Digital China Holdings Limited — Proxy Solicitation & Information Statement 2012

Jun 4, 2012

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Pacific Century Premium Developments Limited (the “ Company ”), a company incorporated in Bermuda with limited liability, the shares of which (the “ Shares ”) are listed on the Main Board of the Stock Exchange, you should at once hand this document and the accompanying election form (the “ Election Form ”) to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Copies of this document and the Election Form together with the written consent of Anglo Chinese Corporate Finance, Limited have been registered with the Registrar of Companies in Hong Kong pursuant to Section 342C of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong). The Registrar of Companies in Hong Kong and the Securities and Futures Commission of Hong Kong take no responsibility as to the contents of these documents.

Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this document, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

Subject to the granting of the listing of, and permission to deal in, the Bonus Shares and any new shares in the Company which may fall to be issued upon exercise of the conversion rights under the Bonus Convertible Notes, as well as compliance with the stock admission requirements of HKSCC (if applicable), the Bonus Shares and any new shares in the Company which may fall to be issued upon exercise of the conversion rights under the Bonus Convertible Notes will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from their respective commencement dates of dealings on the Stock Exchange or such other dates as determined by HKSCC. Settlement of transactions between participants 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 capitalised terms on this cover page shall have the same meanings as those defined in this document.

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PACIFIC CENTURY PREMIUM DEVELOPMENTS LIMITED 盈科大衍地產發展有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock Code: 00432)

BONUS ISSUE OF SHARES AND ISSUE OF BONUS CONVERTIBLE NOTES TO FULFIL THE MINIMUM PUBLIC FLOAT REQUIREMENT

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Financial adviser to the Company

* For identification only

Hong Kong, 4 June 2012

CONTENTS

			Page
**Expected **	Timetable . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Definitions . . . . . . . . .		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
1.	Introduction	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
2.	Bonus Issue	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
3.	Action to be	taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
4.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		18
Appendix	— Summary of terms and conditions of the Bonus Convertible Notes . . . .		19
Accompanying document — Election Form

— i —

EXPECTED TIMETABLE

Set out below is a timetable for the Bonus Issue which is subject to change. The Company will notify the Shareholders of any changes to the following timetable as and when appropriate.

Suspension of trading in Shares due to insufficient
public float . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. 9:00 a.m. on Thursday, 17 May 2012
Last day of dealings in Shares on a cum-entitlements
basis for the Bonus Issue . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . .Friday, 25 May 2012
First day of dealings in Shares on an ex-entitlements
basis for the Bonus Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Monday, 28 May 2012
Latest time for lodging transfers of Shares for
registration in order to be entitled to the Bonus Issue . . . .	. .4:30 p.m. on Tuesday, 29 May 2012
Closure of Register for the Bonus Issue . . . . . . . . . . . . . . . .	. . . . . . . . . .Wednesday, 30 May 2012
Record Date for determining entitlements to
the Bonus Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . .Wednesday, 30 May 2012
Register re-opens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Thursday, 31 May 2012
Latest date and time for returning the Election Form for the	Bonus Issue . . . . . . . . . .4:30 p.m. on
	Wednesday, 20 June 2012
Announcement of the results of election of
the Bonus Convertible Notes. . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . .at or before 8:30 a.m.
	Friday, 22 June 2012
Despatch of certificates for the Bonus Shares and Bonus
Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . .on or about Friday, 22 June 2012
Resumption of trading and the first day of dealing in the
Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 25 June 2012

Note: All times in this document refer to Hong Kong times.

— ii —

DEFINITIONS

In this document, unless the context otherwise requires, the following expressions have the following meanings:

• “2014 Convertible Note”

the convertible note currently in issue and in the principal amount of HK$2,420 million and due on 9 May 2014 issued by the CN Issuer and guaranteed by the Company, which was owned by the CN Holder as at the Latest Practicable Date

• “2019 Convertible Note”

• the convertible note to be issued pursuant to the Subscription Agreement, the principal terms of which are summarized in the section headed “The Subscription Agreement and Special Deal — Principal Terms of the 2019 Convertible Notes” in the “Letter from the Board” on pages 10 to 12 of the Offer Circular

• “Anglo Chinese”

Anglo Chinese Corporate Finance, Limited, a licensed corporation under the SFO to carry on Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities; and the financial adviser to the Company in respect of the Bonus Issue

• “Asian Motion”

Asian Motion Limited, a company incorporated in the British Virgin Islands and a wholly-owned subsidiary of PCCW

• “Board”

the board of Directors

• “Bonus Convertible Notes”

the new convertible notes to be constituted by the Deed Poll and to be issued by the Company pursuant to the Bonus Issue to Shareholders electing to receive such new convertible notes in lieu of their entitlements to the Bonus Shares

• “Bonus Convertible Noteholder(s)”

• holder(s) of the Bonus Convertible Notes

• “Bonus Issue”

issue of Bonus Shares by the Company on the basis of four (4) Bonus Shares for every one (1) existing Share held by the Qualifying Shareholders with the option to elect to receive the Bonus Convertible Notes in lieu of all or part of their entitlements to the Bonus Shares

• “Bonus Issue and Share Consolidation Announcement”

the announcement of the Company dated 16 May 2012 issued by the Company in connection with the Bonus Issue and the Share Consolidation

• “Bonus Share(s)”

new Share(s) to be issued pursuant to the Bonus Issue

— 1 —

DEFINITIONS

• “business day”

any day on which the Stock Exchange is open for business of dealing in securities

• “Bye-laws” the bye-laws of the Company

• “CCASS” the Central Clearing and Settlement System established and operated by HKSCC

• “CN Holder” PCCW-HKT Partners Limited, company incorporated in Hong Kong with limited liability, an indirect wholly-owned subsidiary of PCCW and the existing holder of the 2014 Convertible Note

• “CN Issuer” PCPD Wealth Limited, a company incorporated in Hong Kong with limited liability, a wholly-owned subsidiary of the Company and the existing issuer of the 2014 Convertible Note

• “Company”

• Pacific Century Premium Developments Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange

• “Deed Poll”

• the deed poll and any other documents (as from time to time altered in accordance with such deed poll and/or other documents) to be executed by the Company in order to provide for and to protect the rights and interests of the Bonus Convertible Noteholders

• “Director(s)” the director(s) of the Company

• “Election Form”

• the election form to be despatched together with this document to the Qualifying Shareholders (other than those Qualifying Shareholders with registered addresses in Australia and California, the United States) for them to elect to receive the Bonus Convertible Notes in lieu of all or part of their entitlements to the Bonus Shares

• “Excluded Shareholder(s)”

• those Overseas Shareholder(s) whom the Directors, having made enquiries pursuant to Rule 13.36(2) of the Listing Rules, consider it necessary or expedient not to issue the Bonus Shares and/or the Bonus Convertible Notes on account either of legal restrictions under the laws of the relevant jurisdiction or the requirements of the relevant regulatory body or stock exchange in that jurisdiction

• “Group” the Company and its subsidiaries

• “HK$”

• Hong Kong dollar(s), the lawful currency of Hong Kong

• “HKSCC”

• Hong Kong Securities Clearing Company Limited

— 2 —

DEFINITIONS

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Latest Practicable Date” Wednesday, 30 May 2012, being the latest practicable date prior to the printing of this document for ascertaining certain information contained in this document

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Macau” the Macau Special Administrative Region of the PRC

• “Minimum Conversion Price” 140% of the 20 trading day average of the closing prices of the Shares ended on Monday, 30 January 2012, subject to adjustments

• “Offer” the conditional cash offer made by Anglo Chinese on behalf of the Company to repurchase for cancellation up to 926,126,540 Shares at HK$1.85 per Share from the Shareholders

• “Offer Announcement” the announcement of the Company dated 2 March 2012 issued by the Company in respect of, among other things, the Offer, and the possible issue of Bonus Shares and the Bonus Convertible Notes to fulfil the minimum public float requirement

• “Offer Circular” the circular of the Company dated 5 April 2012 issued by the Company in respect of, among other things, the Offer, and the possible issue of Bonus Shares and the Bonus Convertible Notes to fulfil the minimum public float requirement

• “Options” options granted by the Company pursuant to the share option scheme adopted by the Company on 17 March 2003

• “Overseas Shareholder(s)” Shareholder(s) whose address(es) as shown on the Register on the Record Date is(are) outside Hong Kong

• “PCCW” PCCW Limited (stock code: 00008), a company incorporated in Hong Kong with limited liability, the shares of which are listed and traded on the Main Board of the Stock Exchange and traded in the form of American depository receipts on the OTC Markets Group Inc. in the United States of America and a substantial Shareholder holding approximately 93.59% of the issued share capital of the Company as at the Latest Practicable Date

“PCCW Group”

PCCW and its subsidiaries, other than the Group

— 3 —

DEFINITIONS

“PRC” the People’s Republic of China

“Qualifying Shareholder(s)” Shareholder(s) whose names appear on the Register at the close of business on the Record Date “Record Date” Wednesday, 30 May 2012, being the record date for the purpose of ascertaining the entitlements of the Shareholders to the Bonus Issue “Register” the register of members of the Company

“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “SGM” the special general meeting of the Company held on Wednesday, 2 May 2012

• “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company

• “Share Consolidation” the proposed consolidation of every five (5) Shares with a nominal value of HK$0.10 each into one (1) share with a nominal value of HK$0.50 each in the authorised share capital of the Company

• “Shareholder(s)” registered holder(s) of Share(s)

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Stock Exchange Business Day” any day (other than a Saturday or Sunday or any public holiday) on which the Main Board market of the Stock Exchange or the Alternative Stock Exchange (as defined in paragraph 6(e) in the Appendix on page 27 of this document) is open for business

“Subscription Agreement” the subscription agreement dated 2 March 2012 entered into between the CN Issuer, the Company and the CN Holder in relation to the 2019 Convertible Note

“United States”

the United States of America

— 4 —

LETTER FROM THE BOARD

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PACIFIC CENTURY PREMIUM DEVELOPMENTS LIMITED 盈科大衍地產發展有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock Code: 00432)

Executive Directors:

Li Tzar Kai, Richard (Chairman) Lee Chi Hong, Robert (Chief Executive Officer and Deputy Chairman) Lam Yu Yee (Deputy Chief Executive Officer and Chief Financial Officer) James Chan Gan Kim See, Wendy

Independent Non-Executive Directors:

Cheung Kin Piu, Valiant Prof. Wong Yue Chim, Richard, SBS, JP Dr. Allan Zeman, GBM, GBS, JP

Registered Office:

Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head Office and Principal Place of Business in Hong Kong:

8th Floor, Cyberport 2 100 Cyberport Road Hong Kong

4 June 2012

To the Shareholders

Dear Sir/Madam,

BONUS ISSUE OF SHARES AND ISSUE OF BONUS CONVERTIBLE NOTES TO FULFIL THE MINIMUM PUBLIC FLOAT REQUIREMENT

1. INTRODUCTION

As mentioned in the Bonus Issue and Share Consolidation Announcement, the Board has decided to make a bonus issue of new Shares, credited as fully-paid, on the basis of four (4) Bonus Shares for every one (1) existing Share held by the Qualifying Shareholders whose names appeared on the Register on the Record Date for the sole purpose of the restoration of the minimum public float of the Shares prescribed under Rule 8.08(1) of the Listing Rules.

