Qiniu Limited — Capital/Financing Update 2011

Jun 19, 2011

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Shares.

SIBERIAN MINING GROUP COMPANY LIMITED 西伯利亞礦業集團有限公司 [*]

(incorporated in the Cayman Islands with limited liability)

(Stock code: 1142)

PROPOSED GRANT OF THE EQUITY LINE OF CREDIT TO THE COMPANY AND

PROPOSED ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE

THE AGREEMENT

After trading hours on 17 June 2011, the Company entered into the Agreement with the Investor, pursuant to which the Company is granted the Option to require the Investor to subscribe for the Option Shares structured under the Equity Line of Credit.

The completion of the Agreement is conditional upon the fulfillment of the Conditions Precedent as set out under the paragraph headed “Conditions Precedent to the Agreement” below and the Share Lending Agreement is subject to the completion of the Agreement and the terms of the Agreement.

THE SHARE LENDING AGREEMENT

In order to facilitate the transactions contemplated under the Agreement, the Share Lender (being a substantial shareholder of the Company as at the date of this Announcement) entered into the Share Lending Agreement with the Investor contemporaneously with the execution of the Agreement. As the Share Lending Agreement is entered purely for the purposes of the transactions contemplated in the Agreement, it is subject to the completion of the Agreement and the terms of the Agreement.

SPECIFIC MANDATE TO ISSUE THE OPTION SHARES

The Company will allot and issue the Option Shares under the Specific Mandate to be sought at the EGM.

* For identification purpose only

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GENERAL

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve (i) the Agreement and the transactions contemplated thereunder, and (ii) the grant of the Specific Mandate.

A circular containing, among other things, (i) further details of the Agreement and the Share Lending Agreement and the transactions contemplated thereunder; (ii) the grant of the Specific Mandate; and (iii) a notice convening the EGM, will be dispatched to the Shareholders as soon as practicable in accordance with the requirements of the Listing Rules.

Applications will be made by the Company to the Stock Exchange for the grant of the Listing of, and permission to deal in, 568,000,000 Option Shares.

The Share Lender itself does not have any interest whatsoever in the Option Shares and the transactions contemplated under the Agreement. There is no transaction between the Company and the Share Lender which falls under Rule 14A.13 of the Listing Rules; and the lending and redelivery of Shares by the Share Lender and the Investor will purely be transactions between the Share Lender and the Investor and do not constitute a connected transaction of the Company as defined under the Listing Rules.

Completion of the Agreement is subject to the satisfaction of the Conditions Precedent as set out above under the paragraph headed “Conditions Precedent to the Agreement” and the Share Lending Agreement is subject to the completion and terms of the Agreement. As the Agreement and the Share Lending Agreement may or may not proceed, potential investors are advised to exercise caution when dealing in the Shares.

THE AGREEMENT

After trading hours on 17 June 2011, the Company entered into the Agreement with the Investor, pursuant to which the Company is granted the Option to require the Investor to subscribe for up to an aggregate of 568,000,000 Options Shares if the Option structured under the Equity Line of Credit is exercised in full.

Parties

Issuer: The Company

Investor: Lyceum Partners LLC

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiry, the Investor and its ultimate beneficial owners are Independent Third Parties. Based on the information provided by the Investor, the Investor is a US-headquartered private investment firm specializing in providing capital to individuals and companies in the form of share purchases.

Equity Line of Credit and Option

Under the Agreement, the Company has been granted the Equity Line of Credit by way of utilization of the Option, pursuant to which the Company may require the Investor to subscribe for up to 568,000,000 Option Shares (i.e. the Total Commitment) during the Commitment Period, subject to the terms and conditions of the Agreement.

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The total aggregate number of Option Shares to be subscribed by the Investor during the Commitment Period shall not exceed the Total Commitment.

Set out below are details of the Option:

Term:

The Option is exercisable by the Company during the Commitment Period, being the period commencing on (and including) the date when the Company has first satisfied or fulfilled the Conditions Precedent pursuant to the Agreement and expiring upon the earlier of (i) the expiry of the 36 consecutive months from such date, and (ii) the date on which the aggregate of the Option Shares subscribed by the Investor under the Agreement equals the Total Commitment.

