Crypto Flow Technology Limited — Capital/Financing Update 2008

Nov 9, 2008

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

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities mentioned herein.

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Melco LottVentures Limited

(incorporated in the Cayman Islands with limited liability) website: http://www.melcolottventures.com.hk (Stock Code: 8198)

VERY SUBSTANTIAL ACQUISITION INVOLVING THE ISSUE OF CONSIDERATION SHARES AND CONVERTIBLE BONDS PRINCIPAL TERMS OF CONVERTIBLE BONDS II

Financial adviser to the Company

Reference is made to the announcement of the Company dated 28 September 2008 in relation to, among other things, the entering into of the Asset Transfer Agreement. After Completion, the Vendor shall provide reasonable assistance to the Company to secure two agreements in connection with CSLA Projects and CWL Projects in the PRC. Upon obtaining such agreements, the Vendor shall be entitled to the Success Payment of a total sum of HK$75,000,000 from the Company to be satisfied by way of the Convertible Bonds II. As stated in the Announcement, further announcement will be made by the Company regarding the other terms of the Convertible Bonds II which were subject to further negotiations. In addition to those terms of Convertible Bonds II as disclosed in the Announcement, other terms of the Convertible Bonds II were finalized on 6 November 2008.

A circular containing further details of the Convertible Bonds II and a notice of the EGM will be despatched to the Shareholders as soon as practicable and in accordance with the GEM Listing Rules.

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Reference is made to the announcement of the Company dated 28 September 2008 (the “ Announcement ”) in relation to, among other things, the entering into of the Asset Transfer Agreement. After Completion, the Vendor shall provide reasonable assistance to the Company to secure two agreements in connection with CSLA Projects and CWL Projects in the PRC. Upon obtaining such agreements, the Vendor shall be entitled to the Success Payment of a total sum of HK$75,000,000 from the Company to be satisfied by way of the Convertible Bonds II. As stated in the Announcement, further announcement will be made by the Company regarding the other terms of the Convertible Bonds II which were subject to further negotiations. In addition to those terms of Convertible Bonds II as disclosed in the Announcement, other terms of the Convertible Bonds II were finalized on 6 November 2008. Unless the context requires otherwise, capitalized terms used herein shall have the same meaning as those defined in the Announcement.

CONVERTIBLE BONDS II

The principal terms of the Convertible Bonds II are summarized as follows:

Issuer the Company Initial subscriber the Vendor Amount HK$75,000,000 Bonds issue price 100% of the principal amount of the Convertible Bonds II Coupon 0.1% interest, payable semi-annually in arrears

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Negative pledge

so long as any of the Convertible Bonds II remains outstanding and to the extent the Convertible Bonds II are held by the Vendor, any of its wholly owned subsidiaries, its holding companies and/or the wholly owned subsidiaries of such holding companies (the “ Intralot Group ”), without the consent of the Intralot Group, the Company will not, and will procure that none of its Subsidiaries shall, create or have outstanding any Security Interest upon, or with respect to, any of its or its Subsidiary’s (as the case may be) present or future business, undertakings, assets or revenues (including any uncalled capital) to secure any Relevant Indebtedness (as defined below), provided that nothing in this clause shall prohibit or restrict the Company, or any of its Subsidiaries, from creating or permitting to have outstanding:

• (a) any Security Interest if it, before or at the same time and, in any other case, promptly, takes any and all action necessary to ensure that:

• (i) all amounts payable by it under the Convertible Bonds II are secured by Security Interests equally and rateably with the Relevant Indebtedness to the satisfaction of the Intralot Group; or

• (ii) such other Security Interest or other arrangement (whether or not it includes the giving of a Security Interest) is provided as is approved in writing by the Intralot Group; and

• (b) the Security Interest granted to secure the Convertible Bonds and/or the Firich CB, the LottVision CB, the Melco LV CB and any indebtedness of the Company which is outstanding and disclosed to the Intralot Group on the date of issue of the Convertible Bonds II in writing.

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Relevant Indebtedness any indebtedness for or in respect of:

• (a) moneys borrowed;

• (b) a ny a c c e p t a n c e c r e d i t ( i n c l u d i n g a ny dematerialised equivalent);

• (c) any bond, note, debenture, loan stock or other similar instrument (including any equity-linked instrument);

• (d) any redeemable preference shares;

• (e) any agreement treated as a finance or capital lease in accordance with generally accepted accounting principles in the jurisdiction of incorporation of the Company or its Subsidiary (as the case may be);

• (f) receivables sold or discounted (other than any receivables to the extent they are sold on a fully non-recourse basis);

• (g) the acquisition cost of any asset or service to the extent payable after its acquisition or possession by the party liable where the advance or deferred payment:

• (i) is arranged primarily as a method of raising finance or financing the acquisition of that asset or the construction of that asset; or

• (ii) involves a period of more than six months before or after the date of acquisition or supply;

• (h) any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, except for nonpayment of an amount, the then mark to market value of the derivative transaction will be used to calculate its amount);

• (i) any other transaction (including any forward sale or purchase agreement) which has the commercial effect of a borrowing;

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• (j) any counter-indemnity obligation in respect of any guarantee, indemnity, bond, letter of credit or any other instrument issued by a bank or financial institution; or

• (k) any guarantee, indemnity or similar assurance against financial loss of any Person in respect of any item referred to in the above paragraphs.

Maturity date

Issue of the Convertible Bonds II

• 5 years from the date of issue of the Convertible Bonds II (“ Maturity Date ”).

the Convertible Bonds II will be issued at two tranches:

• (a) the first tranche of an amount equivalent to 30% of the total Success Payment, being HK$22,500,000, shall be issued when the first Project is procured and the agreement with respect thereto executed; and

• (b) the second tranche of an amount equivalent to 70% of the total success payment, being HK$52,500,000 shall be issued when the second Project is procured and the agreement with respect thereto executed.

Conversion Price II

initial conversion price of HK$1.0759 per Conversion Share II but subject to standard adjustments clauses, including but not limited to, consolidation or subdivision of Shares, capitalization of profits or reserves, capital distribution, issue of Shares by way of rights, issues of new Shares or securities convertible for new Shares at a discount of more than 20% to the then market price of the Shares.

The Conversion Price II of HK$1.0759 per Conversion Share II represents:

• (a) a premium of approximately 37.94% over the closing price of HK$0.78 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (b) a premium of approximately 35.85% over the average closing price of HK$0.792 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day;

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• (c) a premium of approximately 39.01% over the average closing price of HK$0.774 per Share as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Day; and

• (d) a premium of approximately 313.81% over the closing price of HK$0.26 per Share as quoted on the Stock Exchange on the date of this announcement.

Conversion period

Ranking of the Conversion Shares II

Limitation on conversion

the Convertible Bonds II may be converted at any time from the date of issue of the Convertible Bonds II up to and including the close of business on the day immediately prior to the Maturity Date subject to the limitation on conversion set out below.

the Conversion Shares II, when allotted and issued, will rank pari passu in all respects with all Shares in issue at the date of allotment and issue of such Conversion Shares II.

No conversion of the Convertible Bonds II shall be made, if immediately upon such conversion,

• (1) the Bondholder II together with parties acting in concert with it (within the meaning of the Code) control 30% (or such other percentage as stated in the Code in effect from time to time) or more of the voting rights in the Company so that it shall trigger a mandatory offer obligation under Rule 26 of the Code on the part of the Bondholder II which exercised the Conversion Rights II; and/or

• (2) the public float of the Shares falls below 25% (being the current minimum public float of the Company or any given percentage as required by the GEM Listing Rules) of the issued shares of the Company. As the Company is required to maintain the minimum public float of the Shares, the Company will not issue any Conversion Shares II if upon such issuance, the minimum public float requirement of the Company cannot be maintained.

The Convertible Bonds II not so converted will be redeemed at maturity at 100% of the principal amount of the unconverted Convertible Bonds II plus accrued interest.