The purpose of this document is to set out further information in relation to the Bonus Issue (including the option to elect to receive the Bonus Convertible Notes in lieu of all (or part) of their entitlements to the Bonus Shares).

— 5 —

LETTER FROM THE BOARD

A summary of the principal terms and conditions of the Bonus Convertible Notes, including circumstances in which the Bonus Convertible Notes can be converted, is set out in the Appendix on pages 19 to 33 of this document.

2. BONUS ISSUE

Basis of the Bonus Issue

In order to comply with Rule 8.08(1)(a) of the Listing Rules, which requires at least 25% of the Company’s total issued share capital to be held by the public at all times, pursuant to the mandate granted to it by an ordinary resolution passed at the SGM, the Board proposed to make a bonus issue of new Shares, credited as fully-paid, on the basis of four (4) Bonus Shares for every one (1) existing Share held by the Qualifying Shareholders whose names appeared on the Register on the Record Date. The Bonus Issue will be effected by way of capitalisation of an amount standing to the credit of the Company’s retained earnings account.

Each Qualifying Shareholder (other than those as shown on the Register with registered addresses in Australia and California, the United States) will be given the option to elect to receive the Bonus Convertible Notes in lieu of all (or part) of the Qualifying Shareholder’s entitlements to the Bonus Shares under the Bonus Issue. The amount of Bonus Convertible Notes which the Qualifying Shareholders (other than those Qualifying Shareholders with registered addresses in Australia and California, the United States) are entitled to receive in lieu of their entitlements to the Bonus Shares will be calculated as follows:

The number of Shares held on Amount of Bonus the Record Date for which Convertible Notes = x 4 x HK$0.10 Bonus Convertible Notes are to be received elected in lieu of Bonus Shares

The Bonus Convertible Notes will be unlisted, will carry no voting rights at general meetings of the Company and will have no maturity date, but will confer upon the holders thereof substantially the same economic interest attached to the Shares (including rights to receive payments representing any dividends declared and paid, assets distributed, and shares or other securities issued under a capitalisation issue or scrip dividend scheme of the Company, to Shareholders as if the outstanding Bonus Convertible Notes held by them had been converted on the relevant record date) which the electing Shareholders would otherwise be entitled to receive under the Bonus Issue had such Shareholders not elected for the Bonus Convertible Notes. In the absence of such election or, in the case of Qualifying Shareholders with registered addresses in Australia and California, the United States, the exclusion of the right to elect to receive Bonus Convertible Notes, a Shareholder will receive Bonus Shares under the Bonus Issue.

Reasons for the Bonus Issue

Under Rule 8.08(1)(a) of the Listing Rules, at least 25% of the Company’s total issued share capital must at all times be held by the public. Following the close of the Offer on Wednesday, 16 May 2012 and the cancellation of all the Shares in respect of which the Offer has been accepted, only 101,441,689 Shares, representing approximately 6.41% of the issued Shares (which is lower than the minimum prescribed percentage of 25% applicable to the Company) are held by the public. Pursuant

— 6 —

LETTER FROM THE BOARD

to Note 1 to Rule 8.08(1)(b) of the Listing Rules, trading in the Shares on the Stock Exchange has been suspended since 9:00 a.m. on Thursday, 17 May 2012 since the percentage of public float in the Shares has fallen below 15% following the close of the Offer and the cancellation of all the Shares in respect of which the Offer has been accepted.

As mentioned in the Offer Announcement and the Offer Circular, the Company intends to remain to be listed on the Stock Exchange and subject to the Offer being declared or becoming unconditional in all respects, and if necessary and feasible, the Company intends to restore the minimum public float of the Shares by way of the Bonus Issue. In light of the insufficient public float in the Shares, the Board has considered a number of options to fulfil the public float requirement. Following the close of the Offer and taking into consideration the level of acceptances of the Offer and the number of Shares remaining in the hands of public Shareholders, the Board concluded that the Bonus Issue alone is a feasible and practical solution to restore the minimum public float of the Shares if Shareholders other than Asian Motion do not elect to receive Bonus Convertible Notes.

The PCCW Group has been requested to, and PCCW has confirmed that it will, elect for the Bonus Convertible Notes in lieu of all of its entitlement to the Bonus Shares under the Bonus Issue. The Board does not expect Shareholders (other than Asian Motion) to elect to receive the Bonus Convertible Notes which carry no voting rights at general meetings of the Company and will be unlisted and irredeemable and therefore not readily tradeable notwithstanding its transferability.

Advice and Recommendation from the Financial Adviser

The Board has engaged Anglo Chinese to advise it on addressing the public float requirement under Rule 8.08(1)(a) of the Listing Rules, which requires that not less than 25% of the issued share capital of the Company must be held by the public at all times. Anglo Chinese has advised that the Bonus Issue has the following advantages:

• (i) it preserves the equity interest of all Shareholders who receive the Bonus Shares only, and in the case of the PCCW Group and any other Shareholders who elect to receive the Bonus Convertible Notes, their equity interest would be preserved upon full conversion of the Bonus Convertible Notes;

• (ii) all Shareholders will be treated equally;

• (iii) no capital raising will be required, which would potentially incur significant expenses and may have dilutive effects on existing Shareholders’ shareholding in the Company; and

• (iv) it will not be subject to or dependent on market conditions.

Anglo Chinese has advised the Board that it should recommend the public Shareholders NOT to elect to receive any Bonus Convertible Notes which carry no voting rights at general meetings of the Company and will be unlisted and irredeemable and therefore not readily tradeable notwithstanding its transferability. The Bonus Convertible Notes cannot be readily realisable other than by converting them into shares in the Company and subsequently selling them in the market. Furthermore, there is no redemption date for the Bonus Convertible Notes. On a voluntary dissolution, liquidation or

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LETTER FROM THE BOARD

winding up of the Company, the Bonus Convertible Notes will be mandatorily converted into shares in the Company at the then applicable conversion price; and on an involuntary dissolution, liquidation or winding-up of the Company, the Bonus Convertible Noteholders whose Bonus Convertible Notes are cancelled not as a result of a conversion but as a result of an involuntary dissolution, liquidation or winding-up of the Company will be entitled to receive out of the assets of the Company the same amount and at the same time as are paid with respect to the shares in the Company; and the rights of the Bonus Convertible Noteholders do not have priority over other Shareholders.

The Company has requested PCCW to, and PCCW has confirmed that it will, procure Asian Motion to elect for the Bonus Convertible Notes in lieu of all of its entitlements to the Bonus Shares. Asian Motion will remain as the controlling Shareholder following completion of the Bonus Issue. Assuming that no other Shareholder elects to receive the Bonus Convertible Notes in lieu of its/his/her entitlements under the Bonus Issue and there are no other changes to the shareholding structure of the Company, the PCCW Group will hold approximately 74.49% of the issued share capital of the Company immediately following completion of the Bonus Issue. As PCCW is and will remain the indirect controlling Shareholder, the disadvantages of holding part of its interest in the Company in the form of the Bonus Convertible Notes arising from the election for the Bonus Convertible Notes, are not significant to PCCW. PCCW will still have considerable flexibility in being able to trade part of its current shareholdings, should it so wish, before reducing its shareholdings in the Company to 50% or less. Any such trading can then be replenished by conversion of the corresponding amount of the Bonus Convertible Notes. Accordingly, the marketability of the Bonus Convertible Notes does not have the same significance to Asian Motion as it does to public Shareholders. In economic terms, the Bonus Convertible Notes have no advantages over the Shares and in terms of rights, they have less than the Shares. No benefit is being conferred on Asian Motion through its election for the Bonus Convertible Notes. PCCW has agreed to procure Asian Motion to elect for the Bonus Convertible Notes in lieu of all its entitlements to the Bonus Shares in order to facilitate the Company’s fulfilment of the minimum public float requirement as prescribed under the Listing Rules, or else the purpose of the Bonus Issue may not be achieved.

Anglo Chinese has advised the Directors to recommend that all Shareholders, other than Asian Motion, NOT to elect to receive the Bonus Convertible Notes as doing so will not be in their interests and will defeat the sole objective of the Bonus Issue for the Company to fulfil the minimum public float requirement as prescribed under the Listing Rules.

Recommendation from the Board

Based on the advice of Anglo Chinese as aforesaid, the Board therefore recommends that all Shareholders, other than Asian Motion, NOT to elect to receive any Bonus Convertible Notes as the Bonus Convertible Notes carry no voting rights at general meetings of the Company and are unlisted and irredeemable and therefore not readily tradeable notwithstanding its transferability. There is therefore no benefit to the public Shareholders holding the Bonus Convertible Notes. Furthermore, public Shareholders electing to receive the Bonus Convertible Notes may jeopardise the objective of the Bonus Issue for the Company to meet the minimum public float requirement prescribed under the Listing Rules. However, the decision in regard to receiving Bonus Shares or Bonus Convertible Notes and all effects resulting therefrom are the sole responsibility of each Qualifying

— 8 —

LETTER FROM THE BOARD

Shareholder. If you are in doubt as to what to do, you should consult your professional advisers. Qualifying Shareholders who are trustees are recommended to seek professional advice as to whether the choice of the Bonus Convertible Notes is within their powers and as to its effect having regard to the terms of the relevant trust instrument.

Number of Bonus Shares and Amount of Bonus Convertible Notes to be issued

As at the Record Date, the number of Shares in issue was 1,582,775,022 and accordingly the Bonus Issue would give rise to the issue of 405,766,756 Bonus Shares in the absence of any Shareholder other than Asian Motion electing to receive the Bonus Convertible Notes in lieu of all or any of its/his/her entitlements under the Bonus Issue and assuming that all Shareholders are Qualifying Shareholders. In order to facilitate the Company to comply with the minimum public float requirement prescribed under the Listing Rules, which requires that not less than 25% of the issued share capital of the Company shall be held by the public at all times, PCCW, as the ultimate controlling shareholder of the Company, has confirmed to the Company that it will procure Asian Motion to elect to receive the Bonus Convertible Notes in lieu of all its entitlements to the Bonus Shares in respect of all the Shares registered in its name on the Record Date. As at the Latest Practicable Date, PCCW, through Asian Motion, indirectly owned a total of 1,481,333,333 Shares, representing approximately 93.59% of the issued share capital of the Company. Set out below is the shareholding structure of the Company as at the Latest Practicable Date and upon completion of the Bonus Issue (assuming all Shareholders are Qualifying Shareholders, no Shareholders other than Asian Motion will elect to receive the Bonus Convertible Notes in lieu of their entitlements to the Bonus Shares and there being no other changes in the share capital structure of the Company):

				Immediately after
				completion of the Bonus
				Issue if only Asian Motion
				elects to receive the Bonus
				Convertible Notes in lieu	If the Bonus
		**As at **	the	of all its entitlement to the	Convertible Notes are
	Latest Practicable Date			Bonus Shares	converted in full			Notes
			Shareholding	Shareholding		Shareholding
			percentage	percentage			percentage
	**No. **	of Shares	(approx.)	No. of Shares (approx.)	No. of Shares		(approx.)
No. of Shares held by
Asian Motion	1,481,333,333		93.59%	1,481,333,333 74.49%	7,406,666,665			93.59%
No. of Shares held by
the public	101,441,689		6.41%	507,208,445 25.51%	507,208,445			6.41%
Total	1,582,775,022		100.00%	1,988,541,778 100.00%	7,913,875,110		100.00%

Notes:

(1) Under the terms of the Deed Poll, if and to the extent that the minimum public float requirement in respect of the Shares under the Listing Rules could not be complied with immediately after the purported exercise of the conversion rights of any Bonus Convertible Noteholder, such holder should not be entitled to exercise such conversion rights.

• (2) Not including the Shares convertible by PCCW under the 2014 Convertible Note.

— 9 —

LETTER FROM THE BOARD

In the absence of any Shareholders other than Asian Motion electing to receive the Bonus Convertible Notes in lieu of their entitlements to the Bonus Shares, Bonus Convertible Notes in the principal amount of HK$592,533,333.20 would be issued under the Bonus Issue.

Since the Bonus Issue is made on the basis of four (4) Bonus Share for every one (1) existing Share held by the Qualifying Shareholders on the Record Date, there will not be any fractional entitlements to the Bonus Shares.

Pursuant to the Bye-laws, the Company may resolve by ordinary resolution to capitalise all or any part of the amount standing to the credit of any reserve or fund (including the profit and loss account) whether or not the same is available for distribution and to apply such amount in or towards paying up in full unissued shares, debentures or other obligations of the Company. The total amount to be capitalised from the retained earnings account of the Company for the issue of Bonus Shares pursuant to the Bonus Issue and the issue of new Shares upon conversion of all the Bonus Convertible Notes will be approximately HK$633,110,008.80. As at 31 December 2011, the Company had in its account retained earnings of an amount of approximately HK$1,890 million.

Condition of the Bonus Issue

The Bonus Issue is conditional upon the Stock Exchange granting the listing of, and permission to deal in, the Bonus Shares and the Shares to be issued upon conversion of the Bonus Convertible Notes.

Principal terms of the Bonus Convertible Notes

The principal terms of the Bonus Convertible Notes are set out below:

Principal Amount Up to an amount equal to the maximum number of Bonus Shares issuable under the Bonus Issue, following the cancellation of Shares tendered and accepted under the Offer, multiplied by the nominal value per Bonus Share, in the denomination of HK$0.10 per unit of the Bonus Convertible Notes. Conversion Price HK$0.10 per Share, subject to adjustment in accordance with the Deed Poll. Mandatory Conversion On voluntary dissolution, liquidation or winding up of the Company, the Bonus Convertible Notes will be mandatorily converted into Shares at the then applicable conversion price.

— 10 —

LETTER FROM THE BOARD

No Redemption The Bonus Convertible Notes will not be subject to redemption. Conversion Period At any time after the issue of the Bonus Convertible Notes, and the conversion date will be deemed to be the 30th Stock Exchange Business Day following surrender of the Bonus Convertible Notes certificates by the Bonus Convertible Noteholder with a notice of conversion and the Bonus Convertible Noteholder will be deemed to be the holder of the Shares so converted with effect from the aforesaid conversion date.

If and to the extent that the minimum public float requirements in respect of the Shares under the Listing Rules could not be complied with immediately after the purported exercise of the conversion rights of any holder of the Bonus Convertible Notes, such holder shall not be entitled to exercise such conversion rights.

Distributions

The Bonus Convertible Notes will have no entitlement to interest but:

• (i) if and whenever the Company shall pay or make any cash dividend or distribution of any kind or any distribution of assets in specie (other than distribution of Shares, debentures or other securities) to its Shareholders (the “ Distribution ”), the Company shall, subject to compliance with relevant laws, rules, regulations and requirements in Hong Kong and Bermuda, at the same time pay or distribute to each Bonus Convertible Noteholder an amount of cash or other assets being the subject matter of the Distribution which is equal to (a) the amount of cash or other assets being the subject matter of the Distribution per Share receivable by the Shareholders under the Distribution, multiplied by (b) the number of Shares which the Bonus Convertible Noteholder would have become a holder of, had such Bonus Convertible Noteholder’s Bonus Convertible Notes then outstanding been converted on the relevant record date for determining entitlement to the Distribution; or

• (ii) if and whenever the Company shall issue any Shares, debentures or other securities, credited as fully paid, out of or by way of capitalisation of its profits or reserves and/or share premium account to its Shareholders (the “ Capitalisation Issue ”), the Company shall, subject to compliance with relevant laws, rules, regulations and requirements in Hong Kong and Bermuda, issue to each Bonus Convertible Noteholder either, at the option of the Company (a) such number of Shares, debentures or securities which is equal to (1) the number of such Shares, debentures or securities receivable by the Shareholders in respect of each issued Share held by them under the Capitalisation Issue, multiplied by (2) the number of Shares which the Bonus

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LETTER FROM THE BOARD

Convertible Noteholder would have become a holder of, had such Bonus Convertible Noteholder’s Bonus Convertible Notes then outstanding been converted on the relevant record date for determining entitlement to the Capitalisation Issue, or (b) further convertible notes on the same terms and conditions as the Bonus Convertible Notes in such amount which would on conversion thereof entitle the Bonus Convertible Noteholders of such convertible notes to such number of Shares as is equal to (1) the number of Shares receivable by the Shareholders in respect of each issued Share held by them under the Capitalisation Issue, multiplied by (2) the number of Shares which the Bonus Convertible Noteholder would have become a holder of, had such Bonus Convertible Noteholder’s Bonus Convertible Notes then outstanding been converted on the relevant record date for determining entitlement to the Capitalisation Issue.

Transferability Transferable in whole or in part in respect of its amount outstanding from time to time.

Other Rights If and whenever the Company shall offer to issue Shares or other securities by way of rights to its Shareholders (the “ Rights Issue ”), the Company shall, subject to compliance with the relevant laws, rules, regulations and requirements in Hong Kong and Bermuda, at the same time offer to each Bonus Convertible Noteholder for subscription either, at the option of the Company (a) such number of Shares or securities which is equal to (i) the number of such Shares or securities offered by the Company to the Shareholders in respect of each issued Share held by them under the Rights Issue, multiplied by (ii) the number of Shares which the Bonus Convertible Noteholder would have become a holder of, had such Bonus Convertible Noteholder’s Bonus Convertible Notes then outstanding been converted on the relevant record date for determining entitlement to the Rights Issue, or (b) further convertible notes on the same terms and conditions as the Bonus Convertible Notes in such amount which would on conversion thereof entitle the Bonus Convertible Noteholders of such convertible notes to such number of Shares as is equal to (i) the number of Shares offered for subscription by the Shareholders in respect of each issued Share held by the Shareholders under the Rights Issue, multiplied by (ii) the number of Shares which the Bonus Convertible Noteholder would have become a holder of, had such Bonus Convertible Noteholder’s Bonus Convertible Notes then outstanding been converted on the relevant record date for determining entitlement to the Rights Issue.

A more detailed summary of the terms and conditions of the Bonus Convertible Notes is set out in the Appendix on pages 19 to 33 of this document.

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LETTER FROM THE BOARD

Status of the Bonus Shares and Shares issuable upon conversion of Bonus Convertible Notes

The Bonus Shares and the shares in the Company which may fall to be allotted and issued on conversion of the Bonus Convertible Notes, upon issue, will rank pari passu in all respects with the shares in the Company then in issue on the date of such allotment and issue, including the entitlement to receive dividends and other distributions the record date of which is on or after the date of allotment and issue of those Bonus Shares. Before conversion, the Bonus Convertible Notes do not carry voting rights at general meetings of the Company.

Record Date and closure of the Register

To qualify for the Bonus Issue, a Shareholder must on the Record Date be registered as a member of the Company and not be an Excluded Shareholder.

In order to determine the list of Shareholders who were entitled to the Bonus Issue, the Register was closed on Wednesday, 30 May 2012, on which date no transfer of Shares was registered.

Effect of the Bonus Issue

As at the Latest Practicable Date, the Company had outstanding (i) Options entitling the holder thereof to subscribe for 5,000,000 new Shares at the exercise price of HK$2.375 per Share (subject to adjustment); and (ii) the 2014 Convertible Note which was convertible into 672,222,222 new Shares at the conversion price of HK$3.60 per Share (subject to adjustment). In addition, pursuant to, and subject to the terms and conditions of, the Subscription Agreement, the CN Issuer may issue the 2019 Convertible Note which, if issued, will be in the principal amount of HK$2,904,000,000 or the redemption amount of the 2014 Convertible Note due and not repaid at its maturity on Friday, 9 May 2014 (whichever is less) and is convertible into shares in the Company at a conversion price to be set on the issue date of the 2019 Convertible Note to be equal to 140% of the 20 trading day average of the closing prices of the Shares ended on such issue date, but not less than the Minimum Conversion Price (which Minimum Conversion Price and the conversion price so set are subject to adjustment).

