09:09 HANG TEN GROUP<00448> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. HANG TEN GROUP HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 448) CONTINUING CONNECTED TRANSACTIONS On 23 May 2005, ILC entered into the Licence Agreement with Hang Ten (China) and Hang Ten Enterprises entered into the First Supply Agreement with associates of Chua and company. The Licence Agreement and the First Supply Agreement constitute continuing connected transactions of the Company under Rule 14A.34 of the Listing Rules and are subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules, but are exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules. On 23 May 2005, Hang Ten Enterprises entered into the Second Supply Agreement with Hang Ten Phils., a non-wholly owned subsidiary of the Company. The Second Supply Agreement constitutes a continuing connected transaction of the Company that is subject to the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules. Since no Shareholder or any associates of any Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Second Supply Agreement, the Company has, pursuant to Rule 14A.53 of the Listing Rules, applied to the Stock Exchange for a waiver from strict compliance with the requirement that a general meeting be held for the approval of the Second Supply Agreement and the related annual cap as specified in Rule 14A.52 of the Listing Rules, and for permission from the Stock Exchange that such agreement and annual cap instead be approved by way of a written approval of the independent Shareholders who together hold more than 50% in nominal value of the issued ordinary share capital of the Company. A circular containing details of the Second Supply Agreement, a letter from the Independent Board Committee containing its advice in respect of the Second Supply Agreement and a letter of advice from an independent financial adviser will be despatched to Shareholders as soon as practicable. LICENCE AGREEMENT Background ILC is an indirect wholly owned subsidiary of the Company. Hang Ten (China) is indirectly owned as to 25% by YGM and as to 73% by Asian Wide (both substantial Shareholders) and as to the remaining 2% by Ms. Wang Li Wen and Ms. Kao Yu Chu collectively (both executive Directors and each holding 1%). As disclosed in the Listing Document, ILC entered into a licence agreement dated 28 March 2002 with Hang Ten (China) under which ILC granted an exclusive licence to Hang Ten (China) to use in the PRC the words 'Hang Ten' and associated trade marks in the design, manufacturing, advertising, sale and promotion of clothing, footwear, headwear and other accessories. As this agreement was entered into before 31 March 2004, it was subject to, and constituted a continuing connected transaction of the Company under, the Listing Rules in force prior to that time. The Stock Exchange granted a waiver to the Company, subject to conditions, from strict compliance with the announcement requirements applicable to this agreement which was for a term not exceeding five years commencing from 1 April 2002. To comply with the Listing Rules as currently in effect, the Company has decided to take this opportunity to enter into the Licence Agreement with Hang Ten (China) for a fixed term of 3 years commencing from 1 April 2005 which supersedes the prior licence agreement made between them. As each of the relevant percentage ratios (other than the profits ratio and equity capital ratio which are inapplicable) set out in the Listing Rules in respect of the royalties and advertising contribution payable under the Licence Agreement is, on an annual basis, less than 2.5%, the Licence Agreement constitutes a continuing connected transaction of the Company under Rule 14A.34 of the Listing Rules and is subject to the reporting and announcement requirements set out in Rules 14A.45 to