China Brilliant Global Limited — Proxy Solicitation & Information Statement 2000

Dec 14, 2000

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited takes no responsibility for the contents of this Circular, 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 Circular.

This Circular, for which the directors of Prosten Technology Holdings Limited collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to Prosten Technology Holdings Limited. The directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this Circular 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 Circular misleading; and (3) all opinions expressed in this Circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

If you are in doubt as to any aspect of this Circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Prosten Technology Holdings Limited, you should at once hand this Circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

A copy of this Circular has been delivered to and registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies Ordinance of Hong Kong. The Registrar of Companies in Hong Kong takes no responsibility as to the contents hereof.

PROSTEN TECHNOLOGY HOLDINGS LIMITED �� ! " # $ % & ' [*]

(Incorporated in the Cayman Islands with limited liability)

PROPOSAL FOR A BONUS ISSUE OF 2004 WARRANTS

(ONE 2004 WARRANT FOR EVERY TEN SHARES)

A notice convening an extraordinary general meeting of Prosten Technology Holdings Limited to be held at Unit 906-910, Dah Sing Financial Centre, 108 Gloucester Road, Wanchai, Hong Kong on Friday, 5 January 2001 at 10:00 a.m., at which the above proposal will be considered is set out on page 19 of this Circular. Whether or not you propose to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company’s Branch Share Registrar in Hong Kong, Tengis Limited at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion and delivery of the form of proxy will not preclude shareholders from attending and voting in person at the meeting should they so wish.

This Circular will remain on the GEM Website on the “Latest Company Announcements” page for 7 days from the date of its posting.

14 December 2000

* For identification purpose only

CHARACTERISTICS OF GEM

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. GEM-listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM Website in order to obtain up-to-date information on GEM-listed issuers.

– i –

CONTENTS
Page
Characteristics of GEM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
Expected timetable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Appendix I – Summary of the terms of the 2004 Warrants . . . . . . . . . . . . . . . . . . 9
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
EXPECTED TIMETABLE
Last day of dealings in Shares cum entitlements
to the Bonus Warrants Issue . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 27 December 2000
Latest time for lodging share transfers for
entitlements to the Bonus Warrants Issue . . . . . . . . 4:00 p.m. on Friday, 29 December 2000
Closure of the Register of Members
(both days inclusive) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . From Tuesday, 2 January 2001
to Friday, 5 January 2001
Latest time for forms of proxy to be returned . . . . . . . . . . . . . . . . . 10:00 a.m. on Wednesday,
3 January 2001
Record date for entitlements to the Bonus Warrants Issue . . . . . . . . . . Friday, 5 January 2001
Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Friday,
5 January 2001
Despatch of the 2004 Warrant Certificates on or before . . . . . . . . . . . Tuesday, 9 January 2001
Commencement of dealings in the 2004 Warrants . . . . . . . . . . . . . . . . Friday, 12 January 2001

– ii –

DEFINITIONS

In this Circular, unless the context otherwise indicates, the following expressions have the following meanings:

• “Bonus Warrants Issue”

the proposed bonus issue of 2004 Warrants to the Company’s Shareholders (other than Substantial Shareholders and Overseas Shareholders) whose names appear on the Register at the close of business on the Record Date on the basis of one 2004 Warrant for every ten Shares held on that date

“CCASS”	The Central Clearing and Settlement System established
	and operated by Hongkong Clearing
“Clawback Units”	the aggregate of 40,428,060 units of 2004 Warrants not
	to be taken up by Substantial Shareholders
“Company”	Prosten Technology Holdings Limited, a company
	incorporated in the Cayman Islands whose Shares are
	listed on the GEM
“Directors”	the Board of Directors of the Company
“Exercise Period”	the period from the first day of issue of 2004 Warrants
	(which is expected to be 9 January 2001) up to and
	including 8 January 2004
“Extraordinary	an extraordinary general meeting of the Company to be
General Meeting”	held at Unit 906-910, Dah Sing Financial Centre, 108
	Gloucester Road, Wanchai, Hong Kong on Friday, 5
	January 2001 at 10:00 a.m. or any adjournment thereof
“GEM”	the Growth Enterprise Market operated by the Stock
	Exchange
“GEM Listing Rules”	the rules governing the listing of securities on GEM made
	by the Stock Exchange from time to time
“Hongkong Clearing”	Hong Kong Securities Clearing Company Limited
“Latest Practicable Date”	11 December 2000, being the latest practicable date prior
	to the printing of this Circular
“Overseas Shareholders”	Shareholders whose addresses on the Register are in
	places outside Hong Kong

– 1 –

DEFINITIONS

“Record Date”	5 January 2001, being the date for determination of
	entitlements to the Bonus Warrants Issue
“Register”	the Register of Members of the Company
“Securities”	issued Shares and 2004 Warrants
“Shares”	shares of HK$0.10 each in the capital of the Company
“Shareholders”	holders of Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Substantial Shareholders”	Greenford Company Limited, Century Technology
	Holding Limited and Bakersfield Global Corporation
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers
“2004 Warrant(s)”	warrant(s) to be constituted by an instrument by way of
	deed poll to be executed on 5 January 2001 by the
	Company and to be issued by way of bonus issue by the
	Company as described herein in amounts of HK$1.43
	each of exercise rights, entitling the holder(s) to subscribe
	at any time during the Exercise Period for fully paid
	Shares at an initial exercise price of HK$1.43 per Share
	(subject to adjustment) and otherwise on the terms set
	out in the instrument, particulars of which are set out in
	Appendix I to this Circular
“HK$” and “cents”	Hong Kong dollars and cents respectively