The Company may exercise the Option by issuing multiple Tranche Notices during the Commitment Period except that it may not, without the prior written consent of the Investor, deliver a Tranche Notice until (i) the expiry of the Pricing Period relating to any Tranche Notice previously issued by the Company and (ii) the Option Shares specified in the relevant previous Tranche Notice have been Listed and become Tradable.

Subscription Price per Option Share:

• With regard to any Pricing Period, the Subscription Price per Option Share shall be 83% of the average of the closing prices of the Shares during such period. In addition, the Subscription Price per Option Share shall not be lower than the Threshold Price being a minimum of HK$0.09 per Option Share, as adjusted by any subdivision, consolidation or otherwise as set out in the Agreement.

The minimum Threshold Price of HK$0.09 per Option Share represents:

• (i) no discount to the closing price per Share of HK$0.09 as quoted on the Stock Exchange on the date of the Agreement;

• (ii) a discount of approximately 13.46% to the average closing prices of HK$0.104 per Share as quoted on the Stock Exchange for the last five trading days ended on and including the Last Trading Day;

• (iii) a discount of approximately 13.71% to the average closing prices of HK$0.1043 per Share as quoted on the Stock Exchange for the last ten trading days ended on and including the Last Trading Day; and

• (iv) a discount of approximately 72.72% to the audited net asset value per Share of approximately HK$0.3299 as at 31 March 2010 based on the number of issued Shares as at the Last Trading Day.

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Option Shares:

The Company shall exercise any part of the Option by serving a Tranche Notice specifying the Number of Option Shares. The Investor shall respond to any Tranche Notice by delivering a Closing Statement, which shall set out, inter alia, the Subscription Price to be paid to the Company on or prior to the Closing Date.

Based on the Total Commitment, up to a total of 568,000,000 Option Shares will be allotted and issued upon the full exercise of the Option, representing approximately 20.00% of the existing issued Shares or approximately 16.66% of the issued share capital of the Company as enlarged by the issue and allotment of such 568,000,000 Option Shares.

The Company will apply to the Stock Exchange for the Listing of, and permission to deal in, 568,000,000 Option Shares.

Undertakings by the Investor under the Agreement:

Pursuant to the Agreement, the Investor undertakes that it shall not:

• (i) on each Trading Day during the Pricing Period, dispose or procure to be disposed through the Stock Exchange of any number of Shares over and above one-fifth (1/5) of the applicable Number of Option Shares, provided that where the Investor has disposed or procured to be disposed of Shares on a Trading Day which number is less than one-fifth (1/5) of the applicable Number of Option Shares, the Investor may dispose or procure to be disposed of the remaining balance for that Trading Day on any subsequent Trading Day during and/or after the Pricing Period; and

• (ii) effect or procure to be effected any short selling, as prohibited by Section 170 of the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong), of any Shares and it shall, in respect of the Shares, comply with all applicable laws and regulations of Hong Kong including but not limited to the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong); and

• (iii) at any point in time hold directly or indirectly in excess of 9.99% in aggregate of the total issued share capital of the Company from time to time and in the calculation of such shareholding interest, the number of Option Shares yet to be allotted and issued to the Investor pursuant to a Tranche Notice shall not be taken into account.

Indemnity given by the Company under the Agreement:

The Company shall indemnify and defend the Investor and its affiliates against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all damages or losses incurred or sustained by, or imposed upon, the Investor and its affiliates based upon, arising out of, with respect to or by reason of:

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• (a) any material inaccuracy in or material breach of any of the representations or warranties of the Company contained in the Agreement or any ancillary documents, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of each relevant Closing Date (except for representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified date); or

• (b) any material breach or non-fulfillment of any material covenant, agreement or obligation to be performed by the Company pursuant to the Agreement.

Conditions Precedent to the Agreement

The right of the Company to access the Equity Line of Credit is subject to and conditional upon the following Conditions Precedent:

• (a) the Company having obtained the approval of its Shareholders at the EGM in respect of the Agreement and the transactions contemplated in the Agreement and the grant of the Specific Mandate;

• (b) compliance by the Company and the Investor of all applicable laws, rules and regulations in their respective jurisdictions, including but not limited to, the Listing Rules for the entering into of the Agreement and all the other transactions contemplated thereunder; and

• (c) the Stock Exchange having granted the Listing of, and permission to deal in, 568,000,000 Option Shares.