If the Bonus Issue alone is implemented without the Share Consolidation, (i) it will lead to an adjustment to the subscription price and/or the number of shares of the Company which may fall to be issued upon exercise of such Options; and (ii) as mentioned in the Offer Circular, an adjustment to the Minimum Conversion Price and to the conversion price of the 2014 Convertible Note appropriate in the case of a bonus issue will be applied as if all Shareholders had not elected to receive the Bonus Convertible Notes.

Although the maximum number of the Bonus Shares issuable under the Bonus Issue was determined to be 405,766,756 (taking into account that PCCW has confirmed that it will procure Asian Motion to elect for the Bonus Convertible Notes in lieu of all of its entitlements to the Bonus Shares, and in the absence of any Shareholder other than Asian Motion electing to receive the Bonus Convertible Notes in lieu of all or any of its/his/her entitlements under the Bonus Issue and assuming that all Shareholders are Qualifying Shareholders), the Share Consolidation is subject to the fulfillment of all the necessary conditions. As such, the Company will make further announcement regarding the adjustments (if any) to the outstanding Options, the conversion price of the 2014 Convertible Notes, the Minimum Conversion Price as and when appropriate.

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LETTER FROM THE BOARD

Save for the Options and the 2014 Convertible Notes, as at the Latest Practicable Date, the Company had no outstanding options, warrants or convertible securities to subscribe for any securities of the Company.

Shareholders should note that the Bonus Shares and the Bonus Convertible Notes to be issued under the Bonus Issue may give rise to disclosure requirements under Part XV of the SFO. Shareholders who are in any doubt as to how these provisions may affect them as a result of the issue of the Bonus Shares and the Bonus Convertible Notes are recommended to consult their own professional advisers. Shareholders who are in any doubt as to their taxation position are also recommended to consult their own professional advisers.

Overseas Shareholders

This document, the Election Form and the issue of the Bonus Shares and the Bonus Convertible Notes in relation to the Bonus Issue will not be registered under any securities legislation outside Hong Kong. As at the Latest Practicable Date, there were certain Shareholders whose addresses as shown in the Register were in Australia, the PRC, Macau and California, the United States. The Board has made enquiries with its legal advisers as to the laws in such jurisdictions pursuant to Rule 13.36(2) of the Listing Rules. Based on the advice from its legal advisers in such jurisdictions, the Board will extend the Bonus Issue and the option to elect to receive Bonus Convertible Notes in lieu of all or part of Shareholders’ entitlements to the Bonus Shares only to those Overseas Shareholders whose names appeared on the Register on the Record Date with registered addresses in the PRC and Macau. This document and the Election Form have been sent to such Shareholders.

The Company’s legal advisers on the laws of Australia have advised that references in this document and the Election Form to the ability of Shareholders to elect for Bonus Convertible Notes may constitute an “offer” and as such, may be subject to disclosure requirements under the Corporations Act 2001 (Cth) (the “Corporations Act”). In particular, Chapter 6D of the Corporations Act requires a company to provide offerees of “securities” with a disclosure document such as a prospectus that meets Australian disclosure standards. As such, there may be legal restrictions on the Company’s ability to provide the option to elect to receive Bonus Convertible Notes in lieu of all or part of Shareholders’ entitlements to the Bonus Shares (“Option to Elect”) to Shareholders whose names appeared on the Register on the Record Date with registered addresses in Australia.

The Company’s legal advisers on the laws of the United States have advised that the election between the Bonus Shares and the Bonus Convertible Notes could be viewed as an investment decision and therefore could be treated like a rights offering for United States securities laws purposes, and could require compliance with Rule 801 under the United States federal securities laws. The Rule 801 requirements include certain legend requirements, submission to the Securities Exchange Commission of the United States (the “SEC”) of documents otherwise circulated to non-US holders and appointment by the Company of an agent for service of process in the United States. Further, given the state of California views a cash or stock election as an investment decision, the Company’s legal advisers on the laws of the United States believe that an election between the Bonus Shares and the Bonus Convertible Notes will be viewed as an investment decision and without that stock dividend exemption, the Company would have to qualify the Bonus Issue with the California Department of

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LETTER FROM THE BOARD

Corporations and obtain a permit. Accordingly, the Company’s legal advisers on United States laws have advised that Shareholders with registered address in the United States should be excluded from the Bonus Convertible Notes election option and receive only Bonus Shares.

Based on advice of the Company’s legal advisers as to the laws of Australia and the laws of the United States, the Directors have decided that it would be necessary or expedient to exclude the Shareholders whose names appeared on the Register on the Record Date with registered addresses in either Australia or in California, the United States from the Option to Elect. Therefore, the Option to Elect will NOT be available to any Shareholder with registered address in Australia and California, the United States but otherwise the Bonus Issue will still be extended to such Shareholders. This document (but not the Election Form) has been sent to such Shareholders for information only.

Australia

This document does not constitute a prospectus for the purposes of the Corporations Act and has not been, and will not be, lodged with the Australian Securities and Investments Commission. This document is not, and under no circumstances is to be construed as, an advertisement or a public offering of, or invitation to elect for, Bonus Shares or Bonus Convertible Notes in Australia.

The information in this document may contain references to dollar amounts which are not Australian dollars, may contain financial information which is not prepared in accordance with Australian law or practices, may not address risks associated with investment in foreign currency denominated investments and does not address Australian tax issues.

The information has not been prepared for an Australian audience. The documents are prepared under the laws and operating rules of Hong Kong and may not contain all information that would be typical for Australian disclosure documents.

All other Shareholders resident outside Hong Kong should consult their professional advisers as to whether or not they are permitted to participate in the Bonus Issue or whether any legal, regulatory or governmental or other consents are required in order to participate in the Bonus Issue or whether any legal, regulatory or governmental or other consents are required or other formalities need to be observed. No Shareholder receiving a copy of this document and/or an Election Form in any territory outside Hong Kong may treat the same as an invitation to elect for the Bonus Shares and/or the Bonus Convertible Notes unless in the relevant territory such invitation could lawfully be made to it/him/her without the Company having to comply with any registration or other legal requirements, governmental or regulatory procedures or any other similar formalities. It is the responsibility of any Shareholder outside Hong Kong who wishes to receive the Bonus Shares and/or the Bonus Convertible Notes to comply with the laws of the relevant jurisdictions including procedures or any other similar formalities. Persons who receive the Bonus Shares and/or the Bonus Convertible Notes must also comply with any restrictions on the resale of Shares and/or the Bonus Convertible Notes which may apply outside Hong Kong.

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LETTER FROM THE BOARD

Listing, Dealings and Settlement

Application has been made to the Stock Exchange for the listing of, and permission to deal in, the Bonus Shares and the Shares to be issued on conversion of the Bonus Convertible Notes. Subject to fulfillment of the condition under the section headed “Condition of the Bonus Issue” above, certificates for the Bonus Shares and the Bonus Convertible Notes are expected to be despatched by ordinary post to Shareholders entitled thereto to their respective addresses shown on the Register on the Record Date at their own risk on or about Friday, 22 June 2012. In the case of joint shareholdings, the certificates for the Bonus Shares and the Bonus Convertible Notes will be despatched by ordinary post to the address of the Shareholder first named in the Register in respect of such joint shareholding at their own risk.

Dealings in the Bonus Shares are expected to commence on Monday, 25 June 2012.

Subject to the granting of the listing of, and permission to deal in, the Bonus Shares and the shares in the Company to be issued on conversion of the Bonus Convertible Notes, as well as compliance with the stock admission requirements of HKSCC, the Bonus Shares and the shares in the Company to be issued on conversion of the Bonus Convertible Notes will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of their dealings on the Stock Exchange or such other date as shall be determined by HKSCC. Settlement of transactions between participants 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.

None of the Shares are listed or dealt in on any stock exchange other than the Stock Exchange, and the Bonus Shares and the shares in the Company to be issued on conversion of the Bonus Convertible Notes will not be listed or dealt in on any stock exchange other than the Stock Exchange at the time of the issuance and allotment of the Bonus Shares, and no such listing or permission to deal is being or is proposed to be sought. Investors should seek the advice of their stockbroker or other professional adviser for details of the settlement arrangements for the Bonus Shares and the shares in the Company to be issued on conversion of the Bonus Convertible Notes and how such arrangements affect their rights and interests.

Bonus Shares issued to the Qualifying Shareholders pursuant to an election to receive part of their entitlements under the Bonus Issue in the form of Bonus Shares may be allocated in odd lots (of less than a board lot of 1,000 Shares). Qualifying Shareholders should be aware that odd lots usually trade at a discount to the price of board lots.

Election Form

The Election Form has been prepared for use by the Qualifying Shareholders (other than those as shown on the Register with registered addresses in Australia and California, the United States) who wish to receive their entitlements under the Bonus Issue wholly in the form of the Bonus Convertible Notes or partly in the form of Bonus Shares and partly in the form of Bonus Convertible Notes in lieu of Bonus Shares. Please read carefully the instructions below and the instructions printed on the Election Form.

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LETTER FROM THE BOARD

(a) To receive only Bonus Shares

If you wish to receive only Bonus Shares under the Bonus Issue, you do not need to take any action. Therefore, please DO NOT return the Election Form.

(b) To receive only Bonus Convertible Notes

If you wish to receive only Bonus Convertible Notes in lieu of all of your entitlements to the Bonus Shares under the Bonus Issue, please insert a “�” in Box C of the Election Form, then SIGN, DATE and RETURN the Election Form.

(c) To receive partly Bonus Shares and partly Bonus Convertible Notes

If you wish to receive your entitlements under the Bonus Issue partly in the form of Bonus Shares and partly in the form of Bonus Convertible Notes, please insert in Box D of the Election Form the number of Shares which you held on the Record Date for which you require your entitlements under the Bonus Issue to be issued in the form of the Bonus Convertible Notes in lieu of Bonus Shares, then, SIGN, DATE and RETURN the Election Form.

If you do not specify the number of Shares in respect of which you wish to receive Bonus Convertible Notes in Box D, you will be deemed to have elected to receive ONLY Bonus Shares in respect of ALL the Shares registered in your name on the Record Date.

If you elect to receive Bonus Convertible Notes in respect of a greater number of Shares than your registered holding of Shares on the Record Date, you will be deemed to have elected to receive ONLY Bonus Convertible Notes in respect of ALL the Shares registered in your name on the Record Date. Therefore, you will receive only Bonus Convertible Notes in lieu of all of your entitlements to the Bonus Shares under the Bonus Issue.