– 2 –

LETTER FROM THE BOARD

PROSTEN TECHNOLOGY HOLDINGS LIMITED �� ! " # $ % & ' [*]

(Incorporated in the Cayman Islands with limited liability)

Executive Directors:

Yip Seng Mun (Chairman) Yip Heon Ping Yip Heon Wai Yip Heon Keung

Chan Fu Kuen, Gladys

Principal place of business: Unit 906-910 Dah Sing Financial Centre 108 Gloucester Road Wanchai Hong Hong

Chiu Wai Ki Clement Lau

Independent Non-Executive Directors:

James T. Siano

Au Shing Kwok

14 December 2000

To the shareholders

Dear Sir or Madam,

PROPOSAL FOR A BONUS ISSUE OF 2004 WARRANTS (ONE 2004 WARRANT FOR EVERY TEN SHARES)

INTRODUCTION

On 24 November 2000, the Directors announced a proposal for the Bonus Warrants Issue. The purpose of this Circular is to provide Shareholders with details of the Bonus Warrants Issue.

BONUS WARRANTS ISSUE

Subject to the conditions mentioned below, the 2004 Warrants will be issued by way of a bonus issue to Shareholders whose names appear on the Register on the Record Date (other

* For identification purpose only

– 3 –

LETTER FROM THE BOARD

than Substantial Shareholders and Overseas Shareholders) on the basis of one 2004 Warrant for every ten Shares held on that date. The authorised share capital of the Company is HK$250,000,000 comprising 2,500,000,000 Shares, of which 511,250,000 Shares are in issue and fully paid or credited as fully paid. On the basis of 511,250,000 Shares in issue as at the Record Date, an aggregate of no more than 51,125,000 2004 Warrants with aggregate exercise rights of HK$73,108,750 will be issued. Each 2004 Warrant will entitle the holder thereof to subscribe in cash for one fully paid new Share at an initial exercise price of HK$1.43 per Share, subject to adjustment, at any time during the Exercise Period. Full exercise of the 51,125,000 2004 Warrants at the initial exercise price of HK$1.43 per Share would therefore result in the issue of a total of 51,125,000 Shares, representing 10% of the then existing issued share capital and approximately 9.09% of the then enlarged existing issued share capital, and the receipt of up to HK$73,108,750, before expenses, by the Company.

The 2004 Warrants will be created by an instrument by way of deed poll to be executed by the Company and are proposed to be granted in registered form subject to the terms and conditions set out in the instrument. Shares which are issued on the exercise of the exercise rights attaching to the 2004 Warrants will rank pari passu in respect of any dividends and other distributions the record date for which is on or after the relevant exercise date and in all other respects with the then existing issued Shares.

A summary of the particulars of the 2004 Warrants, including the circumstances in which the exercise price may be adjusted, is set out in Appendix I to this Circular.

SUBSTANTIAL SHAREHOLDERS

The Directors confirm that the following Substantial Shareholders holding the following number of Shares in the Company have decided not to take up the 2004 Warrants (upon the Bonus Warrants Issue becoming unconditional) to which they will otherwise be entitled under the Bonus Warrants Issue. Each of them will instead direct the Company to allot and issue the Clawback Units to the qualifying Shareholders in proportion (as nearly as possible without involving fraction) to their respective shareholdings as shown on the Register on the Record Date.

			Number of 2004
		Number of	Warrants
		Shares held	otherwise	Shareholding	Shareholding
		(as at the	entitled under	before	after full
		Latest	the Bonus	exercise of the	exercise of the
Name	Practicable Date)		Warrants Issue	2004 Warrants	2004 Warrants
Greenford Company Limited		155,931,035	15,593,103	30.5%	27.7%
Century Technology
Holding Limited		155,931,035	15,593,103	30.5%	27.7%
Bakersfield Global Corporation		92,418,549	9,241,854	18.0%	16.4%
Total		404,280,619	40,428,060	79.0%	71.8%

– 4 –

LETTER FROM THE BOARD

On the basis of 106,969,381 Shares in issue held by the qualifying Shareholders, each qualifying Shareholder will, in addition to its assured entitlement under the Bonus Warrants Issue, be allotted about 378 units of 2004 Warrants for every 1,000 Shares held on the Record Date.

OVERSEAS SHAREHOLDERS

The 2004 Warrants will not be registered under any securities legislation of any jurisdiction outside Hong Kong and therefore the 2004 Warrants will not be granted to any Overseas Shareholders. However, arrangements will be made for the 2004 Warrants which would otherwise have been issued to the Overseas Shareholders to be sold in the market as soon as practicable. Any net proceeds of sale, after deduction of expenses, will be distributed in Hong Kong dollars pro rata to such persons and remittance thereof will be posted to them, at their own risk, unless the amount falling to be distributed to any such person is less than HK$100 in which case it will be retained for the benefit of the Company.

