Grand Pharmaceutical Group Limited — Proxy Solicitation & Information Statement 2002

Oct 22, 2002

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect about this circular 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 MAXX Bioscience Holdings Limited , you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

MAXX BIOSCIENCE HOLDINGS LIMITED 曼盛生物科技集團有限公司

(incorporated in Bermuda with limited liability)

DISCLOSEABLE TRANSACTION INVOLVING THE ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF JOY ROUTE DEVELOPMENT LIMITED AND

RENEWAL OF GENERAL MANDATE TO ISSUE SHARES

A notice convening a special general meeting of the shareholders of MAXX Bioscience Holdings Limited to be held at 11 a.m. on Tuesday, 5 November 2002 at Room 3802, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong are set out on pages 13 to 15 of this circular. Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible to the Company Secretary, Mr. Rico Chow, at Room 3802, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong no later than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof.

Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so desire.

This circular is provided for the information of the shareholders of MAXX Bioscience Holdings Limited only.

21 October 2002

CONTENTS

		Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Expected	timetable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
2.	The agreement dated 30 September 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
3.	General mandate to issue shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix	— General information
1.	Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
2.	Disclosure of interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
3.	Service contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
4.	Substantial shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
5.	Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
6.	Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Notice of	special general meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

— i —

DEFINITIONS

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

• “Acquisition”

• The acquisition of the entire issued share capital of Joy Route by Biometrics on the terms and conditions of the Agreement

• “Agreement”

• A sale and purchase agreement in respect of the Acquisition dated 30 September 2002 entered into between Biometrics and the Vendor

• “Balance Consideration”

The sum of HK$10,000,000

• “Best Express”

• Best Express Worldwide Limited, a company incorporated in the British Virgin Islands, 70 per cent. of its share capital are legally and beneficially held by Joy Route and the remaining 30 per cent. are legally and beneficially held by Regal Town Trading Limited

• “Biometrics”

• Biometrics Technology Limited, a company incorporated in the British Virgin Islands, a wholly-owned subsidiary of the Company and the purchaser to the Agreement

• “Board”

• The board of Directors

• “Business Day”

• Any day (other than Saturday or Sunday) on which banks are open for business in Hong Kong throughout its normal business hours

• “Cash Consideration”

• The sum of HK$30,000,000 to be paid by Biometrics to the Vendor in cash on or before 90 days after the Completion Date constituting part of the Consideration;

• “Company”

• MAXX Bioscience Holdings Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the main board of the Stock Exchange (stock code: 512)

• “Completion Date” 3 October 2002

• “Consideration”

The consideration of HK$40,000,000 to be paid by the Company to the Vendor pursuant to the Agreement

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DEFINITIONS

• “Consideration Shares”

Such number of new Shares with an aggregate value equivalent to the Balance Consideration when calculated based on the Conversion Price, to be issued and allotted to the Vendor upon Biometrics electing to settle the Balance Consideration by way of procuring the issuance of new Shares which constitutes part of the Consideration

• “Conversion Price”

• The price representing a 10 per cent. discount of the average of the closing prices of the Shares as stated in the Stock Exchange’s daily quotation sheets for the 5 Business Days immediately preceding the date on which the Balance Consideration is settled by way of issuance of the Consideration Shares by the Company

• “Directors”

• The director(s) of the Company

• “General Mandate”

• The general mandate granted by the Shareholders to the Directors to generally and unconditionally allot, issue and deal with up to 163,020,000 Shares representing 20 per cent. of the entire issued share capital of the Company as at 23 May 2002 at the Company’s annual general meeting held on 23 May 2002

• “Group”

• The Company and its subsidiaries

• “HK$”

• The Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong” The Hong Kong Special Administrative Region of People’s Republic of China

• “Latest Practicable Date”

• 18 October 2002, being the latest practicable date for ascertaining information referred to in this circular prior to the printing of this circular

• “Joy Route”

