09:44     KARCE INTL HOLD<01159>-Announcement&Resumption of Trading-6         

    subject to any regulatory approval                                        
                                                                              
    The Directors understand that in the event that the Group does            
    not exercise its conversion rights pursuant to (c) above and              
    Ascalade Inc. does not, after the completion of Public Listing            
    Event, exercise its rights to redeem the Convertible Debentures           
    by issuing Ascalade Inc. Shares pursuant to (d) above nor to              
    satisfy its obligation to repay the principal amount of the               
    Convertible Debentures due at maturity by issuing Ascalade Inc.           
    Shares pursuant to (e) above, the Group shall be able to receive          
    the outstanding principal amount together with all accrued and            
    unpaid interest thereon of its Convertible Debentures in cash             
    upon maturity.                                                            
                                                                              
    Relevant major terms of the Warrants:                                     
                                                                              
    Right to Ascalade Inc. Shares - Each whole Warrant will be                
    exercisable to acquire, subject to adjustment(s), one Ascalade            
    Inc. Share at any time until November 2007 for an exercise price          
    (subject to adjustment(s)) to be determined as follows:                   
                                                                              
    (a)     in the event Public Listing Event has been completed by the       
    time of such exercise, the exercise price per Ascalade Inc. Share         
    shall be equal to a 15% premium to the share price pursuant to            
    Public Listing Event; or                                                  
                                                                              
    (b)     in the event Public Listing Event has not been completed by       
    the time of such exercise, the exercise price shall be equal              
    to CAD$1.15 (approximately HK$ 7.25) per Ascalade Inc. Share.             
                                                                              
    Completion:                                                               
                                                                              
    Completion shall take place on or before 30th April, 2005 or              
    such other date as the parties agreed in writing. There is no             
    termination provision contained in the Assignment and Unit                
    Subscription Agreements to terminate the same save as the right           
    to rescind the Assignment and Unit Subscription Agreements due            
    to non-fulfillment of the conditions as mentioned above.                  
                                                                              
    INFORMATION OF THE GROUP AND ASCALADE INC.                                
                                                                              
    The Group is principally engaged in the businesses of                     
    manufacturing and distribution of electronic calculators and              
    organizers, conductive silicon rubber keypads, printed circuit            
    boards, electronic toys products and cordless telephone                   
    products.                                                                 
                                                                              
    Ascalade Inc. is a corporation incorporated in November, 2004             
    pursuant to the laws of the Province of British Columbia. Its             
    only substantial assets are its direct or indirect shareholdings          
    in (a) Ascalade Communications Group which is principally                 
    engaged in the design, manufacture and distribution of cordless           
    phones and other telecommunications products and (b) Arkon Group          
    which is principally engaged in the businesses of research and            
    design of consumer electronics products and the sales and                 
    marketing of these products.                                              
                                                                              
    No accounts of Ascalade Inc. is available as at the date of this          
    announcement. The Directors are advised that Ascalade Inc. is             
    currently preparing its financial statements and as a result,             
    the Group is not able to provide financial information relating           
    to the Ascalade Group at this stage. However, the Group will              
    make relevant financial disclosure in the circular in relation            
    to the Transactions.                                                      
                                                                              
    The Directors also understand that apart from the Agreements,             
    Ascalade Inc. had also issued or may issue the following                  
    securities ("Other Securities") as at the date of the Agreements: