CHINA AGRI PROD 
By J 'lll lÌi :ff m * U
KINGSTON SECURITIES LIMITED
STRICTLY PRIVATE AND CONFIDENTIAL
25 October 2013
China Agri-Products Exchange Limited
h Floor, Wai Yuen Tong Medicine Building
9 Wang Kwong Road
Kowloon Bay
HongKong
Attn.: The Board ofDirectors
Dear Sirs,
China Agri-Products Exchange Limitcd (the "Company")
Placing (the "Piacing") of a maximum of 490,000,000 new sharcs ofHK$0.01 each (tbc
"Shares") in the Company (the "Piacing Sharcs") under generai mandate
PART l- THE PLACING UNDER GENERAL MANDATE
On the terms set out in this agreement (the "Piacing Agreement"), we, Kingston Securities Limited (the "Piacing Agent") agree, on a best effort basis, to piace, or procure the placing of, the Placing Shares being a maximum of 490,000,000 Shares with not less than six independent professional, institutional or other investors (the "Piacees") as we may select at the placing price being HK$0.112 (the "Piacing Price") per Placing Share (together with The Stock Exchange of Hong Kong Limited (the "Sfoci< Exchange") trading fee, Securities and Futures Commission (the "SFC") transaction levy, and Centrai Clearing and Settlement System ("CCASS") stock settlement fee as may be payable by the Placees) in the capacity as the Company's agent.
We understand that the Placing Shares will be issued under the generai mandate to allot, issue and dea! with Shares granted to the directors of the Company by resolution of the shareholders of the Company passed at the annua! generai meeting (the "AGM") of the Company held on 16 May 2013, subject to the limit up to 20% ofthe issued share capitai of the Company as at the date ofpassing the resolution at the AGM (i.e. 492,196,827 Shares).
The Company represents, warrants and undertakes to the Placing Agent that:
(a) the Placing Shares will, when fully paid, be allotted and issued in accordance with the memorandum of association and bye-laws ofthe Company and with the relevant mles and regulations applicable to the Company in Bermuda and Hong Kong and will, at completion of the Placing ("Completion"), be free from ali liens, charges, encumbrances or third party rights of whatsoever nature and together with ali rights attaching thereto at Completion and thereafter; and
(b) the Placing Shares will rankpari passu in ali respects with the existing Shares in issue as at the date ofallotment and issue ofthe Placing Shares.
The Placing Agent represents, warrants and undettakes to the Company tlmt:
(a) the Placing Agent will not, directly or indirectly, offer, sell or delivet· any Placing Shares or distribute or publish any documents in relation to the Placing (including without limitation to the foregoing, any prospectus, form of application, offering circular,
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Suite 2801, 28th Floor, One International Flnance Centre, l Harbour View Street, Centrai, Hong Kong
Telffi: 2298-6200 Fax A : 2552-6666
advet1isement or other offering materia!) in any countty or jurisdiction except under circumstances that willnot result in the breach of any applicable laws and regulations;
(b) the Placing Agent has not offered for subscription or sold and will not offer for snbscription or sell in Hong Kong, by means of any document, any Placing Shares except in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) or in contravention of any securities laws in Hong Kong;
(c) the Placing will be completed on a best effot1 basis. The Completion is in accordance with this Placing Agreement shall referred to as "Conditions ofthe Placing" below;
(d) the Placing Agent undet1akes to piace the Placing Shares only to independent professional, institutional, or other investors, who and whose ultimate beneficiai owner(s) will be third pat1ies independent of, not cotmected or acting in concet1(as defined in the Hong Kong Code on Takeovers and Mergers (the "Takeovers Code")) with any directors, chief executive or substantial shareholder(s) of the Company or its subsidiaries and their respective associates (as defined under the Rules Governing the Listing of Securities (the "Listing Rules") on the Stock Exchange);
(e) the Placing Agent may require any sub-placing agents or other person to or through whom it may effect the Placing or offer or sell any Placing Shares to comply with the foregoing provisions;
(f) the Placing Agent will ensure that the Placing will be done in such a way that the Company will stili maintain andlor meet the public float requirements under Rule 8.08 of the Listing Rules immediately after the Placing
(g) the Placing Agent will use its best endeavour to ensure that none of the Placees will be allotted with Placing Shares to the extent that any Placee (together with parties acting in concet1 with it) will become a substantial shareholder (as defined under the Listing Rules) ofthe Company as a result ofthe Placing; and
(h) by not later than 4:00 p.m. on second business day immediately prior to Completion, the Placing Agent shall deliver to the Company or its professional advisers a list of the Placees procured by it, the number of the Placing Shares to be subscribed by each Piacee (together with the duly completed placing letters and confirmations as to their independence, as required by the Stock Exchange, to the Company and the Stock Exchange as soon as practicable and as and when known), the names and denominatimi (in board lots or otherwise) in which the Placing Shares are to be registered and, where relevant, the particulars of the account with the CCASS operated by Hong Kong Securities Clearing Company Limited to which Placing Shares are to be credited.
