UNDERTAKING OF ASCENDENT AUTOMATION (CAYMAN) LIMITED

14 June 2019

To: Brightex Enterprises Limited (the "Brightex")

Unit 3205B-3206

32nd Floor Office Tower,

Convention Plaza

1 Harbour Road

Wanchai, Hong Kong

China Automation Group Limited (the "Company")

Unit 3205B-3206

32nd Floor Office Tower,

Convention Plaza

1 Harbour Road

Wanchai, Hong Kong

Dear Sirs,

Proposal for the Privatisation of China Automation Group Limited by the Joint Offerors by way of a scheme of arrangement (under Section 86 of the Companies Law)

- Undertaking of Ascendent Automation (Cayman) Limited

Unless otherwise defined, capitalized term used in this undertaking ("Undertaking") shall have the same meaning as defined in the announcement to be jointly made by us, Brightex and the Company pursuant to Rule 3.5 of the Hong Kong Code on Takeovers and Mergers (the "Takeovers Code") (the "Announcement").

1. We, Ascendent Automation (Cayman) Limited, understand that:

  1. China Automation Group Limited is a company incorporated in the Cayman Islands with limited liability, the shares ("Shares") of which are listed on the Main Board of The Stock Exchange of Hong Kong Limited ("Stock Exchange")(Stock Code: 569);
  2. as at the date hereof, we are the legal and beneficial owner of 248,235,132 Shares, representing approximately 24.19% of the issued share capital of the Company;
  3. we and Brightex (the "Joint Offerors") are putting forward a proposal to the Scheme Shareholders for the privatisation of the Company by way of a scheme of arrangement under Section 86 of the Companies Law involving the cancellation of the Scheme Shares and, in consideration thereof, the payment to the Scheme Shareholders of the Cancellation Price in cash for each Scheme Share, and the withdrawal of the listing of the Shares on the Stock Exchange;
  4. if the Proposal is approved and implemented, under the Scheme, the share capital of the Company will, on the Effective Date of the Scheme, be reduced by

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cancelling and extinguishing the Scheme Shares. Upon such reduction, the share capital of the Company will be increased to its former amount by the issuance at par to Brightex, credited as fully paid, of the aggregate number of Shares as is equal to the number of Scheme Shares cancelled;

    1. on 17 December 2018, we (as lender), Araco Investment Limited ("Araco") (as borrower), Brightex and Mr. Xuan entered into a facility agreement (the "Facility Agreement"). Pursuant to the Facility Agreement, we advanced a loan in the principal amount of HK$360,000,000 (the "Loan") to Araco. On 3 January 2019, Araco executed a share charge to create a charge over 300,000,000 Shares ("Charged Shares") owned by it in favour of us as security. Pursuant to the Facility Agreement, we have the right to exchange (the "Exchange Right") in full the outstanding loan amount for the Charged Shares at the exchange price of HK$1.2 per share (subject to adjustment) at any time after the utilisation date of the Loan but on or before the final exchange date (i.e. 31 December 2023), and such Exchange Right may be exercised on one occasion. If we do not exercise the Exchange Right before 31 December 2023, Araco shall repay the Loan together with all outstanding amounts under the finance documents (including the Facility Agreement) in full on 31 December 2023; and
  1. We undertake, agree and represent to Brightex and the Company that, from the date of this Undertaking and until after the Effective Date, we will not offer, sell, give, transfer, pledge, encumber, charge, or grant any right over or otherwise dispose of the Exchange Right.
  2. We understand that, in accordance with the Rules Governing the Listing of Securities on the Stock Exchange (the "Listing Rules") and Takeovers Code, particulars of this Undertaking will need to be publicly disclosed and will also be contained in the Announcement, any subsequent announcements and documents in relation to the Scheme, and that a copy of this Undertaking will be available for inspection until the end of the offer period. We consent to the issue of the Announcement and related documents incorporating references to this Undertaking (including the relevant terms contained therein) and we acknowledge that, if the Scheme is made, this Undertaking will be made available for inspection during the offer period and the particulars of it will be contained in the Scheme Documents to the extent required by the Takeovers Code or the Listing Rules.
  3. The following additional provisions apply to this Undertaking:
    1. This Undertaking shall terminate immediately upon the Scheme having been withdrawn, lapsed or closed.
    2. All notices or other communication required or permitted hereunder shall be in writing and shall be deemed given or delivered when (i) delivered personally, (ii) if transmitted by facsimile upon confirmation that such facsimile has been received or (iii) when sent by registered or certified mail or by overnight courier service that obtains a receipt.
      Any notice to be given to us pursuant to this Undertaking shall be delivered to:

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Address:

c/o Ascendent Capital Partners (Asia) Limited

Suite 3501, 35/F Jardine House

1 Connaught Place

Central, Hong Kong

Attention:

+852 2165 9090

Fax No.:

john@ascendentcp.com

  1. This Undertaking is governed by and shall be construed in accordance with the laws of Hong Kong. We hereby irrevocably submit to the non-exclusive jurisdiction of the Hong Kong courts.

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China Automation Group Limited published this content on 30 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 August 2019 14:36:11 UTC