FRACTIONAL ENTITLEMENTS

Fractional entitlements to 2004 Warrants will not be issued but will be aggregated and sold for the benefit of the Company.

CONDITIONS TO BONUS WARRANTS ISSUE

The Bonus Warrants Issue will be conditional upon:

• (i) the approval of the Shareholders at the Extraordinary General Meeting; and

• (ii) the GEM Listing Committee of the Stock Exchange granting listings of, and permission to deal in, the 2004 Warrants and the new Shares falling to be issued upon exercise of the exercise rights attaching to the 2004 Warrants.

CLOSURE OF REGISTER

The Register will be closed from Tuesday, 2 January 2001 to Friday, 5 January 2001, both days inclusive, in order to determine entitlements to the Bonus Warrants Issue, during which period no transfers of Shares can be registered. The last day of dealings in Shares cum entitlements to the Bonus Warrants Issue will be Wednesday, 27 December 2000.

To qualify for the proposed Bonus Warrants Issue, all transfers accompanied by the relevant share certificates should be lodged with the Company’s Branch Share Registrar in Hong Kong, Tengis Limited at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong, not later than 4:00 p.m. on Friday, 29 December 2000.

– 5 –

LETTER FROM THE BOARD

LISTINGS AND DEALINGS

Application has been made to the GEM Listing Committee of the Stock Exchange for listings of, and permission to deal in, the 2004 Warrants and the new Shares falling to be issued upon exercise of the exercise rights attaching to the 2004 Warrants. Subject to the granting of listings of and permission to deal in the 2004 Warrants and the Shares which may fall to be issued upon the exercise of the exercise rights attaching to the 2004 Warrants on the Stock Exchange as well as compliance with the stock admission requirements of Hongkong Clearing, the 2004 Warrants and the Shares which may fall to be issued upon the exercise of the exercise rights attaching to the 2004 Warrants will be accepted as eligible Securities by Hongkong Clearing for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the 2004 Warrants on the Stock Exchange or such other date as determined by Hongkong Clearing. Settlement of transactions between Members of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. All necessary arrangements have been made enabling the 2004 Warrants to be admitted into CCASS. Shareholders should seek the advice of their stockbroker or other professional adviser for details of those settlement arrangements and how such arrangements will affect their rights and interests.

It is expected that certificates for the 2004 Warrants will be posted on or before 9 January 2001 at the risk of the persons entitled thereto to their respective addresses shown on the Register and, in the case of joint holders, to the address of the joint holder whose name stands first in the Register in respect of the joint holding. Dealings in the 2004 Warrants are expected to commence on 12 January 2001. The 2004 Warrants will be traded in board lots of 20,000 units entitling the holders thereof to subscribe for, subject to adjustments, an amount of HK$28,600 initially for new Shares, representing the aggregate exercise price for 20,000 Shares, on the basis of an initial exercise price of HK$1.43 per Share. The exercise price per Share of HK$1.43 represents a premium of approximately 12.6% to the closing price of HK$1.27 per Share on the Stock Exchange on 23 November 2000 (being the last trading day of the Shares on the Stock Exchange prior to the date of the announcement of the proposed Bonus Issue of Warrants) and a premium of approximately 13.5% based on the average closing price per Share of HK$1.26 as quoted on the Stock Exchange for the past 10 trading days up to, and including 23 November 2000. In addition, the exercise price per Share of HK$1.43 represents a premium of approximately 16.7% to the closing price of HK$1.225 per Share on the Stock Exchange on the Latest Practicable Date.

The proceeds, before expenses, of the issue of Shares upon full exercise of the exercise rights attaching to the 2004 Warrants are estimated to be HK$73,108,750. The proceeds from the said issue of Shares are intended to be applied in proprietary software solution development.

The market capitalisation of the 2004 Warrants is approximately HK$6,104,325. Based on the share register as at latest practicable date, the 2004 Warrants will be expected to be held among 100 or more persons in public on 12 January 2001 (being the commencement date of dealings).

– 6 –

LETTER FROM THE BOARD

The Shares are not listed or dealt in, and no listing of or permission to deal in the Shares and/or the 2004 Warrants is being, or is proposed to be, sought on any stock exchange other than the Stock Exchange.

Dealings in the 2004 Warrants and Shares which are issued upon the exercise of the exercise rights attaching to the 2004 Warrants will be subject to Hong Kong stamp duty.

RESOLUTION TO BE PROPOSED AT THE EXTRAORDINARY GENERAL MEETING

The Ordinary Resolution to be proposed at the Extraordinary General Meeting relates to the proposed Bonus Warrants Issue.

PROXY ARRANGEMENT

A form of proxy for use at the Extraordinary General Meeting is enclosed with this Circular. To be valid, the form of proxy must be completed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority at the Company’s Branch Share Registrar in Hong Kong, Tengis Limited at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong not less than 48 hours before the time appointed for holding the Extraordinary General Meeting. Completion and delivery of the form of proxy will not preclude you from attending and voting at the Extraordinary General Meeting.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the offices of Tengis Limited of 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong during normal business hours on any day up to and including the date of the Extraordinary General Meeting:

• (i) The Memorandum and Articles of Association of the Company; and

• (ii) Summary of the terms of the 2004 Warrant Instrument referred to in Appendix I.

