EXECUTION VERSION

DATED 23 June 2016

ASCENDENT AUTOMATION (CAYMAN) LIMITED ARACO INVESTMENT LIMITED and BRIGHTEX ENTERPRISES LIMITED CONSORTIUM AGREEMENT

in connection with the proposed mandatory conditional general cash offer for all of the issued shares and options of China Automation Group Limited (not held by Araco Investment Limited. and parties acting in concert with it)

CONTENTS
  1. INTERPRETATION IN THIS AGREEMENT: 2

  2. IMPLEMENTATION OF THE OFFERS AND ALLOCATION OF CAG SHARES 11

  3. RESTRICTED TRANSACTIONS 18

  4. CORPORATE GOVERNANCE 19

  5. MEETINGS OF SHAREHOLDERS 22

  6. RESTRICTION ON TRANSFER OF CAG SHARES 23

  7. PRE-EMPTIVE RIGHT AND ANTI-DILUTION 28

  8. REPRESENTATIONS AND WARRANTIES 30

    8A INDEMNITIES 31

  9. INSIDE INFORMATION 32

  10. GUARANTEE 32

  11. TERMINATION 32

  12. NOTICES 33

  13. COSTS AND EXPENSES 33

  14. GENERAL PROVISIONS 34

  15. ANNOUNCEMENTS. 35

  16. CONFIDENTIALITY. 36

  17. CONSTITUTION AND SUPREMACY 37

  18. LANGUAGE 37

  19. COUNTERPARTS 37

  20. GOVERNING LAW AND ARBITRATION 37

SCHEDULE 1 FORM OF ANNOUNCEMENT 39

SCHEDULE 2 FORM OF AMENDED AND RESTATED ARTICLES 40

SCHEDULE 3 RESERVED MATTERS 41

SCHEDULE 4 DEED OF ADHERENCE 43

SCHEDULE 5 NET SETTLEMENT AMOUNT AND EXCHANGEABLE LOAN

AMOUNT 45

i

THIS AGREEMENT is made on 23 June 2016 BETWEEN:
  1. Ascendent Automation (Cayman) Limited, an exempted company incorporated with limited liability in the Cayman Islands, whose registered office is at c/o Walkers Corporate Limited, Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1- 9008, Cayman Islands ("AACL");
  2. Araco Investment Limited, a BVI business company incorporated in the British Virgin Islands, whose registered office is at Morgan & Morgan Building, Pasea Estate, Road Town, Tortola, British Virgin Islands with BVI Company Number:1907170 (the "Offeror"); and
  3. Brightex Enterprises Limited, a BVI business company incorporated in the British Virgin Islands, whose registered office is at Morgan & Morgan Building, P.O. Box 958, Pasea Estate, Road Town, Tortola, British Virgin Islands with BVI Company Number 1904314 ("Brightex Enterprises"),

each a "Party" and together the "Parties".

WHEREAS:
  1. China Automation Group Limited ("CAG"), is an exempted company incorporated in the Cayman Islands with its registered office at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands, and its issued CAG Shares are listed on the Main Board of the HKSE (Stock Code: 569). As at the date of this Agreement, CAG has an authorised share capital of HK$30,000,000 divided into 3,000,000,000 ordinary shares of a par value of HK$0.01 per share, of which 1,026,263,729 CAG Shares are in issue and are fully paid or credited as fully paid, and 102,626,000 outstanding Share Options.

  2. As of the date of this Agreement: (i) Consen Group holds 457,933,541 CAG Shares (the "CAG Sale Shares"); (ii) the Offeror does not hold any Equity Securities or any other interest in CAG; and (iii) Mr. Xuan holds 1,000,000 CAG Shares and 3,100,000 Share Options in his own name.

  3. Pursuant to and subject to the terms and conditions of the SPA, on or about the date of this Agreement, the Offeror will acquire all of the CAG Sale Shares held by Consen Group.

  4. Following the SPA Completion, the Offeror proposes to make a mandatory conditional general offer for all the issued share capital of CAG (the "Share Offer") and the Share Options (the "Option Offer") (other than those CAG Shares and Share Options already owned by the Offeror and parties acting in concert with it) on the terms and subject to the conditions set out in the Announcement (the Share Offer and the Option Offer together, the "Offers").

  5. The Parties have agreed to enter into this Agreement to regulate: (i) their relationship in respect of the Offers; (ii) the terms and conditions relating to the exchange and/or purchase of CAG Shares by AACL from the Offeror; (iii) certain corporate governance rights relating to the CAG Group following the Share Offer Closing Date; and (iv) the ongoing respective arrangements between the Parties concerning their respective shareholding in CAG and the corresponding rights and obligations attached thereto.

1

IT IS AGREED as follows: 1 INTERPRETATION

In this Agreement:

"AACL Director" has the meaning given to it in Clause 4.2(a); "AACL Tag Along Right" has the meaning given to it in Clause 6.7(a);

"acting in concert" has the meaning given to it in the Takeovers Code, and "persons acting in concert" and "concert parties" shall be construed accordingly;

"Acceptance Notice" has the meaning given to it in Clause 6.6(d);

"Ascendent Fund" means Ascendent Capital Partners II, L.P. an exempted limited liability partnership formed and existing under the laws of the Cayman Islands, whose office registered address is c/o Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue, George Town, Grand Cayman KYI-9005, Cayman Islands;

"Affiliate" means:

  1. in relation to an individual, that individual's relatives (whether close or distant, including any spouse, child (including adopted child and step-child), parent or sibling of that individual), any person which is Controlled by that individual and/or that individual's relatives (whether close or distant and whether acting singly or together) ("Controlled Entity") and any Affiliate of a Controlled Entity; and

  2. in relation to any other person, any other person that (directly or indirectly) Controls, is Controlled by or is under common Control with such person;

"Amended and Restated Articles" means the amended and restated memorandum and articles of association of CAG in the form set out in Schedule 2;

"Announcement" means the announcement relating to the Offers, to be issued under Rule 3.5 of the Takeovers Code, in substantially the form set out in Schedule 1 to this Agreement, with such amendments thereto as may be approved by the Executive and/or the HKSE and agreed between the Parties;

"Articles" means, at any time, the memorandum and articles of association (or other constitutional documents of CAG at that time (including the Amended and Restated Articles, if applicable which shall be adopted following the delisting of CAG on the Main Board of the HKSE);

"Authorisation" means any license, permit, consent, authorisation, permission, clearance, warrant, confirmation, certificate, order, exemption or approval of any Authority or any other person;

"Authority" means any competent governmental, administrative, supervisory, regulatory, judicial, determinative, disciplinary, enforcement or tax raising body, authority, agency, board, department, court or tribunal of any jurisdiction (including any relevant securities exchange) and whether supranational, national, regional or local;

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China Automation Group Limited published this content on 05 August 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 05 August 2016 02:00:04 UTC.

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