10:27 SHENZHEN INT'L<00152>&SHENZHENEXPRESS<00548>- JA & Resume-4 will be terminated. The Project Company Acquisition Agreement is not conditional upon the Jade Emperor Acquisition Agreement. Apart from the obligations of Jade Emperor to return the Initial Instalment of RMB20,000,000 (approximately HK$18,867,925) to SZ Expressway and SZ Expressway to transfer the Project Company Equity back to Jade Emperor (if approval for the transfer of the Project Company Equity have been obtained or registered and the transfer back procedures have not been completed), the parties do not bear any obligation to each other. COMPLETION The transfer of the Project Company Equity shall be completed on or before the Scheduled Completion Date and on the condition that Jade Emperor has received the consideration for the Project Company Equity. If there is no occurrence of completion on or before the Scheduled Completion Date, either party has the right to rescind the Project Company Acquisition Agreement. Any party in breach of the Project Company Acquisition Agreement shall be liable for the default accordingly. Save and except the following two circumstances, each party will bear its own costs and expenses in case the transfer of the Project Company Equity cannot be completed: (1) If notice has been given by SZ Expressway to Jade Emperor indicating that it is satisfied with the due diligence result as described in subsection (c) under the paragraph headed `Conditions Precedent' above, and the failure to achieve successful completion is caused by the default of SZ Expressway, SZ Expressway will be liable to pay RMB1,000,000 (approximately HK$943,396) to Jade Emperor; (2) If notice has been given by SZ Expressway to Jade Emperor indicating that it is satisfied with the due diligence exercise as described in subsection (c) under the paragraph headed `Conditions Precedent' above, and the failure to achieve successful completion is caused by the default of Jade Emperor, Jade Emperor will be liable to pay RMB1,000,000 (approximately HK$943,396) to SZ Expressway. RETRANSFER OF PROJECT COMPANY EQUITY If SZ Expressway fails to remit the consideration for acquisition of the Project Company Equity to Jade Emperor according to the terms of the Project Company Acquisition Agreement, as specified in subsection (7) under the paragraph headed `Consideration' above, for whatever reason, SZ Expressway shall retransfer the Project Company Equity to Jade Emperor and will be liable to pay for the consequential losses. Jade Emperor will refund the Initial Instalment to SZ Expressway if the retransfer of the Project Company Equity occurs. JADE EMPEROR ACQUISITION AGREEMENT DATE OF AGREEMENT 19 March 2005 PARTIES Purchasers: (1) Mei Wah (2) Flywheel Vendors: (1) Hubei Investment Limited (`First Vendor') (2) Wong Chik Lim Holdings (H.K.) Limited (`Second Vendor') (3) Sabagaya Sendirian Berhad (`Third Vendor') Guarantors for the Vendors: (1) Lee San Choon (2) Tan Leong Min (3) Wong Chik Lim Other parties: (1) SZ Expressway (2) Jade Emperor ACQUISITION OF JADE EMPEROR SALE SHARES AND REPURCHASE OF REPURCHASE SHARES Mei Wah will acquire from the Vendors 112,000,000 shares (representing 40% of the existing issued capital of Jade Emperor) and Flywheel will acquire from the Vendors 126,000,000 shares (representing 45% of the existing issued capital of Jade Emperor), free and clear of all encumbrances. The par value of the shares is US$0.10 each. For simultaneous completion with the sale and purchase of the Jade Emperor Sale Shares, the Third Vendor will sell its remaining 42,000,000 shares (representing 15% of the existing issued capital of Jade Emperor), i.e. the Repurchase Shares, at Project Company Net Consideration, back to Jade Emperor for cancellation by Jade Emperor subsequent to the Repurchase. Upon completion of the Jade Emperor Acquisition, the total number of Jade Emperor shares will be 238,000,000 and the shareholding of Mei Wah and Flywheel in Jade Emperor will be approximately 47.06% and 52.94%, respectively. The following is a breakdown of the acquisition of Jade Emperor Sale Shares and the Repurchase: Vendor No. of Jade No. of Jade No. of Jade No. of Jade Emperor Emperor Emperor Emperor consideration by internal resources and external loan financing; (2) On top of the consideration to be paid to Jade Emperor, SZ Expressway will also be responsible for payment of the profit tax arising from the gain on disposal of the Project Company Equity to the PRC tax