The Election Forms should be completed and returned in accordance with the instructions printed thereon, so that they are received by the branch share registrar of the Company no later than 4:30 p.m. on Wednesday, 20 June 2012 at:

Computershare Hong Kong Investor Services Limited 17M Floor, Hopewell Centre 183 Queen’s Road East Wanchai Hong Kong

The latest time for return of the Election Form mentioned above will not be valid if there is a tropical cyclone warning signal number 8 or above, or a “black” rainstorm warning:

• a. in force in Hong Kong at any local time at or before 12:00 noon and no longer in force after 12:00 noon on Wednesday, 20 June 2012. Instead, the deadline for the submission of the Election Form will be at 5:00 p.m. on the same day;

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LETTER FROM THE BOARD

• b. in force in Hong Kong at any local time between 12:00 noon and 4:30 p.m. on Wednesday, 20 June 2012. Instead, the deadline for the submission of the Election Form will be rescheduled to 4:30 p.m. on the next business day which does not have either of those warning in force at any time between 9:00 a.m. and 4:30 p.m.

Failure to complete and return the Election Form in accordance with the instructions printed thereon will result in the relevant Qualifying Shareholder’s entitlements under the Bonus Issue being issued wholly in the form of Bonus Shares. No acknowledgement of receipt of the Election Form will be issued. No elections to receive Bonus Convertible Notes in lieu of all (or part) of the Qualifying Shareholders’ entitlements to the Bonus Shares may, after the relevant Election Form is signed and returned to the branch share registrar of the Company, be in any way withdrawn, revoked, superseded or altered.

Stamp Duty

Dealings in the Bonus Shares, the Bonus Convertible Notes and the Shares to be issued on conversion of the Bonus Convertible Notes will be subject to the payment of stamp duty, Stock Exchange trading fee, transaction levy, or any other applicable fees and charges in Hong Kong. The Shareholders are recommended to consult their professional advisers if they are in any doubt as to the taxation implications of holding, disposing of or dealing in the Bonus Shares, the Bonus Convertible Notes and the Shares to be issued on conversion of the Bonus Convertible Notes. It is emphasized that none of the Company, its Directors or any other parties involved in the Bonus Issue accepts responsibility for any tax implication or liabilities of the Shareholders.

3. ACTION TO BE TAKEN

An Election Form is also enclosed with this document to the Qualifying Shareholders (not being those Qualifying Shareholders with registered addresses in Australia and California, the United States). Qualifying Shareholders (other than those Qualifying Shareholders with registered addresses in Australia and California, the United States) who wish to elect for the Bonus Convertible Notes must complete and return the Election Form in accordance with the instructions thereon. Failure to do so may result in such election being void or having no effect.

No action needs to be taken by Shareholders who wish to receive Bonus Shares only. Shareholders will receive Bonus Convertible Notes only if they make an election to receive the Bonus Convertible Notes under the Election Form.

4. RECOMMENDATION

The Board believes that the Bonus Issue is in the best interests of the Company and its Shareholders as a whole. The Board recommends the Shareholders (other than Asian Motion) to elect to receive Bonus Shares and NOT TO elect to receive the Bonus Convertible Notes, which carry no voting rights at general meetings of the Company and will be unlisted and irredeemable and therefore not readily tradeable notwithstanding its transferability.

Yours faithfully,

For and on behalf of the Board

PACIFIC CENTURY PREMIUM DEVELOPMENTS LIMITED

Lee Chi Hong, Robert

Chief Executive Officer and Deputy Chairman

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APPENDIX SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

The Bonus Convertible Notes will be issued subject to and with the benefit of the Deed Poll to be executed by the Company and they will be issued in registered form and will form one class and rank pari passu in all respects with each other.

The principal terms and conditions of the Bonus Convertible Notes will be set out in the certificates for the Bonus Convertible Notes and will include provisions to the effect set out below. Bonus Convertible Noteholders will be entitled to the benefit of, be bound by, and be deemed to have notice of all such terms and conditions and the provisions of the Deed Poll, a copy of the draft of which is available for inspection by the Shareholders at the head office and principal place of business of the Company located at 8th Floor, Cyberport 2, 100 Cyberport Road, Hong Kong during normal business hours on any Business Day, up to and including 20 June 2012.

1. Status

The Bonus Convertible Notes constitute direct, unconditional, unsubordinated and unsecured obligations of the Company and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Company in respect of the Bonus Convertible Notes shall, save for such exceptions as may be provided by applicable legislation, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations.

2. Form, Denomination and Title

(a) Form and denomination

The Bonus Convertible Notes are in registered form in the denomination of HK$0.10 (each, a “ Bonus Convertible Note ”). A note certificate (each, a “ Certificate ”) will be issued to each Bonus Convertible Noteholder in respect of its registered holding of the Bonus Convertible Notes. Each Bonus Convertible Note and each Certificate will have an identifying number which will be recorded on the relevant Certificate and in the register of Bonus Convertible Noteholders which the Company will procure to be kept by the registrar and the paying, transfer and conversion agent in respect of the Bonus Convertible Notes (the “ Bonus CN Registrar ”).

(b) Title

The holder of any Bonus Convertible Notes will (except as otherwise required by law) be treated as its absolute owner for all purposes (regardless of any notice of ownership, trust or any interest in it or any writing on, or the theft or loss of, the Certificate issued in respect of it) and no person will be held liable for so treating the holder. “ Bonus Convertible Noteholder ” and (in relation to a Bonus Convertible Note) “ holder ” means the person in whose name a Bonus Convertible Note is registered as recorded in the register of Bonus Convertible Noteholders.

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

3. Payment to or Entitlement of the Bonus Convertible Noteholder

• (a) If and whenever the Company shall, in respect of the issued Shares, pay or make any cash dividend or distribution of any kind or any distribution of assets in specie (other than the Capitalisation Issue referred to in paragraph 3(b) below) to the Shareholders (for the purpose of this Appendix, the “ Distribution ”), the Company shall, subject to compliance with the relevant laws, rules, regulations and requirements in Hong Kong and in Bermuda and the applicable listing rules of the Stock Exchange (or if applicable, the Alternative Stock Exchange (as defined in paragraph 6(e) below)), at the same time pay or distribute to each Bonus Convertible Noteholder an amount of cash or other assets being the subject matter of the Distribution which is equal to (i) the amount of cash or other assets being the subject matter of the Distribution per Share receivable by the Shareholders under the Distribution, multiplied by (ii) the number of Shares which such Bonus Convertible Noteholder would have become a holder of, had the Bonus Convertible Notes then outstanding held by the Bonus Convertible Noteholder been converted in accordance with the conditions of the Bonus Convertible Note (the “ Conditions ”) on the record date for determining entitlement to the Distribution.

• (b) If and whenever the Company shall, in respect of the issued Shares, issue any Shares or debentures or securities, credited as fully paid, out of or by way of capitalisation of its profits or reserves and/or share premium account (whether or not issued in lieu of the whole or any part of a cash dividend) to its Shareholders (for the purpose of this Appendix, the “ Capitalisation Issue ”), subject to compliance with the relevant laws, rules, regulations and requirements in Hong Kong and in Bermuda and the applicable listing rules of the Stock Exchange (or if applicable, the Alternative Stock Exchange, as defined in paragraph 6(e) below), the Company shall, on the date of the Capitalisation Issue, issue to each Bonus Convertible Noteholder either, at the option of the Company, (a) such number of Shares, debentures or securities which is equal to (i) the number of such Shares, debentures or securities receivable by the Shareholders in respect of each issued Share held by them under the Capitalisation Issue, multiplied by (ii) the number of Shares which such Bonus Convertible Noteholder would have become a holder of, had the Bonus Convertible Notes then outstanding held by the Bonus Convertible Noteholder been converted in accordance with the Conditions on the record date for determining entitlement to the Capitalisation Issue; or (b) further convertible notes on the same terms and conditions as the Bonus Convertible Notes in such amount which would on conversion thereof entitle the holder thereof to such number of Shares as is equal to (i) the number of Shares receivable by the Shareholders in respect of each issued Share held by them under the Capitalisation Issue, multiplied by (ii) the number of Shares which such Bonus Convertible Noteholder would have become a holder of, had the Bonus Convertible Notes then outstanding held by the Bonus Convertible Noteholder been converted in accordance with the Conditions on the record date for determining entitlement to the Capitalisation Issue.

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

4. Transfer, Transmission and Register of Bonus Convertible Noteholders; Issue of Certificates

(a) Transfer, Transmission and Register of Bonus Convertible Noteholders

Subject to the registrar and paying, transfer and conversion agency agreement to be entered into between the Company and the Bonus CN Registrar whereby the Bonus CN Registrar will be appointed as the registrar and the paying, transfer and conversion agent in respect of the Bonus Convertible Notes (the “ Agency Agreement ”), a Bonus Convertible Note may be transferred in whole or in part in respect of its amount outstanding from time to time by delivering the Certificate issued in respect of that Bonus Convertible Note, with the form of transfer in any usual or common form or such other form as may be approved by the Board duly completed, signed and stamped (if required), to the specified office of the Bonus CN Registrar. Where the transferor or the transferee is a clearing house or its nominee(s) (or such other company as may be approved by the Board for this purpose), the transfer may be executed under the hands of the authorised person(s) or by machine imprinted signatures on its behalf or of such person(s), as the case may be. No transfer of title to any Bonus Convertible Note will be effective unless and until entered on the register of Bonus Convertible Noteholders and provided that such transfer is in compliance with the regulations concerning transfer of Bonus Convertible Notes. For this purpose, the Company shall procure to be kept by the Bonus CN Registrar a register of the Bonus Convertible Noteholders and subject to the provisions of the Deed Poll and the Conditions, the provisions of the Bye-laws for the time being in relation to the registration, transmission and transfer of Shares shall apply, mutatis mutandis, to the registration, transmission and transfer of the Bonus Convertible Notes and shall have full effect as if the same had been incorporated in the Deed Poll.

(b) Closing of Register of Bonus Convertible Noteholders

The register of Bonus Convertible Noteholders may be closed from time to time, subject to the same restrictions, mutatis mutandis, as apply to the closure of the Register under the applicable law or regulation and the Bye-laws of the Company. If any Conversion Rights (as defined in paragraph 6(a)(i) below) are exercised during the period for which the register of Bonus Convertible Noteholders is closed, the first day upon which the register of Bonus Convertible Noteholders reopens shall be deemed to be the relevant Conversion Date (as defined in paragraph 6(b)(i) below) for all purposes in respect of such exercise of Conversion Rights.

