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This announcement is dated 30 November 2007.
Reference is made to the announcement dated 1 August 2007 in relation to the conditional sale and purchase agreement (“Initial SPA”) entered into between the Trustee and the Vendor on 1 August 2007 for the proposed acquisition of all property units owned by the Vendor that are located within the mixed commercial complex known as “The Summit Subang USJ”, comprising:-

(a) 9 levels of office lots forming part of a 15-storey office tower block with 2 mechanical floors known as Menara Summit (“Office Lots”);

(b) a 17-storey 332-room 4-star rated hotel tower block known as The Summit Hotel, Subang USJ (“Hotel");
(c) 155 retail lots forming part of 540 retail lots that are located within a 6-storey retail podium with mezzanine floor located below the office tower block and a double volume cinema located on level 5 (“Retail Lots”); and

(d) 2,125 car parking bays located within 3 basement levels and an open area within the perimeter of the site (“Car Park”),

all of which are constructed on a piece of freehold land under title known as Geran 43528, Lot No. 14 (formerly known as H.S.(D) 121185, P.T. No. 8) in Pekan Subang Jaya, District of Petaling, State of Selangor (“Land”)

(the Office Lots, Hotel, Retail Lots and Car Park are hereinafter collectively be referred to as “Property”).

On behalf of the Board of Directors ("Board") of Am ARA REIT Managers Sdn Bhd ("Am ARA" or "Manager"), the manager of AmFIRST REIT, AmInvestment Bank Berhad (formerly known as AmMerchant Bank Berhad)(a member of AmInvestment Bank Group) wishes to announce that the Trustee had on even date entered into a new conditional sale and purchase agreement (“SPA”) with the Vendor to vary certain terms and conditions of the Initial SPA (“Variations”). The SPA shall immediately replace and substitute the Initial SPA in its entirety as from 1 August 2007.

Since the date of the Initial SPA, the Trustee has been notified by Companion Park Sdn Bhd (“Companion Park”) of a pending legal suit between the Vendor and Companion Park (“Legal Suit”). The Legal Suit arose from the latter’s claim on the Office Lots pursuant to various sale and purchase agreements and a put option agreement entered into between the Vendor and Companion Park.

Arising thereof and to enable the Trustee to proceed with the purchase of the Property, variations have been made to certain terms and conditions of the Initial SPA.

The Trustee shall purchase from the Vendor, the Hotel, Retail Lots and Car Park (collectively referred to as “Unaffected Property”) free from all encumbrances, for a total purchase consideration of RM230,000,000, subject to the terms and conditions set out in the SPA (“Proposed Acquisition of Unaffected Property”).

The Trustee shall further purchase from the Vendor the Office Lots free from all encumbrances, for a total purchase consideration of RM30,000,000, subject to the terms and conditions set out in the SPA (“Proposed Acquisition of Office Lots”)

(the Proposed Acquisition of Unaffected Property and the Proposed Acquisition of Office Lots are hereinafter collectively be referred to as “Proposed Acquisition”).

The total purchase consideration for the Property, however, remained unchanged at RM260,000,000.

A total deposit of RM13,000,000 had been paid for the purchase of the Unaffected Property prior to the date of the SPA. The balance of RM217,000,000 shall be settled as follows:-
(a) the balance deposit of RM10,000,000 shall be paid within 5 business days upon the removal of all existing caveats registered over the Land and upon the Vendor signing the SPA; and
(b) the completion balance of RM207,000,000 (subject to certain adjustments, which include redemption sum payable to existing chargee, tenancy deposits, retention amounts, outgoings reimbursable by the Vendor / Trustee and any late payment interest payable by the Trustee) shall be paid during the completion period for the purchase of the Unaffected Property.

A deposit of RM3,000,000 shall be paid for the purchase of the Office Lots within 5 business days upon the Vendor furnishing the Trustee a confirmation from the Vendor’s solicitors that the Vendor has, as at the date of the said letter, executed a conditional settlement agreement with Companion Park in relation to the settlement and withdrawal of the Legal Suit. The completion balance of RM27,000,000 (subject to certain adjustments, which include tenancy deposits, retention amounts, outgoings reimbursable by the Vendor / Trustee and any late payment interest payable by the Trustee) shall be payable during the completion period for the purchase of the Office Lots.


3.2 Conditions Precedent

The conditions precedent for the purchase of the Unaffected Property, to be fulfilled on or before the cut-off date (being a date falling 8 months from 1 August 2007) or such extended date as agreed by the parties to the SPA, are, amongst others, as follows:-
(a) the Trustee shall have obtained all such required approvals or waivers from the Securities Commission (“SC”) or such other regulatory authorities relating to the purchase of the Unaffected Property, including but not limited to the valuation of the Unaffected Property at not less than RM230,000,000;

