10:18     KANTONE HOLDING<01059>-Announcement&Resumption of Trading-3         

    Principal amount of Original Tranche 1 Bonds:                             
    US$8,000,000 (equivalent to approximately                                 
    HK$62,400,000), payable in cash by CSFB on the                            
    Original Tranche 1 Bonds Closing Date.                                    
                                                                              
    Original Tranche 1 Bonds Closing Date:                                    
    1 April 2005                                                              
                                                                              
    Principal terms of the Bonds:                                             
    Maturity:                                                                 
    The third anniversary of the issue date of the Bonds.                     
                                                                              
    Unless previously redeemed, converted or purchased                        
    and cancelled, the Tranche 1 Bonds and the Tranche                        
    2 Bonds (if issued) shall be redeemed by the Company                      
    at 100 per cent. of their principal amount at the                         
    relevant maturity date.                                                   
                                                                              
    Interest:                                                                 
    The Bonds bear interest from the Original Tranche 1                       
    Bonds Closing Date in respect of the Original Tranche                     
    1 Bonds, from the Additional Tranche 1 Bonds Closing                      
    Date in respect of the Additional Tranche 1 Bonds and                     
    from the Tranche 2 Bonds Closing Date in respect of                       
    the Tranche 2 Bonds at the rate of 1 per cent. per                        
    annum. Interest is payable semi-annually in arrears.                      
                                                                              
    Assuming that no conversion right is to be exercised                      
    by CSFB, the total amount of interest payable by the                      
    Company in respect of the Original Tranche 1 Bonds                        
    up to maturity is US$240,000 (equivalent to                               
    approximately HK$1,872,000) which equals to a total                       
    yield of 3% on the principal amount of the Original                       
    Tranche 1 Bonds.                                                          
                                                                              
    Transferability:                                                          
    CSFB agrees with the Company that it shall not assign                     
    or transfer any of the Bonds to any third party other                     
    than its subsidiary or holding company or subsidiary                      
    of such a holding company without the prior written                       
    consent of the Company.                                                   
                                                                              
    Conversion price:                                                         
    At the election of CSFB, either at (i) the Fixed                          
    Conversion Price; or (ii) the Floating Conversion                         
    Price, provided that the conversion price shall not                       
    be less than the par value of the Shares on the date                      
    of conversion unless permitted by law and in                              
    compliance with the Listing Rules.                                        
                                                                              
    Conversion period:                                                        
    Bonds may be converted, at the election of CSFB, at                       
    any time from and including the Original Tranche 1                        
    Bonds Closing Date (or the Additional Tranche 1 Bonds                     
    Closing Date in respect of the Additional Tranche 1                       
    Bonds or the Tranche 2 Bonds Closing Date in respect                      
    of the Tranche 2 Bonds, if issued) up to the close                        
    of business on the day falling one week prior to the                      
    Tranche 1 Maturity Date or the Tranche 2 Maturity Date                    
    (as the case may be) by serving a conversion notice                       
    on the Company. Certificates in respect of the new                        
    Shares issued upon conversion shall be delivered                          
    within 2 business days after the Delivery Date as                         
    defined in the terms and conditions of the Bonds.                         
                                                                              
    Conversion shares:                                                        
    The Original Tranche 1 Bonds (and the Additional                          
    Tranche 1 Bonds or the Tranche 2 Bonds, if issued)                        
    are convertible into new Shares at the election of                        
    CSFB at either (i) the Fixed Conversion Price, or (ii)                    
    the Floating Conversion Price, in each case at any                        
    time during the relevant conversion period