Medlive Technology Co., Ltd. — Capital/Financing Update 2007

May 16, 2007

GUANGDONG KELON ELECTRICAL HOLDINGS COMPANY LIMITED 廣東科龍電器股份有限公司

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 0921)

ANNOUNCEMENT ON DISPOSAL OF ASSETS

This announcement is made in accordance with Rule 13.09(2) of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

I. DESCRIPTIONS OF TRANSACTIONS

The board of directors (the “Board”) of Guangdong Kelon Electrical Holdings Company Limited (the “Company”, “Party AI”) convened its fifth meeting of 2007 on 13 May 2007, at which the “Transfer Agreement of Land Use Rights and Industrial Plants”, the “Transfer Agreement of Land Use Rights and Plants” and the “Building Sale and Purchase Agreement” were considered and passed, pursuant to which the disposal of the three properties of the Company and its subsidiaries were approved.

None of the transferees under these transactions is connected with the Company. As such, such transactions do not constitute connected transactions. Pursuant to Rule 9.3 of Rules Governing the Listing of Securities on the Shenzhen Stock Exchange, the aggregate amount of such transactions of the Company fall into the requirement of the approval from the shareholders at the general meeting. However, the Company has, pursuant to the Rule 9.6 of Rules Governing the Listing of Securities on the Shenzhen Stock Exchange, submitted an application for waiver from compliance with the approval requirement from the shareholders at the general meeting under Rule 9.3. The Company will implement its obligation of information disclosure in due course in compliance with the relevant requirements.

The transfer of the properties has been approved at the 2007 fifth meeting of the sixth session of the Board of the Company with 9 affirmative votes, 0 objected votes and 0 abstained votes. All the independent non-executive directors of the Company have cast affirmative votes in favour of the transfer of the properties. The land of the current disposal have been mortgaged to banks, therefore the completion of the disposal are conditional on obtaining the consent from the mortgagors of the properties regarding the disposal. The Company is in the course of obtaining the consent of the mortgagors.

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II. INTRODUCTION OF THE PARTIES TO THE TRANSACTIONS

Name of assets on disposal	Home Appliance Company Zone （家電公司園區）	Beach Warehouse Zone （海邊倉園區）	Marketing Building （營銷大樓）
Counterparty to the transaction	Hongke Investments Co., Ltd. (泓科 投資有限公司) in Shunde District, Foshan City was established on 14 July 2006. Address: Booth No.1, Phase I of Huaxia New City Zhonghua Road 42, Ronggui, Shunde District, Foshan City; legal representative: Pan Jieduan; registered capital: RMB10 million; nature of company: company with limited liability; scope of business: investment in industrial property industry and tourism development industry.	Natural Person	Haogang Business & Trade Co., Ltd. (濠鋼商貿有限公司) in Shunde District, Foshan City was established on 9 August 2002. Address: No. 13- 14, 1st Floor, Jiangnan Road 61, Ronggui, Shunde District, Foshan City; legal representative: He Jingnian; registered capital: RMB10 million; nature of company: with limited liability; scope of business: supply and marketing of goods and materials in the PRC (excluding restricted items and franchised, state controlled and monopolized merchandises), operating and acting as an agency of import and export business of various kinds of commodities and technologies (excluding commodities and technologies restricted by the PRC in operation or prohibited in import and export, and those involving licensing shall be operated under a valid license certificate).

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III. PARTICULARS OF THE PROPERTIES