• Joy Route Development Limited, a company incorporated in the British Virgin Islands, whose entire share capital is beneficially owned by the Vendor

• “Joy Route Group” Joy Route and Best Express

• “Listing Committee”

The Listing Committee of the Stock Exchange

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DEFINITIONS

“Listing Rules”	The Rules Governing the Listing of Securities on The
	Stock Exchange of Hong Kong Limited
“PRC”	The People’s Republic of China
“Prime Rate”	The rate announced or applied by The Hongkong and
	Shanghai Banking Corporation from time to time as its
	prime rate of interest in Hong Kong for lending of HK$
	to its prime corporate customers
“Sale Shares”	The 100 ordinary shares of US$1.00 each in the issued
	share capital of Joy Route
“SDI Ordinance”	The Securities (Disclosure of Interests) Ordinance,
	Chapter 396 of the laws of Hong Kong
“Share(s)”	Ordinary share(s) of nominal value of HK$0.10 each in
	the share capital of the Company
“Shareholders”	The shareholders of the Company
“Special General Meeting”	A special general meeting of the Company to be convened
	for approving the renewal of the General Mandate
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“US$”	The lawful currency of the United States of America
“Vendor”	Monaco International Group Limited, a company
	incorporated with limited liability under the laws of the
	British Virgin Islands, an independent third party of the
	Company

For the purpose of this circular, conversion of US dollars into Hong Kong dollars is calculated at the approximate exchange rate of HK$7.80 to US$1.00. This exchange rate is for the purposes of illustration only and no representation is made that any amounts in US$ or HK$ could have been or could be converted at such rate or at any other rate at all.

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EXPECTED TIMETABLE

Latest time for lodging forms of

Proxy for the Special General Meeting . . . . . . . . . . . . . . 11 a.m, Sunday, 3 November, 2002

Special General Meeting to be held on . . . . . . . . . . . . . . . 11 a.m, Tuesday, 5 November, 2002

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LETTER FROM THE BOARD

MAXX BIOSCIENCE HOLDINGS LIMITED 曼盛生物科技集團有限公司

(incorporated in Bermuda with limited liability)

Executive Directors: LO Yuk Yee (Chairman) ZANG Jing Wu CAO Wu SHEN Jing Kang HE Jin Hong

Independent Non-Executive Directors: HO Kwok Wah, George YUEN Kin

Registered Office: Clarendon House Church Street Hamilton HM 11 Bermuda

Principal Place of Business: Room 3802, Wu Chung House 213, Queen’s Road East Wanchai Hong Kong

21 October 2002

To the shareholders of MAXX Bioscience Holdings Limited

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION INVOLVING THE ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF JOY ROUTE DEVELOPMENT LIMITED AND RENEWAL OF GENERAL MANDATE TO ISSUE SHARES

1. INTRODUCTION

Reference is made to the announcement of the Company dated 3 October 2002 whereby the Directors announced that a sale and purchase agreement had been entered into between Biometrics and the Vendor underwhich Biometrics has agreed to acquire and the Vendor has agreed to sell the entire issued share capital of Joy Route for a total consideration of HK$40,000,000, in which HK$30,000,000 will be satisfied by way of payment of cash on or before 90 days after the Completion Date, and HK$10,000,000 will be settled on or before 180 days after the Completion Date either by way of procurement of the new issue of the Consideration Shares or repayment of the same amount with interest at Prime Rate to the Vendor.

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LETTER FROM THE BOARD

Completion of the Acquisition took place on 3 October 2002. Biometrics has irrevocably elected to settle the Balance Consideration by way of cash repayment with interest at Prime Rate to the Vendor on or before 1 April 2003 (i.e. 180 days after the Completion Date). The Acquisition constitutes a discloseable transaction of the Company pursuant to the Listing Rules.

