09:43     STONE HOLDINGS<00409> - Announcement (3)                            

    times of the 35% of the 2005 Guaranteed Profit and                        
    the 2006 Guaranteed Profit given by the Vendor.                           
                                                                              
    The first payment of the Gotech Consideration and the                     
    first payment of the Richland Consideration are                           
    subject to the following conditions precedent, that                       
    is Gotech and Richland are satisfied that:                                
                                                                              
    (i)     the rights of the Preference Shares, as set out                   
    in the section headed "Rights of the Preference                           
    Shares" below in this announcement, have been                             
    regulated under the articles of association of Cayman                     
    MTY;                                                                      
                                                                              
    (ii)    the Vendor is the sole owner of Cayman MTY and                    
    has beneficial interest in the entire issued                              
    preference share capital of Cayman MTY;                                   
                                                                              
    (iii)   the legality and validity of the establishment                    
    of Beijing MTY and MTY WFOE under the laws of the PRC,                    
    and that both Beijing MTY and MTY WFOE are not under                      
    liquidation or litigation and legitimately and                            
    effectively own their respective assets;                                  
                                                                              
    (iv)    the respective businesses carried out by                          
    Beijing MTY and MTY WFOE do not violate the laws of                       
    the PRC;                                                                  
                                                                              
    (v)     the respective licences, approvals and permits                    
    of Beijing MTY and MTY WFOE remain effective; and                         
                                                                              
    (vi)    the respective registered capital of Beijing                      
    MTY and MTY WFOE having been fully paid up.                               
                                                                              
    Guaranteed profits                                                        
    Pursuant to the Sale and Purchase Agreement, the                          
    Vendor and Mr. Chen provide a guarantee to the                            
    Purchasers on, among other things, the consolidated                       
    net profits after taxation of Cayman MTY and its                          
    subsidiaries for each of the years ending 31 December                     
    2005 and ending 31 December 2006 respectively. Such                       
    guarantees are based on the unaudited net profit after                    
    taxation of Beijing MTY of approximately RMB67.2                          
    million (equivalent to approximately US$8.1 million)                      
    for the year ended 31 December 2004. Details are as                       
    follows:                                                                  
                                                                              
    For the 2005 Guaranteed Profit:                                           
    The Vendor and Mr. Chen guarantee that:                                   
                                                                              
    (i)     the 2005 Audited Profit of Cayman MTY is not less                 
    than US$8,100,000; and                                                    
                                                                              
    (ii)    the turnover derived from Beijing MTY's LBS/GPS                   
    business for the year ending 31 December 2005 is not                      
    less than 20% of the total consolidated turnover of                       
    Beijing MTY and its subsidiaries as appeared on the                       
    audited accounts of Cayman MTY for the year ending                        
    31 December 2005.                                                         
                                                                              
    In the event that the turnover derived from Beijing                       
    MTY's LBS/GPS business for the year ending 31 December                    
    2005 is less than 20% of the total turnover of Beijing                    
    MTY for the year ending 31 December 2005, the 2005                        
    Guaranteed Profit should be adjusted as follows:                          
                                                                              
    *       2005 Guaranteed Profit = US$8,100,000 x (1 + X)                   
                                                                              
    where X = 20% - (turnover derived from Beijing MTY's                      
    LBS/GPS business for the year ending 31 December                          
    2005/total turnover of Beijing MTY for the year ending                    
    31 December 2005)