Final copies of the 2004 Warrant Instrument will be available for inspection by Warrantholders at the principal place of business of the Company for the time being in Hong Kong throughout the Exercise Period.

ADDITIONAL INFORMATION

Your attention is drawn to Appendix I which sets out a summary of the terms of the 2004 Warrants.

– 7 –

LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that the Bonus Warrants Issue is in the best interests of the Company and the Shareholders because it will supply a future source of working capital for the Company and its subsidiaries. Accordingly, the Directors recommend that all Shareholders should vote in favour of the Resolution to be proposed at the Extraordinary General Meeting.

Yours faithfully, For and on behalf of the Board Chiu Wai Ki Director

– 8 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

PROSTEN TECHNOLOGY HOLDINGS LIMITED �� ! " # $ % & ' [*]

(Incorporated in the Cayman Islands with limited liability)

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Members of the Company will be held at Unit 906-910, Dah Sing Financial Centre, 108 Gloucester Road, Wanchai, Hong Kong on Friday, 5 January 2001 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolution as an Ordinary Resolution:

“ THAT

conditionally upon the GEM Listing Committee of The Stock Exchange of Hong Kong Limited granting listings of, and permission to deal in, the 2004 Warrants (as hereinafter defined) and the new shares of the Company falling to be issued upon exercise of the exercise rights attaching to the 2004 Warrants, the Directors of the Company be and are hereby authorised:

• (a) to create and issue warrants (“2004 Warrants”) which shall be in registered form and shall be exercisable at any time between the first day of issue and 8 January 2004, both days inclusive, to subscribe at an initial exercise price of HK$1.43 per share, subject to adjustment, for shares in the capital of the Company on the terms and conditions set out in the draft 2004 Warrant instrument, a copy of which has been submitted to the Meeting marked “A” and signed for the purpose of identification by the Chairman hereof, and to issue the same by way of bonus to and among the persons who were registered as shareholders of the Company at the close of business on 5 January 2001 (“Record Date”) in the proportion of one 2004 Warrant carrying the right to subscribe at a price of HK$1.43 for one share in the capital of the Company for every ten shares then held provided that:–

• (i) in the case of persons having registered addresses outside Hong Kong, the 2004 Warrants shall not be granted to such persons but shall be aggregated and sold in the market as soon as practicable after dealings in the 2004 Warrants commence and the net proceeds of a sale, after deduction of expenses, shall be distributed to such persons pro rata to their respective entitlements unless the amount falling to be distributed to any such person shall be less than HK$100.00 in which case such amount shall be retained for the benefit of the Company; and

* For identification purpose only

– 19 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

• (ii) no fractional entitlements to the 2004 Warrants shall be granted as aforesaid, but the fractional entitlements shall be aggregated and sold for the benefit of the Company;

• (b) to allot and issue the aggregate of 40,428,060 units of the 2004 Warrants not to be taken up by Substantial Shareholders namely, Greenford Company Limited, Century Technology Holding Limited and Bakersfield Global Corporation to the qualifying shareholders in proportion (as nearly as possible without involving fraction) to their respective shareholdings on the Record Date;

• (c) to issue and allot new shares in the capital of the Company arising from the exercise of subscription rights under the 2004 Warrants or any of them; and

• (d) to do all such acts and things as they consider necessary or expedient to give effect to the foregoing arrangements.”

By order of the Board Chan Yim Kum Company Secretary

Hong Kong, 14 December 2000

Notes:

• (a) The Register of Members will be closed from Tuesday, 2 January 2001 to Friday, 5 January 2001, both days inclusive, during which period no transfer of shares can be registered. In order to qualify for the proposed Bonus Issue of the 2004 Warrants, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Branch Share Registrar in Hong Kong, Tengis Limited at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong not later than 4:00 p.m. on Friday, 29 December 2000.

• (b) A member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and vote on his behalf. A proxy need not be a member of the Company. 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.

• (c) 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 Branch Share Registrar in Hong Kong, Tengis Limited at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong not less than 48 hours before the time fixed for holding the meeting or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the meeting if you so wish.

– 20 –

APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

The 2004 Warrants will be issued subject to and with the benefit of a separate instrument by way of deed poll (the “Instrument”) to be executed by the Company and they will be issued in registered form and will form one class of Securities and rank pari passu in all respects with each other.

The following is a summary of the major provisions of the Instrument. The terms and conditions of the 2004 Warrants will be set out in the 2004 Warrant certificates. Holders of the 2004 Warrants will be entitled to the benefit of, be bound by, and be deemed to have notice of all such terms and conditions and of the provisions of the Instrument, copies of which will be available from the 2004 Warrant registrar for the time being of the Company.

