Hailan : DISCLOSEABLE TRANSACTION IN RELATION TO ACQUISITION OF PROPERTIES

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Hailan Holdings Limited

海 藍 控 股 有 限 公 司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 2278)

DISCLOSEABLE TRANSACTION

IN RELATION TO ACQUISITION OF PROPERTIES

THE AGREEMENTS

The Board announces that on 2 March 2020, (U.S. time), Hylan Investment, an indirect non-wholly owned subsidiary of the Company, and Vendors A entered into Agreement A, pursuant to which Hylan Investment has agreed to acquire and Vendors A have agreed to sell Property A at the consideration of US$16,000,000 (equivalent to approximately HK$124,496,000).

The Board also announces that on 2 March 2020, (U.S. time), Hylan Investment and Vendor B entered into Agreement B, pursuant to which Hylan Investment has agreed to acquire and Vendor B has agreed to sell Property B at the consideration of US$5,125,000 (equivalent to approximately HK$39,877,000).

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Acquisitions (when aggregated) is/are more than 5% but less than 25%, the Acquisitions (when aggregated) constitute a discloseable transaction of the Company and is therefore subject to the reporting and announcement requirements pursuant to Chapter 14 of the Listing Rules.

The Board announces that on 2 March 2020, (U.S. time), Hylan Investment, an indirect non- wholly owned subsidiary of the Company, and Vendors A entered into Agreement A, pursuant to which Hylan Investment has agreed to acquire and each of MPI, MPI-II and Loban have agreed to sell Property A at the consideration of US$16,000,000 (equivalent to approximately HK$124,496,000).

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The Board also announces that on 2 March 2020, (U.S. time), Hylan Investment and Vendor B entered into Agreement B, pursuant to which Hylan Investment has agreed to acquire and Bascom has agreed to sell Property B at the consideration of US$5,125,000 (equivalent to approximately HK$39,877,000).

Set out below are principal terms of the Agreements:

AGREEMENT A
Date:	2 March 2020, (U.S. time)
Vendors A:	MPI, MPI-II and Loban
Purchaser:	Hylan Investment
Assets to be acquired

Pursuant to Agreement A, Hylan Investment has agreed to acquire and Vendors A have agreed to sell Property A, which is located in California, U.S..

Consideration and payment terms

The consideration for Acquisition A shall be US$16,000,000 (equivalent to approximately HK$124,496,000), which shall be payable by Hylan Investment to Vendors A in the following manner:

1. an initial deposit of US$500,000 (equivalent to approximately HK$3,890,500) shall be deposited with the Escrow Agent within three business days following the execution of Agreement A;
2. an additional deposit of US$500,000 (equivalent to approximately HK$3,890,500) shall be deposited with the Escrow Agent within two business days after the Feasibility Date; and
3. the balance of the consideration of US$15,000,000 (equivalent to approximately HK$116,715,000) shall be deposited with the Escrow Agent no later than one hundred and fifty days after the Feasibility Date.

The Consideration was determined after arm's length negotiations between Vendors A and Hylan Investment, having taken into account the average market price of similar senior housing properties in the U.S.

Due Diligence

Pursuant to Agreement A, Hylan Investment is entitled to carry out due diligence in respect of Property A during the Feasibility Period. If Hylan Investment, in its sole and absolute discretion, is not satisfied with the results of its due diligence of Property A, it shall have the right to terminate Agreement A prior to the expiration of the Feasibility Period, in which case the initial deposit and the additional deposit in the amount of US$1,000,000 less any reasonable fee imposed by the Escrow Agent shall be returned to Hylan Investment.

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Conditions

Hylan Investment's conditions to Closing

The obligations of Hylan Investment to consummate the transactions under Agreement A are subject to the satisfaction (or waiver by Hylan Investment in writing) of the following conditions:

1. all representations and warranties made by Vendors A shall be true and correct in all material respects on and as of Closing Date A, as if made on and as of such date, subject to any updates to the representations of which Vendors A notifies Hylan Investment after the date of Agreement A and which Hylan Investment approves as provided therein;
2. Vendors A shall have delivered all of the documents required to be delivered by Vendors A and shall have performed in all material respects all of its other obligations, hereunder required to be performed by the Closing Date A and complied with all conditions, required by Agreement A to be performed or complied with by Vendors A at or prior to Closing A;
3. there shall exist no pending actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings, actually filed against the other party that would prevent such party from performing its obligations under Agreement A, except as has been disclosed to and approved by the other party;
4. The Title Company shall be irrevocably committed to issue the title policy for Property A to Buyer as of Closing Date A; and
5. on or before five business days prior to Closing Date A, Vendors A shall have delivered Hylan Investment an acceptable estoppel certificate from the tenants leasing no less than 75% of the leased rentable footage in Property A.

