09:52 EGANAGOLDPFEIL<00048> - Announcement (2) into Shares and the Subscription Shares The 4,497,972 Subscription Shares is equivalent to 15% of the principal amount of US$5,000,000 Additional Tranche 3 Bonds (converting into HK$38,823,500 by using the predetermined exchange rate of US$1.00 to HK$7.7647) and then divided by the Base Price (as defined in the Company's announcement dated 27th February, 2003) of HK$1.2947. Due to the error in calculating the number of Subscription Shares under the Additional Tranche 1 Bonds in the Company's announcement dated 27th February, 2003, the correct number of Subscription Shares under the Additional Tranche 1 Bonds should be `4,497,972' instead of `4,517,668' as disclosed in the said announcement. The 7,066,098 Subscription Shares is equivalent to 15% of the principal amount of US$10,000,000 Tranche 2 Bonds (converting into HK$77,647,000 by using the predetermined exchange rate of US$1.00 to HK$7.7647) and then divided by the Base Price (as defined in the Company's announcement dated 27th February, 2003) of HK$1.6483. The formula of the above calculation has already been disclosed in the Company's announcements dated 27th February, 2003 and 15th January, 2004. THE TRANCHE 3 BONDS AND THE SUBSCRIPTION RIGHT Under the Second Subscription Agreement, the Company has granted to CSFB an additional option to require the Company to issue the Tranche 3 Bonds during the period from 15th January, 2005 to 27th February, 2006 together with the Second Subscription Right. For the purpose of illustration, the Tranche 3 Bonds and the Second Subscription Right would represent approximately 49,018,498 Shares and 8,000,000 subscription shares at an estimated fixed conversion price of HK$2.28 (being 125% of the average closing price per Share for the 30 consecutive business days immediately prior to 6th May, 2005). The estimated 49,018,498 Shares was calculated by converting the principal amount of the Tranche 3 Bonds of US$10,000,000 into HK$77,910,000 and then divided by the estimated floating conversion price of HK$1.5894 (being 90% of the five lowest closing price per Shares during the 30 consecutive business day immediate prior to the date of the announcement). The 8,000,000 subscription share was calculated based on a pro-rata proportion of the Subscription Shares under the Tranche 1 Bonds, Additional Tranche 1 Bonds and Tranche 2 Bonds against the Tranche 3 Bonds principal amount. The price of the First Subscription Right represents a discount of approximately 0.05% and 0.03% to the closing price of HK$1.87 per Share on 5th May, 2005 (`Closing Price') and the average closing price of HK$1.83 per Share for the last five business days up to 5th May, 2005 (`Average Closing Price'). The price of the Second Subscription Right represents a premium of approximately 0.22% and 0.25% to the Closing Price and Average Closing Price. AGREEMENT On 5th May, 2005, the Company has entered into an Agreement with CSFB pursuant to which the Company and CSFB agreed to waive their respective rights, benefits, and claims in relation to (i) the First Subscription Right (the options granted by the Company to CSFB to subscribe for an additional 20,599,406 Shares under the Tranche 1 Bonds, Additional Tranche 1 Bonds and Tranche 2 Bonds); (ii) the issuance and delivery of the Tranche 3 Bonds; and (iii) the Second Subscription Right (the option granted by the Company to CSFB to subscribe for an additional 8,000,000 Shares under the Tranche 3 Bonds) at a total consideration (`the Consideration') of US$2,511,307 (HK$19,565,592.84). The Consideration was determined with reference to the estimated profit CFSB will gain if CSFB exercises its rights under the First Subscription Right, the Tranche 3 Bonds and the Second Subscription Right to subscribe/convert for a total of approximately 77,617,903 Shares. The estimated profit represents the difference between the fixed conversion price of HK$2.0604 per Subscription Share and the Average Closing Price of HK$1.83 per Share. The Consideration did not include any elements of penalty or interest imposed on the Company as a result of entering into the Agreement. The Consideration, which will be funded entirely from the Company's available internal financial resources, will be paid by the Company to CSFB in cash on or before 19th May, 2005. RELEASE AND DISCHARGE Upon payment of the Consideration, each party is released and discharged from any liability to the other party and/or any other person on behalf of it (including its successors and assigns), of any kind, whether direct or indirect, foreseen or unforeseen, contingent or actual, present or future, arising or capable of arising out of, or in any way connected with or relating to the First Subscription Right, the Tranche 3 Bonds and the Second Subscription Right.