1. Subscription

• (a) The registered holder or joint holders for the time being of a 2004 Warrant (“Warrantholder”) shall have rights (“Exercise Rights”) to subscribe in units of HK$1.43 in cash for fully paid Shares but not in respect of any fraction of a Share at a price (subject to the adjustments referred to below) of HK$1.43 per Share (“Exercise Price”). The Exercise Rights attaching to the 2004 Warrants may be exercised at any time on or after the first day of issue (which is expected to be 9 January 2001) up to and including 4:00 p.m. (Hong Kong time) on 8 January 2004 (“Exercise Period”). Any Exercise Rights which have not been exercised on or before 4:00 p.m. (Hong Kong time) on 8 January 2004 will thereafter lapse and the relevant 2004 Warrants will cease to be valid for any purpose.

• (b) A Warrantholder may exercise his Exercise Rights by completing and signing the subscription form endorsed on the 2004 Warrant certificate or the separate subscription form which the Company permits to be used (both of which shall, once signed and completed, be irrevocable) and delivering the 2004 Warrant certificate, together with the separate subscription form, if appropriate, to the registrar of the Company for the time being (“Registrar”), together with a remittance for the subscription moneys for the Shares in respect of which the Exercise Rights are being exercised. The date on which such documents (duly completed and signed) and the relevant remittances are delivered to the Registrar shall be the date on which the relevant Exercise Rights are exercised and is hereafter referred to as an “Exercise Date”. In each case, compliance must also be made with any exchange control, fiscal or other laws or regulations for the time being applicable.

• (c) No fraction of a Share will be allotted but any balance of the subscription moneys paid on the exercise of the Exercise Rights will be refunded by the Company to the relevant Warrantholder, provided that if the Exercise Rights comprised in two or more 2004 Warrant certificates are exercised by a Warrantholder on the same Exercise Date then, for the purpose of determining whether any (and if so what) fraction of a Share arises, the Exercise Rights represented by such 2004 Warrant certificates shall be aggregated.

– 9 –

APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

• (d) The Company undertakes in the Instrument that Shares falling to be issued upon the exercise of the Exercise Rights will be issued and allotted not later than 10 business days after the relevant Exercise Date and will rank pari passu with the fully-paid Shares in issue on the relevant Exercise Date and accordingly shall entitle the holders to participate in all dividends or other distributions declared, paid or made after the relevant Exercise Date unless adjustment thereof has been made as provided in the Conditions (as defined in the Instrument) and other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the Record Date (as defined in the Instrument) therefor is on or before the relevant Exercise Date and notice of the amount and Record Date therefor has been given to the Stock Exchange prior to the relevant Exercise Date.

• (e) As soon as practicable after the relevant allotment of Shares (and not later than 10 business days after the relevant Exercise Date) there will be issued free of charge to the Warrantholder:–

• (i) a certificate (or certificates) for the relevant Shares in the name(s) of the Warrantholder(s);

• (ii) (if applicable) a balancing 2004 Warrant certificate in registered form in the name(s) of such Warrantholder(s) in respect of any Exercise Rights remaining unexercised;

• (iii) (if applicable) a cheque representing any fractional entitlement to Shares not allotted as mentioned in sub-paragraph (c) above; and

• (iv) (if applicable) a Deficiency Certificate (as defined in the Instrument).

The certificate(s) for Shares arising on the exercise of Exercise Rights, the balancing 2004 Warrant certificate (if any), the cheque in respect of fractional entitlement (if any) and the Deficiency Certificate (if any) will be sent by post at the risk of such Warrantholder to the address of such Warrantholder as set out in the register of Warrantholder(s) (or in the case of a joint holding, to that one of them whose name stands first in the register of Warrantholders). If the Company agrees, such certificates and cheque may by prior arrangement be retained by the Registrar to await collection by the relevant Warrantholder(s). The Registrar will notify the Warrantholders the date available for collecting the certificates. In such case, late collection will incur the Warrantholder a custodian fee (HK$2.00 per certificate per month) to be charged by the Registrar if the certificate(s) is/are not collected within one month from the available date.

– 10 –

APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

2. Adjustments of Exercise Price

The Instrument contains detailed provisions relating to the adjustment of the Exercise Price. The following is a summary of, and is subject to, the provisions of the Instrument:–

• (a) The Exercise Price shall (except as mentioned in sub-paragraphs (b) and (c) below) be adjusted as provided in the Instrument in each of the following cases:–

• (i) an alteration of the nominal amount of the Shares by reason of any consolidation or subdivision;

• (ii) an issue (other than in lieu of a cash dividend) by the Company of Shares credited as fully paid by way of capitalisation of profits or reserves (including any share premium account);

• (iii) a capital distribution (as defined in the Instrument) being made by the Company, whether on a reduction of capital or otherwise, to holders of Shares in their capacity as such;

• (iv) a grant by the Company to holders of Shares in their capacity as such of rights to acquire for cash any assets of the Company or any of its subsidiaries (as defined in the Instrument);

• (v) an offer or grant of Shares being made by the Company to holders of Shares by way of rights or of options or warrants to subscribe for Shares at a price which is less than 90 per cent. of the market price (calculated as provided in the Instrument);

• (vi) an issue wholly for cash being made by the Company or any other company of securities convertible into or exchangeable for or carrying rights of subscription for new Shares, if in any case the total Effective Consideration (as defined in the Instrument) per Share is less than 90 per cent. of the market price (calculated as provided in the Instrument), or the terms of any such issue are altered so that the said total Effective Consideration is less than 90 per cent. of the market price;

• (vii) an issue being made wholly for cash of Shares other than pursuant to a Share Option Scheme (as defined in the Instrument), at a price less than 90 per cent. of the market price (calculated as provided in the Instrument); or

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APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

  - (viii) the purchase by the Company of Shares or securities convertible into Shares or any rights to acquire Shares in any other circumstances where the Company considers that it may be appropriate to make an adjustment to the Exercise Price.

