11:10 MAXX BIOSCIENCE<00512>-Announcement&Resumption of Trading-11 The Company, being the issuer of the Convertible Notes and the Promissory Notes; and Payton Place, the holder of the Convertible Notes and the Promissory Notes, which is beneficially owned by Ms. Lo who being a Director and the beneficial owner of Vision Ocean. Terms Reference is made to the Company's announcement dated 15 October 2003 and the Company's circular dated 22 November 2003 regarding an acquisition (`Acquisition') by the Company from Payton Place of: (i) a 86% equity interest in New Wealth Assets Limited; (ii) a 30% equity interest in Maxx Immunotech Limited; and (iii) interest bearing shareholders loan (`Loan') given by Payton Place to New Wealth Assets Limited of approximately HK$4.2 million. As the consideration of the Acquisition, the Company issued the Convertible Notes and the Promissory Notes to Payton Place in December 2003 upon completion of the Acquisition. According to the terms of the Acquisition, the Company has granted to Payton Place a right of first offer to re-purchase the equity interests in New Wealth Assets Limited and Maxx Immunotech Limited and the Loan so acquired by the Company any time provided the Company is the owner of such equity interests and the Loan. As at the Announcement Date, the Company has no intention to dispose of the equity interests in New Wealth Assets Limited and Maxx Immunotech Limited and the Loan acquired by the Company under the Acquisition. Pursuant to the terms of the Convertible Notes and the Promissory Notes, the Company shall repay Payton Place the principal amount of HK$50 million and HK$28 million respectively on the date falling thirty-six months after the issue date of the Convertible Notes and the Promissory Notes. The Convertible Notes and the Promissory Notes bear interest on the outstanding principal from the date of issue at a rate of 1.5% per annum and the interest is payable semi-annually in arrears. Under the Early Redemption Agreement, Payton Place and the Company have conditionally agreed that the Company is able to redeem the Convertible Notes and the Promissory Notes in full by payment of a sum of HK$70.2 million, representing a discount of 10% to the aggregate principal sum of the Convertible Notes and the Promissory Notes. The said sum of HK$70.2 million will be funded from the proceeds of the Open Offer. The basis of 10% discount on principal sum of Convertible Notes and Promissory Notes is determined by the commercial negotiations between the Company and Payton Place. Payton Place further agrees to waive all its entitlement in the accrued interest and further interest in the Convertible Notes and the Promissory Notes. Conditions for completion of the Early Redemption Agreement Completion of the Early Redemption is subject to, amongst other things,: (a) approval by the Independent Shareholders by way of poll at the SGM of the Open Offer; (b) the Open Offer is duly completed and the dealings in Offer Shares under the Open Offer has duly commenced; and (c) all relevant regulatory requirements, including without limitation to those under the Listing Rules, having been complied with and satisfied. Completion of the Early Redemption shall take place on or before the seventh business day following the day on which the last condition is satisfied or such other date as the parties to the Early Redemption Agreement may agree. Pursuant to the Early Redemption Agreement, if any of the conditions precedent is not fulfilled on or before 31 March 2005 (or such other date as the Company and Payton Place may agree in writing), the Early Redemption Agreement shall lapse and the parties shall be released from all obligations under the Early Redemption Agreement save for any liability arising out of any antecedent breach. The Company will make an announcement when the Early Redemption Agreement completes or lapses. 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. REASONS FOR THE EARLY REDEMPTION Under the Convertible Notes and the Promissory Notes, the Company shall pay to Payton Place an respective aggregate principal amount of HK$50 million and HK$28 million on or before 9 December 2006 together with accrued interest calculated at an interest rate of 1.5% per annum payable semi-annually in arrears.