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Redemption

Unless previously redeemed, converted or purchased and cancelled, the Company will redeem each Convertible Bond II at 100% of its principal amount on the Maturity Date.

Following the occurrence of a Relevant Event, each Bondholder II will have the right at such holder’s option, to require the Company to redeem all or only some of that holder’s Convertible Bonds II on the Redemption Date at 100% of their principal amount together with any outstanding interest.

Transferability

Listing

Voting

Events of default

• The holder(s) in whose name the Convertible Bonds II is registered (“ Bondholder(s) II ”) shall be permitted at any time to assign or transfer the Convertible Bonds II, or part of the Convertible Bonds II to any transferee as nominated by the Bondholder(s) II provided that any such assignment or transfer shall be made in whole or in part (in whole multiples of HK$1,000,000) of its outstanding principal amount. A Bondholder II may not require the transfer of the Convertible Bonds II to be registered (i) after a Conversion Notice has been delivered with respect to a Convertible Bond II or (ii) during the period of 7 business days ending on (and including) any Interest Record Date.

• No application will be made by the Company to the GEM Listing Committee for the listing of the Convertible Bonds II. Application will be made by the Company to the GEM Listing Committee for the listing of, and permission to deal in, the Conversion Shares II on the GEM.

Bondholder(s) II shall not be entitled to attend or vote at any general meetings of the Company by reason only of it being the Bondholder II.

Events of default shall include the following:

• (i) a default is made in the payment of principal or interest in respect of any of the Convertible Bonds II and such default continues for a period of seven days in the case of principal or 14 days in the case of interest;

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• (ii) appointment of receivership, declaration of insolvency or a winding up order made against the Company;

• (iii) the Group as a whole ceases to carry on its ordinary course of business;

• (iv) material change in the business nature of the Group from the business nature as of the issue date of the Convertible Bonds II;

• (v) material adverse change in the financial condition of the Company as determined by the Bondholders II;

• (vi) any material default made by the Company in the performance or observance of any undertaking, warranty or representation given by it under the conditions of the Convertible Bond II or the deed poll regarding the terms of the Convertible Bonds II to be executed by the Company (“ Deed Poll II ”) (other than the covenant to pay the principal and interest in respect of the Convertible Bonds II) and such default is incapable of remedy (in which event no such notice as is referred to below shall be required), or if capable of remedy is not remedied within thirty days of service by any Bondholder II on the Company of notice requiring such default to be remedied; or

• (vii) it is or becomes unlawful for the Company to perform or comply with any of its obligations under the Deed Poll II or any Convertible Bonds II, or due to no fault on the part of any Bondholder II any such obligation is not or ceases to be enforceable or is claimed by the Company not to be enforceable.

Governing Law

The Convertible Bonds II shall be governed by and construed in accordance with the laws of Hong Kong.

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IMPLICATIONS UNDER THE GEM LISTING RULES

The Company will seek the approval of its Shareholders at the EGM to be convened and held by the Company to approve, among others, the Assets Transfer Agreement and the Transactions including but not limited to the issues of the Convertible Bonds II and the allotments and issues of the Conversion Shares II.

A circular containing further details of the Convertible Bonds II and a notice of the EGM will be despatched to the Shareholders as soon as practicable and in accordance with the GEM Listing Rules.

By order of the Board Melco LottVentures Limited Chan Sek Keung, Ringo Chairman

Hong Kong, 7 November 2008

As at the date of this announcement, the Board consists of two executive Directors, namely Mr. CHAN Sek Keung, Ringo and Mr. KO Chun Fung, Henry; and three independent non-executive Directors, namely Mr. David TSOI, Mr. PANG Hing Chung, Alfred and Mr. SO Lie Mo, Raymond.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this announcement is accurate and complete in all material respects and not misleading;(2) there are no other matters the omission of which would make any statement in this announcement misleading; and (3) all opinions expressed in this announcement have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

This announcement will remain on the “Latest Company Announcement” page of the GEM website www.hkgem.com for at least 7 days from its date of publication and on the Company’s website at www.melcolottventures.com.hk.

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