authority. It is estimated by SZ Expressway that the amount of such profit tax payable is about RMB15,442,611 (approximately HK$14,568,501). Parties will apply for assessment of tax within 5 working days upon completion of the registration procedures for the transfer of the Project Company Equity with the relevant tax authority. SZ Expressway will be obliged to pay the profit tax within 15 working days after the exact amount of profit tax payable is ascertained by the relevant tax authority; (3) Within 5 working days upon signing of the Project Company Acquisition Agreement, the parties will apply for approval from the original approving authority, namely Department of Commerce of Hubei Province for (i) the transfer of the Project Company Equity under the Project Company Acquisition Agreement, (ii) the conversion of the Project Company to a Sino-foreign joint venture enterprise and (iii) the replacement of directors and legal representative of the Project Company; (4) The Initial Instalment of RMB20,000,000 (approximately HK$18,867,925) is payable by SZ Expressway into the Instalment Account within 5 working days upon (i) granting of the approval certificate by the original approving authority to effect the conversion of the Project Company to a Sino-foreign joint venture enterprise or (ii) granting of approval by the SZ Expressway Shareholders in general meeting on the Project Company Acquisition Agreement, whichever is the later; (5) Within 5 working days upon completion of the registration procedures regarding matters referred to in subsection (3) above, SZ Expressway will provide Jade Emperor with the Bank Undertaking, to undertake that within 15 working days upon granting of approval by Shenzhen SAFE to SZ Expressway for the purchase of foreign currency (SZ Expressway will purchase and remit HK$ outside China for payment of the consideration) for payment under the Project Company Acquisition Agreement and the refund of the Initial Instalment to the Specified Account by Jade Emperor, SZ Expressway will remit the full amount of the consideration for the Project Company Acquisition into the Designated Account, otherwise the Undertaking Bank will be liable to pay for the foreign currency equivalence to Jade Emperor; (6) Within 3 working days of SZ Expressway's tendering of the consent given by Shenzhen SAFE for the purchase of foreign currency for payment under the Project Company Acquisition Agreement together with a written notification regarding details of the Specified Account, Jade Emperor will refund the Initial Instalment to SZ Expressway by remitting the same into the Specified Account; and (7) Within 15 working days of approval by Shenzhen SAFE to SZ Expressway for the purchase of foreign currency for payment under the Project Company Acquisition Agreement and the refund of the Initial Instalment to the Specified Account by Jade Emperor, SZ Expressway will remit the full amount of consideration for acquisition of the Project Company Equity into the Designated Account, subject to agreed set-offs pursuant to the Project Company Acquisition Agreement. CONDITIONS PRECEDENT The Project Company Acquisition Agreement is conditional upon: (a) approval by SZ Expressway Shareholders in its general meeting on the Project Company Acquisition Agreement and the approval by SZ International Shareholders in its general meeting on the Jade Emperor Acquisition Agreement within 85 days of signing of the Project Company Acquisition Agreement; (b) all other necessary third party consents and approvals for the Project Company Acquisition Agreement including but not limited to those from Hubei Communications Bureau , the original approving and registering authorities of the Project Company, Shenzhen SAFE as well as the Stock Exchange; and (c) SZ Expressway notifying Jade Emperor in writing that it is satisfied with the due diligence results on the financial, taxation, business and other legal aspects of the Project Company and the status of the equity interest in the Project Company held by Jade Emperor within 60 days of signing of the Project Company Acquisition Agreement. Condition precedent (a) is to be fulfilled within 85 days of signing. Condition (c) is to be fulfilled within 60 days of signing. There is no specific date for condition (b) and this should be fulfilled within a reasonable time. Should any of the conditions precedent not be fulfilled, the Project Company Acquisition Agreement The consideration for each of the