Name of assets on disposal	Home Appliance Company Zone （家電公司園區）	Beach Warehouse Zone （海邊倉園區）	Marketing Building （營銷大樓）
Owner	Guangdong Kelon Electrical Holdings CompanyLimited (the “PartyAI”)	Guangdong Kelon Air-conditioning CompanyLimited (the “PartyAII”)	Guangdong Kelon Electrical Holdings CompanyLimited (the “PartyAI”)
Title document number	Yue FangDi ZhengZi No.C0232640	Yue FangDi ZhengZi No.C0005412	Yue FangDi ZhengZi No.C1150997
Expirydate of land use rights	9 September 2046	15 July2047	22 September 2047
Use	Industrial	Industrial	Industrial
Location	No.27 Rongqi Avenue, Desheng Residents’ Committee, Ronggui Street Office, Shunde District	Nanchong Industrial Park, Nanjiang Village’s Committee, Daliang Street Office, Shunde District	No.2 Fengye Road, Desheng Residents’ Committee, Ronggui Street Office, Shunde District
Site area (square metre)	21,956.76	14,570	700.00
Floor area (square metre)	24,335.58	8,496.7	5,013.00
Original carryingamount (RMB)	34,081,551.77	10,601,174.24	6,342,709.46
Accumulated depreciation (RMB)	10,356,064.77	3,652,389.34	2,514,024.07
Net book value (as at 31 December 2006)	RMB23,725,487.00	RMB6,948,784.9	RMB3,828,685.39
Appraised value	RMB26,119,000	RMB14,610,000	RMB5,407,000
Valuation method	Replacement cost approach was adopted in appraising the building and land datum value method was adopted in appraisingthe land	Replacement cost approach was adopted in appraising the building and land datum value method was adopted in appraisingthe land	Replacement cost approach was adopted in appraising the building and land datum value method was adopted in appraisingthe land
Date of valuation	11 May2007	11 May2007	11 May2007
Date of signature	13 May2007	14 May2007
Place of signature	Shunde, Guangdong
Trusted appraiser	Guangdong Zhongguangxin Assets Appraisal Co., Ltd (廣東中廣信資產評估有限公司) (with qualification for engaging in securities and futures related business)

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IV. MAIN CONTENTS OF THE CONTRACTS AND PRICING FOR THE TRANSACTIONS

Name of assets for disposal	Home Appliance Company Zone	Beach Warehouse Zone	Marketing Building
Owner	Party AI	Party AII	Party AI
Counterparty of the transaction	Hongke Investment Company Limited in Shunde District, Foshan City, as “Party BI”	Natural Person as “Party BII”	Haogang Business & Trade Co., Ltd. in Shunde District, Foshan City, as “Party BIII”
Amount of the transaction	Total consideration of transferring the land use rights of Home Appliance Company Zone and industrial Plants: RMB29,000,000.00 only.	Total consideration of the transaction of Beach Warehouse Zone: RMB17,338,300.00 only.	Total consideration of transferring the land use rights of Marketing Building and the buildings thereon: RMB5,438,000.00 only.
Terms of payment	On the date of signing the contract, Party BI shall pay 10% of the total consideration, i.e. RMB2,900,000.00 only, to Party AI as the deposit of the contract. Both parties agreed to the following terms of payment: 40% of the total consideration, i.e. RMB11,600,000.00 only, will be paid to Party AI within 30 days after the signing of the contract, and the remaining amount of RMB14,500,000.00 only will be paid to Party AI on the date of completion of the transfer procedure.	On the date of signing of the contract, Party BII shall pay 10% of the total consideration, i.e. RMB1,733,830.00 only, to Party AII as the deposit of the contract. Both parties agreed to the following terms of payment: 40% of the total consideration, i.e. RMB6,935,320.00 only, will be paid to Party AII within 40 days after the signing of the contract, and 25% of the total consideration, i.e. RMB4,334,575.00 only, will be paid to Party AII within 3 days after the transfer procedure is completed and the remaining amount of RMB4,334,575.00 only will be paid to Party AII on the date when the land and the factory are physically handed over.	On the date of signing the contract, Party BIII shall pay RMB538,800.00 to Party AI as the deposit of the contract. 50% of the total consideration, i.e. RMB2,744,000.00 only, will be paid to Party AI within 30 days after the contract is signed, and the remaining amount RMB2,155,200.00 only will be paid to Party AI on the date when the transfer procedure is completed.
Sharing of taxes	Party A and Party B both shall comply with the national real estate policy, law and regulation and pay the taxes required thereunder during handling the real estate transfer procedure according to the regulation. Tax of transfer deed shall be paid by Party BI. Business tax, land appreciation tax and dyke levy shall be paid by Party AI. Agency fee and ownership transfer handling charge shall be paid by Party BI.	Both Party A and Party B shall comply with the national real estate policy, law and regulation and pay the taxes required thereunder during handling the real estate transfer procedure according to the regulation. Tax of deed shall be paid by Party BII. Business tax, land appreciation tax and dyke levy shall be paid by Party AII. Agency fee and ownership transfer handling charge shall be paid by Party BII.	Party A and Party B both shall comply with the national real estate policy, law and regulation and pay the taxes required thereunder during handling the house and land use right of the house transfer procedure. Tax of deed shall be paid by Party BIII. Business tax, land appreciation tax and dyke levy shall be paid by Party AI. Ownership transfer handling charge shall be paid by Party BIII.

