WeRide Inc. — Capital/Financing Update 2001

Aug 15, 2001

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement.

FAR EAST PHARMACEUTICAL TECHNOLOGY COMPANY LIMITED

（遠 東 生 物 制 藥 科 技 有 限 公 司）

(incorporated in the Cayman Islands with limited liability)

ISSUE OF UP TO US$12,000,000 2.5 PER CENT.

UNLISTED AND UNSECURED REDEEMABLE CONVERTIBLE BONDS DUE 2004

On 14th August, 2001, the Company and CSFB entered into the Subscription Agreement in relation to the subscription of Bonds.

Under the Subscription Agreement, among other things, (i) the Company agreed to issue and CSFB agreed to purchase the Original Tranche 1 Bonds with an aggregate principal amount of US$4,000,000 (equivalent to approximately HK$31,200,000), (ii) the Company granted to CSFB an option during a limited period, to require the Company to issue the Additional Tranche 1 Bonds in the principal amount of up to US$4,000,000 (equivalent to approximately HK$31,200,000) on substantially the same terms as in the Original Tranche 1 Bonds and (iii) CSFB granted to the Company an option during a limited period after the conversion of the last Original Tranche 1 Bond, to issue and to require CSFB to subscribe and pay for the Tranche 2 Bonds in the principal amount of up to US$4,000,000 (equivalent to approximately HK$31,200,000) on substantially the same terms as in the Original Tranche 1 Bonds. The Bonds bear interest at the rate of 2.5 per cent. per annum and are due on 14th August, 2004, being the Maturity Date.

Completion of the issue of the Bonds is subject to certain conditions which are set out in the paragraph headed "Conditions" below.

The Original Tranche 1 Bonds are convertible into Shares at a conversion price equal to, at the option of CSFB, either (i) the Fixed Conversion Price; or (ii) the Floating Conversion Price.

Pursuant to the Subscription Agreement, the Company has also granted the Subscription Right to CSFB, pursuant to which CSFB is entitled to subscribe for up to 4,741,641 Shares at a subscription price of HK$1.645, which is equal to the Fixed Conversion Price for the Tranche 1 Bonds. The Subscription Right is exercisable by CSFB at any time from and including the Original Tranche 1 Bonds Closing Date up to and including the Maturity Date.

The terms of the Subscription Agreement were negotiated on an arm's length basis and the Directors believe that they are fair and reasonable so far as the Company is concerned.

The Original Tranche 1 Bonds will be issued and the Subscription Right will be granted pursuant to the Existing General Mandate and the issue of the Additional Tranche 1 Bonds (to the extent that such issue is not within the authority of the Existing General Mandate) and the Tranche 2 Bonds will be subject to the approval of the shareholders of the Company.

SUBSCRIPTION AGREEMENT

Date:

14th August, 2001

Issuer:

The Company

Form of Bonds/Option for the issue of the Additional Tranche 1 Bonds and Tranche 2 Bonds:

The convertible bonds shall be issued in up to two tranches with the Original Tranche 1 Bonds being issued on the Original Tranche 1 Bonds Closing Date.

The Company has granted an option to CSFB under the Subscription Agreement to require the Company to issue the Additional Tranche 1 Bonds, such option to be exercisable by CSFB in the following manner:

(a) to the extent that the grant of such option, the issue of such Additional Tranche 1 Bonds and the allotment and issue of Shares pursuant to the exercise of such Additional Tranche 1 Bonds is permitted pursuant to the Existing General Mandate, during the period from the Original Tranche 1 Bonds Closing Date to the New AGM Date (as defined below) (the "Current Mandate Period"); and

(b) during the period from the business day immediately following the earlier of:

(i) the date on which an ordinary resolution having been passed by the shareholders of the Company to approve the grant of such option, the issue of the Additional Tranche 1 Bonds and the allotment and issue of Shares pursuant thereto; and

(ii) the conclusion of the 2001 annual general meeting of the Company, (the "New AGM Date")

and ending on (and including) the date that is three years after the Original Tranche 1 Bonds Closing Date (the "New Mandate Period").