Reference is also made to the announcement of the Company dated 10 October 2002 regarding the issue of HK$30,000,000 unsecured convertible debentures due 8 October 2004 and the renewal of general mandate to issue Shares. The HK$30,000,000 unsecured convertible debentures are convertible into new Shares provided that, amongst other things, the aggregate cumulated conversion of Shares shall not exceed 163,020,000 Shares representing 20 per cent. of the issued share capital of the Company as at 23 May 2002. The issuance of such new Shares in the event of such conversion will be made pursuant to the General Mandate. Application has been made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Shares to be issued upon conversion of the debentures.

The Directors consider that it is in the interest of the Company to renew the General Mandate and propose to convene the Special General Meeting to seek approval from the Shareholders to authorise the Directors to generally and unconditionally issue, allot and deal in new Shares representing up to 20 per cent. of the entire issued share capital of the Company as at the date of the Special General Meeting. The Directors do not have any present intention to issue Shares pursuant to the renewed general mandate.

The purpose of this circular is to provide you with further information relating to the Acquisition, the proposal to renew the General Mandate. This circular also contains and a notice to convene the Special General Meeting and other information in compliance with the Listing Rules.

2. THE AGREEMENT DATED 30 SEPTEMBER 2002

Purchaser

Biometrics, a wholly-owned subsidiary of the Company.

Vendor

Monaco International Group Limited whose entire issued share capital is held by Mr. Alex Chow, an independent third party not connected with any Directors, chief executive or substantial shareholders of the Company, its subsidiaries or their respective associates pursuant to the Listing Rules. As at the date of the Agreement, the Vendor is the legal and beneficial holder of all of the Sale Shares.

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LETTER FROM THE BOARD

The Asset Acquired

The asset being acquired under the Agreement is the entire issued share capital of Joy Route whose sole asset is the legal and beneficial interest in 70 ordinary shares of US$1.00 each, representing 70 per cent. of the entire issued share capital of Best Express.

The primary assets owned by Best Express are the intellectual property rights relating to the technology on new chemical entities used as drugs for cardiovascular and cerebrovascular diseases, and the patent in respect thereof registered in the World Intellectual Property Organization, United States Patent and Trademark Office, Canadian Intellectual Property Office, and European Patent Office

Based on the latest consolidated unaudited balance sheet of the Joy Route Group as at 31 August 2002, Joy Route Group has a net asset value of US$1,372,503 (equivalent to HK$10,705,523.40) and based on the latest consolidated unaudited income statement of Joy Route Group for the period from 8 February 2002 to 31 August 2002, it has an accumulated loss of US$1,806 (equivalent to HK$14,806.80).

Consideration and Payment Terms

The Consideration for the Acquisition amounts to HK$40,000,000. The Consideration will be satisfied by Biometrics by two installments.

Pursuant to the Agreement, the Cash Consideration shall be settled by Biometrics in cash or by way of delivery of a bankers’ draft drawn on a prime bank in Hong Kong for HK$30,000,000 to the Vendor on or before 1 January 2003 (i.e. 90 days after the Completion Date).

The Balance Consideration shall be settled by Biometrics on or before 1 April 2003 (i.e. 180 days after the Completion Date) either (i) by way of procuring that the Consideration Shares be issued and allotted by the Company, credited as fully paid to the Vendor subject to the Listing Committee of the Stock Exchange granting the listing of and the permission to deal in the Consideration Shares to be so issued; or (ii) by way of repaying the Balance Consideration with interest calculated based on the Prime Rate prevailing from day to day to the Vendor. Upon completion of the Acquisition, Biometrics has irrevocably elected to settle the Balance Consideration by way of the latter method.

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LETTER FROM THE BOARD

The Consideration was negotiated and was reached by the parties on an arms’ length basis after taking into account the future business development potential of the Joy Route Group and is with reference to a valuation conducted by LCH (Asia Pacific) Surveyors Limited, an independent valuer, on the value of the intellectual property owned by Best Express as at 31 August 2002 which amounts to approximately US$8,500,000 (equivalent to HK$66,300,000). The Directors considered that the terms of the Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

Completion

Completion of the Acquisition took place on 3 October 2002.