A. Placing Agent for the Placing
As the Placing Agent, the major areas of our involvement would be as follows:-
• to piace on a best effort basis a maximum of 490,000,000 Placing Shares to independent professional, institutional other investor(s); and
• to assist the Company in coordinating and liaising with the Placee(s) in relation to the
Placing.
B. Proposed remuneration in relation to tbc Placing
With respect to the services outlined above, we would propose the following fee structure:
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(i) The Placing
Upon Completion, a placing commission of 2.5% of the aggregate amount equa!to the Placing Price multiplied by the actual number of the Placing Shares being placed is payable to the Placing Agent. A documentatimi fee in the amomit of HK$50,000 shall also be payable by the Company to Kingston Corporate Finance Limited ("KCF") pursuant to the mandate letter dated 25 October 2013 entered into between the Company and KCF. For this purpose, the Placing Agent may deduct the full amount of such placing commission, documentatimi fee for the Placing and ali reasonable costs and expenses (as set out under the clause "Expenses" below) from the amomit of any placing moneys paid by such investor(s).
(ii) Expenses
Upon Completion, Placing Agent will deduct ali costs and expenses reasonably incurred in connection with or arising out of the Placing, including without limitation, travelling, printing, postage and telecommunications costs from the proceeds of the Placing. In addition, ali fees and expenses of other professional advisers involved in the Placing will be for the Company's account.
C. Conditions of the Placing
(i) Completion ofthe Placing is conditional upon:-
(a) the Listing Committee ofthe Stock Exchange granting or agreeing to grant (subject to allotment and/or despatch of certificates for the Placing Shares) the approvai for the listing of, and permission to dea!in, the Placing Shares; and
(b) the obligations of the Placing Agent under this Placing Agreement not being terminated in accordance with the tenns hereof, including provisions regarding force majeure event.
(ii) Completion of the Placing, in any event, will take piace within four business days after the fulfilment ofthe conditions as set out in paragraph C (i) above or such later date (the "Completion Date") to be agreed between the Company and the Placing Agent. If the above conditions are not satisfied and/or waived (other than paragraph C (i)(a) above, which cannot be waived) in whole or in part by the Placing Agent prior to 5:00 p.m. on
25 November 2013 or such later date to be agreed between the Company and the Placing Agent in writing (the "Long Stop Date"), the Placing will be tenninated and the Placing willnot proceed and ali obligations and liabilities of the parties hereunder wili fmihwith cease and determine and no party will have any claim against the others (save for any antecedent breaches hereof).
(iii) The Placing Agent shall, in accordance with terms and conditions of this Placing Agreement, use its best endeavours to procure, and shall give allnecessary assistance to the Company, in, the satisfaction ofthe above conditions prior to the Long Stop Date.
(iv) If the Placing does not become unconditional or is tenninated in accordance with the terms herein, the Company and/or the Placing Agent shall arrange for the repayment to ali investor(s) of ali application moneys paid by them without interest.
Upon Completion, the Placing Agent shall deliver to the Company the net proceeds from the Placing by way of a cheque or telegraphic transfer or electronic transfer or bank transfer after deduction of the Stock Exchange trading fee, SFC transaction levy, and CCASS stock settlement fee (if any) and any other fees payable by the Company in
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respect of the Placing Shares unde1taken by the Placing Agent as well as the fees and expenses payable by the Company as set aut in paragraph B above from the proceeds of the Placing, and the Company shall deliver share ce1tificates of t he Placing Shares to the Placing Agent or arrange the Placing Shares to be issued in the name of HKSCC Nominees Limited and deposited into CCASS far the credit of the Placees' designated investor pmticipants' or CCASS participants' stock accounts (as the case may be).
D. Tel'mination of the Placing(i) Unless otherwise agreed between the Company and the Placing Agent, the Placing Agent's appointment shall tenninate upon the earlier of (a) Completion; (b) the Long Stop Date if the conditions set aut in paragraph C(i) above have not been satisfied (or waived, as the case may be); and (c) termination of the Placing by the Placing Agent in accordance with the terms and conditions of this Placing Agreement, whereby yon will be formally notified by the Placing Agent in writing in accordance with the tenns ofthis Placing Agreement.
(ii) The Placing Agent reserves its right to terminate the arrangements se!aut in this Placing Agreement by notice in writing prior to 9:00 a.m. on the Completion Date, if in the absolute opinion of the Placing Agent, the success of the Placing would be materially and adversely affected by any force majeure events (as defined below).
Far this purpose, a "force majeure event" refers to
(a) the introduction of any new laws or regulations or any change in existing laws or regulations (or the judicial interpretatian thereof) or other occurrence of any nature whatsoever which may, in the absolute opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Company and its subsidiaries (together the "GI'oup") as a whole; or
(b) the occurrence of any !oca!, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before and/or after the date hereof) of a politica!, militmy, financial, economie, currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of America) or other nature (whether or not sui generis with any ofthe foregoing), or in the nature of any !oca!, national, international outbreak or escalation of hostilities or anned conflict, or affecting !oca! securities market or the occurrence of any combinatimi of circumstances which may, in the absolute opinion of the Placing Agent, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or adversely prejudices the success of the Placing of the Shares by potential investor(s) or otherwise makes it inexpedient or inadvisable far the Company or the Placing Agent to proceed with the Placing; or
(c) any change in market conditions or combination of circumstances in Hong Kong (including without limitation suspension or materia! restriction or trading in securities) occurs which affect the success of the Placing (such success being the placing of the Shares to potential investor(s)) or otherwise in the absalute opinion of the Placing Agent makes it inexpedient or inadvisable or inappropriate far the Company or the Placing Agent to proceed with the Placing.
(iii) If, at or prior to 9:00 a.m. on the Completion Date;
(a) the Company commits any materia! breach of or omits to observe any of the obligations or undertakings expressed or assumed under this Placing Agreement; or
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(b) the trading of the Shares on the Stock Exchange has been suspended for more than ten consecutive trading days save for the purposes of clearing of the announcement relating to this Placing Agreement or any announcements or circulars relating to any notifiable transactions or connected transactions of the Company under Chapter 14 or 14A ofthe Listing Rules; or
(c) the Placing Agent shall become aware of the fact that any of the representations or warranties contained in this Placing Agreement was, when given, untrue or inaccurate or would in any respect be untrue or inaccurate if repeated the Placing Agent shall determine that any such untrue representation or warranty represents or is likely to represent a materia!adverse change in the financial or trading position or prospects of the Group taken as a whole or will otherwise likely to have a materia!prejudicial effect on the Placing.
The Placing Agent shall be entitled (but not bound) by notice in writing to the Company to elect to treat such matter or event as releasing and discharging the Placing Agent from its obligations under this Placing Agreement.
(iv) Upon giving of notice pursuant to the paragraph above, ali obligations of the Placing Agent hereunder shall cease and determine and no party shall have any claim against any other parties in respect of any matter or thing arising out of or in connection with this Placing Agreement, save for any antecedent breaches.
The Placing Agent confinns that ali information and documents received from the Company in connection with this engagement will be regarded as strictly confidential to the Company and will be treated accordingly by the Placing Agent.
B. Representations, Warranties ami lndemnities
(i) In agreeing to the tenns ofthis Placing Agreement, you hereby agree the followings: (a) You shall be responsible forali other professional fees, printer's charges and
ali disbursements and out of pocket costs reasonably incurred by us in relation to the Placing which will include, but not limited to, the
photocopying charges, telephone/facsimile charges, postage and delivety expenses.
(b) You shall provide us with ali such information relating to you, any companies controlled by you and the Group as we would reasonably require for the purpose of making an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Group or otherwise and ali materia!facts and information which might reasonably be expected to be relevant in enabling us to fulfil our responsibilities in carrying out the terms of our engagements.
(c) You shall inform us in the event of any materia!change in the infonnation in respect of (b) above or in the reasonable opinion of you relevant to the Placing.
(d) You shall accept full responsibility for the accuracy of ali infonnation and facts given by you to us in relation to the Placing and warrant that no other
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materia! information or materia! facts have been or will be withheld, the omission ofwbicb will make tbe infonnation or facts given to us incorrect or misleading, and to notify us sbould sucb omission or inaccuracy first come to the attention of you.
(e) You sball provide tbe Placing Agent witb any fmtber information available to you, wbicb would be of relevance to the Placing Agent in carrying out its duties in respect of tbe engagement. If during the COllfSe of tbe Placing Agent's engagement, you subsequently discover something wbicb renders any such infonnation untrue, unfair, inaccurate or misleading, you unde1take to notify tbe Placing Agent at once.
(f) The Placing Agent may, from time to time, disclose infonnation regarding you and eacb of tbe companies controlled by you, its directors, sbarebolders, representatives and officers which may be confidential to tbe regulatory autborities upon tbeir enquiries, including but not limited to tbe Stock Excbange and the SFC. Sbould sucb disclosure be required to be made, the Placing Agent agrees to obtain tbe consent from tbe Company or the Company's representatives prior to sucb disclosure.