CSFB may exercise such option once during the Current Mandate Period, and once during the New Mandate Period. The aggregate principal amount of the Additional Tranche 1 Bonds to be issued pursuant to the exercise of such option by CSFB shall not exceed US$4,000,000 (equivalent to approximately HK$31,200,000). The Additional Tranche 1 Bonds shall be issued by the Company within 10 business days after exercise of such option by CSFB.

The Additional Tranche 1 Bonds shall, if issued, be on substantially the same terms as the Original Tranche 1 Bonds set out below save for, among other things, the principal amount, the number of Additional Tranche 1 Bonds and the number of Shares to be issued upon conversion.

CSFB has granted an option to the Company under the Subscription Agreement to issue and require CSFB to subscribe and pay for the Tranche 2 Bonds, such option to be exercisable by the Company within 60 calendar days following and subject to the conversion of the last Original Tranche 1 Bond and subject to the satisfaction of certain conditions. The Tranche 2 Bonds shall be issued by the Company within 10 business days after exercise of such option by the Company.

The Tranche 2 Bonds shall, if issued, be for a principal amount of up to US$4,000,000 (equivalent to approximately HK$31,200,000) and be on substantially the same terms as the Original Tranche 1 Bonds set out below save for, among other things, the Fixed Conversion Price for the Tranche 2 Bonds shall be determined by reference to the closing prices of the Shares immediately prior to the Tranche 2 Bonds Closing Date.

Subscriber of the Bonds:

CSFB, an independent third party not connected with any of the directors, chief executive and substantial shareholders of the Company or any of its subsidiaries or their respective associates (as defined in the Listing Rules)

Principal amount of Original Tranche 1 Bonds:

US$4,000,000 (equivalent to approximately HK$31,200,000), payable in cash by CSFB on the Original Tranche 1 Bonds Closing Date

Original Tranche 1 Bonds Closing Date:

14th August, 2001

Principal terms of the Bonds

Interest:

The Bonds bear interest from the Original Tranche 1 Bonds Closing Date in respect of the Original Tranche 1 Bonds, from the applicable Additional Tranche 1 Bonds Closing Date in respect of the Additional Tranche 1 Bonds and from the applicable Tranche 2 Bonds Closing Date in respect of the Tranche 2 Bonds at the rate of 2.5 per cent. per annum. Interest is payable semi-annually in arrears on 30th June and 30th December in each year, with the first interest payment date to fall on 30th December, 2001 for the Original Tranche 1 Bonds.

Transferability:

CSFB agrees with the Company that it will not assign or transfer any of the Bonds to any third party other than its subsidiary or holding company or subsidiary of such a holding company without the prior written consent of the Company and, if so required, subject to the prior approval of the Stock Exchange.

The Company and its Directors undertake to the Stock Exchange that they will inform the Stock Exchange of any dealings by any connected persons (as defined in the Listing Rules) of the Company or their respective associates (as defined in the Listing Rules) in the Bonds from time to time immediately upon the Company becoming aware of any such dealings.

Conversion price:

At the option of CSFB, either at (i) the Fixed Conversion Price; or (ii) the Floating Conversion Price, provided that the conversion price shall not be less than the par value of the Shares on the date of conversion unless permitted by law and in compliance with the Listing Rules.

Conversion period:

Bonds may be converted, at the option of CSFB, at any time from and including the date falling 14 calendar days after the Original Tranche 1 Bonds Closing Date (or the Additional Tranche 1 Bonds Closing Date in respect of the Additional Tranche 1 Bonds or the Tranche 2 Bonds Closing Date in respect of the Tranche 2 Bonds, if issued) up to the close of trading on the day falling one week prior to the Maturity Date.

Conversion shares:

The Original Tranche 1 Bonds (and the Additional Tranche 1 Bonds and the Tranche 2 Bonds, if issued) are convertible into new Shares at the option of CSFB at either (i) the Fixed Conversion Price, or (ii) the Floating Conversion Price, in each case at any time during the relevant conversion period (as set out above). Such Shares which fall to be issued on conversion of the Bonds shall rank pari passu in all respects with Shares in issue on the date of issue of such Shares pursuant to the conversion.

