equivalent credit voucher.

Article 105——Electronic surveillance and control equipment

The obligations specified in the first paragraph of Article 13 shall only apply to the installation of new surveillance and control equipment within the operation premises of Games of Fortune or Chance or Other Casino Games set forth in the first paragraph of Article 103.

Article 106——Appointment or power of attorney

The Concessionaire undertakes to notify the Government, no later than April 8, 2002, of any and all appointments or authorizations empowered within the limit of authority of board of directors on the basis of a steady relation with effect as of the date of the conclusion of this License Contract or the right of legal act to work out laws on enterprise operation in the name of the Concessionaire in order for the latter to grant any approval thereof; however, the right of doing an act purely of general affairs nature, especially the right of such act in a public department or public authorities, is an exception.

Article 107——Present participation in the operation of games of fortune or chance or other casino games in other jurisdictional areas

The Concessionaire undertakes to notify the Government, no later than May 31, 2002, of the present participation by the controlling shareholder of the Concessionaire, all shareholders in possession of 10% or more of the corporate capital of the Concessionaire or present participation by all the shareholders of the Concessionaire in the operations of Games of Fortune or Chance or Other Casino Games within any other jurisdictional area, including participation through management contract only.

Article 108——Statutory body’s of the Concessionaire

The Concessionaire undertakes to notify the Government, no later than April 5, 2002 of the composition of board of directors, presidium of the shareholders’ meeting, supervisory council and other statutory body’s on the date of this License Contract.

Article 109——Structure of the shareholders and corporate capital

1. The Concessionaire undertakes to submit to the Government, no later than April 5, 2002 the structure of shareholders on the date of this License Contract signature.

2.  The Concessionaire undertakes to submit to the Government, no later than April 5, 2002 the structure of legal persons in possession of 5% or more of the corporate capital of the Concessionaire on the date of this License Contract signature, especially the structure of the company’s corporate capital, the structure of the corporate capital of the legal persons in possession of 5% or more of the corporate capital in possession of the above legal persons, and progressively until the final single or corporate shareholders.

3. The Concessionaire undertakes to submit to the Government, no later than April 15, 2002, the statement for 2002 as set forth in the second paragraph of Article 19.

Article 110——Limit on the number of licenses

The Concessor undertakes not to grant any license for Games of Fortune or Chance or Other Casino Games, by April 1, 2009, so that the number of license at any time will not exceed three, according to law.

Article 111——Allocate Casino Lisboa (葡京娛樂場) for licensed services

1. “Casino Lisboa”(葡京娛樂場), inclusive of all equipment and appliances used for the operation of Games of Fortune or Chance or Other Casino Games, shall be allocated for the licensed services for a term of one (1) year by means of a temporary transfer of the ownership, proceeds and use of “Casino Lisboa” (葡京娛樂場) to the Concessionaire.

2. The compensation payable to the Grantor arising from the allocation of “Casino Lisboa” (葡京娛樂場), inclusive of all equipment and appliances used for the operation of Games of Fortune or Chance or Other Casino Games, shall be worth one eighteenth (1/18) of the sales price of the said casino as agreed upon between the Grantor and the Concessionaire when this casino is transferred.

3. Should the Grantor and the Concessionaire fail to reach an agreement on the transfer price of “Casino Lisboa’, inclusive of all equipment and appliances used for the operation of Games of Fortune or Chance or Other Casino Games by December 31, 2002, the Government will, upon consultation with the Concessionaire, unilaterally specify the amount of compensation payable to the Grantor arising from the alienation of such property for licensed operations.

4. The Concessionaire undertakes to cooperate with the Government to promote all acts needed to the registration of the building “Casino Lisboa”(葡京娛樂場) in the name of Grantor and other acts incurred therefrom.

Article 112——Revision of contribution percentages

Both contracting parties shall revise the contribution percentages set forth in Article 48 and Article 49, in the year of 2010.

Article 113——Effectiveness

This License Contract written in both official languages takes effect as from April 1, 2002.

Signature of both parties:

Finance Services Department On this 28th day of March 2002  

Substitute notary: Chu Iek Chong (朱奕聰)

———

On this 3rd day of April 2002 in Finance Services Department

Director: Carlos F. Ávila

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