10:24     PACIFIC ANDES<01174> - Announcement & Resumption (7)                

    If any of the conditions precedent set out above under                    
    the heading "1. Conditions in respect of PAIH (BVI)"                      
    has not been fulfilled for any reason whatsoever and                      
    is not waived by PAIH (BVI) on or before 24 March 2005,                   
    then PAIH (BVI) may at its sole option (but without                       
    prejudice to any other right or remedy it may have),                      
    by written notice to KILLP and Kyoshoku elect to                          
    terminate the Subscription Agreement.                                     
                                                                              
    If any of the conditions precedent set out above under                    
    the heading "2. Conditions in respect of Kyoshoku"                        
    has not been fulfilled for any reason whatsoever and                      
    is not waived by Kyoshoku on or before 14 July 2005,                      
    then Kyoshoku may at its sole option (but without                         
    prejudice to any other right or remedy it may have),                      
    by written notice to PAIH (BVI) elect to terminate                        
    the Subscription Agreement. Further announcement(s)                       
    will be made by the Company if any of such conditions                     
    are waived or if the Subscription Agreement is not                        
    completed by 31 March 2005 or is otherwise terminated.                    
                                                                              
    Post-Completion Undertakings                                              
    If any of the following post-Completion undertakings                      
    is not fulfilled by KILLP and SPIA within a reasonable                    
    time after Completion, PAIH (BVI) shall be entitled                       
    to, at its sole and absolute discretion, rescind the                      
    Subscription Agreement and the Shareholders'                              
    Agreement and KILLP and SPIA shall be jointly and                         
    severally liable to compensate PAIH (BVI) for all its                     
    losses suffered as a result. In the alternative, PAIH                     
    (BVI) may, at its sole and absolute discretion,                           
    continue with the Subscription Agreement and the                          
    Shareholders' Agreement and claim for damages from                        
    KILLP and SPIA for such breach.                                           
                                                                              
    (a)     KILLP shall obtain full discharge of Kyoshoku's                   
    obligations under an existing loan agreement in                           
    relation to certain borrowings by Kyoshoku from a bank                    
    in the amount of 800 million Yen (equivalent to                           
    approximately HK$60,446,000) as at 30 November 2004                       
    and full release and discharge of the securities                          
    thereunder,                                                               
                                                                              
    (b)     Upon the delivery of the written waivers by SPIA                  
    in relation to Kyoshoku's debt to KILLP and the                           
    allotment of the Kyoshoku Common Shares and the                           
    Kyoshoku Preferred Shares and Kyoshoku's repayment                        
    of the outstanding balance of certain subordinated                        
    loans to SPIA, SPIA, KILLP and Kyoshoku in the amount                     
    of 1,100 million Yen (equivalent to approximately                         
    HK$83,113,000) as at 30 November 2004 shall cancel                        
    the relevant subordinated loan agreement,                                 
                                                                              
    (c)     KILLP and SPIA shall have obtained the relevant                   
    written bank consent for the cancellation of the                          
    aforesaid subordinated loan, and                                          
                                                                              
    (d)     KILLP shall procure the registration of capital                   
    structure and issued shares in Kyoshoku with the Legal                    
    Affairs Bureau forthwith.                                                 
                                                                              
    The Subscription Agreement has not provided for the                       
    subscription of the Subscription Shares by PAIH (BVI)                     
    and the Kyoshoku Common Shares and the Kyoshoku                           
    Preferred Shares by KILLP being inter-conditional.                        
                                                                              
    Disputes over the terms of the Subscription Agreement                     
    shall be resolved under the laws of Japan and will                        
    be settled by arbitration at the Arbitration Centre                       
    of Tokyo.