(c) Delivery of New Certificates

Each new Certificate to be issued upon a transfer of Bonus Convertible Note will, within fourteen Business Days of receipt by the Bonus CN Registrar of the form of transfer duly completed, signed and stamped (in required), be made available for collection at the specified office of the Bonus CN Registrar or, if so requested in the form of transfer, be mailed by uninsured mail at the risk of the holder entitled to the Bonus Convertible Notes (but free of charge to the holder) to the address specified in the form of transfer.

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

Where only part of the amount of the Bonus Convertible Notes in respect of which a Certificate is issued is, subject to the Conditions, to be transferred or converted, a new Certificate in respect of the remaining amount of the Bonus Convertible Notes not so transferred or converted will, within fourteen Business Days after receipt of the form of transfer duly completed, signed and stamped (if required) or after the Conversion Date (as defined in sub-paragraph 6(b)(i) below), as the case may be, be made available for collection without charge at the specified office of the Bonus CN Registrar or, if so requested by the holder, be mailed by uninsured mail at the risk of the holder of the Bonus Convertible Notes not so transferred or converted (but free of charge to the holder) to the address of such holder appearing on the register of Bonus Convertible Noteholders.

For the purposes of the Conditions, “ Business Day ” shall mean any day (excluding a Saturday, a Sunday or any public holiday and any day on which a tropical cyclone warning signal no.8 or above or a “black” rainstorm warning signal is hoisted or remains hoisted in Hong Kong at any time between 9 a.m. to 5 p.m.) on which banks are generally open for business in Hong Kong.

(d) Fees in Respect of Formalities

Registration of transfer of the Bonus Convertible Notes will be effected by or on behalf of the Company or the Bonus CN Registrar, but upon payment of such transfer charge as determined in accordance with the Bonus CN Registrar’s scale of charges as revised from time to time and upon payment which shall not exceed the maximum fees prescribed by the Stock Exchange from time to time under the Listing Rules (or the giving of such indemnity as the Company, or the Bonus CN Registrar may require) in respect of any tax or other governmental charge which may be imposed in relation to it.

(e) Regulations

All transfers of the Bonus Convertible Notes and entries on the register of Bonus Convertible Noteholders will be made subject to the detailed regulations concerning transfers of Bonus Convertible Notes scheduled to the Agency Agreement. The regulations may be changed by the Company, with the prior written approval of the Bonus CN Registrar. A copy of the current regulations will be mailed (free of charge) by the Bonus CN Registrar to any Bonus Convertible Noteholder upon request.

5. Interest

The Bonus Convertible Notes do not bear any interest.

6. Conversion

(a) Conversion Period and Conversion Price

• (i) Subject to and upon compliance with the provisions of the Conditions, the right of a Bonus Convertible Noteholder to convert any Bonus Convertible Note into Shares (the “ Conversion Rights ”) attaching to any Bonus Convertible Note may be exercised, at the

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

option of the holder thereof, at any time on or after the date of the Deed Poll (at the place where the Certificate representing such Bonus Convertible Note is deposited for conversion) for so long as the Bonus Convertible Notes remain outstanding until the outstanding Bonus Convertible Notes are mandatorily converted in accordance with sub-paragraph 9(a) below (the “ Conversion Period ”). Bonus Convertible Noteholders have the right to convert their Bonus Convertible Notes into Shares at any time during the Conversion Period PROVIDED THAT a Bonus Convertible Noteholder shall not be entitled to exercise its Conversion Rights if and to the extent that the minimum public float requirements in respect of the Shares under the Listing Rules could not be complied with immediately after the purported exercise of any Conversion Rights of the Bonus Convertible Noteholder (“ Restrictions on Conversion ”). In relation to the Restrictions on Conversion, nothing shall prohibit a Bonus Convertible Noteholder from exercising the Conversion Rights if at the time of the exercise of such Conversion Rights, such Bonus Convertible Noteholder and/or the Company has taken other action(s) simultaneously such that there will be no non-compliance of the above minimum public float requirements under the Listing Rules immediately after the issuance of the Shares upon such conversion. Upon conversion, the right of the converting Bonus Convertible Noteholder to any payment by the Company in respect of the Bonus Convertible Notes to be converted shall be extinguished and released, and the Company shall allot and issue Shares credited as paid up in full as provided in this paragraph 6.

The number of Shares to be issued on conversion of a Bonus Convertible Note will be determined by dividing the amount of the Bonus Convertible Note to be converted by the Conversion Price (as defined in sub-paragraph 6(a)(iii) below) in effect on the Conversion Date (as defined in sub-paragraph 6(b)(i) below).

• (ii) If more than one Bonus Convertible Note is converted at any one time by the same holder, the number of Shares to be issued upon such conversion will be calculated on the basis of the aggregate amount of the Bonus Convertible Notes to be converted. Fractions of Shares will not be issued on conversion and no cash adjustments will be made in respect thereof. Notwithstanding the foregoing, in the event of a consolidation or re-classification of Shares by operation of law or otherwise occurring after the date of the Deed Poll, the Company will upon conversion of the Bonus Convertible Notes pay in cash (in Hong Kong dollars by means of a Hong Kong dollar cheque drawn on a bank in Hong Kong) a sum equal to such portion of the amount of the Bonus Convertible Note or Bonus Convertible Notes in respect of which the Conversion Rights are exercised as corresponds to any fraction of a Share not issued as aforesaid if such sum exceeds HK$100.

• (iii) The price at which Shares will be issued upon conversion (the “ Conversion Price ”) will initially be HK$0.10 per Share but will be subject to adjustment in the manner provided in sub-paragraph 6(c) below.

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

(b) Procedure for Conversion

• (i) To exercise the Conversion Right attaching to any Bonus Convertible Note, the holder thereof must complete, execute and deposit at his own expense during normal business hours at the specified office of the Bonus CN Registrar a notice of conversion (a “ Conversion Notice ”) in duplicate in the form (for the time being current) obtainable from the specified office of the Bonus CN Registrar, together with the relevant Certificate and any amount to be paid by the Bonus Convertible Noteholder pursuant to this sub-paragraph 6(b)(i).

The conversion date in respect of a Bonus Convertible Note (the “ Conversion Date ”) must fall at a time when the Conversion Right attaching to that Bonus Convertible Note is expressed in the Conditions to be exercisable and will be deemed to be (i) the 30th Stock Exchange Business Day (as defined below) immediately following the date of the surrender of the Certificate in respect of such Bonus Convertible Note and delivery of such Conversion Notice and, if applicable, any payment to be made or indemnity given under the Conditions in connection with the exercise of such Conversion Right or, (ii) in the case of a mandatory conversion pursuant to sub-paragraph 9(a), the relevant mandatory conversion date. A Conversion Notice once delivered shall be irrevocable. For the purpose of this Appendix, “ Stock Exchange Business Day ” means any day (other than a Saturday or Sunday or any public holiday) on which the Main Board Market of the Stock Exchange or the Alternative Stock Exchange (as defined in sub-paragraph 6(e) below), as the case may be, is open for business.

A Bonus Convertible Noteholder delivering a Certificate with respect to a Bonus Convertible Note for conversion must pay to the paying, transfer and conversion agent (the “ Agent ”) appointed by the Company for the purpose of the Bonus Convertible Notes any taxes and capital, stamp, issue and registration duties arising on conversion (other than any taxes or capital or other duties payable in Bermuda, Hong Kong, or in the place of the Alternative Stock Exchange, as the case may be, by the Company in respect of the allotment and issue of Shares and listing of the Shares on conversion) (“ Taxes ”) (if any) and such Bonus Convertible Noteholder must pay all, if any, taxes arising by reference to any disposal or deemed disposal of a Bonus Convertible Note in connection with such conversion. The Company will pay all other expenses arising on the issue of Shares on conversion of the Bonus Convertible Notes. The Agent and the Company are under no obligation to determine whether a Bonus Convertible Noteholder is liable to pay any Taxes including capital, stamp, issue, registration or similar taxes and duties or the amounts payable (if any) in connection with this sub-paragraph 6(b)(i).

• (ii) As soon as practicable, and in any event not later than 14 Business Days after the Conversion Date, the Company will, in the case of the Bonus Convertible Notes converted on exercise of the Conversion Right and in respect of which a Conversion Notice has been delivered and the relevant Certificate and amounts payable by the relevant Bonus Convertible Noteholder (if any) deposited as permitted by sub-paragraph (b)(i) above,

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

register the person or persons designated for the purpose in the Conversion Notice which must be the same person(s) as the relevant holder(s) of the Bonus Convertible Note(s) to be converted as the holder(s) of the relevant number of Shares in the Register in Hong Kong and will make a certificate or certificates for the relevant Shares available for collection at the Registrar’s principal office in Hong Kong or, if so requested in the relevant Conversion Notice, will mail such certificate or certificates to the person(s) and at the place specified in the Conversion Notice, together with any other securities, property or cash required to be delivered upon conversion and such assignments.

If the Conversion Date in relation to any Bonus Convertible Note shall be on or after a date with effect from which an adjustment to the Conversion Price takes retroactive effect pursuant to any of the provisions referred to in sub-paragraph 6(c) below and Clause 9 of the Deed Poll and the relevant Conversion Date falls on a date when the relevant adjustment has not yet been reflected in the then current Conversion Price, the Company will procure that the provisions of this sub-paragraph (ii) shall be applied, mutatis mutandis, to such number of Shares as is equal to the excess of the number of Shares which would have been required to be issued on conversion of such Bonus Convertible Note if the relevant retroactive adjustment had been given effect as at the said Conversion Date over the number of Shares previously issued pursuant to such conversion, and in such event and in respect of such number of Shares references in this sub-paragraph (ii) to the Conversion Date shall be deemed to refer to the date upon which such retroactive adjustment becomes effective (disregarding the fact that it becomes effective retroactively).

The person or persons designated for that purpose in the Conversion Notice (which must be the same person(s) as the relevant holder(s) of the Bonus Convertible Notes so converted) will be deemed for all purposes to be the holder(s) of record of the number of Shares issuable upon conversion with effect from the relevant Conversion Date. The Shares issued upon conversion of the Bonus Convertible Notes will in all respects rank pari passu with the Shares in issue on the relevant Conversion Date except for any right excluded by mandatory provisions of applicable law. A holder of Shares issued on conversion of the Bonus Convertible Notes shall not be entitled to any rights the record date for which precedes the relevant Conversion Date.