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Name of assets for disposal	Home Appliance Company Zone	Beach Warehouse Zone	Marketing Building
Time of hand over or transfer	Transfer procedure of both parties shall be handled by Party BI in principle, but Party AI shall provide assistance to Party BI unconditionally if its assistance is required during handling transfer procedure, and Party AI shall provide assistance to party BI in handling land function conversion procedure, at the same time it shall produce relevant documents about the related conversion of industrial land into commercial land and the relevant documents for fee exemption/reduction of land function conversion upon Party BI’s request. Transfer procedure shall be completed within 60 days after Party AI has provided complete procedures.	Party AII is responsible for providing the necessary conditions such as documents required in handling transfer procedure, and Party BII is responsible for handling the transfer procedure. Transfer procedure shall be completed within 60 days after Party AII has provided complete procedures.	Party AI is responsible for providing the necessary conditions such as documents required in handling transfer procedure, and Party BIII is responsible for handling the transfer procedure. Transfer procedure shall be completed within 60 days after Party AI has provided complete procedures.
Liability for breach of contract	Upon both parties’ entering into the contract, in the event that Party BI fails to make payment according to the agreed terms, or requests for termination of the contract before completion, Party BI shall bear the liability for the breach of contract, and shall not get any refund of the deposit from Party AI, and the money already paid by Party BI will not be refunded by Party AI as well, which will be taken as compensation for the loss of Party AI . In case of any breach by Party AI before the completion of the contract, Party AI shall inform Party BI in written form, and shall refund to Party BI twice the amount of the money already paid by Party BI (including the deposit and without interest) within 10 days from the occurrence of the breach.	Upon both parties’ entering into the contract, in the event that Party BII fails to make payment according to the agreed terms, or requests for termination of the contract before completion, Party BII shall bear the liability for the breach of contract, and shall not get any refund of the deposit from Party AII, and the money already paid by Party BII will not be refunded by Party AII as well, which will be taken as compensation for the loss of Party AII. In case of any breach by Party AII before the completion of the contract, Party AII shall inform Party BII in written form, and shall refund to Party BII twice the amount of the money already paid by Party BII (including the deposit and without interest) within 10 days from the occurrence of the breach.	Upon both parties’ entering into the contract, in the event that Party BIII fails to make payment according to the agreed terms, or requests for termination of the contract before completion, Party BIII shall bear the liability for the breach of the contract, and shall not get any refund of the deposit from Party AI, and the money already paid by Party BIII will not be refunded by Party AI as well, which will be taken as compensation for the loss of Party AI. In case of any breach by Party AI before the completion of the contract, Party AI shall inform Party BIII in written form, and shall refund to Party BIII twice the amount of the money already paid by Party BIII within 10 days from the occurrence of the breach.