Maturity:

14th August, 2004. Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by the Company at 100 per cent. of the principal amount at maturity.

Right of first refusal, participation right and exchange right:

The Company may offer and sell Equity-Linked Securities. However, so long as there are Bonds outstanding, persons holding in aggregate not less than 50 per cent. in aggregate of the Bonds then outstanding shall have the Right of First Refusal.

If the Right of First Refusal is not exercised, any holder of the Bonds shall have the Participation Right, the proportion of such participation to be determined by reference to the response of such holder and the other holders to the proposed private placement under the Participation Right.

Furthermore, holders of the Bonds are given the right to exchange the outstanding Bonds for the new issue of the Equity-Linked Securities up to an aggregate principal amount of their outstanding Bonds on the same terms of those Equity-Linked Securities, save as to the maturity date, which shall remain unchanged.

In certain circumstances set out in the Subscription Agreement, the Bonds may be redeemed early for an amount between 110 per cent. and 112 per cent. of the principal amount of the Bonds plus accrued interest.

Conditions

Completion of the Subscription Agreement is conditional on, among other things, the satisfaction of certain conditions, including:

(i) the granting by the Stock Exchange of listing of and permission to deal with the Shares which may be issued pursuant to the conversion of the Bonds by the dates stipulated under the Subscription Agreement and the Shares which may be issued pursuant to the exercise of the Subscription Right;

(ii) the obtaining of the approvals from the shareholders of the Company for the grant of the option exercisable by CSFB in relation to the issue of the Additional Tranche 1 Bonds; the issue of the applicable portion of the Additional Tranche 1 Bonds and the issue of Shares pursuant to the exercise of the Additional Tranche 1 Bonds and/or the issue of the Tranche 2 Bonds and the issue of Shares pursuant to the exercise of the Tranche 2 Bonds; and

(iii) the delivery by the Company to CSFB of certain documents specified in the Subscription Agreement by the closing date for the relevant Bonds.

Escrow:

An escrow agreement (the "Escrow Agreement") was made on 13th August 2001 between the Company, CSFB and Bermuda Trust (Hong Kong) Limited as escrow agent (the "Escrow Agent") in connection with the subscription of the Tranche 1 Bonds.

CSFB will deposit any subscription funds required to an account of the Escrow Agent. The subscription funds will be released by the Escrow Agent to the Company subject to the terms and conditions set out in the Escrow Agreement.

The Company and CSFB have agreed that another escrow agreement will be entered into before the issue (if applicable) of the Additional Tranche 1 Bonds or the Tranche 2 Bonds on similar terms to the Escrow Agreement.

Subscription right:

Pursuant to the Subscription Agreement, the Company also granted to CSFB an option with the following principal terms for the subscription of up to 4,741,641 new Shares:

(1) Exercise price: from and including the Original Tranche 1 Bonds Closing Date up to and including the Maturity Date; and

(2) Exercise price: HK$1.645, being the Fixed Conversion Price for the Original Tranche 1 Bonds, representing a premium of about 22.76 per cent. over the closing price of HK$1.34 per Shares as at 13th August, 2001 (the trading day immediately prior to the date of the Subscription Agreement).

General mandate:

The maximum number of new Shares which may be issued upon conversion of the Original Tranche 1 Bonds based on the Fixed Conversion Price is 18,966,565 representing approximately 5.51 per cent. and approximately 5.16 per cent. of the existing issued share capital and the enlarged issued share capital respectively. Upon exercise of the Subscription Right in full, 4,741,641 new Shares, representing approximately 1.38 per cent. and approximately 1.29 per cent. of the existing issued share capital and enlarged issued share capital respectively, will be issued by the Company. The total number of Shares which may be issued upon full conversion of the Original Tranche 1 Bonds and the exercise in full of the Subscription Right is 23,708,206 Shares, representing approximately 6.89 per cent. and approximately 6.45 per cent. of the existing issued share capital and the enlarged issued share capital respectively, which Shares, will be issued pursuant to the Existing General Mandate.