(c) Adjustment to Conversion Price

The Conversion Price will be subject to adjustment, in the event(s) set out in the Deed Poll, being:

• (i) any alteration to the nominal value of the Shares as a result of consolidation or subdivision or reclassification; or

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

• (ii) if the Company considers that it would be appropriate for an adjustment to be made to the Conversion Price as a result of any event(s) or circumstances not referred to in clause 9.1 of the Deed Poll, the Company shall, at its own expense, consult an independent investment bank of international repute (which shall be selected and appointed by the Company and acting as experts) selected by the Company to determine as soon as practicable what adjustment (if any) to the Conversion Price is fair and reasonable to take account thereof and the date on which such adjustment should take effect, and upon such determination by such independent investment bank such adjustment (provided that the adjustment would not reduce the Conversion Price below the par value of the Shares) shall be made and take effect in accordance with such determination;

provided that where the circumstances giving rise to any adjustment pursuant to this sub-paragraph 6(c) have already resulted or will result in an adjustment to the Conversion Price or where the circumstances giving rise to any adjustment arise by virtue of the circumstances which have already given or will give rise to an adjustment to the Conversion Price, such modification (if any) shall be made to the operation of the provisions of this sub-paragraph 6(c) as may be advised by the independent investment bank to be in their opinion appropriate to give the intended result.

On any adjustment, the resultant Conversion Price, if not an integral multiple of one (1) Hong Kong cent, shall be rounded down to the nearest one (1) Hong Kong cent. No adjustment shall be made to the Conversion Price where such adjustment (rounded down if applicable) would be less than one per cent. of the Conversion Price then in effect. Any adjustment not required to be made, and any amount by which the Conversion Price has not been rounded down, shall be carried forward and taken into account in any subsequent adjustment. Notice of any adjustments shall be given to Bonus Convertible Noteholders in accordance with paragraph 15 of this Appendix as soon as practicable after the determination thereof.

The Conversion Price may not be reduced so that, on conversion of the Bonus Convertible Notes, Shares would fall to be issued at a discount to their par value.

Where more than one event which gives or may give rise to an adjustment to the Conversion Price occurs within such a short period of time that in the opinion of the independent investment bank (which shall be selected and appointed by the Company and acting as experts) a modification would need to be made to the foregoing provisions in order to give the intended result, such modification shall be made as may be advised by the independent investment bank to be in their opinion appropriate in order to give such intended result.

No adjustment will be made to the Conversion Price (i) when an anti-dilution event set out in paragraph 7 arises; or (ii) when the Company pays or makes a Distribution to the Shareholders and makes payment to the Bonus Convertible Noteholders as referred to in Clause 3.1 of the Deed Poll and sub-paragraph 3(a) of this Appendix; or (iii) when the Company makes any Capitalisation Issue and issue any Shares, debentures or securities or further convertible notes to the Bonus Convertible Noteholders as referred to in Clause 3.2 of the Deed Poll and sub-paragraph 3(b) of this Appendix; or (iv) when Shares or other securities (including rights or options) are issued, offered or granted pursuant to any Employee Share Scheme (as defined below).

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

“ Employee Share Scheme ” shall mean any scheme as may be approved by the Company at a general meeting (whether before or after the date of the Deed Poll) and in compliance with the applicable listing rules of the Stock Exchange (or if applicable, the Alternative Stock Exchange) pursuant to which Shares or other securities (including rights or options) are issued to employees (including directors) or former employees of the Company, its subsidiaries and/or associated companies, and/or consultants, professional and other advisers to the Company, its subsidiaries and/or associated companies, and/or chief executives and/or substantial shareholders of the Company, its subsidiaries and/or associated companies, and/or employees of substantial shareholders of the Company, its subsidiaries and/or associated companies (including without limitation the share option schemes adopted by the Company on 17 March 2003 and 23 May 2005 respectively).

(d) Consolidation, Amalgamation or Merger

In the case of any consolidation, amalgamation or merger of the Company with any other corporation (other than a consolidation, amalgamation or merger in which the Company is the continuing corporation), or in the case of any sale or transfer of all, or substantially all, of the assets of the Company, the Company will forthwith notify the Bonus Convertible Noteholders of such event in accordance with paragraph 15 and (so far as legally possible) cause the corporation resulting from such consolidation, amalgamation or merger or the corporation which shall have acquired such assets, as the case may be, to execute a deed poll supplemental to the Deed Poll to ensure that the holder of each Bonus Convertible Note then outstanding will have the right (during the period in which such Bonus Convertible Note shall be convertible) to convert such Bonus Convertible Note into the class and amount of shares and other securities and property receivable upon such consolidation, amalgamation, merger, sale or transfer by a holder of the number of Shares which would have become liable to be issued upon conversion of such Bonus Convertible Note immediately prior to such consolidation, amalgamation, merger, sale or transfer. Such supplemental deed poll will provide for adjustments which will be as nearly equivalent as may be practicable to the adjustments provided for in the foregoing provisions of this paragraph. The above provisions of this paragraph 6(d) will apply in the same way to any subsequent consolidations, amalgamation, mergers, sales or transfers.

(e) Undertakings

The Company has undertaken in the Deed Poll that it will use all reasonable endeavours to maintain a listing on the Stock Exchange for all the issued Shares for the time being (save for any suspension of trading of a temporary nature) and to obtain and maintain a listing for all the Shares to be issued (i) on exercise of the Conversion Rights; (ii) pursuant to the terms and conditions of the Bonus Convertible Notes and (iii) on exercise of the conversion rights attaching to any further convertible notes which may be issued by the Company to the Bonus Convertible Noteholders on the same terms and conditions as the Bonus Convertible Notes in accordance with the Deed Poll and the Conditions or, if the Company is unable to obtain or maintain such listing having used such reasonable endeavours, use all reasonable endeavours to obtain and maintain a listing for such Shares on any other stock exchange (each an “ Alternative Stock Exchange ”) as the Company may from time to time determine and will forthwith give notice to the Bonus Convertible Noteholders in accordance with paragraph 15 of the listing or delisting of the Shares on the Stock Exchange or such Alternative Stock Exchange.

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APPENDIX SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

The Company has undertaken in the Deed Poll to pay the expenses of the issue of, and all expenses of obtaining and maintaining listing for, the Shares arising on conversion of the Bonus Convertible Notes.

The Company has also given certain other undertakings in the Deed Poll for the protection of the Conversion Rights.

7. Anti-dilution Events

• (a) Rights Issues of Shares or Options over Shares: If and whenever the Company shall offer to issue Shares or other securities to its Shareholders by way of rights, or offer to issue or grant to Shareholders by way of rights, options, warrants or other rights to subscribe for or purchase or otherwise acquire any Shares or other securities (for the purpose of this Appendix, the “ Rights Issue ”), the Company, subject to compliance with the relevant laws, rules, regulations and requirements in Hong Kong and in Bermuda and the applicable listing rules of the Stock Exchange (or if applicable, the Alternative Stock Exchange), shall at the same time offer to each Bonus Convertible Noteholder for subscription either, at the option of the Company (a) such number of Shares or securities which is equal to (i) the number of such Shares or securities offered by the Company to the Shareholders in respect of each issued Share held by them under the Rights Issue, multiplied by (ii) the number of Shares which such Bonus Convertible Noteholder would have become a holder of, had the Bonus Convertible Notes then outstanding held by the Bonus Convertible Noteholders been converted in accordance with the Conditions on the record date for determining entitlement under the Rights Issue, in which case, the subscription price per Share or for each of the securities offered to the Bonus Convertible Noteholder would be the same as the subscription price per Share or for each of the securities offered to the Shareholders under the Rights Issue; or (b) further convertible notes on the same terms and conditions as the Bonus Convertible Notes in such amount which would on conversion thereof entitle the holder thereof to such number of Shares as is equal to (i) the number of Shares offered for subscription by the Shareholders in respect of each issued Share held by the Shareholders under the Rights Issue, multiplied by (ii) the number of Shares which such Bonus Convertible Noteholder would have become a holder of, had the Bonus Convertible Notes then outstanding held by the Bonus Convertible Noteholder been converted in accordance with the Conditions on the record date for determining the Shareholders’ rights entitlement under the Rights Issue provided that the latest time and date for payment and the manner and format of payment for Shareholders under the Rights Issue shall apply mutatis mutandis to Bonus Convertible Noteholders tendering payment for taking up the Shares or securities or further convertible notes being offered by the Company as aforesaid so long as and to the extent permitted by relevant laws, rules, regulations and requirements in Hong Kong and in Bermuda and the applicable listing rules of the Stock Exchange (or if applicable, the Alternative Stock Exchange).

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

• (b) Other Events: If the Company in its sole and absolute discretion determines that any event(s) or circumstance(s) not referred to in paragraph 3, paragraph 6(c) or (d) or paragraph 9(a) would have a dilutive effect on the rights of Bonus Convertible Noteholders (as if Bonus Convertible Noteholders had fully converted their Bonus Convertible Notes into Shares), other than an event or circumstance which would have an equally dilutive effect on Shareholders and Bonus Convertible Noteholders (as if Bonus Convertible Noteholders had fully converted their Bonus Convertible Notes into Shares) alike, the Company may, at its own expense, consult an independent investment bank of international repute (which shall be selected and appointed by the Company and acting as experts) to determine as soon as practicable what action to be taken by the Company would be fair and reasonable to Bonus Convertible Noteholders in view of such event(s) or circumstance(s), and upon such determination by such independent investment bank, the Company may at its sole and absolute discretion take such action.

8. Payments

Any payment required to be made by the Company to the Bonus Convertible Noteholders in respect of the Bonus Convertible Notes pursuant to the Deed Poll and the Conditions will be made by Hong Kong dollar cheque drawn on a bank in Hong Kong mailed to the registered address of the Bonus Convertible Noteholder. Any payment in respect of each Bonus Convertible Note will be paid to the holder whose name is shown on the register of Bonus Convertible Noteholders on the due date for such payment (or, if it is not a Business Day, the immediately following Business Day).

All payments are subject in all cases to any applicable fiscal or other laws and regulations, but without prejudice to the provisions of paragraph 10 of this Appendix. No commissions or expenses shall be charged to the Bonus Convertible Noteholders in respect of such payments.

