09:35     CHINA HEALTH<00673> - Announcement & Resumption (2)                 

    sub-section headed "Conditions of the Subscription Agreements" and        
    pursuant to the terms of the Subscription Agreements, the Company will    
    issue the Convertible Bonds to the Bondholders. No new substantial        
    Shareholders may result from the conversion of the Convertible Bonds.     
                                                                              
    Conditions of the Subscription Agreements                                 
    Completion of the Subscription Agreements is conditional upon, among      
    other things:                                                             
                                                                              
    (a)        trading in the Shares on the Stock Exchange not being          
    suspended for any single period of more than ten Stock Exchange trading   
    days (excluding any suspension for the purpose of clearance by the Stock  
    Exchange and/or the Securities and Futures Commission of any              
    announcement or circular to the Shareholders relating to the issue of     
    the Convertible Bonds); and                                               
                                                                              
    (b)        the Listing Committee of the Stock Exchange granting approval  
    of the listing of, and permission to deal in, all the Conversion Shares   
    falling to be issued on the exercise of the conversion rights attached    
    to the Convertible Bonds.                                                 
                                                                              
    None of the conditions above can be waived. If the above conditions are   
    not fulfilled on or before 30 June 2005 (or such later date as may be     
    agreed between the Bondholders and the Company), the Subscription         
    Agreements will lapse.                                                    
                                                                              
    Principal Terms of the Convertible Bonds                                  
    The principal terms of the Convertible Bonds are summarised as follows:   
                                                                              
    Issuer        the Company                                                 
                                                                              
    Principal Amount        US$6.6 million in aggregate                       
                                                                              
    Denomination        US$10,000 / Bond                                      
                                                                              
    Issue Price        100% of the principal amount                           
                                                                              
    Interest        The Bonds will bear interest at a rate of 3% per annum    
    on the aggregate principal amount outstanding from time to time, grossed  
    up for any taxes and fees/costs. The interest will be payable by the      
    Company semi-annually in arrears in equal instalments starting the 180th  
    day of the date of issue of the Convertible Bonds.                        
                                                                              
    Default Interest Rate        Without prejudice to the rights of the       
    Bondholders, to the extent that interest is not paid by the Company on    
    any Convertible Bonds on the interest payment day, interest shall accrue  
    thereon from that interest payment day at a default rate of 5% per annum  
    until date of payment.                                                    
                                                                              
    Maturity Date        Four years after the issue of the Convertible Bonds  
    (or, if that is not a Business Day, the first Business Day thereafter).   
                                                                              
    Extension Option         The Maturity Date may be extended at the same    
    terms by one year at the option of the Company by way of a notice 20      
    Business Days in advance of the Maturity Date. Further announcement will  
    be made by the Company if such extension option is exercised by the       
    Company.                                                                  
                                                                              
    Conversion Price        The initial price at which Conversion Shares      
    will be issued is HK$2.525 per Conversion Share. The Conversion Price     
    will be subject to adjustment in certain circumstances in accordance      
    with the terms of the Convertible Bond instrument, including share        
    split, subdivision or consolidation of the Shares, bonus issues, rights   
    issue, capitalization of profits or reserves, capital distribution or     
    other dilutive events. In such case, the Conversion Price shall be        
    adjusted accordingly.                                                     
                                                                              
    Conversion Rights        The Convertible Bonds carry the rights to        
    convert either in whole or in part of the principal amount into           
    Conversion Shares from time to time in amounts of US$10,000 or its        
    integral multiple at the Conversion Price at any time after the issue of  
    the Convertible Bonds up to the Maturity Date at the discretion of the    
    Bondholders, where for the purpose of conversion, the exchange rate is    
    fixed at 1 US$ for 7.8 HK$.                                               
                                                                              
    Conversion Period        The period commencing on the issue date of the   
    Convertible Bonds up to the Maturity Date.                                
                                                                              
    Conversion Shares        The Conversion Shares will rank pari passu in    
    all respects with the existing Shares in issue and be issued free and     
    clear from all liens, charges, encumbrances, claims, options, and third   
    party rights and with all rights attaching thereto as at the date of      
    conversion, including the right to receive all dividends and other        
    distributions thereafter declared, paid or made on the Conversion         
    Shares.