10:07 MOULIN INT'L<00389> - Announcement & Resumption (5) Status The Convertible Bonds will constitute direct, senior, unsubordinated, unconditional and, subject to certain conditions, unsecured obligations of the Company and will at all times rank pari passu and without any preference or priority among themselves. The payment obligations of the Company under the Convertible Bonds will at all times rank at least equally with all of its other present and future direct, senior, unsubordinated, unconditional and unsecured obligations, save for exceptions as may be required by mandatory provisions of law and subject to certain conditions. Negative Pledges So long as any Convertible Bond remains outstanding, the Company has agreed that, unless certain conditions are met, it will not create or permit to subsist, and the Company will procure that no Material Subsidiary (as defined in the Terms and Conditions) will create or permit to subsist any Security upon the whole or any part of its undertaking, assets or revenues, present or future, to secure any International Investment Securities or to secure any guarantee of or indemnity in respect of, any International Investment Securities. Listing Application will be made for the listing of the Convertible Bonds on the Hong Kong Stock Exchange. No application will be made for the listing of the Convertible Bonds on any other stock exchange. Application will be made for the listing of, and permission to deal in, the Conversion Shares on the Hong Kong Stock Exchange. Comparison of the Conversion price The initial Conversion price of HK$7.098 per Conversion Share (subject to adjustment) represents (i) a premium of approximately 10.9% to the closing price of HK$6.4 per Share as quoted on the Hong Kong Stock Exchange on 18 February 2005; (ii) a premium of approximately 14.3% to the average closing price of HK$6.21 per Share as quoted on the Hong Kong Stock Exchange for the last 5 trading days up to and including 18 February 2005; and (iii) a premium of approximately 13.4% to the average closing price of HK$6.26 per Share as quoted on the Hong Kong Stock Exchange for the last 10 trading days up to and including 18 February 2005. Conversion Shares For illustrative purpose and assuming conversion at HK$7.098 per Conversion Share (subject to adjustment for, among other things, subdivision or consolidation of the Shares, bonus issues, rights issues and other dilutive events), the Convertible Bonds with an aggregate principal amount of HK$321 million are convertible into approximately 45,224,006 Conversion Shares, representing approximately 9.1% of the existing issued share capital of the Company and approximately 7.5% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares and the New Shares to be issued pursuant to the Placing and Subscription Agreement. The Conversion Shares will be issued pursuant to the general mandate given by the Shareholders to the Directors at the annual general meeting of the Company held on 14 June 2004. Completion of the Subscription Agreement is subject to the satisfaction and/or waiver of the conditions precedent therein. In addition, the Subscription Agreement may be terminated in certain circumstances. As the Subscription Agreement may or may not complete, Shareholders and prospective investors are advised to exercise caution when dealing in the Shares of the Company. The Company will promptly notify the Hong Kong Stock Exchange if it becomes aware of any dealings in the Convertible Bonds by any connected person (as defined in the Listing Rules) of the Company. A shareholders' circular in respect of the listing of the Convertible Bonds will be despatched no later than 26 April 2005. An announcement will be made by the Company upon completion of the Subscription Agreement. 2. PLACING OF EXISTING SHARES AND SUBSCRIPTION TOP-UP FOR NEW SHARES PLACING AND SUBSCRIPTION AGREEMENT DATED 19 FEBRUARY 2005 Parties