10:37 TONIC IND HOLD<00978> - Announcement (3) Closure of register of members The register of members of the Company will be closed from Friday, 18 February 2005 to Thursday, 24 February 2005, both dates inclusive. No transfer of Shares will be registered during this period. TERMS OF THE RIGHTS ISSUE Subscription Price HK$0.20 per Rights Share, payable in full by a Qualifying Shareholder upon acceptance of the provisional allotment of the Rights Shares under the Rights Issue or application for excess Rights Shares or when a renouncee of any provisional allotment of the Rights Shares or a transferee of nil-paid Rights Shares applies for the Rights Shares. The Subscription Price represents: (i) a discount of approximately 25.9% to the closing price of HK$0.27 per Share as quoted on the Stock Exchange on 28 January 2005, being the date of this announcement; (ii) a discount of approximately 22.9% to the average closing price of HK$0.2595 per Share for the 10 consecutive trading days up to and including 28 January 2005; (iii) a discount of approximately 23.8% to the average closing price of HK$0.2623 per Share for the 30 consecutive trading days up to and including 28 January 2005; (iv) a discount of approximately 18.9% to the theoretical ex-right price of HK$0.2467 based on the closing price of HK$0.27 per Share as quoted on the Stock Exchange on 28 January 2005; (v) a discount of approximately 67.1% to the audited consolidated net tangible assets value per Share of approximately HK$0.6081 as at 31 March 2004; and (vi) a discount of approximately 67.6% to the unaudited consolidated net tangible assets value per Share of approximately HK$0.6164 as at 30 September 2004. The Subscription Price was arrived at after arm's length negotiation between the Company and Success Forever with reference to the market price of the Shares under the prevailing market conditions. The Directors consider the terms of the Rights Issue to be fair and reasonable and in the best interests of the Group and the Shareholders as a whole. Basis of provisional allotments: One Rights Share (in nil-paid form) for every two existing Shares held by the Qualifying Shareholders as at the close of business on the Record Date. Status of the Rights Shares The Rights Shares (when allotted, issued and fully paid) will rank pari passu with the then existing Shares in issue in all respects. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which are declared, made or paid after the date of allotment and issue of the Rights Shares. Certificates for the Rights Shares Subject to the fulfillment or the waiver by Success Forever of the conditions of the Rights Issue, certificates for all fully-paid Rights Shares are expected to be posted by Thursday, 17 March 2005 to those Qualifying Shareholders who have paid for and have accepted the Rights Shares, at their own risk. Fractions of the Rights Shares The Company will not provisionally allot and issue and will not accept application for any fraction of the Rights Shares. The Company will sell any nil-paid Rights Shares created by adding fractions of the Rights Shares in the market, if any, and will keep the net proceeds for its own benefit. Application for excess Rights Shares The Qualifying Shareholders shall be entitled to apply for any unsold entitlements of the Excluded Shareholders, any unsold Rights Shares created by adding together fractions of the Rights Shares and any Rights Shares provisionally allotted but not accepted by the Qualifying Shareholders. Application may be made by completing the form of application for excess Rights Shares and lodging the same with a separate remittance for the excess Rights Shares being applied for. The Board will allocate the excess Rights Shares at its discretion, but on a fair and reasonable basis as far as practicable, and will give preference to topping-up odd lots to whole board lots.