If any of the above Conditions Precedent are not satisfied or waived on or before 31 August 2011 (or such later date as may be agreed by the parties), the Agreement shall lapse and shall have no further force or effect and none of the parties shall have any claim against the other under the Agreement.

Subscription Conditions for the Investor’s Subscription in Each Tranche

The closing of the subscription of the Option Shares in each tranche shall occur only if the following Subscription Conditions have been satisfied:

• (i) the satisfaction of the Conditions Precedent;

• (ii) the Company having obtained all the necessary consents, if any, and not withdrawn or revoked by third parties (including, without limitation, government bodies, the Stock Exchange and other relevant authorities under the Agreement) and if such consents are obtained subject to any conditions and where such conditions affect any of the parties, such conditions being acceptable to the party concerned and if, such conditions are required to be fulfilled before the Closing Date, such conditions being fulfilled before the Closing Date;

• (iii) compliance by the Company and the Investor of all applicable laws, rules and regulations;

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• (iv) the subscription and payment for the Option Shares in the relevant tranche not being prohibited or enjoined (temporarily or permanently) by any applicable law or governmental or other regulation to which the Investor and/or the Company are subject (other than by reason of the Investor’s own breach of its representations, warranties and/or undertakings under the Agreement, or the default of the Investor);

• (v) all matters and all documentation and other instruments in connection with the issuance, allotment and subscription of the Option Shares shall be reasonably satisfactory in form and substance to the Investor and the Investor shall have received copies of all documents which it may reasonably request in connection with the issuance and subscription of the Option Shares;

• (vi) there being no change during the period between the date of the Agreement and on the applicable Closing Date, in any law, governmental or other regulation applicable in Hong Kong which would adversely affect in any material aspect the holding or disposal of Shares by or by order of the Investor or any other rights of the Investor or any person acting by order of the Investor in respect of these Shares;

• (vii) there being no law and/or governmental or other regulation in Hong Kong on the applicable Closing Date which would require the Investor and/or any person acting by the Investor’s order to make a mandatory offer for all the issued Shares and other securities of the Company;

• (viii) there being no law or governmental or other regulation applicable in Hong Kong on the applicable Closing Date which would require the Investor and/or any person acting by order of the Investor to comply with prospectus registration requirements in Hong Kong;

• (ix) the representations and warranties of the Company contained in the Agreement remaining to be true and correct in all material respects as at the date made and as at the relevant Closing Date as repeated at that time (except that representations and warranties that are expressed by their terms to be made as at a specific date need to be true and correct in all material respects only as at such specific date);

• (x) the Company having performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Agreement to be performed, satisfied or complied with by the Company at or prior to the applicable Closing Date;

• (xi) the Investor has not given a notice to the Company on or before the applicable Tranche Notice Date that either (i) the Share Lender has failed to duly perform its obligations pursuant to the terms of the Share Lending Agreement, or (ii) the Share Lending Agreement has been terminated;

• (xii) the Option Shares subscribed under the relevant Closing Statement shall be Listed on the relevant Closing Date; and

(xiii) the Trading of the Option Shares are not restricted by the Stock Exchange on the Closing Date.

Share Lending Agreement

Pursuant to the terms of the Share Lending Agreement, within 1 Trading Day after the Tranche Notice Date, the Investor shall issue a Borrowing Request to the Share Lender. The Investor shall not be entitled to issue a Borrowing Request unless it has received a Tranche Notice from the Company.

The Share Lender shall by 4:00 pm (Hong Kong time) of the Delivery Date deliver such number of Loan Shares stated in the relevant Borrowing Request, to a securities account designated by the Investor in the Borrowing Request or as otherwise notified by the Investor to the Share Lender in writing from time to time.

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Within 3 Trading Days after any Closing Date in accordance with the Agreement, the Investor shall redeliver the Equivalent Shares to the Share Lender or its nominees by crediting such Equivalent Shares to the securities account of the Share Lender (or as otherwise designated by the Share Lender and notified to the Investor from time to time).

In consideration of the Share Lender agreeing to lend the Loan Shares to the Investor for the mere purpose of facilitating the exercise of the Option by the Company under the Agreement, the Company has agreed with the Share Lender to reimburse the Share Lender for all costs, fees and expenses incurred by the Share Lender in direct connection with the lending of the Loan Shares and the redelivery of the Equivalent Shares stipulated in the Share Lending Agreement.

As at the date of this announcement, the Share Lender was interested in 455,070,000 Shares. The Share Lender is wholly owned by Mr. Choi Sungmin, a business consultant of Grandvest International Limited, a wholly owned subsidiary of the Company and a director of a non-wholly owned subsidiary of the Company, Sofoco Development Limited. To facilitate the subscription for the Option Shares by the Investor under the Agreement, the Share Lender agrees to lend the Loan Shares according to the terms of the Share Lending Agreement.

The Share Lender is a party in the Share Lending Agreement for the primary purpose of facilitating the Investor’s subscription of the Option Shares under the Agreement. The Share Lender itself does not have any interest whatsoever in the Option Shares and the transactions contemplated under the Agreement. In addition, the Share Lender will not receive any fee in relation to the lending of the Loan Shares. There is no transaction between the Company and the Share Lender which falls under Rule 14A.13 of the Listing Rules; and the lending and redelivery of Shares by the Share Lender and the Investor will purely be transactions between the Share Lender and the Investor and do not constitute a connected transaction of the Company as defined under the Listing Rules.

The Share Lending Agreement is subject to the completion of the Agreement and the terms of the Agreement.

Termination of the Agreement

The Agreement may be terminated at any time during the Commitment Period by the mutual consent of the Company and the Investor.

The Agreement may be terminated during the Commitment Period by the Investor by giving written notice of such termination to the Company, if the Company enters into a definitive agreement with any third party, the principal purpose of which is to secure any equity financing which provides for (i) the issuance of the Third Party New Shares, other than an underwritten public offering, and the Investor has declined to exercise its rights of first refusal in accordance with the Agreement, or (ii) the implementation by the Company of a pricing mechanism to the effect that the Subscription Price per Option Share would be set below the Threshold Price (unless otherwise agreed by the parties), provided that in any event no Option Shares will be allotted and issued under the Agreement at the Subscription Price per Option Share below the Threshold Price.

The Agreement may be terminated during the Commitment Period by the Investor or the Company by giving written notice of such termination to the other party if:

• (a) there has been any Material Adverse Effect or any Material Change in Ownership of the Company; or

• (b) hostilities not presently existing commence (whether war has been declared or not) or in the opinion of the Investor there is a major act of terrorism or significant escalation in existing hostilities (whether war has been declared or not) involving any one or more of Hong Kong and the US.

The Company shall grant the Investor a right-of-first-refusal in respect of the Third Party New Shares in accordance with the Agreement. The Company shall give prior written notice to the Investor before issuing any Third Party New Shares, and within 3 Trading Days after such date, the Investor shall be entitled to subscribe for all or part of the Third Party New Shares by giving the Company a written notice.

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FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has conducted the following fund raising activities during the past 12 months immediately before the date of this announcement:

Fund raising activities in the past twelve months

			Intended use of proceeds as	Actual use of proceeds/
Date of announcement	Event	Net proceeds	stated in the announcement	Remarks
4 October 2010	Placing of	Approximately	General working capital,	All proceeds had been used as
	60,000,000	HK$13.5 million	repayment of liabilities and	intended for repayment of
	new Shares		future business development	liabilities of the Company
9 October 2010	Placing of	Approximately	General working capital,	All proceeds had been used as
	120,000,000	HK$22.3 million	repayment of liabilities and	intended for repayment of
	new Shares		future business development	liabilities of the Company
14 October 2010	Placing of	Approximately	General working capital,	All proceeds had been used as
	100,000,000	HK$16 million	repayment of liabilities and	intended as general working
	new Shares		future business development	capital and for repayment of
				liabilities of the Company
27 October 2010	Placing of	Approximately	General working capital,	All proceeds had been used as
	200,000,000	HK$37.5 million	repayment of liabilities and	intended as general working
	new Shares		future business development	capital and for repayment of
				liabilities of the Company
16 February 2011	Placing of	Approximately	Future investment purpose,	All proceeds had been used as
	260,000,000	HK$34.9 million	general working capital and	intended as general working
	new Shares		repayment of liabilities	capital and for repayment of
				liabilities of the Company
11 May 2011	Placing of	Approximately	General working capital,	All proceeds had been used as
	128,000,000	HK$14.2 million	repayment of liabilities and	intended as general working
	new Shares		future investment purpose	capital and for repayment of
				liabilities of the Company

