10:17 CAPITAL STRAT<00497>CAPITAL ESTATE<00193>-JA&<00193>Resume7 39.76% of the existing issued share capital of the Company, and approximately 24.91% of the enlarged issued share capital of the Company by the Top-Up Subscription Shares and the Conversion Shares. The Conversion Shares will be issued pursuant to the passing of the relevant resolution at the EGM. The market value of the total Conversion Shares will be in aggregate of HK$40.3 million based on the closing price of HK$0.031 per Share on 30 December 2004, being the Last Trading Day. Conversion period Each of the holders of the Convertible Notes shall have the right at any time after the date of issue of the relevant Convertible Note to convert all or part of the principal amount of the relevant Convertible Note outstanding at any time into new Shares at the conversion price of HK$0.028 per Share provided that an integral multiple of HK$100,000 be converted at any time and save that if the outstanding principal amount of the relevant Convertible Notes is less than HK$100,000, the whole (but not part only) of the outstanding principal amount of the relevant Convertible Note must be converted. Ranking The Conversion Shares will rank pari passu in all respects among themselves and with all other Shares in issue on the date of such allotment and issue. Redemption by the Company The Company shall be entitled at any time to redeem the whole or any part of the outstanding principal amount of the relevant Convertible Notes at 5% premium over the outstanding principal amount and interest accrued thereon with the consent of the holder(s). Status of the Convertible Notes The Convertible Notes constitute general and unsecured obligations of the Company and shall rank equally among themselves and pari passu with all other present and future unsecured and unsubordinated obligations of the Company except for obligations accorded preference by mandatory provisions of applicable law. No application will be made for listing of the Convertible Notes. Application will be made to the Listing Committee of the Stock Exchange for the listing of and permission to deal in the Shares falling to be issued upon exercise of the Convertible Notes. Transferability The Convertible Notes are freely transferable, provided that the holders of the Convertible Notes must inform the Company of each transfer or assignment made by them. The Company will notify the Stock Exchange if any of the Convertible Notes is transferred to a connected person (as defined in the Listing Rules). Events of default All Convertible Notes contain an event of default provision which provides that on the occurrence of certain events of default specified in the Convertible Notes (e.g. liquidation), each of the holders of the Convertible Notes shall be entitled to demand for immediate repayment of the principal amount outstanding under the relevant Convertible Note. EFFECTS ON SHAREHOLDING STRUCTURE Apart from the Convertible Notes, the Company has outstanding 2% redeemable convertible notes with aggregate principal amount of HK$3,000,000 at a conversion price of HK$0.02 per Share. Assuming