09:57 COMPASS PACIFIC<01188>-Announcement&Resumption of Trading-3 by a share mortgage of 25% equity interest of Star Western, a wholly owned subsidiary of APG. Up to 11 March 2005 and the date of this announcement, the principal amount outstanding is US$5.6 million (equivalent to approximately HK$43.68 million) and the interests accrued thereon of US$153,930 and US$161,632 (equivalent to approximately HK$1.2 million and HK$1.26 million) respectively. Under the 1st Acquisition Agreement, the Purchaser has conditionally agreed to subscribe for 35,569,384 Subscription Shares at US$5,753,930 (equivalent approximately to HK$44.88 million), representing approximately US$0.16177 (equivalent approximately to HK$1.26178) per Subscription Share. The Subscription Shares represent approximately 48.5% of the existing issued share capital of APG and approximately 32.66% of the enlarged share capital of APG upon completion of the 1st Acquisition. The consideration will be satisfied by setting off against the principal amount owed by APG to the Purchaser under the Loan Agreement and the interest accrued thereon as of 11 March 2005 upon completion of 1st Acquisition. Ranking The Subscription Shares shall rank pari passu in all respects with all existing Class A common stocks of APG in issue as at the date of the 1st Acquisition Agreement and are free from all encumbrances. Consideration The consideration under the 1st Acquisition has been determined after arm's length negotiations with reference to the means of payment under the 1st Acquisition, the financial and market position and prospects of the APG Group. The Directors consider that the terms of the 1st Acquisition Agreement and the subscription price thereof (being a premium of 2.4% to the unaudited consolidated net assets value of Ningbo Phoenix as at 31 December 2004) to be fair and reasonable and in the interest of Company and the Shareholders as a whole. The terms of payment of the consideration under the 1st Acquisition will allow APG to retain the amount otherwise repayble under the Loan Agreement as its working capital. Conditions Completion of the 1st Acquisition Agreement is subject to the fulfillment of, among others, the following conditions: 1. simultaneous completion of the 2nd Acquisition Agreement; 2. the approval by Shareholders in general meeting of (a) the 1st Acquisition; and (b) all other transactions contemplated under the 1st Acquisition Agreement; 3. the obtaining of all consents from government or regulatory authorities or third parties which are necessary or desirable in connection with the execution and performance of the 1st Acquisition Agreement and any of the transactions contemplated under the 1st Acquisition Agreement; 4. the legal, financial and operational due diligence on the APG Group having been completed to the satisfaction of the Group. The Purchaser may waive the condition precedents in items 1 and 3 above at any time, and such waiver may be subject to such terms and conditions as may be determined by the Purchaser. As at the date hereof, the Group has no intention to waive any of the conditions. B. 2ND ACQUISITION AGREEMENTS Date 11 March 2005 Parties (1) The Vendors, being 37 individuals and 2 limited liability companies, are the legal and beneficial owners of the Sale Shares, which represent 76.18% existing issued share capital of APG. The shareholding of the Vendors in APG ranges from 0.039% to 9.704%. Both of the two corporate Vendors are limited liability companies principally engaged in the business of financial investments. (2) The Purchaser, as purchaser. (3) APG.