If CSFB exercises its option to require the Company to issue the Additional Tranche 1 Bonds, or the Company exercises its option to issue and require CSFB to subscribe for the Tranche 2 Bonds and the maximum number of Shares which may be issued upon full conversion of the Additional Tranche 1 Bonds or the Tranche 2 Bonds to be issued by the Company exceeds the limit under any then available general mandate granted to the board of Directors, the Company would be obliged to seek its shareholders' approval of the issue of such Shares prior to the issue of the Additional Tranche 1 Bonds or the Tranche 2 Bonds.

USE OF PROCEEDS:

The net proceeds of approximately US$3,680,000 (equivalent to approximately HK$28,704,000) derived from the issue of the Original Tranche 1 Bonds, together with the amount of HK$7,800,000 which would be received subject to and upon exercise in full of the Subscription Right (subject to adjustment as set out in the Subscription Agreement), will be used for capital expenditure in relation to the expansion of production and manufacturing facilities in relation to pharmaceutical products and general working capital purposes, provided that proceeds from the issue of the Bonds shall not be used to pay dividends to its shareholders, for the purposes of or in relation to the any repayment to or reduction of the debt of a related party (as defined under Hong Kong Statement of Standard Accounting Practice 20) or to repurchase Shares. The Company currently has no specific plan as to the use of the net proceeds for other purposes save for mentioned above.

SHAREHOLDING STRUCTURE:

As at the date of this announcement, the issued share capital of the Company is HK$34,400,000 comprising 344,000,000 Shares. Great Wall Investment Group Limited is currently the single largest shareholder of the Company, holding 249,800,000 Shares, representing approximately 72.62 per cent. of the existing issued share capital. If the maximum possible number of Shares are issued pursuant to the conversion of the Original Tranche 1 Bonds and the Subscription Right is exercised in full, 23,708,206 new Shares will be issued, representing approximately 6.89 per cent. and approximately 6.45 per cent. of the existing issued share capital and the enlarged issued share capital respectively. The shareholding interests of all the shareholders of the Company will be proportionately diluted by approximately 1.76 per cent. and the shareholding interest of Great Wall Investment Group Limited in the Company will be diluted correspondingly from approximately 72.62 per cent. to approximately 67.93 per cent..

To maintain the listing status of the Shares, the Company will procure that not less than 25 per cent. of the issued Shares, from time to time, will be held by the public.

LISTING:

No application will be made for the listing of, or permission to deal in, the Bonds and the Subscription Right on the Stock Exchange or any other stock exchange. Application will be 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 Bonds or upon exercise of the Subscription Right.

GENERAL:

Any alterations in the terms of the Subscription Right after issue must be approved by the Stock Exchange, except where the alterations take effect automatically under the existing terms of the Subscription Right.

The Additional Tranche 1 Bonds and the Tranche 2 Bonds may or may not be issued. The Company will issue a further announcement as required by the Listing Rules if any of the Additional Tranche 1 Bonds and the Tranche 2 Bonds are issued.

The terms of the Subscription Agreement were negotiated on an arm's length basis and the Directors believe that they are fair and reasonable so far as the Company is concerned.

FINANCIAL ADVISER TO THE COMPANY:

Guotai Junan Securities (Hong Kong) Limited has been appointed as the financial adviser to the Company in respect of the issue of the Bonds.

DEFINITIONS:

Unless otherwise defined herein, capitalised terms used in this announcement shall have the following meanings.

"Additional Tranche 1 Bonds" convertible bonds with an aggregate principal amount of up to US$4,000,000 which are to be issued by the Company on substantially the same terms as in the Original Tranche 1 Bonds and are to be purchased by CSFB pursuant to an option granted by the Company to CSFB

"Additional Tranche 1 Bonds Closing Date" each date on which Additional Tranche 1 Bonds are issued (if applicable)

"Bonds" Tranche 1 Bonds and Tranche 2 Bonds (if applicable)

"business day" any day on which the Stock Exchange is open for trading in Hong Kong

"CSFB" Credit Suisse First Boston (Hong Kong) Limited, an independent third party not connected with any of the directors, chief executive and substantial shareholders of the Company or any of its subsidiaries or their respective associates (as defined under the Listing Rules)