Vendors A's conditions to Closing

The obligations of Vendors A to consummate the transactions under Agreement A are subject to the satisfaction (or waiver by Vendors A in writing) of the following conditions:

1. all representations and warranties made by Hylan Investment in Agreement A shall be true and correct in all material respects on and as of the Closing Date A, as if made on and as of such date;
2. Hylan Investment shall have paid the balance of the consideration, and all of the documents required to be executed by Hylan Investment and shall have performed in all material respects all of its other obligations hereunder required to be performed by the Closing Date A, and complied with all conditions, required by Agreement A to be performed or complied with by Hylan Investment at or prior to Closing A;

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1. there shall exist no pending actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings, actually filed against the other party that would prevent such party from performing its obligations under Agreement A, except as has been disclosed to and approved by the other party; and
2. Vendors A shall assign and Hylan Investment shall assume all of Vendors A's rights and obligations under all service contracts, licenses and permits, or other agreements arising from or relating to the management, operation and ownership of Property A.

Closing

Closing A shall take place on the date which will be no later than one hundred and fifty days after the Feasibility Date or such other date as agreed to in writing between the parties.

AGREEMENT B
Date:	2 March 2020, (U.S. time)
Vendor B:	Bascom Union LLC
Purchaser:	Hylan Investment
Assets to be acquired

Pursuant to Agreement B, Hylan Investment has agreed to acquire and Vendor B has agreed to sell Property B, which is located in California, U.S..

Consideration and payment terms

The consideration for Acquisition B shall be US$5,125,000 (equivalent to approximately HK$39,877,000), which shall be payable by Hylan Investment to Vendor B in the following manner:

1. an initial deposit of US$200,000 (equivalent to approximately HK$1,556,000) shall be deposited with the Escrow Agent within two business days following the execution of Agreement B;
2. an additional deposit of US$300,000 (equivalent to approximately HK$2,334,000) shall be deposited with the Escrow Agent within two business days after the expiration of the Due Diligence Period; and
3. the balance of the consideration of US$4,625,000 (equivalent to approximately HK$35,987,000) shall be deposited with the Escrow Agent no later than one hundred and fifty days after the expiration of the Due Diligence Period.

The Consideration was determined after arm's length negotiations between Vendor B and Hylan Investment, having taken into account the average market price of similar senior housing properties in the U.S..

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Due Diligence

Pursuant to Agreement B, Hylan Investment is entitled to carry out due diligence in respect of Property B during the Due Diligence Period. If Hylan Investment, in its sole and absolute discretion, is not satisfied with the results of its due diligence of Property B, it shall have the right to terminate Agreement B prior to the expiration of the Due Diligence Period, in which case the initial deposit and the additional deposit in the amount of US$500,000 less US$100 and cancellation fees and costs of the Escrow Agent shall be returned to Hylan Investment.

Conditions

Hylan Investment's conditions to Closing

The obligations of Hylan Investment to consummate the transactions under Agreement B are subject to the satisfaction (or waiver by Hylan Investment in writing) of the following conditions:

1. The physical condition of Property B shall be substantially the same on Closing Date B as on the date of Agreement B, reasonable wear and tear excepted;
2. Vendor B shall have delivered all of the material documents and other items required and shall have performed all other covenants, undertakings and obligations, and complied with all conditions required by Agreement B, to be performed or complied with by Vendor B at or prior to Closing B;
3. Subsequent to the date of Agreement B and prior to Closing B there shall not have occurred a destruction, or damage or loss to, Property B or any portion thereof, from any cause whatsoever, which would cost more than US$10,000 repair or cure. If the cost of repair or cure is US$10,000 or less, Vendor B shall repair or cure the loss prior to Closing B;
4. Vendor B shall not have received written notice of any administrative agency, litigation or governmental proceeding of any kind whatsoever, pending or threatened, that, after Closing B, would, in Hylan Investment's sole (but reasonable) discretion, materially and adversely affect the value or marketability of Property B, or the ability of Hylan Investment to develop Property B in the manner contemplated by Hylan Investment; and
5. At Closing, the Escrow Agent shall issue to Hylan Investment an American Land Title Association 2006 extended coverage Owner's Policy of Title Insurance insuring Hylan Investment's fee simple title to Property B for the sum equal to the consideration for Acquisition B, conforming to the required title condition approved by Hylan Investment and containing such endorsements as Hylan Investment shall have reasonably required.