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SHAREHOLDING STRUCTURE

Assuming that there will be no other change in the shareholding structure of the Company immediately before the exercise of the Option in full, the shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately after the issue of 568,000,000 Option Shares in full to the Investor (i.e. the Total Commitment) are as follows:

Total Commitment) are as follows:
		Immediately after
		the issue of
		568,000,000
		Option Shares
	As at the date of	in full to
Name of Shareholder	this announcement	the Investor
	No. of Shares	No. of Shares
Goldwyn Management Limited_(Note 1)_	228,000,000	228,000,000
(approx.) %	8.03	6.69
Mr. Pang Ngoi Wah Edward_(Note 2)_	3,500,000	3,500,000
(approx.) %	0.12	0.10
Cordia Global Limited_(Note 3)_	455,070,000	455,070,000
(approx.) %	16.02	13.35
DTV China Holdings Limited_(Note 4)_	16,000,000	16,000,000
(approx.) %	0.56	0.47
Co An	147,610,000	147,610,000
(approx.) %	5.20	4.33
Sub-total:	850,180,000	850,180,000
(approx.) %	29.93	24.94
Investor	0	568,000,000
(approx.) %	0	16.66
Public	1,990,233,060	1,990,233,060
(approx.) %	70.07	58.40
Sub-total:	1,990,233,060	2,558,233,060
(approx.) %	70.07	75.06
Total:	2,840,413,060	3,408,413,060

Notes:

1. Goldwyn Management Limited is wholly and beneficially owned by Mr. Lim Ho Sok, an executive Director and the Chairman of the Company.

2. Mr. Pang Ngoi Wah Edward is a non-executive Director.

3. Cordia Global Limited is wholly and beneficially owned by Mr. Choi Sungmin, a business consultant of Grandvest International Limited, a wholly owned subsidiary of the Company and a director of a non-wholly owned subsidiary of the Company, Sofoco Development Limited.

4. DTV China Holdings Limited is wholly and beneficially owned by Mr. Li Yi Nan, a director of a non-wholly owned subsidiary of the Company, DTVChina, Inc.

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REASON FOR ENTERING INTO THE AGREEMENT

The Company is an investment holding company. The Group is principally engaged in (i) coal mining in Russia and coal trading business; (ii) digital television broadcasting industry including provision of equipments and software of cable video-on-demand system, information broadcasting system, embedded television systems and value added services; and (iii) vertical farming in the People’s Republic of China.

If the Option is exercised in full, the gross proceeds and net proceeds to be raised by the Company therefrom will be HK$51,120,000 and about HK$50,000,000 (based on the assumption that all 568,000,000 Option Shares are issued at the Threshold Price of HK$0.09 and the total costs payable by the Company is about HK$1,120,000) respectively, and the net Subscription Price will be approximately HK$0.088 per each Option Share. The Company intends to apply the net proceeds from the allotment and issue of the Option Shares in part for reimbursing the costs and expenses incidental to the potential acquisition as referred to in the announcement dated 17 April 2011 should such potential acquisition proceed. If such potential acquisition does not proceed, the net proceeds will be applied for general working capital, repayment of liabilities or future investment purpose of the Group.

The Directors are of the view that any allotment and issue of the Option Shares offer a good opportunity to raise additional capital for the Company and to strengthen the financial position of the Group. In addition, given the Option is granted to the Company which shall exercise the same at its option, it is considered that the Group will have flexibility in raising funds by exercising the Option during the Commitment Period. Accordingly, the Directors consider that the Agreement and the transactions contemplated thereunder are fair and reasonable and are in the best interests of the Company and the Shareholders as a whole.

MANDATE TO ISSUE THE OPTION SHARES

The Company will allot and issue the Option Shares under the Specific Mandate to be sought at the EGM.

GENERAL

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve (i) the Agreement and the transaction contemplated thereunder, and (ii) the grant of the Specific Mandate.

