Youzan Technology Limited — Capital/Financing Update 2007

Oct 23, 2007

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.

==> picture [41 x 46] intentionally omitted <==

SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

ANNOUNCEMENT

SUPPLEMENTAL AGREEMENT TO THE SHARE SUBSCRIPTION AGREEMENT

AND

TERMINATION OF THE SHARE SUBSCRIPTION AGREEMENT AND SUPPLEMENTAL AGREEMENT TO THE SHARE SUBSCRIPTION AGREEMENT

The Board would like to announce that on 16 October 2007, the Company, Syscan Manufacturing and Luck Fame entered into the Supplemental Agreement to vary and amend the terms of the Share Subscription Agreement, including:

1. Luck Fame shall, on or before 20 October 2007, pay to the Company RMB126,500,000, being the total outstanding balance of the 4th and 5th instalments of the Consideration originally due for payment on 20 September 2007 and Completion Date respectively;

2. Upon full payment of the Consideration by Luck Fame, Syscan Manufacturing will allot 40,000 new shares of Syscan Manufacturing to Luck Fame; and

3. In the event that Luck Fame shall fail to make the payment according to the aforesaid time frame, the Company shall have the options to (i) terminate the Share Subscription Agreement and the Supplemental Agreement, retain all Consideration already received from Luck Fame and that Luck Fame does not have any rights to obtain any shares of Syscan Manufacturing; or (ii) demand payment of the unpaid amount of the Consideration within a specified time plus a default interest of 0.05% per day on all unpaid amount of the Consideration by Luck Fame, and Luck Fame will be responsible to the Company and Syscan Manufacturing for any loss arose, and Luck Frame shall pay to the Company an amount of RMB10,995,271.86 if Bank of China, Shenzhen Branch ceases to waive payment of loan interests of RMB10,995,271.86 to Syscan Optoelectronics.

* For identification purposes only

– 1 –

As at the date hereof, the Company still has not received payment of RMB126,500,000 from Luck Fame. In light of default of payment of the outstanding Consideration by Luck Fame for a long time and after negotiation between the Company and Luck Fame, the Board announces that the Company decided to terminate the Share Subscription Agreement and the Supplemental Agreement with immediate effect.

Reference is made to the announcement (the “Announcement”) of Syscan Technology Holdings Limited (the “Company”) dated 16 July 2007, in relation to, among other things, the very substantial disposal regarding the Deemed Disposal as a result of the Share Subscription. Capitalised terms used in this announcement shall have the same meanings as those defined in the Announcement unless defined otherwise herein.

BACKGROUND

As disclosed in the Announcement, Luck Fame agreed to subscribe for and Syscan Manufacturing agreed to allot and issue 40,000 new shares of US$1 each in its share capital to Luck Fame at the Consideration of RMB184,000,000 which were payable by 5 instalments to a bank account designated by the Company.

The payment due date for the 4th instalment of the Consideration in the amount of RMB34,500,000 was 20 September 2007. As at the date hereof, the Company only received from Luck Fame the 1st, 2nd and 3rd instalments of the Consideration in the total sum of RMB57,500,000 and RMB126,050,000 (being the 4th and 5th instalments) remains outstanding.

Accordingly, the Company, Syscan Manufacturing and Luck Fame entered into a supplemental agreement on 16 October 2007 (the “Supplemental Agreement”), to alter the terms of the Share Subscription Agreement. Details of the Supplemental Agreement as well as the amendments to the Share Subscription Agreement are set out below:

THE SUPPLEMENTAL AGREEMENT

Date:

16 October 2007

Parties:

(i) the Company; (ii) Syscan Manufacturing; and

• (iii) Luck Fame

Principal terms:

The terms under the Supplemental Agreement are as follows:

1. Luck Fame shall, on or before 20 October 2007, pay to the Company RMB126,500,000, being the total outstanding balance of the 4th and 5th instalments of the Consideration originally due for payment on 20 September 2007 and Completion Date respectively;