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Vendor B's conditions to Closing

The obligations of Vendor B to consummate the transactions under Agreement B are subject to the satisfaction (or waiver by Vendor B in writing) of the following conditions:

1. All representations and warranties made by Hylan Investment in Agreement B shall be true and correct on and as of Closing Date B, as if made on and as of such date except to the extent they expressly relate to an earlier date; all representations and warranties made by Hylan Investment in Agreement A shall be true and correct in all material respects on and as of the Closing Date A, as if made on and as of such date;
2. Hylan Investment has satisfied itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdiction over Property B and which Hylan Investment deems necessary or desirable in connection with its intended use of Property B, including, but not limited to, permits and approvals required with respect to zoning, planning, building and safety, fire, police, handicapped and Americans with Disabilities Act requirements, transportation and environmental matters; and
3. Hylan Investment shall have paid the balance of the consideration, and all of the documents required to be executed by Hylan Investment and shall have performed in all material respects all of its other obligations hereunder required to be performed by the Closing Date B, and complied with all conditions, required by Agreement B to be performed or complied with by Hylan Investment at or prior to Closing B.

Closing

Closing B shall take place on the date which will be no later than one hundred and fifty days after the expiration of the Due Diligence Period or such other date as agreed to in writing between the parties.

INFORMATION OF VENDORS A, VENDOR B AND THE ESCROW AGENT

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries:

1. MPI is a privately held company which is principally engaged in development and investment of real estate in California, U.S. MPI is controlled by Joseph Kovalik, which is Independent Third Party;
2. MPI-IIis a privately held company which is principally engaged in development and investment of real estate in California, U.S. MPI-II is controlled by Joseph Kovalik, which is Independent Third Party;
3. Loban is a limited partnership which is principally engaged in development and investment of real estate in California, U.S. Loban is controlled by Joseph Kovalik, which is Independent Third Party;

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1. Bascom is a privately held company which is principally engaged in development and investment of real estate in California, U.S. Bascom is controlled by Wayne Gong, which is Independent Third Party; and
2. the Escrow Agent is engaged in the provision of title insurance protection and professional settlement services for real estate transactions.

Each of MPI, MPI-II, Loban, Bascom and the Escrow Agent and their respective controlling person(s) are Independent Third Parties.

INFORMATION OF THE GROUP AND THE PURCHASER

The Group is principally engaged in development and sales and lease of residential properties in the PRC.

Hylan Investment is a corporation incorporated in accordance with the laws of California, U.S. and is an indirect wholly-owned subsidiary of the Company. Its principal activity is investment holding.

INFORMATION OF PROPERTY A AND PROPERTY B

Property A is located on a land plot at San Jose, California, U.S. with an area of approximately 2.0 acres. It is currently a multi-tenant retail centre with floor area of approximately 24,000 square feet. Property A will be developed as a mixed-use property which will include approximately 200 residential units.

Property B is located on a land plot at San Jose, California, U.S. with an area of approximately 0.58 acres. It is currently a commercial property with floor area of approximately 6,726 square feet. Property B will be developed as a mixed-use property which will include approximately 200 residential units.

SOURCE OF FUNDING FOR THE ACQUISITIONS

The aggregate consideration for the Acquisitions is US$21,125,000 (equivalent to approximately HK$164,373,000), which the Group will contribute US$8,800,000 (equivalent to approximately HK$68,473,000) and an Independent Third Party will contribute US$2,200,000 (equivalent to approximately HK$17,118,000) for the consideration. The remaining consideration of US$10,125,000 (equivalent to approximately HK$78,782,000) for the Acquisitions will be financed by bank loan.

REASONS FOR ENTERING INTO THE AGREEMENTS

The Group has been actively exploring for other business opportunities in order to diverse its business risk. The Company believes that the Acquisitions will allow the Group to tap into the real estate industry in the U.S. which will provide a new source of income to the Group.

The Group plans to develop Property A and Property B together. After completion of the Acquisitions, the Group expects that Property A and Property B will generate a management fee income of US$150,000 to the Group each year.

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The terms of Agreement A and Agreement B were negotiated on an arm's length basis between Vendors A and Hylan Investment, and Vendor B and Hylan Investment, respectively. The Company believes that the transactions contemplated under the Agreements are beneficial to the Company and the Shareholders as a whole.