(b) the Trustee shall have conducted and completed a legal, financial, building structure and property due diligence on the Unaffected Property and is satisfied with the results thereof;
(c) the Trustee shall have received a valuation report from an independent valuer appointed by the Trustee confirming that the market value of the Unaffected Property is not less than RM230,000,000;
(d) the Vendor shall have, at its own costs and expense, submitted its application and done all acts for the subdivision of the Property and the issuance of strata titles to the Property;
(e) within ninety (90) days from 1 August 2007 or such extended date as may be granted by the Trustee, the Vendor shall have removed all private caveats (save for the Trustee’s private caveat) registered or presented for registration on the Land;
(f) the Vendor shall have executed a first legal charge in favour of the Trustee over all monies in the account to be opened for the purposes of receiving all monies received or derived from the business or operations of the letting out of the Hotel by the Trustee to the Vendor;
(g) the Vendor shall have formed the Joint Management Body in accordance with the Building and Common Property (Maintenance and Management) Act 2007;
(h) the Vendor shall have obtained the approval of the SC for the disposal of the Unaffected Property;
(i) compliance with and satisfaction of such other conditions precedent as may be stipulated or imposed by the SC or any other persons in connection with the sale and purchase of the Unaffected Property;
(j) within ninety (90) days from 1 August 2007 or such extended date as may be granted by the Trustee, the Vendor shall have obtained its shareholders’ approval for the disposal of the Property; and
(k) where the Trustee is obtaining financing for the purchase of the Property, the loans required to finance the purchase of the Unaffected Property and the Office Lots are to be made available for drawdown during the completion periods for the Unaffected Property and the Office Lots respectively, provided that the Trustee shall furnish documentary evidence of an in-principle loan approval for the purchase of the Property within ninety (90) days from 1 August 2007 or such extended date as may be granted by the Vendor.

The conditions precedent for the purchase of the Office Lots, to be fulfilled on or before the cut-off date (being a date falling 8 months from 1 August 2007) or such extended date as agreed by the parties to the SPA, are, amongst others, as follows:-
(a) the Trustee shall have obtained all such required approvals or waivers from the SC or such other regulatory authorities relating to the purchase of the Office Lots, including but not limited to the valuation of the Unaffected Property at not less than RM30,000,000;

(b) Trustee shall have conducted and completed a legal, financial, building structure and property due diligence on the Office Lots and is satisfied with the results thereof;
(c) the Vendor shall have obtained the approval of the SC for the disposal of the Office Lots;
(d) the Vendor shall have removed all private caveats (save for the Trustee’s private caveat) registered or presented for registration on the Land;
(e) compliance with and satisfaction of such other conditions precedent as may be stipulated or imposed by the SC or any other persons in connection with the sale and purchase of the Office Lots;
(f) there shall have not been any non-consumation or termination of the sale and purchase of the Unaffected Property; and
(g) the Vendor shall have delivered to the Trustee a confirmation from the Vendor’s solicitors that the Vendor has, as at the date of the said letter, executed a conditional settlement agreement with Companion Park in relation to the settlement and withdrawal of the Legal Suit.


3.3 Warranties by the Vendor

The warranties given by the Vendor on the minimum net incomes of the Retail Lots, Office Lots and Car Park shall be as follows:-

(a) the minimum net incomes of the Retail Lots and Car Park for a period of four (4) consecutive years immediately following the date the Trustee takes possession of the Unaffected Property shall amount to RM60,470,000; and

(b) the minimum net incomes of the Office Lots for a period of four (4) consecutive years immediately following the date the Trustee takes possession of the Office Lots shall amount to RM10,530,000.

In this respect, the Trustee had on even date entered into two (2) new separate Guarantee and Indemnity Agreement (“Guarantee Agreements”) with Meda Inc. to incorporate, amongst others, the abovementioned variations in the warranties given by the Vendor. The Guarantee Agreements shall replace and substitute the Guarantee and Indemnity Agreement entered into between the Trustee and Meda Inc. on 1 August 2007 in its entirety as from 1 August 2007.

Accordingly, the amounts to be retained in the escrow accounts for the purpose of, amongst others, meeting any shortfall between the actual net incomes and rentals received by the Trustee with regards to the Property and their guaranteed minimum net incomes and rentals, shall be as follows:-

(i) the sum of RM11,600,000 will be retained with respect to the Unaffected Property; and

(ii) the sum of RM1,400,000 will be retained with respect to the Office Lots.

The purchase considerations for the Unaffected Property and the Office Lots of RM230,000,000 and RM30,000,000 respectively were arrived at on a willing-buyer willing-seller basis based on their respective market values of RM232,0000,000 and RM33,000,000 as valued by Rahim & Co Chartered Surveyors Sdn Bhd, an independent firm of registered valuers, in their valuation report dated 27 July 2007 (“Valuation Report”). The material date of the valuation is 13 June 2007.

The valuation of the Property has been carried out based on the Investment, Profit and Comparison Methods.

5.1 Gearing

Pursuant to the Variations, the proforma effects of the Proposed Acquisition on the gearing of AmFIRST REIT will be as set out in Table 1.

The Proposed Acquisition of Office Lots is conditional upon the Proposed Acquisition of Unaffected Property but not vice-versa.

Save as highlighted above, all other conditions of the Proposed Acquisition set out in Section 6 of the announcement dated 1 August 2007 remains unchanged.

Pursuant to the Variations and the signing of the SPA, the Vendor has requested for an extension of time up to 31 December 2007 for the submission of their application to the SC and other relevant authorities for the sale of the Property.

The Trustee has granted the Vendor the said extension of time. Accordingly, the timing of the submission of the applications to the SC for the Proposed Acquisition will be extended to 31 December 2007.

The SPA and the Valuation Report are available for inspection at the registered office of Am ARA at Level 16, Bangunan AmBank Group, 55 Jalan Raja Chulan, 50450 Kuala Lumpur during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this announcement.

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