• (b) Except as mentioned in sub-paragraph (c) below, no adjustment as is referred to in sub-paragraphs (a)(ii) to (vii) above will be made in respect of:–

• (i) an issue of fully-paid Shares upon the exercise of any conversion rights attached to securities convertible into Shares or upon the exercise of any rights (including the Exercise Rights) to acquire Shares;

• (ii) an issue of Shares, or other securities of the Company or any subsidiary, wholly or partly convertible into, or rights to acquire Shares to directors or employees of the Company or any subsidiary pursuant to a Share Option Scheme;

• (iii) an issue by the Company of Shares or by the Company or any subsidiary of securities wholly or partly convertible into or rights to acquire Shares, in any such case in consideration or in part for the acquisition of any other securities, assets or business;

• (iv) an issue of fully-paid Shares by way of capitalisation of all or part of the Exercise Right Reserve (as defined in the Instrument) to be established in certain circumstances pursuant to the terms and conditions contained in the Instrument (or any similar reserve which has been or may be established pursuant to the terms of any other securities wholly or partly convertible into or rights to acquire Shares); or

• (v) an issue of Shares in lieu of a cash dividend where an amount not less than the nominal amount of the Shares so issued is capitalised and the market value (calculated as provided in the Instrument) of the Shares is not more than 110 per cent. of the amount of dividend which holders of Shares could elect to or would otherwise receive in cash.

• (c) Notwithstanding the provisions referred to in sub-paragraphs (a) and (b) above, in any circumstances where the Directors consider that an adjustment to the Exercise Price provided for under the said provisions should not be made or should be calculated on a different basis or that an adjustment to the Exercise Price should be made notwithstanding that no such adjustment is required under the said provisions or that an adjustment should take effect on a different date or at a different time from that provided for under the said provisions, the Company may appoint an approved merchant bank (as defined in the Instrument) to consider whether for any reason whatsoever the adjustment to be made (or the absence of

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APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

adjustment) would or might not fairly and appropriately reflect the relative interests of the persons affected thereby and, if the approved merchant bank considers this to be the case, the adjustment shall be modified or nullified or an adjustment made instead of no adjustment in the manner (including, without limitation, making an adjustment calculated on a different basis) and/or the adjustment shall take effect from such other date and/or time as shall be certified by the approved merchant bank to be in their opinion appropriate.

• (d) Any adjustment to the Exercise Price will be made to the nearest one cent so that any amount under half a cent shall be rounded down and any amount of half a cent or more shall be rounded up. No adjustment shall be made to the Exercise Price in any case in which the amount by which the Exercise Price to be reduced would be less than one cent and any adjustment which would otherwise then be required shall not be carried forward. No adjustment may be made (except on a consolidation of Shares) which would increase the Exercise Price.

• (e) Every adjustment to the Exercise Price shall be certified by the auditors of the Company or an approved merchant bank (acting as experts whose decision, in the absence of manifest error, shall be conclusive and binding on the Company and the Warrantholders) and notice of each adjustment (giving the relevant particulars) shall be given to the Warrantholders. Any such certificates of the Company’s auditors and/or approved merchant bank shall be available for inspection at the principal place of business of the Company in Hong Kong, where copies may be obtained.

3. Registered Warrants

The 2004 Warrants will be issued in registered form. The Company shall be entitled to treat the registered holder of any 2004 Warrant as the absolute owner thereof and accordingly shall not, except as ordered by a court of competent jurisdiction or as required by law, be bound to recognise any equitable or other claim to or interest in such 2004 Warrant on the part of any other person, whether or not the Company has express or other notice thereof.

4. Transfer, transmission and register

The Exercise Rights are transferable, in whole amounts or integral multiples of HK$1.43 of Exercise Rights, by instrument of transfer in any usual or common form or in any other form which may be approved by the Directors. The Company shall maintain a register of Warrantholders accordingly. Transfers of 2004 Warrants must be executed by both the transferor and the transferee. Where the transferor or the transferee is HKSCC Nominees Limited (or such other company as may be approved by the Directors for this purpose), the transfers may be executed under the hand of an authorised person or by machine imprinted signature. The provisions of the Company’s Articles of Association relating to the registration, transfer and transmission of Shares shall apply, mutatis mutandis, to the registration, transfer and transmission of the 2004 Warrants.

