43ddee85-75c9-42bc-a765-e388191bc011.pdf



29 April 2015


DAIWA ASSOCIATE HOLDINGS LIMITED


AND

HUATAI PRINCIPAL INVESTMENT I LIMITED


SUBSCRIPTION AGREEMENT

relating to the subscription for 36,861,972 new shares of HK$0. 1each in


DAIWA ASSOCIATE HOLDINGS LIMITED



THIS SUBSCRIPTION AGREEMENT is made on 29 April 2015


BETWEEN


  1. DAIWA ASSOCIATE HOLDINGS LIMITED, a company incorporated with limited liability in Bermuda and whose registered office is at Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda and its head office of principal place of business in Hong Kong at 11/F, Block G, East Sun Industrial Centre, 16 Shing Yip Street, Kwun Tong, Hong Kong (Company); and


  2. HUATAI PRINCIPAL INVESTMENT I LIMITED, a company incorporated under the laws of the British Virgin Islands with limited liability and having its registered address at OMC Chambers, Wickhams Cay, 1, Road Town, Tortola, British Virgin Islands (Subscriber).


    WHEREAS


    1. At the date hereof, the Company had an authorised share capital of HK$100,000,000 divided into l,000,000,000 ordinary shares of HK$0.1 each (Shares) of which 437,239,448 Shares have been issued and are fully paid up or credited as fully paid;


    2. All of the issued Shares are currently listed on the Main Board of The Stock Exchange of Hong Kong Limited (Stock Exchange) under stock code: 1037;


    3. Simultaneously with the execution of this Agreement, a sale and purchase agreement (SPA) has been entered into by and amongst Lau Tak Wan, Chan Yuen Mei, Pinky, China Capital Holdings Investment Limited, Leading Trade Limited and Asia-IO Acquisition Fund, L.P. (Asia-IO Fund) pursuant to which Asia-IO Fund, agreed to purchase approximately 55.17% of the issued Shares;


    4. Simultaneously with the execution of this Agreement, the Company has entered into a disposal agreement (Disposal Agreement ) in respect of disposal of certain of its subsidiaries to Champion Success Holdings Limited;


    5. Subject to completion of this Agreement, the Company proposes to declare and distribute cash dividend (Special Dividend) of not less than HK$85,000,000 to the existing shareholders of the Company whose names appear on the register of members of the Company at the close of business on a record date (Record Date) to be determined by the Company;


    6. Simultaneously with the execution of this Agreement, the Company has entered into a subscription agreement with Asia-IO Fund (Asia-IO f'und SSA) pursuant to which Asia-IO Fund agreed to subscribe for 144,698,889 new Shares;


    7. Simultaneously with the execution of this Agreement, the Company has entered into a subscription agreement with Asia-IO Holdings Limited (Asia- 10 Holdings SSA) pursuant to which Asia-IO Holdings Limited agreed to subscribe for 43,439,139 new Shares; and


    8. The Company has agreed to issue and the Subscriber has agreed to subscribe for 36,861,972 new Shares (Subscription Shares) on the terms and subject to the conditions herein contained.


      1. Conditions


        1. Completion of this Agreement (Completion) is conditional on:


          1. the Listing Committee of the Stock Exchange granting listing of, and permission to deal in, all of the Subscription Shares;


          2. the shareholders (or independent shareholders, as the case may be) of the Company approving the Subscription (as defined below) in accordance with all applicable requirements under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (Listing Rules) and the Hong Kong Code on Takeovers and Mergers ( Takeovers Code) and all other requirements imposed by the Stock Exchange and the Securities and Futures Commission (SFC) (including rules and requirements regarding certain shareholders to abstain from voting in the relevant resolutions);


          3. the SPA having becoming unconditional (save for the condition for this Agreement having becoming unconditional);


          4. the Asia-IO Fund SSA having becoming unconditional (save for the condition for this Agreement having becoming unconditional); and


          5. the Asia-IO Holdings SSA having becoming unconditional (save for the condition for this Agreement having becoming unconditional).


          6. In the event that the conditions in clause I.I above (Conditions) are not fulfilled on or before 180th from the day after the date of this Agreement (Long Stop Date) (or such later date as may be agreed between the parties) then this Agreement and all rights and obligations hereunder will cease and terminate.


          7. The Company undertakes to use all reasonable endeavours to obtain the fulfilment of Conditions as soon as is reasonably practicable and in any event on or before the Long Stop Date and will inform the Subscriber promptly following the grant of such listing and permission to deal in the Subscription Shares.


            1. Subscription


              1. The Subscriber shall subscribe for, and the Company shall issue, the Subscription Shares, fully paid and free from all liens, charges, security interests, encumbrances and adverse claims (Subscription).


              2. The Subscription Shares to be subscribed for and issued pursuant to this clause 2 shall rank pari passu in all respects with the Shares in issue at the date of allotment and in particular will rank in full for all dividends and other distributions declared made or paid at any time after the date of allotment (excluding, for the avoidance of doubt, the entitlement to the Special Dividends (as defined in the SPA)).


              3. The subscription price of each of the Subscription Shares shall be HK.$1.144 (Subscription Price).


              4. Completion


                1. Completion of the Subscription shall take place on any business day after the Record Date and shall take place contemporaneously upon completion of the SPA, the Disposal Agreement the Asia-IO Fund SSA and the Asia-IO Holdings SSA at the office of Ropes & Gray at4 l/F One Exchange Square, 8 Connaught Place, Central, Hong Kong at a time to be fixed between the parties and in any event within 48 hours following the receipt by the Subscriber of written confirmation that the Conditions have been satisfied.


                2. At Completion:


                  1. the Subscriber shall make payment (for value on the date of Completion) to the Company of the aggregate amount of the Subscription Price multiplied by the total number of Subscription Shares, which shall constitute a complete discharge of the Subscriber's obligations in respect thereof;


                  2. the Company shall allot and issue the Subscription Shares to the Subscriber (or as it may direct) and shall promptly thereafter register the Subscriber or its nominee(s) as member(s) of the Company and shall cause to be delivered to the Subscriber a definitive jumbo certificate of title in respect of the Subscription Shares; and


                  3. in case the Subscriber would like the Company to allot and issue the Subscription Shares to its nominee(s), the Subscriber shall provide the identity of its nominee(s) before the publication of the Announcement (as defined below).


                  4. Announcement


                    5. The parties hereby authorise the release for publication of an announcement in respect of the Subscription pursuant to this Agreement following agreement of

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