Paradise Entertainment Limited — Proxy Solicitation & Information Statement 2004

Apr 2, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in or warrants of LifeTec Group Limited (the “Company”), you should at once hand this circular and, if applicable, the accompanying form of proxy to the purchaser or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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(Incorporated in Bermuda with limited liability) (Stock Code: 1180)

PROPOSED REFRESHMENT OF THE 10% LIMIT ON GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME

A notice convening the special general meeting of the Company to be held at 26th Floor, Central Tower, 28 Queen’s Road Central, Hong Kong on Monday, 19th April 2004 at 11:00 a.m. (the “Special General Meeting”) is set out on pages 8 to 9 of this circular. Whether or not you are able to attend the Special General Meeting, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrars of the Company in Hong Kong, Secretaries Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event, not less than 48 hours before the time appointed for holding the Special General Meeting or any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting or any adjourned meeting should you so wish.

2nd April 2004

* For identification purposes only

CONTENTS

	Page
Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Refreshment of the 10% limit on grant of options
under the Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Application for listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Document available for inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Notice of the Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

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RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The 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.

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DEFINITIONS

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

• “Board”

the board of Directors

• “Company”

• LifeTec Group Limited, an exempt company incorporated in Bermuda with limited liability, the securities of which are listed on the Stock Exchange

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

• “Group” the Company and its subsidiaries

• “Hong Kong”

• Hong Kong Special Administrative Region of the People’s Republic of China

• “Invested Entity”

any entity in which the Group holds any equity interest

• “Latest Practicable Date”

• 30th March 2004, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein

• “Listing Rules”

The Rules Governing the Listing of Securities on the Stock Exchange

• “Participants”

• (i) any employee (whether full time or part time) of any member of the Group or any Invested Entity, including any executive director of any member of the Group or any Invested Entity;

• (ii) any non-executive director (including independent nonexecutive director) of any member of the Group or any Invested Entity;

• (iii) any supplier of goods or services to any member of the Group or any Invested Entity;

• (iv) any customer of any member of the Group or any Invested Entity;

• (v) any adviser or consultant of any member of the Group or any Invested Entity;

• (vi) any person or entity that provides research, development or other technological support to any member of the Group or any Invested Entity; and

• (vii) any shareholder of any member of the Group or any Invested Entity or any holder of any securities issued by any member of the Group or any Invested Entity,

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DEFINITIONS

and for the purposes of the Share Option Scheme, the options may be granted to any company wholly owned by one or more person(s) belonging to any of the above classes of participants

• “Scheme Mandate Limit”

• 10% of the issued share capital of the Company as at the date of adoption of the Share Option Scheme which may be issued upon exercise of all options granted or to be granted under the Share Option Scheme and any other share option scheme of the Company

• “Share Option Scheme”

• the share option scheme of the Company adopted by Shareholders on 15th July 2002

• “Shareholders”

holders of the Shares

• “Special General Meeting”

• the special general meeting of the Company to be held at 26th Floor, Central Tower, 28 Queen’s Road Central, Hong Kong on Monday, 19th April 2004 at 11:00 a.m.

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “Warrantholders” holders of the Warrants

• “Warrants”

• warrants issued by the Company entitling the holders thereof to subscribe for Shares at an initial subscription price of HK$0.102 per Share, subject to adjustment, exercisable from 23rd February 2004 to 26th February 2005, both days inclusive

• “HK$”

Hong Kong dollars, the lawful currency of Hong Kong

• “%” per cent

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

Executive Directors: Mr. Jay Chun (Chairman and Managing Director) (alternative director to Mr. Shan Shiyong) Mr. Shan Shiyong, alias, Sin Sai Yung Dr. Ma Xianming, alias, Ma Yin Ming Independent Non-executive Directors: Mr. Frank Hu Mr. Wang Faqi

Head Office and Principal Place of Business: 26th Floor Central Tower 28 Queen’s Road Central Hong Kong

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

2nd April 2004

To the Shareholders, and for information only, the Warrantholders

Dear Sir or Madam,

PROPOSED REFRESHMENT OF THE 10% LIMIT ON GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME

INTRODUCTION

The purpose of this circular is to provide you with details regarding the proposed refreshment of the Scheme Mandate Limit.