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APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

Persons who hold 2004 Warrants and have not registered the 2004 Warrants in their own names and wish to exercise the 2004 Warrants should note that they may incur additional costs and expenses in connection with any expedited re-registration of the 2004 Warrants prior to the transfer or exercise of the 2004 Warrants, in particular during the period commencing 10 business days prior to and including the last day for subscription being 8 January 2004.

In addition, since the 2004 Warrants will be admitted to CCASS, the last trading day of the 2004 Warrants will be on a date at least three trading days before 8 January 2004.

5. Closure of register of Warrantholders

The registration of transfers may be suspended and the register of Warrantholders may be closed for such periods as the Directors may from time to time direct, provided that the same may not be closed for a period of more than 60 days in any one year. Any transfer or exercise of the Exercise Rights attached to the 2004 Warrants, made while the register of Warrantholders is so closed shall, as between the Company and the person claiming under the relevant transfer or, as the case may be, as between the Company and the Warrantholder who has so exercised the Exercise Rights attached to his 2004 Warrants (but not otherwise), be considered as made immediately after the re-opening of the register of Warrantholders.

6. Purchase and cancellation

The Company or any of the subsidiaries may at any time purchase 2004 Warrants:–

• (i) in the open market or by tender (available to all Warrantholders alike) at any price; or

• (ii) by private treaty at a price per 2004 Warrant, exclusive of expenses, not exceeding 110 per cent. of the closing price of the 2004 Warrants on the Stock Exchange prior to the date of purchase of the 2004 Warrants on the Stock Exchange;

but not otherwise. All 2004 Warrants purchased shall be cancelled forthwith and may not be re-issued or re-sold.

7. Meetings of Warrantholders and modification of rights

• (a) The Instrument contains provisions for convening meetings of Warrantholders to consider any matter affecting the interests of Warrantholders, including the modification by Special Resolution (as defined in the Instrument) of the provisions of the Instrument and/or of the terms and conditions endorsed on the 2004 Warrant certificates. A Special Resolution duly passed at any such meeting of Warrantholders shall be binding on the Warrantholders, whether present or not.

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APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

• (b) All or any of the right for the time being attached to the 2004 Warrants (including any of the provisions of the Instrument) may from time to time (whether or not the Company is being wound up) be altered or abrogated (including, but without prejudice to that generality, by waiving compliance with, or by waiving or authorising any past or proposed breach of any of the provisions of the conditions endorsed on the 2004 Warrant certificates and/or the Instrument) and the sanction of a Special Resolution shall be necessary and sufficient to effect the alteration or abrogation.

• Where the Warrantholder is a recognised clearing house (within the meaning of the Securities and Futures (Clearing Houses) Ordinance (Chapter 420 of the Laws of Hong Kong)) or its nominee(s), it may authorise such person or persons as it thinks fit to act as its representative (or representatives) or proxy (or proxies) at any Warrantholders’ meeting provided that, if more than one person is so authorised, the authorisation or proxy form must specify the number and class of warrants in respect of which each such person is so authorised. The person so authorised will be entitled to exercise the same power on behalf of the recognised clearing house as that clearing house or its nominee(s) could exercise if it were an individual Warrantholder of the Company.

8. Quorum

A quorum of a meeting of Warrantholders will be two or more Warrantholders representing not less than 2 per cent. in value of the Exercise Rights for the time being outstanding, present in person or by proxy. The quorum for the passing of a Special Resolution is two or more Warrantholders representing not less than one-tenth in value of the Exercise Rights for the time being outstanding, present in person or by proxy.

9. Replacement of 2004 Warrant certificates

If a 2004 Warrant certificate is mutilated, defaced, lost or destroyed, it may, at the Company’s discretion, be replaced at the office of the Registrar on payment of such costs which may be incurred in connection therewith and on such terms as to evidence, indemnity and/or security which the Company may require and on payment of such fee not exceeding the fee as may from time to time be permitted under the Listing Rules as the Company may determine plus the costs incurred by the Company (or the Registrar) in publishing the required public notice. Mutilated or defaced 2004 Warrant certificates must be surrendered before replacements will be issued.

In the case of lost 2004 Warrant certificates, Section 71A subsections (2), (3), (4), (6), (7) and (8) of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) shall apply as if “shares” referred to therein included 2004 Warrants.

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APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

10. Protection of Exercise Rights

The Instrument contains certain undertakings by and restrictions on the Company designed to protect the Exercise Rights.

11. Call

If at any time the aggregate of the amount of subscription moneys attached to the outstanding 2004 Warrants is equal to or less than 20 per cent. of the amount of moneys payable on exercise of all the 2004 Warrants issued under the Instrument then the Company may, on giving not less than three months’ notice by delivery, prepaid letter, cable or telex message or press announcement in Hong Kong, require Warrantholders either to exercise their Exercise Rights or to allow them to lapse. On expiry of such notice, all unexercised 2004 Warrants will be automatically cancelled, without compensation to Warrantholders.

12. Further issues

The Company shall be at liberty to issue further subscription warrants whereupon a relevant announcement will be made if the Company remains listed on the Stock Exchange.

