Crescent Hydropolis Announces Qingdao, China Project

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. October 14, 2008

DUBAI, UAE, May 10, 2006. The Directors of Crescent Hydropolis Resorts PLC (the Company) announce today that agreement has been reached with the People's Government of Laoshan District, Qingdao, China (Laoshan) to allocate land and sea rights required for building the world's first deepwater Hydropolis Hotel and Resort (Hydropolis Qingdao). Agreement has also been reached with Laoshan on Hydropolis Qingdao's technical specifications and Laoshan has confirmed that all necessary regulatory and licensing approvals are in place, including licenses that will permit the local project development company to sell, sub-sell, lease or otherwise dispose of apartment units in the proposed HydroTower Landstation prior to the onset of construction.

On 26 April 2006, Crescent Hydropolis Holdings Qingdao Limited (CHHQ), a wholly owned subsidiary of the Company created for the purpose of developing Hydropolis Qingdao, entered into a Binding Cooperation Agreement (the Agreement) with Laoshan that codified the material action items contained in the Cooperation Agreement agreed between Laoshan and the Company on 13 October 2005.

Under terms of the Agreement, the HydroTower Landstation will be located on 33,000 sq meters of land (the Land) that comprise the previous location of the Ocean Entertainment Park in Qingdao. The Hydropalace underwater hotel component will be situated southwest of the island of Chidao and southeast of Xiao Maidao. The price of the Land is subject to an open tender process but is expected to be EUR per sq meter, which when paid will give CHHQ the right to occupy the Land for 40 years with further rights to extend for  years. Sea rights will be offered in the form of a lease at the site where the Hydropalace is to be situated. The sea rights leased will cover a surface area of at least 20,000 sq meters and CHHQ will have the right to occupy and use the location for 25 years, with further rights to extend for  years. The leasing fee will be an annual payment of EUR per sq meter.

The Agreement sets forth a detailed construction description of the HydroTower Landstation and its interior spaces, due for completion in 2008 prior to the start of the Beijing Summer Olympic Games, as well as its ancillary buildings. It further sets forth the prototype design images and floor plans for the Hydropalace, including layouts of interior spaces. An integrated financial model that shows profitability and operating assumptions for the project are also submitted as part of the Agreement.

Laoshan confirms, as a part of the Agreement, to license HydroShuttle water ferry operations between the HydroTower Landstation and the Hydropalace, and to license for operation any other transport systems that may be necessary to operate the various buildings that comprise Hydropolis Qingdao.

Laoshan confirms in the Agreement that no other licensing, permissions or other approvals are needed for the project to commence with construction. The Agreement is conditional upon CHHQ obtaining financing for the Hydropolis Qingdao project on terms to the satisfaction of CHHQ and the Company.