Information on Joy Route Group

The principal business of Joy Route is investment holding. Joy Route was incorporated on 8 February 2002 with a total issued paid-up capital of US$1,000,000. Joy Route has acquired a 70 per cent. equity interest in Best Express on 28 March 2002. The remaining 30 per cent. of Best Express is legally and beneficially held by Regal Town Trading Limited, an independent third party of the Company not connected with the Directors, chief executive or substantial shareholders of the Company, its subsidiaries or their respective associates pursuant to the Listing Rules.

Best Express was incorporated on 19 December 2001 with a total issued paid-up capital of US$1,250,000. It is principally engaged in research, development and production of potential drug candidates targeting at cardiovascular and cerebrovascular diseases.

The Joy Route Group is not connected with the Directors, chief executive or substantial shareholders of the Company, its subsidiaries or their respective associates pursuant to the Listing Rules.

Reasons for the Acquisition

The Company is principally engaged in the development and production of health products. Its subsidiaries are principally engaged in the business of development, manufacture and sale of tonic and health drink products, pharmaceutical products and pyruvate calcium series products in the PRC, and the research and development of embryonic technology and related technical know-how in the PRC and in North America. The principal business activities of the Joy Route Group are research, development and production of potential drug candidates targeting at cardiovascular and cerebrovascular diseases.

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LETTER FROM THE BOARD

The Directors consider that the Acquisition is in line with the Group’s principal activities and believe the Acquisition will increase the Group’s competitiveness in the pharmaceutical market as many large pharmaceutical companies are eager to develop their own pipeline products. The Directors were given to understand that many pharmaceutical companies are keen to obtain licences to commercialize good drug candidates for treatment of cardiovascular and cerebrovascular diseases. The Directors believe that the Acquisition will not only give the Group a good opportunity to strengthen its drug development business, but also will increase the pipeline products of the Group.

Source of funds for the Acquisition

As indicated in the announcement made by the Company on 10 October 2002, most of the funds required for the payment of the Cash Consideration have been raised from the issue of the unsecured convertible debentures to Health Capital Investment Limited. The Directors intend to source the funds required for the payment of the remaining part of the Cash Consideration amounting to approximately HK$1 million and the Balance Consideration from internal financial resources of the Group.

3. GENERAL MANDATE TO ISSUE SHARES

At the Special General Meeting, the Shareholders will be asked to consider and, if thought fit, to approve an ordinary resolution for the granting to the Directors of a general mandate to generally and unconditionally issue new Shares representing up to 20 per cent. of the entire issued share capital of the Company as at the date of the Special General Meeting.

The Directors have no present intention to issue any new Shares pursuant to the renewed general mandate.

Special General Meeting

The Special General Meeting will be held at 11 a.m. on Tuesday, 5 November 2002 at Room 3802, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong. A notice of the Special General Meeting is set out on pages 13 to 15 of this circular.

A form of proxy for use at the Special General Meeting is enclosed. You are requested to complete the enclosed form of proxy and return the same to the Company Secretary, Mr. Rico Chow, at Room 3802, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong in accordance with the instructions printed thereon not less than 48 hours

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LETTER FROM THE BOARD

before the time of the Special General Meeting (or any adjournment thereof) whether or not you intend to be present at the meeting. Completion and the return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting or any adjournment meeting should you so desire.

General

The English text of this circular and the accompanying proxy form shall prevail over the Chinese text of the same in case of inconsistency.

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purposes of giving information with regard to the Group. Save and except Professor Shen Jing Kang who cannot be located for the time being, all other Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

• (a) As at the Latest Practicable Date, the interests of the Directors in the equity or debt securities of the Company or any of its associated corporations (within the meaning of the SDI Ordinance) which required notification to the Company pursuant to Section 28 of the SDI Ordinance (including interest which any such Director was deemed or taken to have under Section 31 or Part I of the Schedule to the SDI Ordinance) or which were required to be entered in the register maintained by the Company pursuant to Section 29 of the SDI Ordinance, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, were as follows:

Directors’ interests in the share capital of the Company

	Personal	Corporate	Total number
Name of Director	Interests	Interests	of Shares
Ms. Lo Yuk Yee	—	415,230,000_(note)_	415,230,000

Note: Such interests are held by Ms. Lo through her wholly-owned company, Vision Ocean Investments Limited.