Acquisitions together with all the other terms of the Acquisitions have been arrived at after arm's length negotiations among the relevant parties, taking into account the estimated valuation of the Project Company of approximately HK$1.21 billion as at 31 December 2004 provided by Sallmanns (Far East) Limited, an independent professional valuer. The Jade Emperor Acquisition constitutes a major transaction for SZ International under the Listing Rules and is therefore conditional upon approval by SZ International Shareholders in general meeting. As far as the SZ International Directors are aware, no SZ International Shareholder or its associate has a material interest in the Jade Emperor Acquisition and would therefore be required to abstain from voting at the relevant general meeting of SZ International on the relevant resolution(s) approving the Jade Emperor Acquisition. A circular containing, among other things, details of the Jade Emperor Acquisition and a notice of an extraordinary general meeting will be dispatched to SZ International Shareholders as soon as practicable in accordance with the requirements of the Listing Rules. The Acquisitions constitute a major transaction for SZ Expressway under the Listing Rules. Since Xin Tong Chan, a wholly-owned subsidiary of SZ International is a controlling shareholder of SZ Expressway holding 30.03% of the SZ Expressway Shares, SZ International is a connected person of SZ Expressway. By virtue of SZ International's interest in the Jade Emperor Acquisition, the Acquisitions also constitute a connected transaction for SZ Expressway under Rule 14A.13(1)(b)(i) of the Listing Rules and are therefore subject to independent SZ Expressway Shareholders' approval in general meeting. Xin Tong Chan will abstain from voting at the extraordinary general meeting on the relevant resolution(s) approving the Acquisitions. As far as the SZ Expressway Directors are aware, except for Xin Tong Chan and its associates, no other SZ Expressway Shareholder has a material interest in the Acquisitions and would therefore be required to abstain from voting at the relevant general meeting of SZ Expressway on the relevant resolution(s) approving the Acquisitions. A circular containing, among other things, details of the Acquisitions, the recommendation from the independent board committee in relation to the Acquisitions, the opinion from the independent financial adviser and a notice of an extraordinary general meeting will be dispatched to SZ Expressway Shareholders as soon as practicable in accordance with the requirements of the Listing Rules. Trading in the SZ International Shares and the SZ Expressway Shares was suspended at the request of SZ International and SZ Expressway with effect from 9:30 a.m. on 21 March 2005 pending release of this announcement. Application has been made to the Stock Exchange for trading to resume from 9:30 a.m. on 23 March 2005. Trading of SZ Expressway A Shares on the Stock Exchange of Shanghai was also suspended at the request of SZ Expressway from 9:30 a.m. on 21 March 2005. Trading of SZ Expressway A Shares was resumed from 10:30 a.m. on 22 March 2005. PROJECT COMPANY ACQUISITION AGREEMENT DATE OF AGREEMENT 19 March 2005 PARTIES Purchaser: SZ Expressway Vendor: Jade Emperor Guarantors for Vendor: (1) Lee San Choon (2) Tan Leong Min (3) Wong Chik Lim PROJECT COMPANY EQUITY SZ Expressway will acquire from Jade Emperor 15% of the equity interest in the Project Company, free and clear of all encumbrances. The sole business of the Project Company is the ownership and operation of Wuhuang Expressway for a period of 25 years commencing on 23 September 1997. The Project Company will be converted from a wholly foreign-owned enterprise to a Sino-foreign joint venture enterprise upon transfer of the aforesaid equity interest. The board of directors of the Project Company comprises five directors. At time of transfer of the Project Company Equity, Jade Emperor will remove all the directors that had been nominated by it from the board of directors of the Project Company. It will then nominate four members while the SZ Expressway will nominate one member to form a new board of directors. SZ Expressway will also nominate the legal representative (chairman) of the Project Company. CONSIDERATION (1) The consideration for acquisition of the Project Company Equity payable by SZ Expressway to Jade Emperor is HK$178,263,228 and will be satisfied entirely in cash. SZ Expressway will finance the