For the purposes of making payment in respect of the Bonus Convertible Notes, the cheque will be mailed (at the risk and, if mailed at the request of the Bonus Convertible Noteholder otherwise than by ordinary mail, at the expense of the Bonus Convertible Noteholder) on the due date for payment (or, if it is not a Business Day, the immediately following Business Day).

The Bonus Convertible Noteholders will not be entitled to any interest or other payment for any delay after the due date in receiving the amount due which arises from circumstances other than the fault of the Company, or if a cheque mailed in accordance with this paragraph 8 arrives after the due date for payment.

9. Mandatory Conversion, Cancellation and Redemption

(a) Mandatory Conversion of the Bonus Convertible Notes

Unless previously converted as provided in the Deed Poll, where there is a voluntary dissolution, liquidation or winding-up of the Company, the Company shall forthwith give written notice to the

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

Agent in compliance with the Deed Poll and, all the Bonus Convertible Notes outstanding one Business Day prior to the holding of the general meeting of the Shareholders approving the dissolution, liquidation or winding-up shall be mandatorily and automatically converted by the Company on that same day, into such number of Shares as would have been issued by the Company if such Bonus Convertible Notes had been converted pursuant to the exercise by the Bonus Convertible Noteholders of the Conversion Rights pursuant to paragraph 6 of this Appendix. The mandatory conversion of such Bonus Convertible Notes by the Company shall be made in accordance with all provisions of paragraph 6 (as modified to reflect a conversion by the Company of the Bonus Convertible Notes) and subject to the followings:

• (i) notwithstanding that a Bonus Convertible Noteholder has failed to surrender any certificate(s) in respect of any Bonus Convertible Note, such Bonus Convertible Note shall be automatically cancelled and of no further effect upon a voluntary, liquidation or winding-up of the Company; and

• (ii) all Bonus Convertible Notes to be mandatorily converted pursuant to this sub-paragraph 9(a) shall be so converted notwithstanding that the number of such Bonus Convertible Notes is not an integral multiple of the authorised denomination.

(b) No redemption of the Notes

The Bonus Convertible Notes shall not be redeemed or purchased by the Company and none of the Bonus Convertible Noteholders shall have the right to require the Company to redeem or purchase the Bonus Convertible Notes or any part of the amount thereof.

(c) Cancellation

All Bonus Convertible Notes which are converted will forthwith be cancelled. Certificates in respect of all Bonus Convertible Notes cancelled will be forwarded to or to the order of the Bonus CN Registrar and such Bonus Convertible Notes may not be reissued or resold. Immediately upon the date of the commencement of the dissolution, liquidation or winding-up of the Company, all the Bonus Convertible Notes will be automatically cancelled whether or not the relevant Certificates are surrendered to the Bonus CN Registrar, provided that in the case of an involuntary dissolution, liquidation or winding-up of the Company, holders of the Bonus Convertible Notes whose Bonus Convertible Notes were cancelled not as a result of a conversion but as a result of an involuntary dissolution, liquidation or winding-up of the Company shall be entitled to receive out of the assets of the Company the same amount and at the same time as are paid with respect to the Shares, and for the purpose of calculation, each Bonus Convertible Note shall be deemed to be equal to the number of Shares into which it can be converted upon exercise of the Conversion Rights attached thereto in accordance with paragraph 6 above.

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

10. Taxation

All payments by the Company under or in respect of the Deed Poll or the Bonus Convertible Notes will be made without deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or within Hong Kong or any authority thereof or therein having power to tax, unless such deduction or withholding is required by law. In such event, the Company will pay such additional amounts as will result in the receipt by the Bonus Convertible Noteholders of such amounts as would otherwise have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable in respect of any Bonus Convertible Note:

• (a) to a holder (or to a third party on behalf of a holder) who is subject to such taxes, duties, assessments or governmental charges in respect of such Bonus Convertible Note by reason of his having some connection with Hong Kong other than the mere holding of the Bonus Convertible Note or by the receipt of any payment made in respect of the Bonus Convertible Note or where the withholding or deduction could be avoided by the holder making a declaration of non-residence or other similar claim for exemption to the appropriate authority which such holder is legally capable and competent of making but fails to do so; or

• (b) if the Certificate in respect of such Bonus Convertible Note is surrendered (where such surrender is required) more than 30 days after the Relevant Date (as defined below) except to the extent that the holder would have been entitled to such additional amounts on surrendering the relevant Certificate for payment on the last day of such period of 30 days.

“ Relevant Date ” shall means whichever is the later of (a) the date on which such payment first becomes due and (b) if the full amount payable has not been received in Hong Kong by the Bonus CN Registrar on or prior to such due date, the date on which, the full amount having been so received, notice to that effect shall have been given to the Bonus Convertible Noteholders.

11. Prescription

Claims in respect of any payment in relation to the Bonus Convertible Notes due and payable will become void unless made within six years from the Relevant Date (as defined in paragraph 10 of this Appendix) in respect thereof.

12. Meetings of Bonus Convertible Noteholders, Modification and Waiver

• (a) The Deed Poll contains provisions for convening meetings of Bonus Convertible Noteholders to consider any matter affecting their interests, including the sanctioning by a resolution passed at a meeting of Bonus Convertible Noteholders duly convened and held in accordance with the provisions as set out in Schedule 3 of the Deed Poll by a majority consisting of not less than three-quarters of the votes cast (the “ Extraordinary Resolution ”), of a modification of the Bonus Convertible Note or the provisions of the

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

Deed Poll. The quorum at any such meeting for passing an Extraordinary Resolution will be two or more persons holding or representing over 50 per cent. in aggregate amount of the Bonus Convertible Notes for the time being outstanding or, at any adjournment of such meeting, two or more persons being or representing Bonus Convertible Noteholders whatever the aggregate amount of the Bonus Convertible Notes so held or represented. An Extraordinary Resolution passed at any meeting of Bonus Convertible Noteholders will be binding on all Bonus Convertible Noteholders, whether or not they are present at the meeting. The Deed Poll provides that a written resolution signed by or on behalf of the holders of not less than 90 per cent. of the aggregate amount of the Bonus Convertible Notes outstanding shall be as valid and effective as a duly passed Extraordinary Resolution.

• (b) The Bonus Convertible Noteholders agree to (i) any modification (except as mentioned above) of, or the waiver or authorisation of any breach or proposed breach of, the Bonus Convertible Notes or the Deed Poll which is not, in the opinion of an independent investment bank of international repute (acting as experts) selected by, and at the cost and expense of, the Company, materially prejudicial to the interests of the Bonus Convertible Noteholders or (ii) any modification of the Bonus Convertible Notes or the Deed Poll which is of a formal, minor or technical nature or to correct a manifest error or to comply with mandatory provisions of law. Any such modification, waiver or authorisation will be binding on the Bonus Convertible Noteholders and any such modification will be notified by the Company to the Bonus Convertible Noteholders as soon as practicable thereafter.

13. Replacement of Certificates

If any Certificate is mutilated, defaced, destroyed, stolen or lost, it may be replaced at the specified office of the Bonus CN Registrar upon payment by the claimant of such costs as may be incurred in connection therewith which shall not exceed HK$2.00 or such other amount as may be permitted under the Bye-laws and the listings rules of the Stock Exchange (or, if applicable, the Alternative Stock Exchange) from time to time, as determined by the Company and on such terms as to evidence and indemnity as the Company may reasonably require. Mutilated or defaced Certificates must be surrendered before replacements will be issued.

In case of lost Certificate, the procedure for replacement shall follow Section 71A of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) as if “ shares in the Company ” includes the Bonus Convertible Notes.

14. Further Issues

The Company may from time to time, at the absolute discretion of the Company, create and issue further convertible notes having the same terms and conditions as the Bonus Convertible Notes in all respects and so that such further issue of convertible notes shall be consolidated and form a single series with the Bonus Convertible Notes. Such further convertible notes may be constituted by a deed supplemental to the Deed Poll.

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APPENDIX

SUMMARY OF TERMS AND CONDITIONS OF THE BONUS CONVERTIBLE NOTES

15. Notices

• (a) Subject to paragraph 15(b) below, all notices to the Bonus Convertible Noteholders shall be deemed validly given if mailed to them at their respective addresses in the register of Bonus Convertible Noteholders maintained by the Bonus CN Registrar or published in a leading newspaper having general circulation in Hong Kong. Any such notice shall be deemed to have been given on the date which is two (2) Business Days after the date of despatch, or on the date of such publication (as the case may be).

• (b) To the extent permitted by the listing rules of the Stock Exchange (or if applicable, the Alternative Stock Exchange) and all applicable laws and regulations, the Company may send or otherwise make available notices to a Bonus Convertible Noteholder by electronic means provided that the Company must first have received from such Bonus Convertible Noteholder either (a) that Bonus Convertible Noteholder’s prior express positive confirmation in writing or (b) the Bonus Convertible Noteholder’s deemed consent, in the manner specified in the listing rules of the Stock Exchange (or if applicable, the Alternative Stock Exchange), to receive or otherwise have made available to him such notices by such electronic means. Any such notice shall be deemed to have been given on the day following that on which it is successfully transmitted or at such later time as may be prescribed by the listing rules of the Stock Exchange (or if applicable, the Alternative Stock Exchange) or any applicable laws or regulations.

16. Agents

The names of the initial Bonus CN Registrar (acting as initial registrar, paying, transfer and conversion agent) and its initial specified offices are set out at the end of the Conditions. The Company reserves the right, at any time to vary or terminate the appointment of any of them and to appoint additional or other persons in their place, provided that the Company will at all times maintain (i) a conversion agent, a transfer agent and a paying agent and (ii) a registrar, each having a specified office in Hong Kong, so long as any Bonus Convertible Note remains outstanding. Notice of any such termination or appointment or of any changes in the specified offices or identity of the Bonus CN Registrar (acting as registrar, transfer agent, paying agent and conversion agent) will be given promptly by the Company to the Bonus Convertible Noteholders.

17. Governing Law and Jurisdiction

The Bonus Convertible Notes, the Deed Poll and Agency Agreement are governed by, and shall be construed in accordance with, the laws of Hong Kong. In relation to any legal action or proceedings arising out of or in connection with the Deed Poll, the Agency Agreement and the Bonus Convertible Notes, the Company has in the Deed Poll irrevocably submitted to the courts of Hong Kong.

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