Directors’ right to acquire Shares or debentures of the Company

As at the Latest practicable Date, the interests of the Directors in options to subscribe for Shares were as follows:

		Exercise
		price per		Number of
Name of	Date of	Share	Exercisable	Share
Director	Grant	HK$	Period	Option
Lo Yuk Yee	28 June, 2002	HK$0.315	28 June 2002 to	8,150,000
			27 July 2004
Zang Jing Wu	28 June, 2002	HK$0.315	28 June 2002 to	3,000,000
			27 July 2004

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GENERAL INFORMATION

APPENDIX

All of the above share options were granted pursuant to the share option scheme adopted by the Company on 24 June, 2002. No option had been exercised as at the Latest Practicable Date.

• (b) None of the Directors was materially interested in any contract or arrangement subsisting at the Latest Practicable Date which is significant to the business of the Group taken as a whole.

3. SERVICE CONTRACTS

Ms. Lo Yuk Yee, Dr. Zang Jing Wu and Dr. Cao Wu have service contracts with the Company which are terminable by either party giving not less than three months’ notice in writing. Except the foregoing, none of the Directors has an unexpired service contract with the Company which is not terminable by the Company within one year without payment of compensation (other than statutory compensation).

4. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, the following substantial shareholders were directly or indirectly interested in 10 per cent. or more of the share capital of the Company as recorded in the register required to be kept under Section 16(1) of the SDI Ordinance.

		Percentage of
Name of Shareholder	Number of Shares	existing issued capital
Lok Yuk Yee	415,230,000	50.94 per cent.
Vision Ocean Investments	415,230,000	50.94 per cent.
Limited_(see note a & b)_
Lok Fai	185,000,000	22.70 per cent
Sunny Fortune Limited	185,000,000	22.70 per cent
(see note c)

Note:

• (a) On 22 March 2002, Vision Ocean Investments Limited (a company wholly-owned by Ms. Lo Yuk Yee) has granted a mortgage of 415,000,000 Shares to Lafe Components Limited as security for a loan from Lafe Components Limited. Lafe Components Limited holds the 415,000,000 Shares on trust for Vision Ocean Investments Limited until such financing is fully repaid, when the 415,000,000 Shares will be transferred back to Vision Ocean Investments Limited subject to the terms of the share mortgage.

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GENERAL INFORMATION

APPENDIX

• (b) Mr. Ho Wing On, Christopher has 100 per cent. deemed beneficial interests in The Grande International Holdings Limited, which holds 73.7 per cent. of the entire issued share capital of The Grande Holdings Limited, through its wholly-owned subsidiary, Barrican Investments Corporation, The Grande Holdings Limited holds the entire issued share capital of The Grande (Nominees) Limited, which holds the entire issued share capital of Sheer Profit Corporation as bare trustee on behalf of The Grande Holdings Limited, Sheer Profit Corporation holds 61.9 per cent. of the entire issued share capital of Lafe Technology Limited, which holds the entire issued share capital of Lafe Components Limited.

Therefore, all of these shares are entirely duplicated.

• (c) Sunny Fortune Limited is a company wholly and beneficially owned by Mr. Lok Fai.

5. LITIGATION

As at the Latest Practicable Date, the Company was not engaged in any litigation or arbitration of material importance and there is no litigation or claim material importance known to the Directors to be pending or threatened by or against the Company.

