09:44     STONE HOLDINGS<00409> - Announcement (5)                            

    every US$300,000 in excess of US$13,500,000 in the                        
    2005 Audited Profit, up to a total of 10% of the issued                   
    ordinary share capital of Cayman MTY as at 31 December                    
    2005. The option will be for a period of three years                      
    and exercisable at a price of US$960 per ordinary                         
    share of Cayman MTY.                                                      
                                                                              
    Non-competition undertakings                                              
    The Vendor and Mr. Chen warrant that, for a period                        
    of 10 years following the Completion Date, the                            
    existing shareholders of Beijing MTY and its direct                       
    or indirect shareholders, the Vendor and its direct                       
    or indirect shareholders will not, whether directly                       
    or indirectly, be engaged in any business in the PRC,                     
    Hong Kong, Macau and Taiwan which is in competition                       
    or potentially in competition with the businesses                         
    engaged by Cayman MTY, MTY WFOE and Beijing MTY as                        
    at the Completion Date.                                                   
                                                                              
    Mr. Chen further warrants that for so long as Mr. Chen                    
    remains as an employee of the MTY Group, he will not,                     
    whether directly or indirectly, be engaged in any                         
    businesses which is in competition or potentially in                      
    competition with the businesses of the MTY Group, and                     
    for a period of 10 years following the termination                        
    of his employment with the MTY Group, be engaged in                       
    any businesses in the PRC, Hong Kong, Macau and Taiwan                    
    which is in competition or potentially in competition                     
    with the businesses of the MTY Group, provided that                       
    if termination of the employment of Mr. Chen is by                        
    the MTY Group on grounds other than his misconduct,                       
    such undertaking shall cease to have effect.                              
                                                                              
    Conditions precedent                                                      
    Completion of the Sale and Purchase Agreement is                          
    subject to, among other things, the following                             
    conditions to be fulfilled:                                               
                                                                              
    (a)     the establishment of MTY WFOE by Cayman MTY;                      
                                                                              
    (b)     the completion of the Reorganisation, details                     
    of which are set out in the section headed "The                           
    Reorganisation" below in this announcement;                               
                                                                              
    (c)     the receipt by the Purchasers of a legal opinion                  
    from the Vendor issued by a firm of lawyers qualified                     
    to practice in the PRC confirming that:                                   
                                                                              
    (i)     the completion of conditions (a) and (b) above;                   
                                                                              
    (ii)    the legality and validity of the establishment                    
    of Beijing MTY and MTY WFOE under the laws of the PRC,                    
    and, up to the date of such legal opinion, that both                      
    Beijing MTY and MTY WFOE are not under liquidation                        
    or litigation and legitimately and effectively own                        
    their respective assets;                                                  
                                                                              
    (iii)   the respective businesses carried out by                          
    Beijing MTY and MTY WFOE do not violate the laws of                       
    the PRC;                                                                  
                                                                              
    (iv)    the respective licences, approvals and permits                    
    of Beijing MTY and MTY WFOE remain effective as at                        
    the date of such legal opinion;                                           
                                                                              
    (v)     the respective registered capital of Beijing                      
    MTY and MTY WFOE having been fully paid up;                               
                                                                              
    (vi)    the entering into of the Contractual                              
    Arrangements, details of which are set out in the                         
    section headed "The Contractual Arrangements" below;                      
    and