National Electronics Holdings Limited — Proxy Solicitation & Information Statement 2000

Sep 7, 2000

CHINESE ESTATES HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting of Chinese Estates Holdings Limited (the "Company") will be held at Boardroom III and IV, M/F, Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 25th September 2000 at 10:00 a.m. for the purpose of considering and, if thought fit, passing the following resolution which will be proposed as an ordinary resolution: -

"THAT the agreement dated 25th August 2000 (the "Agreement") made between (a) Global Smart Ltd., an indirect wholly-owned subsidiary of the Company as purchaser; and (b) Eastern Hall Limited, a company 90% ultimately owned by a discretionary trust of which certain family members of Mr. Joseph Lau, Luen-hung, a director of the Company, are eligible beneficiaries and 10% ultimately owned by Mr. Thomas Lau, Luen-hung, a director of the Company, as vendor; and (c) the Company as purchaser's guarantor relating to the sale and purchase of one share of US$1.00 in the capital of Sunny Ocean Limited, representing the entire issued share capital of Sunny Ocean Limited and all amount due and owing by Sunny Ocean Limited to Eastern Hall Limited as at completion of the Agreement, a copy of which has been produced to the meeting, AND all transactions contemplated under the Agreement be and are hereby approved and the directors of the Company be and are hereby authorised generally to do all things and execute all documents which may be necessary or desirable to effect and implement the Agreement and all the transactions contemplated thereunder."

By Order of the Board

Lam, Kwong-wai

Company Secretary

Hong Kong, 6th September 2000

Notes:

1. The consideration payable under the Agreement for the Sale Share (as defined below) will be determined by adding up (a) the agreed value of the Excelsior Property (as defined below), which will be fixed at HK$327.6 million, representing a 10% discount of the independent professional valuation of the Excelsior Property at HK$364 million by FPDSavills (Hong Kong) Limited as at 16th August 2000 and (b) the current assets of Sunny Ocean Limited as at completion, less the total liabilities of Sunny Ocean Limited as at completion and the consideration payable for the Sale Debt (as defined below) is equivalent to the face value of the Sale Debt as at completion. The consideration for the Sale Share payable upon completion is subject to a post completion adjustment with reference to the audited net tangible asset value of Sunny Ocean Limited at completion. It is currently estimated that the consideration payable for the Sale Share shall be approximately HK$284 million and the consideration for the Sale Debt shall be approximately HK$55.5 million.

2. An initial deposit of HK$50 million has been paid upon signing of the Agreement. The second instalment of HK$100 million will be paid at completion. The balance of the consideration (subject to any adjustment of the consideration for the Sale Share referred to above) for the Sale Share and the Sale Debt will be payable within 6 months after completion bearing an interest rate of the Hongkong InterBank Offered Rate for 3 months for the amount outstanding.

3. The Excelsior Property is the principal asset of Sunny Ocean Limited.

4. In this notice, the following expressions have the meanings set out below unless the context required otherwise: -

"Excelsior Property" (i) (a) Shops Nos.1 to 3, Shops Nos.6 to 12, on the Ground Floor of Yee On Building;

(b) Units Nos.6 to 11, on the First Floor of Yee On Building.

(ii) Shop No.21, Shop No.23 and Shop No.24 on Ground Floor of Chee On Building;

(iii) (a) External Wall on the Ground Floor, First Floor and Second Floor of Yee On Building together with the Main Roof thereof; and

(b) Such areas defined as "Reserved Areas and Facilities" under the Sub-Sub Deed of Mutual Covenant and Management Agreement dated 1st September, 1997 and registered in the Land Registry by Memorial No.7276514.

The Excelsior Property forms part of the Excelsior Plaza located at No. 26 East Point Road, Hong Kong;

"Sale Debt" all amount due and owing by Sunny Ocean Limited to Eastern Hall Limited (being approximately HK$55.5 million as at 15th August 2000) as at completion;

"Sale Share" the one share of US$1.00 in the capital of Sunny Ocean Limited, representing the entire issued share capital of Sunny Ocean Limited.

1. Further details of the Agreement have been set out in the announcement of the Company made on 25th August 2000. A copy of the Agreement is also available for inspection during normal business hours on any weekday (other than public holidays) at the offices of Messrs. Sit, Fung, Kwong & Shum, Solicitors, Suite 4428, Cosco Tower, 183 Queen's Road Central, Hong Kong up to and including 25th September 2000 and at the above meeting.

2. In view of the interests of Mr. Joseph Lau, Luen-hung and Mr. Thomas Lau, Luen-hung in the Agreement, the shares held by any of them and their respective associates will not be voted at the above meeting.

3. Any shareholder entitled to attend and vote at the above meeting is entitled to appoint one or more separate proxies to attend and on a poll, to vote instead of him. A proxy need not be a shareholder of the Company.

4. To be valid, a form of proxy in the prescribed form together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy thereof) must be deposited at the Company's principal office in Hong Kong at 26th Floor, MassMutual Tower, 38 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time fixed for holding the above meeting. A form of proxy for use at the above meeting is enclosed.