09:49 HANNY HOLDINGS<00275>-Announcement&Resumption of Trading(3) Agreement and the Subscription Agreement is and (when executed and subject to fulfilment of the conditions of the Subscription) the Convertible Note will be legal, valid and binding on it and enforceable in accordance with the respective terms thereof; (ix) CTH having confirmed that the aggregate principal sum of convertible notes (including that under the Convertible Note) to be issued partly by private placing and partly by direct subscription shall not be less than HK$1,000 million and that such amount, after deducting all related expenses, shall be payable to, and for the account of, CTH; and (x) the passing of the necessary resolution(s) by the Shareholders at a general meeting of the Company approving, inter alia, the Subscription and the transactions contemplated under the Subscription Agreement. Conditions (i), (viii) and (ix) are waivable by Loyal Concept whereas condition (ii) is waivable by CTH. If any of the conditions has not been fulfilled or (as the case may be) waived by 5:00 p.m. on 31st July, 2005 (or such other date as the Company and CTH may agree in writing), the Subscription Agreement shall terminate and the respective obligations of the parties thereto under the Subscription Agreement shall forthwith cease and terminate. Completion Completion is to take place on the third business day after the date upon which the conditions stated in the section headed "Conditions of the Subscription Agreement" above are fulfilled or, as the case may be, waived, or such other date as the Company and CTH may agree. The Group intends to fund the subscription of the Convertible Note by its internal resources and/or debt financing and/or equity fund raising exercises. The Group has no intention to inject any assets or businesses into the CTH Group after the completion of the Subscription and after the exercise of the conversion rights attached to the Convertible Note by Loyal Concept. THE CONVERTIBLE NOTE Principal terms Aggregate principal amount: HK$450 million Initial Conversion Price: 0.44 per CTH Share, subject to adjustments in certain events including, among other things, share consolidation, share subdivision, capitalisation issue, capital distribution and rights issue. If at any time after the first anniversary of the issue date of the Convertible Note, the average closing price per CTH Share for 20 consecutive trading days is higher than HK$0.85 (subject to adjustments in the events of share consolidation or share subdivision), all the then outstanding Convertible Note will be deemed to be converted at the then prevailing conversion price. Interest rate: 0% per annum Maturity: The fifth anniversary from the date of issue of the Convertible Note Redemption: Unless previously converted and cancelled, CTH will redeem the Convertible Note on the Maturity Date at the redemption amount which is 110% of the principal amount of the Convertible Note outstanding. Before the Maturity Date, CTH or any of its subsidiary may purchase the Convertible Note at any price as agreed based on arm's length negotiation between CTH or such subsidiary and Loyal Concept. Further announcement will be made by the Company in the event that the Convertible Note is repurchased. Transferability: The Convertible Note is freely transferable but may not be transferred to a connected person (as defined in the Listing Rules) of CTH without the prior written consent of CTH. Conversion period: Loyal Concept shall have the right to convert, on any business day commencing from the 15th day after the date of issue of the Convertible Note up to and including the date which is 15 days prior to the Maturity Date, the whole or any part (in an amount or integral multiple of HK$500,000) of the principal amount of the Convertible Note into CTH Shares at the then prevailing conversion price. Voting: Loyal Concept will not be entitled to receive notice of, attend or vote at any meeting of CTH by reason only of it being the holder of the Convertible Note.