6. MISCELLANEOUS

• (a) The branch share registrars and transfer office of the Company in Hong Kong is Central Registration Hong Kong Limited, Rooms 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (b) The secretary of the Company is Mr. Chow Wing Chau, Rico who is an associate member of the Hong Kong Society of Accountants. Mr. Chow holds a Bachelor of Economics Degree in Business Finance from Macquarie University in Australia. He is a qualified accountant of CPA Australia and a senior associate member of Australasian Institute of Banking and Finance. Before joining the Group, he had over 10 years’ experience in accounting, financial management and corporate finance, and held a management position as the Project Administration Manager in a listed company in Hong Kong.

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NOTICE OF SPECIAL GENERAL MEETING

MAXX BIOSCIENCE HOLDINGS LIMITED 曼盛生物科技集團有限公司

(incorporated in Bermuda with limited liability)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the “ Special General Meeting ”) of the shareholders of MAXX Bioscience Holdings Limited (the “ Company ”) will be held at 11 a.m. on Tuesday, 5 November 2002 at Room 3802, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong for the purpose of considering and, if thought fit, passing the following resolution as an ordinary resolution:

ORDINARY RESOLUTION

“THAT

• (a) subject to paragraph (c) below, the exercise by the directors of the Company (the “ Directors ”) of all the powers of the Company to generally and unconditionally allot, issue and deal with ordinary shares of HK$0.10 each in the capital of the Company during the Relevant Period and to make or grant offers, agreements and options (including bonds, warrants, debentures, notes and any securities which carry rights to subscribe for or are convertible into shares of the Company) which would or might require the exercise of such power (whether during or after the expiry of the Relevant Period) be and is hereby approved;

• (b) the approval in paragraph (a) of this resolution shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options (including bonds, warrants, debentures, notes and any securities which carry rights to subscribe for or are convertible into shares of the Company) which might require the exercise of such powers during or after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (which pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to or in consequence of:

• (i) a Rights Issue (as hereinafter defined);

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NOTICE OF SPECIAL GENERAL MEETING

• (ii) the exercise of options under any option scheme or similar arrangement for the time being adopted by the Company for the grant or issue to employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company; or

• (iii) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of whole or part of a dividend on shares in the Company in accordance with the Bye-laws of the Company from time to time,

shall not exceed the aggregate of:

• (i) 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of this resolution; and

• (ii) (if the Directors of the Company are so authorised by a separate ordinary resolution of the shareholders of the Company) the aggregate nominal amount of share capital of the Company repurchased by the Company subsequent to the passing of this resolution (up to a maximum equivalent to 10 per cent. of the aggregate nominal value of the share capital of the Company in issue at the date of passing of this resolution),

and the said approval shall be limited accordingly; and

• (d) for the purpose of this resolution:

“ Relevant Period ” means the period from the passing of this resolution until the earliest of:

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

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

• (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.

“ Rights Issue ” means an offer of shares open for a period fixed by the Directors to the holders of shares of the Company or any class of shares of the Company whose names appear on the register of members on a fixed record date in proportion to their then holdings of such shares (subject to such exclusions or other arrangements as the Directors

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NOTICE OF SPECIAL GENERAL MEETING

may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of, any recognized regulatory body or any stock exchange in, any territory applicable to the Company).”

On behalf of the Board MAXX Bioscience Holdings Limited Lo Yuk Yee Chairman

Hong Kong, 21 October 2002

Notes:

• (1) Any member of the Company entitled to attend and vote at the Special General Meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

• (2) Where there are joint registered holders of any share, any one of such persons may vote at the Special General Meeting, either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holders be present at the Special General Meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members in respect of such share shall alone be entitled to vote in respect thereof.

• (3) A form of proxy is enclosed herewith.

• (4) The instrument appointing a proxy must be in writing under hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same.

• (5) To be valid, a form of proxy, together with the power of attorney or other authority, if any, under which it is signed or a certified copy of that power of attorney, must be sent to the Company Secretary, Mr. Rico Chow at Room 3802, Wu Chung House, 213 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time appointed for holding the Special General Meeting or adjourned meeting. Completion and return of the form of proxy will not preclude shareholders from attending the Special General Meeting and voting in person.

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