13. Undertakings by the Company

The Company undertakes in the Instrument, inter alia, that:

• (a) upon exercise of any Exercise Rights it will within 10 business days after the relevant Exercise Date allot the number of Shares for which subscription is made;

• (b) all Shares allotted on the exercise of Exercise Rights will rank pari passu in all respects with the fully paid Shares in issue on the relevant Exercise Date and shall accordingly entitle the holders to participate in full in all dividends or other distributions declared, paid or made on the Shares after the relevant Exercise Date unless adjustment therefor has been made as provided in the Instrument and other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the Record Date therefor shall be on or before the relevant Exercise Date and notice of the amount and Record Date for which shall have been given to the Stock Exchange prior to the relevant Exercise Date;

• (c) it will send to each Warrantholder, at the same time as the same are sent to Shareholders, its audited accounts and all other notices, reports and communications despatched by it to Shareholders generally;

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APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

• (d) it will pay (if applicable) all the Cayman Islands and Hong Kong stamp duties, registration fees or similar charges in respect of the execution of the Instrument, the creation and initial issue of the 2004 Warrants in registered form, the exercise of the Exercise Rights and the issue of Shares upon exercise of the Exercise Rights;

• (e) it will use its best endeavours to ensure that all Shares allotted on exercise of the Exercise Rights shall be admitted to listing on the Stock Exchange provided that no admission shall be obtained in the event that the Shares cease to be listed on the Stock Exchange as a result of an offer being made to the holders of Shares (or to holders excluding the offeror and/or its nominee(s)) to acquire all or a proportion of the Shares;

• (f) it will keep available for issue sufficient Ordinary Capital (as defined in the Instrument) to satisfy in full all rights for the time being outstanding of subscription for the conversion into Shares; and

• (g) it will use all reasonable efforts to procure that at all times during the Exercise Period, 2004 Warrants may be dealt in on the Stock Exchange.

14. Winding-up of the Company

• (a) In the event a notice is given by the Company to its shareholders to convene a shareholders’ meeting for the purposes of considering, and if thought fit approving, a resolution to voluntarily wind-up the Company, the Company shall forthwith give notice thereof to each Warrantholder and thereupon, every Warrantholder shall be entitled by irrevocable surrender of his 2004 Warrant certificate(s) to the Company (such surrender to occur not later than two business days prior to the proposed shareholders’ meeting referred to above) with the subscription form(s) duly completed, together with payment of the subscription moneys or the relative portion thereof, to exercise the Exercise Rights represented by such 2004 Warrant and the Company shall as soon as possible and in any event no later than the day immediately prior to the date of the proposed shareholders’ meeting allot such number of Shares to the Warrantholder which fall to be issued pursuant to the exercise of the Exercise Rights represented by such 2004 Warrant. The Company shall give notice to the Warrantholders of the passing of such resolution within seven days after the passing thereof; and

• (b) If an effective resolution is passed during the Exercise Period for the voluntary winding-up of the Company, for the purpose of reconstruction or amalgamation pursuant to a scheme of arrangement to which the Warrantholders, or some person designated by them for such purpose by Special Resolution, shall be a party or in conjunction with which a proposal is made to the Warrantholders and is approved by Special Resolution, the terms of such scheme of arrangement or (as the case may be) proposal shall be binding on all Warrantholders.

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APPENDIX I SUMMARY OF THE TERMS OF THE 2004 WARRANTS

Subject to the foregoing, if the Company is wound up, all Exercise Rights which have not been exercised at the commencement of the winding-up will lapse and each 2004 Warrant certificate will cease to be valid for any purpose.

15. Overseas Warrantholders

If a Warrantholder subsequently changes his/her registered address to any territory other than Hong Kong where, in the opinion of the Directors, the allotment of Shares to such Warrantholder upon exercise of any Exercise Rights would or may in the absence of compliance with registration or any other special formalities in such territory be unlawful or impracticable under the laws of such territory or Hong Kong, then the Company will as soon as practicable, without obtaining further consent from such Warrantholder, after exercise by such Warrantholder of any Exercise Rights either (i) allot the Shares which would otherwise have been allotted to such Warantholder to one or more third parties selected by the Company or (ii) allot such Shares to such Warrantholder and then, on his behalf, sell them to one or more third parties selected by the Company, in each case for the best consideration then reasonably obtainable by the Company. As soon as reasonably practicable following such allotment or allotment and sale, the Company will pay such Warrantholder an amount equal to the consideration received (less expenses and duties) by it by posting the remittance to him at his risk.

16. Notices

The Instrument contains provisions relating to notices to be given to Warrantholders.

Every Warrantholder must register with the Company an address in Hong Kong or elsewhere to which notices can be sent and if any Warrantholder fails to do so, a notice may be given to such Warrantholder by posting the same for three days at the principal place of business for the time being of the Company in Hong Kong.

The provisions of the Company’s Articles of Association relating to service of notices on Shareholders will apply, mutatis mutandis, to service of notices on Warrantholders and will have full effect as if the same had been incorporated in the Instrument.

All notices with respect to Warrants standing in the names of joint holders shall be given to whichever of such persons as is named first in the Register and notice so given shall be sufficient notice to all such Warrantholders.

17. Governing law

The Instrument and the 2004 Warrants are governed by and will be construed in accordance with the laws of Hong Kong.

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