REFRESHMENT OF THE 10% LIMIT ON GRANT OF OPTIONS UNDER THE SHARE OPTION SCHEME

Pursuant to the Share Option Scheme adopted by the Company pursuant to the approval of the Shareholders at the special general meeting of the Company held on 15th July 2002, the maximum number of Shares in respect of which options may be granted under the Share Option Scheme and any other share option scheme of the Company shall not exceed 171,774,594 Shares, representing 10% of the total number of issued Shares as at the date of approval of the Share Option Scheme. Apart from the Share Option Scheme, the Company has

* For identification purposes only

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LETTER FROM THE BOARD

no other share option scheme as at the Latest Practicable Date. The Company may refresh the Scheme Mandate Limit by ordinary resolution of the Shareholders at general meeting provided that:

• (i) the Scheme Mandate Limit so refreshed shall not exceed 10% of the total number of issued Shares as at the date of the Shareholders’ approval of the refreshment of the Scheme Mandate Limit; and

• (ii) options previously granted under any schemes (including options outstanding, cancelled, or lapsed in accordance with the relevant scheme rules or exercised options) shall not be counted for the purpose of calculating the limit as refreshed.

Notwithstanding the foregoing, the maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other share option scheme(s) of the Company must not in aggregate exceed 30% of the total number of Shares in issue from time to time (the “Scheme Overall Limit”).

As at 15th July 2002, being the date of approval of the Share Option Scheme, the total number of issued Shares was 1,717,745,946 Shares and the Scheme Mandate Limit was 171,774,594 Shares (representing 10% of the Shares in issue as at the date of approval of the Share Option Scheme). As at the Latest Practicable Date, there were 2,597,112,919 Shares in issue. As at the Latest Practicable Date, 171,700,000 options (representing approximately 9.996% of the Shares in issue as at the date of approval of the Share Option Scheme) were granted under the Share Option Scheme of which (i) 51,000,000 options had been exercised and (ii) 120,700,000 options remain unexercised and outstanding.

All the grantees of the options fell within the class of Participants under the Share Option Scheme and all these options were granted in accordance with the rules of the Share Option Scheme and the relevant requirements of the Listing Rules. The following table shows the options being granted to different classes of Participants:

Class of Participants	No. of Participants in class	No. of options granted
Executive Directors	2	3,500,000
Employees	7	76,825,000
Consultants	6	91,375,000

The options were granted to these consultants in consideration of corporate finance, securities, research and other advisory services provided by them to the Group and as an incentive for their continued provision of such services to the Group. None of the grantees has been granted with options which exceed the limit of 1% of the issued share capital of the Company as at the respective dates of grant. Other than the Directors, none of the grantees is a connected person (as defined in the Listing Rules) of the Company.

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LETTER FROM THE BOARD

Since the purpose of the Share Option Scheme is to provide incentive or reward to eligible persons for their contribution to, and continuing efforts to promote the interests of, the Company and in view that the issued share capital of the Company has been enlarged as a result of certain equity fund raising exercises subsequent to the approval of the Share Option Scheme, the Board proposes to refresh the Scheme Mandate Limit. The Directors consider that the refreshment of the Scheme Mandate Limit is in the interests of the Company and its Shareholders as it enables the Company to have more flexibility in providing incentives to those eligible persons by way of the granting of the options.

Based on 2,597,112,919 Shares in issue as at the Latest Practicable Date and assuming no further issue or repurchase of Shares prior to the Special General Meeting, upon refreshment of the Scheme Mandate Limit by Shareholders at the Special General Meeting, the Company may grant options entitling holders thereof to subscribe for up to a maximum of 259,711,291 Shares, representing 10% of the issued share capital of the Company as at the date of the Special General Meeting. No options may be granted if this will result in the number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other share option scheme(s) of the Company exceed the Scheme Overall Limit. On the basis of 2,597,112,919 Shares in issue as at the Latest Practicable Date, the Scheme Overall Limit represents 779,133,875 Shares. Accordingly, the total number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other share option scheme of the Company does not exceed the Scheme Overall Limit as at the Latest Practicable Date.

The refreshment of the Scheme Mandate Limit is conditional on:

• (i) the passing of an ordinary resolution to approve the refreshment of the Scheme Mandate Limit by the Shareholders at the Special General Meeting; and

• (ii) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Shares (representing a maximum of 10% of the Shares in issue as at the date of passing the resolution of refreshment of the Scheme Mandate Limit at the Special General Meeting) which may fall to be issued pursuant to the exercise of the options under the Share Option Scheme and any other share option scheme(s) of the Company.