"Company" Far East Pharmaceutical Technology Company Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Stock Exchange

"Directors" directors of the Company

"Equity-Linked Securities" securities convertible into or exchangeable for securities of the same class as the issued Shares or securities substantially similar to the Bonds excluding: (i) Shares; (ii) warrants relating to Shares; (iii) convertible preference shares issued to shareholders of the Company without preference among the shareholders

"Existing General Mandate" the general mandate (to issue or otherwise deal in 20 per cent. of the issued share capital of the Company as at the date of passing the resolution) granted to the Directors by the shareholders of the Company pursuant to an ordinary resolution passed at the annual general meeting of the Company held on 27th December 2000, pursuant to which a maximum of 44,000,000 new Shares may be issued as at the date of this announcement

"Fixed Conversion Price" the conversion price of the Bonds into the Shares which is set at 125 per cent. of the average closing price per Share for the 30 business days immediately prior to (i) the date of the Subscription Agreement, being HK$1.316, which is equivalent to HK$1.645 in this case, representing a premium of about 22.76 per cent. over the closing price of HK$1.34 per Shares as at 13th August, 2001 (the trading day immediately prior to the date of the Subscription Agreement) in respect of the Tranche 1 Bonds ; and (ii) the Tranche 2 Bonds Closing Date in respect of the Tranche 2 Bonds, both subject to adjustment

"Floating Conversion Price" the conversion price of the Original Tranche 1 Bonds or, as the case may be, the Additional Tranche 1 Bonds and the Tranche 2 Bonds into the Shares which is set at 93 per cent. of the average of any four consecutive closing prices per Share as selected by CSFB during the 30 business days immediately prior to the date on which notice of CSFB is received by the Company

"Group" the Company and its subsidiaries

"Hong Kong" the Hong Kong Special Administrative Region of the People's Republic of China

"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange

"Maturity Date" 14th August, 2004, the date on which the Original Tranche 1 Bonds or as the case may be, the Additional Tranche 1 Bonds and/or Tranche 2 Bonds mature

"Original Tranche 1 Bonds" convertible bonds with an aggregate principal amount of US$4,000,000 due 2004 to be issued by the Company and purchased by CSFB pursuant to the Subscription Agreement

"Original Tranche 1 Bonds Closing Date" 14th August, 2001, the date on which the Original Tranche 1 Bonds were issued

"Participation Right" the subsequent right to participate in a privately placed offering of Equity-Linked Securities if the Right of First Refusal is not exercised

"Right of First Refusal" the right pursuant to which that holder or holders, if any, holding not less than 50 per cent. in aggregate of the outstanding Bonds shall have the right to subscribe for any privately placed Equity-Linked Securities (in accordance with the proportion of the holding of each holder relative to the aggregate principal amount of the Bonds) prior to them being offered to other persons

"Share(s)" ordinary share(s) of HK$0.10 each in the capital of the Company

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"Subscription Agreement" the agreement dated 14th August, 2001 entered into between the Company and CSFB relating to the subscription of the Bonds

"Subscription Right" the option granted by the Company to CSFB for the subscription of up to 4,741,641 new Shares pursuant to the Subscription Agreement

"Tranche 1 Bonds" Original Tranche 1 Bonds and Additional Tranche 1 Bonds (if applicable)

"Tranche 2 Bonds" convertible bonds with an aggregate principal amount of up to US$4,000,000 which are to be issued by the Company on substantially the same terms as in the Original Tranche 1 Bonds and are to be purchased by CSFB pursuant to an option granted by CSFB to the Company after the conversion of the last of the Original Tranche 1 Bonds

"Tranche 2 Bonds Closing Date" the date on which the Tranche 2 Bonds are issued (if applicable)

Unless otherwise specified in this announcement, US$1.00 = HK$7.80. No representation is made that any amounts in US$ or HK$ could have been or could be converted at such a rate or at any other rates or at all.

By Order of the Board

Far East Pharmaceutical Technology Company Limited

Cai Chong Zhen

Executive Director

Hong Kong, 14th August, 2001

Please also refer to the published version of this announcement in the i-Mail.