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THE SUBSCRIPTION AGREEMENT DATED 29 AUGUST 2012IssuerThe CompanySubscriberRuffy Investments Limited (a substantial shareholder of the Company)Number of Subscription SharesPursuant to the Subscription Agreement, the Subscriber has agreed to subscribe for3,750,000,000 new Shares, representing approximately (i) 74.90% of the existingissued share capital of the Company; and (ii) 42.83% of the issued share capital of theCompany as enlarged by the Subscription Shares.The aggregate nominal value of the Subscription Shares (with a par value of HK$0.0004each) is HK$1,500,000.Subscription PriceThe issue price per Subscription Share is HK$0.08, which represents:(i)a premium of approximately 23.08% over the closing price of HK$0.065 per Shareas quoted on the Stock Exchange on the Last Trading Day;(ii) a premium of approximately 34.68% over the average closing price of HK$0.0594per Share for the last ten trading days up to and including the Last Trading Day;(iii) a premium of approximately 39.62% over the average closing price ofapproximately HK$0.0573 per Share for the last thirty trading days up to andincluding the Last Trading Day;(iv) a premium of approximately 26.58% over the average closing price ofapproximately HK$0.0632 per Share for the last three months up to and includingthe Last Trading Day;(v)a premium of approximately 196.30% over the unaudited consolidated net tangibleasset value of the Company of approximately RMB0.022 (which is equivalent toapproximately HK$0.027) per Share as at 30 June 2012; and(vi) a discount of approximately 72.41% to the unaudited consolidated net assetvalue of the Company of approximately RMB0.236 (which is equivalent toapproximately HK$0.290) per Share as at 30 June 2012.4
The Subscription Price was determined after arm’s length negotiation between theCompany and the Subscriber with reference to the prevailing share price and the futureprospects of the Group. The Directors (other than the independent non-executiveDirectors whose views will be given after taken into account the advice from theIndependent Financial Adviser) consider that the issue price per Subscription Share isfair and reasonable.The total subscription monies amounted to HK$300,000,000. The Subscription Sharesare valued at HK$243,750,000 based on the closing price of HK$0.065 per Share as atthe Last Trading Day.Ranking of the Subscription SharesThe Subscription Shares, when issued and fully paid, will rank equally amongthemselves and with all other Shares in issue on the date of allotment and issue of theSubscription Shares.Disposal and lock-up restrictionThe Subscription Shares are not subject to any lock-up or other disposal restrictionunder the terms of the Subscription Agreement.No change in members or composition of the BoardNo agreement has been reached between the Company and the Subscriber to change themembers or composition of the Board as a result of the Subscription.Conditions PrecedentCompletion of the Subscription is conditional on, among others, the followingConditions Precedent being fulfilled or, if applicable, waived by the Longstop Date:(a)the granting by the Executive to the Subscriber of the Whitewash Waiver;(b) the passing of the necessary resolution by the Independent Shareholders at theSGM, voting by poll, to approve the Subscription Agreement and the transactionscontemplated thereunder (including the allotment and issue of the SubscriptionShares to the Subscriber pursuant to the Subscription), the proposed grant of theSpecific Mandate and the Whitewash Waiver;(c)(d)the Listing Committee of the Stock Exchange granting, and not having withdrawnor revoked up to completion of the Subscription, the listing of and permission todeal in the Subscription Shares on GEM (either unconditionally or subject to suchconditions as the Subscriber may reasonably agree);the Shares remaining listed and traded on GEM at all times from the date of theSubscription Agreement and up to the date of fulfilment of the last in time to befulfilled of the Conditions Precedent (other than this Condition Precedent); and5
Page 1 and 2: Hong Kong Exchanges and Clearing Li
Page 3: GeneralAn Independent Board Committ
Page 7 and 8: Except as disclosed above and for b
Page 9 and 10: EFFECT ON THE SHAREHOLDING STRUCTUR
Page 11 and 12: of the exercise or conversion (as t
Page 13 and 14: (b)(c)from approximately 29.39% to
Page 15 and 16: DEFINITIONSIn this announcement, un
Page 17 and 18: “Outstanding CB”“Outstanding
Page 19: “HK$ and cents”Hong Kong dollar

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