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Name of assets for disposal	Home Appliance Company Zone	Beach Warehouse Zone	Marketing Building
Other material terms	(1) Party AI has entered into tenancy agreements with Foshan Shunde EVERTEAM Industrial Co. Ltd. (“EVERTEAM”) and Guangdong Kelon Refrigerator Co. Ltd, (“Kelon Refrigerator”) on 12 October 2006, respectively with a term from 18 December 2006 to 17 December 2011. Under the tenancy agreements, Party A1 shall lease the buildings on such land to EVERTEAM and Kelon Refrigerator, respectively. After accepting the transfer of the land use rights of the of land, Party BI shall continue to perform the tenancy agreements entered into between Party AI and EVERTEAM and Kelon Refrigerator. Before the full payment of the consideration by Party BI, the rental income will be received and owned by Party AI; and commencing from the date of the full payment of the consideration, the rental income will be received and owned by Party BI. In the event that Party AI has to compensate EVERTEAM and Kelon Refrigerator due to Party BI’s request to terminate the contract, Party BI shall indemnify Party AI in the same amount of its loss.		(1) After accepting the transfer of the land use rights of the piece of land, Party BIII shall continue to perform the tenancy agreements entered into between Party AI and the 13 companies (individuals). Before the full payment of the consideration by Party BIII, the rental income will be received and owned by Party AI; and commencing from the date of the full payment of the consideration, the rental income will be received and owned by Party BIII. In the event that Party AI has to compensate the existing tenants due to Party BIII’s request to terminate the contract, Party BIII shall indemnify Party AI in the same amount of Party AI’s loss. (2) Party AI shall continue to use the outdoor billboard on the roof of the building until 31 December 2007. And starting from 2008, if Party AI intends to lease the same place for outdoor advertisement use from Party BIII, Party AI shall be entitled to the preferential rights to lease such place at a favorable price not higher than 80% of the prevailing regular market price.

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Name of assets for disposal	Home Appliance Company Zone	Beach Warehouse Zone	Marketing Building
	Upon the expiration of the tenancy, except the machinery, equipment, tools and any other materials inside the plant belonging to Party AI which can be dismantled and moved, Party AI shall unconditionally keep the plant in good order before handing over it to Party BI. At that time, Party AI shall give Party BI a written notice so as to go through the inspection and hand over procedures of the plant together. To ensure the smooth hand over of the aforesaid items, both parties shall perform a full scale on-site stocktaking within 5 days after signing of the contract and a written confirmation shall be prepared as the proof for the actual hand over. (2) In order to meet its own needs, Party AI has maintained a chemical warehouse on the aforesaid piece of land with a site area of approximately 1,000 sq.m. and a gross floor area of approximately 898 sq.m.. Party AI shall solely take full responsibility for the production safety and day-to-day management of the chemical warehouse as well as compliance with the relevant requirements of state environmental regulations of the PRC. Party BI shall not responsible for the safety and liability relating to chemical warehouse. Party AI undertakes that, in the event of any liability issue occurring in the chemical warehouse, Party AI shall solely be liable for all damages to Party AI and Party BI shall take no responsibility.

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V. REASON FOR AND IMPACT OF THE DISPOSAL OF ASSETS

The final aggregate consideration for the disposal of the three properties is RMB51,776,300.00. As at 31 December 2006, the total net book value of such assets is RMB34,502,957.29. After deducting taxes and other relevant fees, it is expected that the profit realized on such disposal will be approximately RMB14,000,000.

The Company’s intention to dispose of the three properties for a price of not lower than the appraised market price will facilitate the optimal utilization of the Company’s assets and enhance its asset structure. All proceeds from such disposal will be used for repaying bank loans and improving the financing structure of the Company.

VI. DOCUMENTS AVAILABLE FOR INSPECTION

1. The assets valuation report issued by Guangdong Zhongguangxin Assets Appraisal Co., Ltd. (廣東中 廣信資產評估有限公司)

2. The resolutions of the fifth meeting in 2007 of the sixth session of Board of Guangdong Kelon Electrical Holdings Company Limited.

SUSPENSION OF TRADING OF H SHARES

At the request of the Company, trading in the H shares of the Company was suspended with effect from 10:00 a.m. on 16 June 2005 until further notice.

By order of the Board Guangdong Kelon Electrical Holdings Company Limited Tang Ye Guo Chairman

As at the date of this announcement, the Company’s directors are Mr. Tang Ye Guo, Mr. Yang Yun Duo, Mr. Wang Shi Lei, Ms. Yu Shu Min, Mr. Xiao Jian Lin and Mr. Lin Lan; and the Company’s independent nonexecutive directors are Mr. Zhang Sheng Ping, Mr. Lu Qing and Mr. Cheung Yui Kai,Warren.

Foshan City, Guangdong, the PRC,15 May 2007

“Please also refer to the published version of this announcement in China Daily”

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