The Directors, including the independent non-executive Directors, having considered the terms and conditions of the Agreements, are of the view that the terms and conditions are on normal commercial terms, which are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios in respect of the Acquisitions (when aggregated) is/are more than 5% but less than 25%, the Acquisitions (when aggregated) constitute a discloseable transaction of the Company and is therefore subject to the reporting and announcement requirements pursuant to Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context otherwise requires:

''Acquisition A''	the acquisition of Property A by Hylan Investment from
	Vendors A pursuant to the terms and conditions of
	Agreement A
''Acquisition B''	the acquisition of Property B by Hylan Investment from
	Vendor B pursuant to the terms and conditions of
	Agreement B

''Acquisitions'' ''Agreement A''

''Agreement B''

''Agreements'' ''Board'' ''Closing A''

''Closing B''

Acquisition A and Acquisition B

the purchase and sale agreement dated 2 March 2020 (U.S. time) entered into between Vendors A and Hylan Investment in relation to the sale and purchase of Property A

the purchase and sale agreement dated 2 March 2020 (U.S. time) entered into between Vendor B and Hylan Investment in relation to the sale and purchase of Property B

Agreement A and Agreement B

the board of Directors

consummation of Acquisition A in accordance with the terms and conditions of Agreement A

consummation of Acquisition B in accordance with the terms and conditions of Agreement B

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''Closing Date A''

''Closing Date B''

''Company''

''connected person(s)'' ''Director(s)''

''Due Diligence Period''

''Escrow Agent'' ''Feasibility Date'' ''Feasibility Period''

''Group'' ''HK$'' ''Hong Kong''

''Hylan Investment''

''Independent Third Party(ies)''

''Listing Rules''

''Loban''

the date on which Closing A occurs, which will be no later than one hundred and fifty days after the Feasibility Date

the date on which Closing B occurs, which will be no later than one hundred and fifty days after the expiration of the Due Diligence Period

Hailan Holdings Limited (海藍控股有限公司), a company incorporated under the laws of the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange (Stock code: 2278)

has the meaning ascribed under the Listing Rules

the director(s) of the Company

the period from the date of Agreement B and expiring on the sixtieth (60) days after Hylan Investment has received all of the due diligence materials that Hylan Investment has requested from Vendor B

Chicago Title Company

forty-five (45) days from the date of Agreement A

the period from the date of Agreement A to the Feasibility Date

the Company and its subsidiaries

Hong Kong dollars, the lawful currency of Hong Kong

the Hong Kong Special Administrative Region of the PRC

Hylan Investment, Inc., a corporation incorporated in accordance with the laws of California, U.S. and is an indirect wholly-owned subsidiary of the Company

independent third party(ies) who is/are not connected person(s) of the Company and is/are independent of and not connected with the Company and Directors, chief executives, controlling shareholders and substantial shareholders of the Company or any of its subsidiaries or their respective associates

the Rules Governing the Listing of Securities on the Stock Exchange

Loban Maple Leaf Properties LP, a limited partnership established in accordance with the laws of Washington, U.S.

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''MPI''	Maple Leaf Investments, LLC, a limited liability company
	incorporated in accordance with the laws of California, U.S.
''MPI-II''	Maple Leaf Investments-II, LLC, a limited liability company
	incorporated in accordance with the laws of California, U.S.
''PRC''	the People's Republic of China which, for the purpose of
	this announcement, excludes Hong Kong, the Macau Special
	Administrative Region of the People's Republic of China
	and Taiwan

''Property A''

''Property B''

''Shareholder(s)'' ''Shares'' ''Stock Exchange'' ''U.S.''

''US$''

''Vendors A'' ''Vendor B''

''%''

The PRC, 3 March 2020

the property located at 2600-2638 Union Avenue, San Jose, California, U.S.

the property located at 2590 South Bascom Avenue, San Jose, California, U.S.

holder(s) of the Shares

the shares of the Company

the Stock Exchange of Hong Kong Limited

the United States of America

United States dollars, the lawful currency of the U.S.

collectively, MPI, MPI-II and Loban

Bascom Union LLC, a limited liability company incorporated in accordance with the laws of California, U.S.

per cent

By order of the Board

Hailan Holdings Limited

Chairperson

Zhou Li

For the purpose of this announcement, translations of US$ into HK$ or vice versa have been calculated by using an exchange rate of US$1.00 equal to HK$7.781. Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were, may have been or will be exchanged at such rate or any other rates or at all.

As at the date of this announcement, the executive Directors are Ms. Zhou Li, Ms. Fan Wenyi and Mr. Chen Zhonghua; the non-executive Director is Ms. Yao Yu; and the independent non-executive Directors are Mr. Li Yong, Mr. E Junyu and Dr. Zhao Guoqing.

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