09:24     ZZNODE HOLDINGS<02371> - Announcement (3)                           

    million), by five equal installments, on the Completion Date and          
    every six months thereafter for two years.                                
                                                                              
    Further, the Joint Venture Company will assist ASB to collect             
    accounts receivable relating to the business carried on by ASB's          
    multimedia terminal business department up to the Completion Date and     
    the Joint Venture Company will receive a bonus for accounts               
    receivable so collected for and on behalf of ASB every quarter based      
    on the percentage of accounts receivable collected during the period      
    multiplied by the aggregate bonus amount of RMB6,075,000                  
    (approximately HK$5.731 million). Such bonus is payable within twenty     
    working days after confirmation of the accounts receivable so             
    collected by the Joint Venture Company for and on behalf of ASB for       
    the previous quarter and issue of voucher by the Joint Venture            
    Company to ASB.                                                           
                                                                              
    Conditions Precedent                                                      
    (a)                                                                       
    Establishment of the Joint Venture Company;                               
    (b)                                                                       
    Execution and affixation of the common seal by each of the parties        
    to the Joint Venture Contract;                                            
                                                                              
    (c)                                                                       
    Representations and warranties in the Joint Venture Contract              
    remaining true and accurate;                                              
                                                                              
    (d)                                                                       
    The Joint Venture Company and ASB entering into agreements for the        
    licence of IP Rights;                                                     
                                                                              
    (e)                                                                       
    The Joint Venture Company and ASB entering into an agreement for          
    novation of the Contracts;                                                
                                                                              
    (f)                                                                       
    The Joint Venture Company and ASB entering into agreements with ASB       
    for collection of accounts receivable on behalf of ASB and the            
    assumption of repair and maintenance obligations of sales contracts       
    by the Joint Venture Company;                                             
                                                                              
    (g)                                                                       
    The Joint Venture Company entering into new employment contracts          
    with those employees of ASB relevant for the business of the Joint        
    Venture Company on remuneration terms no less favourable than             
    existing remuneration terms for the next twelve months.                   
                                                                              
    The establishment of the Joint Venture Company requires the approval      
    from the regulatory authority of the PRC.                                 
                                                                              
    Reasons for the formation of the Joint Venture Company                    
    The Group is principally engaged in the development and provision of      
    telecommunications operational support system (`OSS') products and        
    solutions in the PRC. The Group's OSS products can help                   
    infrastructural telecommunications service providers to monitor,          
    control, analyze, and manage problems within their telecommunications     
    networks. They may be used for such activities including, but not         
    limited to, ordering and network component tracking, usage tracking,      
    billing and reporting.                                                    
                                                                              
    Shanghai Telecommunications, an independent third party of and not a      
    connected person to the Group, is principally engaged in                  
    communication support services, communications value-added services,      
    communications equipment manufacturing and other businesses.              
                                                                              
    Shanghai Fuxin, an independent third party of and not a connected         
    person to the Group, is principally engaged in providing system           
    support and function requirements solutions, telecommunications           
    network operational support systems, mobile communications equipment,     
    special equipment for telecommunications facilities.                      
                                                                              
    ASB, an independent third party of and not a connected person to the      
    Group, is a leading telecommunications infrastructure and solutions       
    provider in the PRC, which delivers end-to-end solutions and high         
    quality services, covering fixed and mobile networking, broadband         
    access, intelligent optical networking, network applications, network     
    integration service and multimedia solutions.                             
                                                                              
    The Directors believe that the entering into of the Joint Venture         
    Contract will help the Group to develop and expand its principal          
    business. The Directors consider that the terms of the Joint Venture      
    Contract for the formation of the Joint Venture Company and the           
    purchase of the Fixed Assets, Inventory and Contracts by the Joint        
    Venture Company from ASB are made on an arm's length basis and on         
    normal commercial terms, and are made in the ordinary and usual           
    course of business of the Group and are fair and reasonable and is in     
    the interest of the shareholders of the Company as a whole.               
                                                                              
    GENERAL                                                                   
    The entering into of the Joint Venture Contract constitutes a             
    discloseable transaction of the Company under the Listing Rules. A        
    circular containing further details will be despatched to the             
    Shareholders as soon as practicable.