A circular containing, among other things, (i) further details of the Agreement and the Share Lending Agreement and the transaction contemplated thereunder; (ii) the grant of the Specific Mandate; and (iii) a notice convening the EGM will be dispatched to the Shareholders as soon as practicable in accordance with the requirements of the Listing Rules.

Applications will be made by the Company to the Stock Exchange for the grant of the Listing of, and permission to deal in, 568,000,000 Option Shares.

Completion of the Agreement is subject to the satisfaction of the Conditions Precedent as set out above under the paragraph headed “Conditions Precedent to the Agreement”. As the Agreement may or may not proceed, potential investors are advised to exercise caution when dealing in the Shares.

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DEFINITION

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

“Agreement”	the agreement entered into among the Company and the Investor after trading
	hours on 17 June 2011 in relation to the Equity Line of Credit and the Option
“associate(s)”	has the meaning ascribed thereto under the Listing Rules
“Borrowing Request”	a request in writing made by the Investor in writing to the Share Lender
	pursuant to the Share Lending Agreement specifying the number of Loan
	Shares required by the Investor, which shall be equal to the Number of Option
	Shares, and the mode and place of delivery which shall, where relevant,
	include the bank agent clearing or settlement system and account to which
	delivery of the Loan Shares is to be made
“Business Day(s)”	any day(s) (except any Saturday, Sunday or public holiday) on which licensed
	banks in Hong Kong are open for business throughout their normal business
	hours
“Closing Date”	the second Trading Day immediately following the last Trading Day of the
	Pricing Period provided that the Subscription Conditions are satisfied
“Closing Statement”	a statement from the Investor to the Company on the Closing Statement
	Date, which statement shall state the Number of Option Shares to be
	subscribed for by the Investor and the applicable Subscription Price
“Closing Statement Date”	the Trading Day immediately following the last Trading Day of each Pricing
	Period
“Commitment Period”	the period commencing on (and including) the date of when the Company
	has first satisfied or fulfilled the Conditions Precedent to the Agreement
	and expiring upon the earlier of (i) the expiry of the 36 consecutive months
	from such date, and (ii) the date on which the aggregate of the Option Shares
	subscribed by the Investor under the Agreement equals the Total Commitment
“Company”	Siberian Mining Group Company Limited, a company incorporated in the
	Cayman Islands with limited liability, Shares of which are listed on the Stock
	Exchange
“Conditions Precedent”	conditions precedent to the Agreement as set out in the paragraph headed
	“Conditions Precedent to the Agreement” above
“connected person(s)”	has the meaning ascribed thereto under the Listing Rules
“Delivery Date”	the date of delivery of the Loan Shares by the Share Lender to the Investor,
	which shall be the Trading Day immediately after the date on which the
	Borrowing Request is received by the Share Lender
“Director(s)”	director(s) of the Company

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• “EGM” the extraordinary general meeting of the Company to be convened and held to seek Shareholders’ approval for the Agreement and the transactions contemplated thereunder and the Specific Mandate

• “Equity Line of Credit” the equity line of credit granted by the Investor to the Company which shall be accessed, at the option of the Company, by the exercise of the Option during the Commitment Period in accordance with the terms of the Agreement

• “Equivalent Shares” Option Shares of the same quantity and description (or reasonable equivalent) as the relevant Loan Shares

• “Group” the Company and its subsidiaries “Independent Third Party(ies)” third party(ies) who is/are not connected person(s) of the Company and is/ are independent of and not connected with the Company and its connected persons

• “Investor” Lyceum Partners LLC (together with its permitted successors and assigns), a company incorporated in Delaware, US

• “Last Trading Day” 16 June 2011, being the last trading date prior to the date of the Agreement “Listing” or “Listed” the grant of a listing of and permission to deal in the Shares on the Stock Exchange and the term “Listed” shall be construed accordingly

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time

• “Loan” subject to the terms of the Share Lending Agreement, the lending of Loan Shares from the Share Lender to the Investor

• “Loan Shares” any number of Shares transferred in a Loan under the Share Lending Agreement until such Equivalent Shares are redelivered to the Share Lender under the Share Lending Agreement

• “Material Adverse Effect” any effect, whether financial or otherwise, which individually or taken as a whole, could reasonably be expected to be material and adverse to the Company and its subsidiaries and/or any condition, circumstance or situation that would prohibit or otherwise interfere with the ability of the Company to enter into and perform any of its obligations under the Agreement in any material respect

