09:47 AV CONCEPT HOLD<00595> - Announcement & Resumption (2) Parties AVCC as seller and BreconRidge as purchaser Please refer to the section headed "Information on the Group, AV Chaseway and BreconRidge" below for information on AVCC and BreconRidge. The Disposal Pursuant to the Agreement, AVCC has conditionally agreed to dispose of and BreconRidge has conditionally agreed to acquire the equity interests of AV Chaseway, in consideration for certain interests in BreconRidge. The Company has also undertaken to BreconRidge by a separate ancillary agreement that it will procure the due and punctual performance of each obligation of AVCC and AVCM (both wholly owned subsidiaries of the Company) contained in the Agreement and certain relevant ancillary agreements (including the Shareholders' Agreement and the Supply Agreement) and agrees to indemnify (and keep indemnified) BreconRidge on demand any loss, liability or cost incurred by BreconRidge as a result of any of AVCC's or AVCM's failure to perform such obligation. AVCM, a party to the Supply Agreement, is the operating entity within the Group designated to utilise the manufacturing services provided by AV Chaseway upon Initial Closing. Please refer to the section headed "Supply Agreement" below. The percentage holdings of AVCC in BreconRidge set out in this announcement are for illustration purposes only because the Warrant and certain of the BreconRidge Convertibles may only be exercised/converted upon the occurrence of certain events. Furthermore, the illustrative percentage holdings have not taken into account any possible dilution effect which may be caused by BreconRidge issuing further securities upon the occurrence of the Liquidity Event (such as a public offering). Initial Closing Upon Initial Closing, AVCC will dispose of the First Tranche Shares (representing 50% equity interest in AV Chaseway) to BreconRidge in consideration for the Warrant entitling AVCC to subscribe for the BreconRidge Warrant Shares (comprising 7.5 million common shares of BreconRidge). The Agreement does not contain any provision attaching any options, warrants or preferred shares to the BreconRidge Warrant Shares. Upon Initial Closing, AV Chaseway will cease to be a subsidiary of the Company and will be held as to 50% by AVCC and as to 50% by BreconRidge as a jointly controlled entity. Unless as expressly provided for in the Agreement and the relevant ancillary agreements/documents, BreconRidge shall not dispose of its interest in the First Tranche Shares after the date of Initial Closing. BreconRidge will also grant a first charge on the First Tranche Shares in favour of AVCC at Initial Closing by a separate ancillary agreement. The Warrant is not transferable except amongst AVCC and the Company and their respective wholly owned subsidiaries. The Warrant shall be exercised or deemed to be exercised in whole but not in part by AVCC, without any further additional payment. The Warrant shall be deemed exercised by AVCC at Final Closing upon the occurrence of a Liquidity Event. AVCC shall have the right to exercise the Warrant at any time after the third anniversary of the date of Initial Closing if Liquidity Event has not occurred by then. The Warrant shall terminate in accordance with the relevant terms of the Agreement. Initial Closing is conditional upon, among other things, the Shareholders having approved the transactions contemplated under the Agreement and the ancillary agreements and documents in the manner required under the Listing Rules, and all necessary approvals and consents having been obtained. The date of Initial Closing is expected to be 30 June 2005. If any of the conditions of Initial Closing have not been satisfied or waived on or before 30 June 2005, the date of Initial Closing shall be 10 days after the day on which the last condition is satisfied or waived. The parties may also agree in writing any other date for Initial Closing. Unless otherwise agreed by the parties, the long stop date for Initial Closing is 30 October 2005. The Company will make a further announcement in the event that the parties agree in writing to change the long stop date.