09:35 CHINA SCI-TECH<00985> - Announcement & Resumption (2) Date 7 January 2005 Parties involved The Placing Agent and the Vendors Vendors Kaison Limited and Everfull International Limited Placing Agent Kingston Securities Limited is the Placing Agent and will receive a placing commission of 2.5% on the gross proceeds of the Placing paid by the Company, which was arrived at after arm's length negotiations between the Company and the Placing Agent. The Placing Agent and its ultimate beneficial owner are independent of and not connected with the Company and its connected persons (as defined in the Listing Rules) and is not a connected person of the Company. Placees The Placing Agent agreed to place the Placing Shares to not fewer than six placees (the `Placees') which will be independent individual, corporate and/or institutional investors, and who and whose ultimate beneficial owners will not be connected person(s) (as defined in the Listing Rules) of the Company and will be independent third parties and not connected with the Company and its connected persons, the placees of the placing of 3% convertible redeemable notes and the vendors and their respective associates regarding the very substantial acquisition for the 25% registered capital in Shuanghuan as announced on 18 November 2004. No Placees will become substantial Shareholders as a result of the Placing. Placing Price The Placing Price (or the Top-Up Subscription Price) of HK$0.04, which is determined between the Placing Agents and the Vendors on 7 January 2005, represents (i) a premium of about 2.56% over the closing price of HK$0.039 per Share as quoted on the Stock Exchange on the Last Trading Date; (ii) a premium of about 8.70% over the average closing price per Share of about HK$0.0368 as quoted on the Stock Exchange for the last five trading days up to and including the Last Trading Date; and (iii) a premium of about 18.34% over the average closing price per Share of HK$0.0338 as quoted on the Stock Exchange for the last ten trading days up to and including the Last Trading Date. The Placing Price was negotiated on an arm's length basis between the Company and the Placing Agent. The Directors consider that the terms of the Placing are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole. The Placing Shares The Placing Shares (or the Top-Up Subscription Shares) of 2,437,474,000 Shares represent (i) about 19.14% of the existing issued share capital of the Company divided into 12,737,372,004 Shares; and ii) about 16.06% of the issued share capital of the Company divided into 15,174,846,004 Shares as enlarged by the issue of Top-Up Subscription Shares. The 2,437,474,000 Shares to be placed by the Vendors through the Placing Agent include 1,669,624,000 Shares from Kaison Limited and 767,850,000 Shares from Everfull International Limited pursuant to the Placing Agreement. The number of Shares to be subscribed by the Kaison Limited is 1,669,624,000 Shares and by Everfull International Limited is 767,850,000 Shares pursuant to the Top-Up Subscription Agreement. Ranking of Placing Shares The Placing Shares rank pari passu amongst themselves and with Shares in issue as at the date of this announcement. Condition of the Placing The Placing is unconditional. THE TOP-UP SUBSCRIPTION AGREEMENT Date 7 January 2005 Parties involved The Company and the Vendors The Top-Up Subscription Price The Top-Up Subscription Price is HK$0.04 per Share. The Top-Up Subscription Price is the same to the Placing Price and was determined after arm's length negotiation between the Company and the Vendors with reference to the Placing Price of the Placing Shares. Number of Top-Up Subscription Shares The Top-Up Subscription Shares will be allotted and issued pursuant to the general mandate to allot, issue and deal with Shares granted to the Directors by a resolution passed at the annual general meeting of the Company held on 24 September 2004 and such general mandate was granted on the basis of the issued share capital of the Company comprising 12,187,372,004 Shares on that date. At the date of this announcement, the existing general mandate has not been utilized and based on the number of Shares in issue as at the date of the said resolution, 2,437,474,400 new Shares can be issued under the existing general mandate. The number of Top-Up Subscription Shares pursuant to the Top-Up Subscription Agreement is equivalent to the number of Placing Shares, being 2,437,474,000 Shares. Ranking of Top-Up Subscription Shares The Top-Up Subscription Shares, when issued and fully paid, will