09:15 HON PO GROUP<00228> - Announcement & Resumption (2) details of the Placing, Share Consolidation, the change of board lot size and the refreshment of general mandate, together with notice of EGM will be despatched to the Shareholders as soon as practicable. Shareholders should note that completion of the Placing Agreement are conditional. Shareholders and potential investors should exercise caution when dealing in the Shares. (5) RESUMPTION OF TRADING At the request of the Company, trading in Shares on the Stock Exchange was suspended from 9:30 a.m. on 8 February 2005 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in Shares on the Stock Exchange with effect from 9:30 a.m. on 22 February 2005. (1) PLACING OF CONVERTIBLE NOTES Placing agreement Date 7 February 2005 Parties involved The Placing Agent and the Company Placing Agent The Placing Agent has conditionally agreed with the Company to place, on a best effort basis, to not less than six independent professional, corporate or individual investors the Convertible Notes which are proposed to be issued in an aggregate principal amount of HK$40,000,000 in maximum. The placing of the Convertible Notes is carried out in two stages. The first stage of the Convertible Notes with principal amount of HK$20,000,000 (the "First Notes") will be issued within seven days upon fulfillment of the Conditions and the second stage of the Convertible Notes with principal amount of HK$20,000,000 (the "Second Notes") will be issued within three months upon the successful issuing of the First Notes. The Placing Agent will receive a placing commission of 1% on the gross proceeds of the placing of the Convertible Notes in accordance with the aggregate amount underwritten by it, which was arrived at after arm's length negotiations between the Company and the Placing Agent. The Placing Agent is not a connected person (as defined in the Listing Rules) of the Company and is independent of and not connected with the Company nor with the directors, chief executive or substantial shareholders of the Company, and any of their subsidiaries or any of their respective associates. Placees The Placing Agent will place the Convertible Notes to not less than six placees. Such placees and their 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 and not acting in concert with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates (as defined in the Listing Rules). The placees are independent of each other and not acting in concert in respect of the Company. The Conversion Shares will be issued pursuant to the passing of the relevant resolution at the EGM. Conditions The placing of the Convertible Notes is conditional upon, among other things, the Listing Committee of the Stock Exchange having granted (either unconditionally or subject to conditions to which neither the Company nor the Subscribers shall unreasonably object) listing of and permission to deal in the Conversion Shares to be issued upon the exercise of the conversion rights attached to the Convertible Notes and the passing of the relevant resolution for the approval of the issue of the Convertible Notes at the EGM. If the conditions are not fulfilled on or before 6 May 2005 or such later date as may be agreed between the Placing Agent and the Company, the Placing Agreement will lapse and become null and void. Completion Completion of the Placing Agreement shall take place on the third business day following the date on which the conditions thereto are fulfilled (or such other date as the Company and the Placing Agent shall