10:18     KANTONE HOLDING<01059>-Announcement&Resumption of Trading-2         

    At the request of the Company, trading in the Shares                      
    was suspended on the Stock Exchange from 9:30 a.m.                        
    on 4 April 2005 pending release of this announcement.                     
    Trading in the Shares will resume at 9:30 a.m. on 8                       
    April 2005.                                                               
                                                                              
    SUBSCRIPTION AGREEMENT                                                    
    Date:                                                                     
    1 April 2005                                                              
                                                                              
    Issuer:                                                                   
    The Company                                                               
                                                                              
    Bonds to be issued:                                                       
    Up to US$24,000,000 1 per cent. unlisted and unsecured                    
    convertible bonds due 2008 to be issued in up to two                      
    tranches.                                                                 
                                                                              
    Form of Bonds/Options for the issue of the Additional                     
    Tranche 1 Bonds and the Tranche 2 Bonds                                   
    The convertible bonds shall be issued in up to two                        
    tranches with the Original Tranche 1 Bonds being                          
    issued on the Original Tranche 1 Bonds Closing Date.                      
                                                                              
    The Company has granted an option to CSFB under the                       
    Subscription Agreement to require the Company to                          
    issue the Additional Tranche 1 Bonds.                                     
                                                                              
    CSFB may exercise such option once at any time during                     
    the three-year period commencing on the Original                          
    Tranche 1 Bonds Closing Date. The aggregate principal                     
    amount of the Additional Tranche 1 Bonds to be issued                     
    pursuant to the exercise of such option by CSFB shall                     
    not exceed US$8,000,000 (equivalent to approximately                      
    HK$62,400,000). The Additional Tranche 1 Bonds shall                      
    be issued by the Company within 10 business days after                    
    exercise of such option by CSFB.                                          
                                                                              
    The Additional Tranche 1 Bonds shall, if issued, be                       
    on substantially the same terms as the Original                           
    Tranche 1 Bonds set out below save for, among other                       
    things, the number of Shares to be issued upon                            
    conversion. A separate announcement will be issued                        
    by the Company if the Additional Tranche 1 Bonds are                      
    to be issued.                                                             
                                                                              
    CSFB has granted an option to the Company under the                       
    Subscription Agreement to issue and require CSFB to                       
    subscribe the Tranche 2 Bonds subject to the                              
    satisfaction of certain conditions. Such option can                       
    be exercisable once by the Company within 60 calendar                     
    days following and subject to the conversion of the                       
    last Original Tranche 1 Bond. The Tranche 2 Bonds                         
    shall be issued by the Company within 10 business days                    
    after exercise of such option by the Company. A                           
    separate announcement will be issued by the Company                       
    if the Tranche 2 Bonds are to be issued.                                  
                                                                              
    The Tranche 2 Bonds shall, if issued, be for an                           
    aggregate principal amount of up to US$8,000,000                          
    (equivalent to approximately HK$62,400,000) and be                        
    on substantially the same terms as the Original                           
    Tranche 1 Bonds set out below save for, among other                       
    things, the Fixed Conversion Price for the Tranche                        
    2 Bonds shall be determined by reference to the                           
    closing prices of the Shares immediately prior to the                     
    Tranche 2 Bonds Closing Date.                                             
                                                                              
    Subscriber of the Bonds:                                                  
    CSFB, an independent third party which is not a                           
    connected person of the Company (as defined in the                        
    Listing Rules).