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Allegiance Capital Corporation Negotiates Cruise Ship Purchase

7 September 2000

DALLAS, Texas--(Press Release)--Sept. 7, 2000--Allegiance Capital Corporation, a Dallas-based investment banking firm, this week announced its negotiated purchase of the TSS Fair Princess, a cruise ship to be converted into a five-star luxury casino based in the Port of Hong Kong. The sale price was $15.5 million.

Participants include Great Canadian Casinos and Lake City Casinos in Vancouver, British Columbia, and a Hong Kong-based investor in the travel and tour business. The seller, P&O Holidays, will make significant repairs as part of the sale and has also agreed to pay for delivery of the ship to Hong Kong in December 2000.

As part of the purchase, the ship is presently under charter, and once delivered to Hong Kong, it will be refurbished and reconfigured at an additional expenditure of approximately $7 million.

Great Canadian will have a 25 percent interest in the ship, and Lake City will own 20 percent, which includes managing the casino and entertainment operations. Hong Kong interests will own 35 percent and will supply the booking of clients. Allegiance Capital Corporation received a $1.9 million transaction fee and will retain a 20 percent ownership in the vessel; Allegiance will also be responsible for operating the ship and supplying the officers and engine room crew.

``This transaction was a big gamble that has paid off handsomely,'' explains David Mahmood, president and founder of Allegiance Capital. ``The revenue stream that Allegiance will share is expected to generate several millions of dollars in annual profit.

``The ship will be ready before the Chinese New Year, and we project annual revenue to be in excess of $100 million for the first year alone.

``This deal was highly unique in that I never left my office here in Dallas. Of course, we had someone examine the vessel, but all negotiations and the transaction itself were handled via e-mail, phone and fax, and were completed in less than 90 days,'' he added.

The cruise ship is over 500 feet in length, weighs 24,800 tons, has 469 cabins and can carry 1,094 passengers with a crew of 443. The vessel will offer cruises departing from Hong Kong, and will offer the combined amenities of a luxury hotel and an exclusive gambling casino.

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