10:25     PACIFIC ANDES<01174> - Announcement & Resumption (10)               

    exchange within 12 months thereafter. KILLP shall be                      
    entitled to re-purchase the Kyoshoku Common Shares                        
    from PAIH (BVI) at the same price as when the call                        
    option was originally exercised by PAIH (BVI). (i.e.                      
    the net asset value per share of Kyoshoku based on                        
    the audited financial statements of Kyoshoku in the                       
    past fiscal year), provided that the aggregate price                      
    shall not exceed 1.88 billion Yen (equivalent to                          
    approximately HK$142,048,000).                                            
                                                                              
    The Company will comply with the relevant                                 
    requirements under Chapters 14 and 14A of the Listing                     
    Rules in relation to options, upon the occurrence of                      
    certain events (including the expiry, transfer or                         
    exercise of the above options).                                           
                                                                              
    Pre-emptive Rights      Subject to the occurrence of                      
    certain events and the fulfillment of certain                             
    conditions, the Shareholders' Agreement sets out                          
    provisions for rights of first refusal and tag-along                      
    rights. Further particulars of such rights, events                        
    and conditions will be disclosed in the circular                          
    containing details of the Transactions to be                              
    despatched to the Shareholders.                                           
                                                                              
    Guarantee for Financial PAIH (BVI) shall arrange                          
    bank financing to Kyoshoku not exceeding                                  
      Support       1,400,000,000 Yen (equivalent to                          
    approximately HK$105,780,000) (consisting of term                         
    loan, overdraft facilities, trade finance facilities                      
    and account receivable loans) which shall be solely                       
    guaranteed by PAIH (BVI).                                                 
                                                                              
    Replacement     As at the date of the Shareholders'                       
    Agreement, KILLP, SPIA and certain of                                     
      Guarantees    Kyoshoku's existing directors have                        
    provided joint and several guarantees to customers                        
    of Kyoshoku. Such guarantees shall be withdrawn as                        
    of the effective date of the Shareholders' Agreement.                     
    Each of PAIH (BVI) and KILLP have undertaken to                           
    provide replacement guarantees in accordance with                         
    their respective relevant proportion of interest in                       
    the Common Shares in Kyoshoku for any customers who                       
    were previously granted a guarantee and who desire                        
    a replacement guarantee to secure the obligations of                      
    Kyoshoku. The replacement guarantees to be provided                       
    by PAIH (BVI) will amount to 60 million Yen                               
    (equivalent to approximately HK$4,534,000) based on                       
    the management accounts of Kyoshoku as at 30 November                     
    2004.                                                                     
                                                                              
    The aggregate amount of guarantee for financial                           
    support and the replacement guarantees to be given                        
    by PAIH (BVI) described above shall be 1,460 million                      
    Yen (equivalent to approximately HK$110,314,000).                         
                                                                              
    Conditions      The Shareholders' Agreement is                            
    conditional upon the fulfillment of the conditions                        
    precedent which are subject to the satisfaction of                        
    PAIH (BVI) in accordance with the Subscription                            
    Agreement.                                                                
                                                                              
    Effective Date  The Shareholders' Agreement shall                         
    become effective from the date on which PAIH (BVI)                        
    has become a shareholder of Kyoshoku, which shall be                      
    on or before 31 March 2005 or such other date as agreed                   
    between the parties to the Shareholders' Agreement.                       
                                                                              
    IMPLICATIONS UNDER THE LISTING RULES                                      
    The transactions contemplated under the Agreements                        
    constitute a discloseable transaction for the Company                     
    under Chapter 14 of the Listing Rules.