– 2 –

1. Upon full payment of the Consideration by Luck Fame, Syscan Manufacturing will allot 40,000 new shares of Syscan Manufacturing to Luck Fame; and

2. In the event that Luck Fame shall fail to make the payment according to the aforesaid time frame, the Company shall have the options to (i) terminate the Share Subscription Agreement and the Supplemental Agreement, retain all Consideration already received from Luck Fame and that Luck Fame does not have any rights to obtain any shares of Syscan Manufacturing; or (ii) demand payment of the unpaid amount of the Consideration within a specified time plus a default interest of 0.05% per day on all unpaid amount of the Consideration by Luck Fame, and Luck Fame will be responsible to the Company and Syscan Manufacturing for any loss arose, and Luck Frame shall pay to the Company an amount of RMB10,995,271.86 if Bank of China, Shenzhen Branch ceases to waive payment of loan interests of RMB10,995,271.86 to Syscan Optoelectronics.

Notes:

• a. According to the Share Subscription Agreement, Luck Fame shall pay to a bank account designated by the Company the 4th instalment of the Consideration of RMB34,500,000 (equivalent to approximately HK$34,500,000) on or before 20 September 2007.

• b. According to the Share Subscription Agreement, Luck Fame shall pay to a bank account designated by the Company the 5th instalment of the Consideration of RMB92,000,000 (equivalent to approximately HK$92,000,000) on or before the Completion Date.

TERMINATION OF THE SHARE SUBSCRIPTION AGREEMENT AND THE SUPPLEMENTAL AGREEMENT

According to the Supplemental Agreement, if Luck Fame fails to make payment of RMB126,500,000 (being the total outstanding balance of the 4th and 5th instalments of the Consideration) to the Company on or before 20 October 2007, the Company shall have the rights to terminate the Share Subscription Agreement and the Supplemental Agreement, retain all Consideration already received from Luck Fame and that Luck Fame does not have any rights to obtain any shares of Syscan Manufacturing.

As at the date hereof, the Company still has not received payment of RMB126,500,000 from Luck Fame. In light of default of payment of the outstanding Consideration by Luck Fame for a long time and after negotiation between the Company and Luck Fame, the Board announces that the Company decided to terminate the Share Subscription Agreement and the Supplemental Agreement with immediate effect. The Consideration already received from Luck Fame in the total sum of RMB57,500,000 will be forfeited by the Company. Syscan Manufacturing has not issued and will not issue any of its shares to Luck Fame.

GENERAL

As disclosed in the Announcement, the Share Subscription and the Deemed Disposal is advantageous to the Company and the Shareholders as a whole, in that a) it releases the Group-guaranteed loans owed by Syscan Optoelectronics to banks and non-banking financial institutions; b) it eases the Group’s financial burden as a result of the reduction of the Group’s debts and liabilities due from Syscan Optoelectronics; and c) it introduces a strategic partner for the better development of Syscan Industrial Park, from which the Group will further benefit. Despite the Share Subscription Agreement and the Supplemental Agreement were terminated, the Board considers that the total sum of RMB57,500,000 forfeited by the Company can

– 3 –

ease the Group’s financial burden in the meantime. The Company is now looking for new investors for investing in the Group. The Company will inform the Shareholders and comply with the Listing Rules as and when any further development may occur.

By Order of the Board SYSCAN TECHNOLOGY HOLDINGS LIMITED Cheung Wai Chairman

Hong Kong, 23 October 2007

As at the date of this announcement, the Board comprises Mr. Cheung Wai and Mr. Zhang Ming as executive directors, and Mr. Fong Chi Wah, Mr. Jin Qingjun and Mr. Wang Ruiping as independent nonexecutive Director.

This announcement, for which the directors of Syscan Technology Holdings Limited collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to Syscan Technology Holdings Limited. The directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief:- (1) the information contained in this announcement is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this announcement misleading; and (3) all opinions expressed in this announcement have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

This announcement will remain on the “Latest Company Announcements” page on the GEM website for at least 7 days from the day of its posting and on the Company’s website at www.syscangroup.com.

– 4 –