• “Material Change in Ownership” any change in the control or beneficial ownership of the Shares and securities which are convertible into Shares by the substantial shareholders, directors and officers as at the date of the Agreement resulting in them ceasing or beginning directly or indirectly to control, or own issued Shares and securities which are convertible into Shares of a combined total of 30% of the issued Shares in the Company from time to time. For the avoidance of doubt, any reduction in such percentage purely as a consequence of new issue of securities pursuant to fund raising or acquisitions shall not be treated as a Material Change in Ownership

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• “Number of Option Shares” in respect of a Tranche Notice, the aggregate number of Option Shares stated in the Tranche Notice that the Company requires the Investor to subscribe for the aggregate number of Option Shares as stated in the Tranche Notice, provided that such number shall not exceed the Total Commitment

• “Option” the option granted by the Investor to the Company to require the Investor to subscribe for the Option Shares up to the Total Commitment under the Agreement, and to thereby enable the Company to access the Equity Line of Credit

• “Option Share(s)” new Shares to be allotted and issued by the Company upon the exercise of all or any part of the Option

• “Pricing Period” with regard to any Tranche Notice being served by the Company, a period of 5 consecutive Trading Days commencing on the second Trading Day after the Tranche Notice Date, provided that if the Investor has not received the Loan Shares in accordance with the terms of the Share Lending Agreement by such date, the Pricing Period shall commence on the Trading Day after the date on which the Investor shall have received the Loan Shares from the Share Lender

• “Share Lender” Cordia Global Limited, a company incorporated in the British Virgin Islands which is wholly-owned by Mr. Choi Sungmin

• “Share Lending Agreement” the agreement entered into between the Share Lender and the Investor after trading hours on 17 June 2011 for lending of Shares by the Share Lender to the Investor

• “Shareholder(s)” registered holder(s) of the Shares in issue “Share(s)” ordinary share(s) of HK$0.01 each in the share capital of the Company “Specific Mandate” the mandate to allot and issue the Option Shares to be sought at the EGM “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subscription Conditions” the conditions precedent to the closing of the subscription of the Option Shares in each tranche, which have been set out in the paragraph headed “Subscription Conditions for the Investor’s Subscription in Each Tranche” above

• “Subscription Price” the price of issue of the Option Shares, the determination mechanism of which are set out in the paragraph headed “Equity Line of Credit and Option” above

• “Takeovers Code” the Hong Kong Codes on Takeovers and Mergers “Third Party New Shares” the Shares or securities convertible into the Shares to be issued to any third party other than the Investor at a subscription price per Share below the Subscription Price per Option Share

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“Threshold Price” a price per Share set by the Company in the Agreement below which the Company does not wish to allot and issue Shares to the Investor, which price shall not be less than HK$0.09 per Share unless otherwise agreed by the Company and the Investor

• “Total Commitment” the subscription for an aggregate total of 568,000,000 Option Shares under the Option by the Investor, where the aggregate nominal value of such Shares is HK$5,680,000

“Trading” trading and dealing in the Shares on the Stock Exchange (without restriction) and the terms “ Traded ” and “ Tradable ” shall be construed accordingly

• “Trading Day(s)” a day (days) on which the securities of the Company are traded on the Stock Exchange, and if on any business days of the Stock Exchange, the securities of the Company are suspended from trading on the Stock Exchange, such day(s) will be excluded from being counted in the Trading Day(s)

• “Tranche Notice(s)” written notice(s) issued by the Company to the Investor being delivered on any Trading Day during the Commitment Period in respect of the exercise of part or all of the Option by the Company

• “Tranche Notice Date” the Trading Day on which a Tranche Notice is delivered by the Company to the Investor pursuant to the Agreement

• “US”

the United States of America

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “%” per cent.

By order of the Board Lim Ho Sok Chairman

Hong Kong, 17 June 2011

As at the date of this announcement, the executive Directors are Mr. Lim Ho Sok and Mr. Shin Min Chul, the non-executive Director is Mr. Pang Ngoi Wah Edward and the independent non-executive Directors are Mr. Liew Swee Yean, Mr. Tam Tak Wah and Mr. Young Yue Wing Alvin.

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