11:05 MAXX BIOSCIENCE<00512>-Announcement&Resumption of Trading-2 Pursuant to the Early Redemption Agreement, the Convertible Notes and the Promissory Notes will be fully redeemed by payment of HK$70.2 million to Payton Place, representing a discount of 10% to the principal sum of both the Convertible Notes and the Promissory Notes. The redemption monies will be settled by the proceeds of the Open Offer. Early redemption of the Convertible Notes and Promissory Notes is permitted under the existing terms of Convertible Notes and Promissory Notes respectively. The issue of the Convertible Notes and Promissory Notes and their respective terms thereunder, details of which were set out in the Company's announcement dated 15 October 2003, was approved by the Independent Shareholders at the special general meeting of the Company held on 9 December 2003. The Open Offer and the Early Redemption are inter-conditional. In case the Open Offer does not proceed, the Company will not carry out the Early Redemption by other means. GENERAL A circular containing, amongst other things, information regarding the Open Offer and the Early Redemption Agreement, the recommendation from the independent board committee of the Company and the letter from the independent financial adviser, South China Capital Limited, to the independent board committee and Independent Shareholders will be despatched to the Shareholders as soon as practicable together with the notice of the SGM. SUSPENSION AND RESUMPTION OF TRADING At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:47 a.m. on Monday, 20 December 2004 pending the issue of this announcement. Application has been made to the Stock Exchange for resumption in trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on Friday, 7 January 2005. PROPOSED OPEN OFFER On 20 December 2004, the Company entered into the Underwriting Agreement with the Underwriters in respect of the Open Offer. Details of the Open Offer are set out below:- Basis of Open Offer: Two Offer Shares for every Share held by the Qualifying Shareholders on the Record Date on an assured basis. Qualifying Shareholders may apply for any entitlements of the Excluded Shareholders and any Offer Shares not taken up by the Qualifying Shareholders. Number of Shares in issue: 357,978,000 Shares as at the Announcement Date Number of Offer Shares: In view of the Options granted to Dr. Cao, the number of Offer Shares will be not less than 715,956,000 Offer Shares and not more than 719,868,000 Offer Shares Subscription price: HK$0.11 per Offer Share As at the Announcement Date, the number of Shares convertible under the Convertible Notes is 82,608,695 Shares of conversion price of HK$0.605 per Share. Payton Place, being the holder of the Convertible Notes, has undertaken to the Company that it will not exercise any conversion rights attached to the Convertible Notes during the period from the Announcement Date up to and including the Record Date. As at the Announcement Date, Dr. Cao has a total number of 1,956,000 Options which are outstanding and may be exercised on or before the Record Date and which, if exercised, would allow him to subscribe for up to an aggregate of 1,956,000 Shares at a price of HK$0.79 per Share. If all the subscription rights attached to the Options granted to Dr. Cao are exercised and Shares are issued pursuant to such exercise on or before the Record Date, the number of issued Shares of the Company will increase from 357,978,000 to 359,934,000 Shares and the number of Offer Shares will thus increase from 715,956,000 to 719,868,000 Offer Shares. Up to the Announcement Date, Dr. Cao has not indicated any intention to the Company on whether he will exercise his Options on or before the Record Date or not. Save for the Options and the Convertible Notes, the Company has no other derivatives, options, warrants and conversion rights or other similar rights which are convertible into Shares. Pursuant to the Underwriting Agreement, the Company has undertaken that it shall not issue any Shares or issue any Options or other securities which carry rights to acquire or convert into Shares (other than the Offer Shares) from the date of the Underwriting Agreement until after the latest time for acceptance of the Offer Shares.