Baoye Group Company Limited — Proxy Solicitation & Information Statement 2000

Apr 12, 2000

*

(Incorporated in Bermuda with Limited Liability)

Notice of Special General Meeting

NOTICE IS HEREBY GIVEN that a special general meeting of Chun Tai Holdings Limited (the "Company") will be held at 10:00 a.m. on 2nd May, 2000 at Tang Rooms 1-3, 4/F, Furama Hotel Hongkong, One Connaught Road Central, Hong Kong for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as ordinary resolutions of the Company:-

1. "THAT

(a) the subscription by He Xue Chu, Lai Sze Wai Joyce, Du Xin Jian, Zhang Lian, China E-trade Network Limited and Bright Ocean Investment Limited (the "Subscribers") of 10,000,000, 10,000,000, 10,000,000, 10,000,000, 20,000,000 and 20,000,000 shares of par value HK$0.10 each ("Shares") in the capital of the Company (the "Subscription") pursuant to six respective Subscription Agreements with each of He Xue Chu, Lai Sze Wai Joyce, Du Xin Jian, Zhang Lian, China E-trade Network Limited and Bright Ocean Investment Limited individually (the "Agreements"), copies of which have been produced to the meeting marked "A", "B", "C", "D", "E" and "F" respectively and signed by the Chairman of the meeting for the purpose of identification, be and are hereby approved, ratified and confirmed;

(b) the allotment and issue of an aggregate of 80,000,000 shares of par value HK$0.10 each for the purpose of the Subscription (the "Subscription Shares") be and is hereby approved;

(c) a specific mandate be and is hereby granted to the directors of the Company (the "Directors") to allot and issue the Subscription Shares to the Subscribers according to their respective entitlements under the Agreements;

(d) each of the Agreements, copies of which have been produced to the meeting marked "A", "B", "C", "D", "E" and "F" respectively and signed by the Chairman of the meeting for the purpose of identification, be and are hereby approved, ratified and confirmed; and

(e) the Directors be and are hereby authorised on behalf of the Company to sign, execute, perfect, deliver all such documents, deeds and certificates of title, and do all such acts, matters and things as they may in their discretion consider necessary or desirable for the purposes of or in connection with the implementation and consummation of the Subscription and to carry out each of the Agreements and the Directors be and are hereby authorised to make and agree such variations of a non-material nature in the terms of the Agreements as they may in their discretion consider to be desirable and in the best interests of the Company."

2. "THAT

(a) a general mandate be and is hereby unconditionally given to the Directors to exercise all the powers of the Company during the Relevant Period (as hereinafter defined) to issue, allot and dispose of shares in the capital of the Company (including making and granting offers, agreements and options which would or which might require shares to be issued, allotted or disposed of, whether during the continuance of such mandate or thereafter) otherwise than pursuant to:-

(i) a rights issue where shares are offered to shareholders on a fixed record date in proportion to their then holdings of shares (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regards, as appropriate, to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or stock exchange in, or in any territory outside, Hong Kong); or

(ii) any share option scheme or similar arrangement established by the Company and approved by The Stock Exchange of Hong Kong Limited; or

(iii) any issue of shares in the Company upon the exercise of subscription rights attaching to any securities which are convertible into shares of the Company; or

(iv) any scrip dividend scheme or similar arrangement implemented in accordance with the Bye-laws of the Company; or

(v) any issue of shares in the Company for the purpose of the Subscription as referred to in Resolution 1 above.

(b) the aggregate nominal value of the share capital issued, allotted or disposed of shall not in aggregate exceed 20 per cent. of the aggregate nominal value of the share capital of the Company in issue at the date of this Resolution.

(c) for the purpose of this resolution, "Relevant Period" means the period from the passing of this Resolution until whichever is the earlier of:

(i) the conclusion of the next annual general meeting of the Company;

(ii) the expiration of the period within which the next annual general meeting or the Company is required by the Bye-laws of the Company or the Companies Act 1981 of Bermuda or other applicable laws of Bermuda to be held;

(iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the approval and authority given to the Directors by this Resolution."

By Order of the Board

Zou Yishang

Executive Director

11th April, 2000

* for identification purposes only

Notes:

The Register of Members will be closed from 26th April, 2000 to 2nd May, 2000 (both days inclusive), during which period no share transfers will be registered. In order to be eligible to attend and vote at the Special General Meeting of the Company to be held on Tuesday, 2nd May, 2000, all transfers accompanied by the relevant share certificates must be lodged with Share Registrar of the Company in Hong Kong, Tengis Limited, 1601 Hutchison House, 10 Harcourt Road, Hong Kong, not later than 4:00 p.m. on 25th April, 2000.

A shareholder of the Company who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf. A proxy need not be a shareholder. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power or authority, must be lodged with the Company's Share Registrar in Hong Kong, Tengis Limited at 1601 Hutchison House, 10 Harcourt Road, Central, Hong Kong on or before 10:00 a.m. on 27th April, 2000, i.e. 48 hours before the time fixed for holding the Meeting or any adjournment thereof (excluding Saturday and public holidays) .