APPLICATION FOR LISTING

Application has been made by the Company to the Stock Exchange for the listing of, and permission to deal in, the new Shares to be issued by the Company (representing a maximum of 10% of the Shares in issue as at the date of passing the resolution of refreshment of the Scheme Mandate Limit at the Special General Meeting) which may fall to be issued pursuant to the exercise of options under the Share Option Scheme and any other share option scheme(s) of the Company.

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LETTER FROM THE BOARD

SPECIAL GENERAL MEETING

A notice convening the Special General Meeting to be held at 26th Floor, Central Tower, 28 Queen’s Road Central, Hong Kong on Monday, 19th April 2004 at 11:00 a.m. is set out on pages 8 to 9 of this circular for the purpose of considering and, if thought fit, passing the ordinary resolution in respect of the refreshment of the Scheme Mandate Limit.

A form of proxy for use by the Shareholders at the Special General Meeting is enclosed. Whether or not you are able to attend the meeting in person, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon to the branch share registrars of the Company in Hong Kong, Secretaries Limited of Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong, as soon as possible and in any event, not later than 48 hours before the time appointed for holding such meeting or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the Special General Meeting or any adjourned meeting thereof (as the case may be) should you so wish.

DOCUMENT AVAILABLE FOR INSPECTION

Copy of the Share Option Scheme will be available for inspection during normal business hours on any week days (except public holidays) at the head office and principal place of business of the Company at 26th Floor, Central Tower, 28 Queen’s Road Central, Hong Kong up to and including 19th April 2004 and will also be available for inspection at the Special General Meeting.

RECOMMENDATION

The Directors consider that the proposed refreshment of the Scheme Mandate Limit is fair and reasonable and in the best interest of the Company and its Shareholders and recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the Special General Meeting to refresh the Scheme Mandate Limit.

Yours faithfully, For and on behalf of LifeTec Group Limited Jay Chun Chairman

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NOTICE OF THE SPECIAL GENERAL MEETING

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(Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that a special general meeting of the shareholders of LifeTec Group Limited (the “Company”) will be held at 26th Floor, Central Tower, 28 Queen’s Road Central, Hong Kong on Monday, 19th April 2004 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolution which will be proposed as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited granting listing of, and permission to deal in, the shares of HK$0.01 each (“Shares”) in the share capital of the Company to be issued pursuant to the exercise of options which may be granted under the Refreshed Limit (as defined below), the refreshment of the scheme mandate limit under paragraph 8.1(ii) of the Company’s share option scheme adopted on 15th July 2002 (the “Share Option Scheme”) be and is hereby approved provided that (i) the total number of Shares which may be issued upon the exercise of all options granted or to be granted under the Share Option Scheme and any other share option scheme of the Company shall not exceed 10 per cent of the number of Shares in issue as at the date of passing this resolution (the “Refreshed Limit”) and (ii) options previously granted under the Share Option Scheme and any other share option scheme of the Company (including those outstanding, cancelled, lapsed or exercised in accordance with the Share Option Scheme and any other share option scheme of the Company) shall not be counted for the purpose of calculating of the Refreshed Limit and that the directors of the Company be and are hereby authorised, from time to time, to offer or grant options pursuant to the Share Option Scheme subject to the Refreshed Limit and to exercise any power of the Company to allot and issue Shares upon the exercise of any such options.”

By Order of the Board Poon Yick Pang, Philip Company Secretary

2nd April 2004

Head Office and Principal Place of Business: 26th Floor Central Tower 28 Queen’s Road Central Hong Kong

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

* For identification purposes only

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NOTICE OF THE SPECIAL GENERAL MEETING

Notes:

• (1) A shareholder entitled to attend and vote at the meeting may appoint one or more proxies to attend and to vote instead of him. A proxy need not be a shareholder of the Company.

• (2) In the case of joint holders of any share, any one of such persons may vote at the said 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 is present at the said 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) In order to be valid, the form of proxy together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power or authority, must be deposited at the Company’s share registrar in Hong Kong, Secretaries Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting. Completion and return of a form or proxy will not preclude shareholders from attending and voting in person should they so desire.

• (4) A form of proxy for use at the meeting is enclosed herewith.

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