(g) You agree to indemnify tbe Placing Agent and its respective officers and employees (ali sucb companies and persons being collectively referred to as "indemnified persons") against ali actions, claims, demands, proceedings or judgements (collectively "indemnified claims") and ali losses, liabilities, damages, costs, charges and expenses of whatever nature (including costs, cbarges and expenses incurred in investigating or defending any indemnified claim and in complying witb any request made pursuant to sub-paragrapb (ii) below) (collectively "indemnifie1l losses") made against or incurred by any indemnified person directly or indirectly relating to or arising from tbe Placing Agent's engagement bereunder PROVIDED THAT any indemnified claims or indemnified losses reasonably suffered or properly incurred by any indemnified person or persons sball not extend to any claims or losses wbicb are attributable in any way to tbe fraud, gross negligence or wilful default of sucb indemnified person or persons.
(h) Any indemnified person against wbom an indemnified claim is made sball be entitled to defend, compromise, settle or dea!with sucb indemnified claim as the Placing Agent may see fit after baving bad due regard to ali reasonable requests wbicb you may make.
(i) If any amount becomes payable under this indemnity, you sball pay sucb additional amount (if any) as is required to ensure that tbe net amount received by the relevant indemnified person, after ali deductions and witbboldings required to be made from such aggregate payment and ali taxation suffered in respect of its receipt, will equa! the full amount wbicb would bave been received bad no sucb deduction or withholding been made and had no sucb taxation been suffered.
G) Tbe benefit of this indemnity shall survive any terrnination of the arrangements contained in tbis letter and is in addition to any rigbts which any indemnified person may have at common law or otherwise including, but not limited to, any rigbt of contribution.
(k) Tbe Placing Agent sball bave no liability to you in connection with our engagement other tban as a result of its fraud, wilful default or negligent breacb of its obligations to you berein.
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(ii) Fmthennore, with the exception of those arising out of or as a result of any fraud, wilful default or negligence on our patt, you undettake by signing and retnrning to us Confinnation of Acceptance enclosed herewith that neither you, each of the companies controlled by you, its holding company, any of the subsidiaty of the such company and their respective associates (the "Member Company") and directors of such company and/or Member Company shall make any claim against us to recover any damages, losses, costs, charges, or expenses which you may suffer arising out of the performance by us of our obligation under this Placing Agreement and shall hold us hannless on allmatters arising from our engagement or in connection herewith.
(i) You warrant that you shall have the legai rights, full power and authority to execute, deliver and exercise your rights and perfonn your obligations under this Placing Agreement. This Placing Agreement constihttes a valid and binding agreement amongst the parties enforceable in accordance with the terms and conditions. This Placing Agreement shall be governed by and construed in accordance with the laws of the Hong Kong Special Administrative Region and the patties hereby irrevocably submit to the non-exclusive jurisdiction of the comts of the Hong Kong Special Administrative Region.
(ii) The Placing Agent hereby warrants and represents to the Company that it is a deemed Jicensed corporation under the Securities and Futnres Ordinance (Chapter 571 ofthe Laws of Hong Kong) ("SFO") and an independent third party not connected with the directors, chief executive, substantial shareholder(s) of the Company or its subsidiaries or any oftheir respective associates (as defined in the Listing Rules).
(iii) In relation to our appoinhnent, the Placing Agent will not provide any advice on matters relating to the Listing Rules, the Takeover Codes, the SFO, the applicable law of Bennuda and/or the Companies Ordinance of Hong Kong. In addition, the Placing Agent will not be responsible for providing any specialist or technical advice which you would need to obtain from other advisers (such as on accounting, legai and regulatory issues).
(iv) By signing the attached Confirmation of Acceptance, the signatoty confirms that the Company's entty into this Placing Agreement willnot cause any breach ofthe Listing Rules and the Takeover Codes by the Placing Agent in any regards.
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If you wish to accept this Placing Agreement subject to the terms and conditions set aut above, please duly complete and sign the attached confirmation of acceptance and return duplicate of this Placing Agreement to Kingston Securities Limited by fax to Ms. Rosita Kiu at 2295-0682 on or before 5:30 p.m. on 25 October 2013 and by hand to Kingston Securities Limited at Suite 280 l, 28th Fioor, One Intemational Finance Centre, l Harbour View Street, Centrai, HongKong.
Yours faithfully,
Far and on behalf of
Kingston Securities LimitedAuthorised ignature
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To : Kingston Securities Limited
Confirmation of Acceptance
We confum our acceptance of the terms and conditions of the agreement as set out in your letter dated 25 October 2013 ofwhich this confinnation forms patt.
For and on behalf of
China Agri-Products Exchange Limited
For and on hehalf o[
CHINAAORI-PR DUCTS EXCHANGE LIMITED
3i:. P: Jfìl- /,}
- ...... ·1·· 11.:.1
th
Authorised Signature
Name: Chan Chun Hong, TI mas
Date: 25 October 2013
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