0000909518-13-000154.txt : 20130528 0000909518-13-000154.hdr.sgml : 20130527 20130528153315 ACCESSION NUMBER: 0000909518-13-000154 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20130528 DATE AS OF CHANGE: 20130528 GROUP MEMBERS: GROW GRAND LTD FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Ma Shing Yung CENTRAL INDEX KEY: 0001511374 FILING VALUES: FORM TYPE: SC 13D MAIL ADDRESS: STREET 1: UNIT 1105, THE METROPOLIS TOWER STREET 2: 10 METROPOLIS DRIVE, HUNG HOM, KOWLOON CITY: HONG KONG STATE: K3 ZIP: HUNG HOM SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Le Gaga Holdings Ltd CENTRAL INDEX KEY: 0001499506 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 000000000 STATE OF INCORPORATION: E9 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-85878 FILM NUMBER: 13874926 BUSINESS ADDRESS: STREET 1: Unit 1105, The Metropolis Tower STREET 2: 10 Metropolis Tower CITY: Hung Hom, Kowloon STATE: K3 ZIP: 00000 BUSINESS PHONE: (852)31628585 MAIL ADDRESS: STREET 1: Unit 1105, The Metropolis Tower STREET 2: 10 Metropolis Tower CITY: Hung Hom, Kowloon STATE: K3 ZIP: 00000 SC 13D 1 mm05-2413ma_sc13d.htm mm05-2413ma_sc13d.htm

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 

 
 
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.  )*

 
Le Gaga Holdings Limited
(Name of Issuer)
 
 
Ordinary Shares, Par Value $0.01
(Title of Class of Securities)
 
 
521168 104
(CUSIP Number)
 
 
Shing Yung Ma
c/o Le Gaga Holdings Limited
Unit 1105, The Metropolis Tower
10 Metropolis Drive
Hung Hom, Kowloon
Hong Kong
(852) 3162 8585
 
 
With copies to:
 
 
Akiko Mikumo
Weil, Gotshal & Manges LLP
29/F, Alexandra House
18 Chater Road, Central
Hong Kong
(852) 3476 9000
 
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
 
 
May 21, 2013
(Date of Event Which Requires Filing of this Statement)
 
 
 
 
 
 
 

 
 
 
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. x
 
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
 
*
The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
2

 


CUSIP No.
521168 104
 

 
1.
 
 
NAME OF REPORTING PERSON:  Shing Yung Ma
 
 
 
2.
 
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)         o
(b)         o
 
3.
 
 
SEC USE ONLY
 
 
 
4.
 
 
SOURCE OF FUNDS
PF, OO
 
 
5.
 
 
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): o
 
6.
 
 
CITIZENSHIP OR PLACE OF ORGANIZATION
Hong Kong
 
 
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
 
 
7.
 
 
SOLE VOTING POWER
726,102,6681
 
 
8.
 
 
SHARED VOTING POWER
0
 
 
9.
 
 
SOLE DISPOSITIVE POWER
726,102,668
 
 
10.
 
 
SHARED DISPOSITIVE POWER
0
 
 
11.
 
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
726,102,668
 
 
12.
 
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
o
 
13.
 
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31.29%2
 
 
14.
 
 
TYPE OF REPORTING PERSON
IN
 

 
1 Includes 20,000,000 ordinary shares directly held by Mr. Shing Yung Ma, 667,318,001 ordinary shares directly held by Grow Grand Limited, of which Mr. Ma is the sole shareholder, and options to purchase 36,699,667 ordinary shares that are currently exercisable and options to purchase 2,085,000 ordinary shares that will be exercisable within 60 days, in each case, held by Mr. Ma.
 
2 Based on 2,281,430,300 ordinary shares outstanding as of June 30, 2012, plus options to purchase 36,699,667 ordinary shares that are currently exercisable and options to purchase 2,085,000 ordinary shares that will be exercisable within 60 days, in each case, held by Mr. Ma.
 
 


 
3

 


CUSIP No.
521168 104
 
 
 
1.
 
 
NAME OF REPORTING PERSON:  Grow Grand Limited
 
 
 
2.
 
 
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)         o
(b)         o
 
 
3.
 
 
SEC USE ONLY
 
 
 
4.
 
 
SOURCE OF FUNDS
AF, OO
 
 
5.
 
 
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): o
 
 
6.
 
 
CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
 
 
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
 
 
7.
 
 
SOLE VOTING POWER
667,318,001
 
 
8.
 
 
SHARED VOTING POWER
0
 
 
9.
 
 
SOLE DISPOSITIVE POWER
667,318,001
 
 
10.
 
 
SHARED DISPOSITIVE POWER
0
 
 
11.
 
 
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
667,318,001
 
 
12.
 
 
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
o
 
 
13.
 
 
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.25%3
 
 
14.
 
 
TYPE OF REPORTING PERSON
CO
 

 
4

 



Preamble

This Statement on Schedule 13D (this “Schedule 13D”) supersedes the Statement on Schedule 13G, as last amended by Amendment No. 1 on February 13, 2012, filed by Mr. Shing Yung Ma (“Mr. Ma”) and Grow Grand Limited (“Grow Grand” and, together with Mr. Ma, the “Reporting Persons”), relating to ordinary shares of Le Gaga Holdings Limited.  This Schedule 13D is being filed because the Reporting Persons may no longer qualify to file on Schedule 13G.  See Item 4 below.

Item 1.           Security and Issuer

The title and class of equity securities to which this Schedule 13D relates are the ordinary shares, par value $0.01 per share (the “Ordinary Shares”), of Le Gaga Holdings Limited, a Cayman Islands company (the “Issuer”).  The address of the principal executive offices of the Issuer is Unit 1105, The Metropolis Tower, 10 Metropolis Drive, Hung Hom, Kowloon, Hong Kong.

Item 2.           Identity and Background

This Schedule 13D is filed jointly by Mr. Ma, a citizen of Hong Kong, and Grow Grand, a British Virgin Islands company.  Mr. Ma’s business address is c/o Le Gaga Holdings Limited, Unit 1105, The Metropolis Tower, 10 Metropolis Drive, Hung Hom, Kowloon, Hong Kong.  Grow Grand’s business address is c/o Shing Yung Ma, Le Gaga Holdings Limited, Unit 1105, The Metropolis Tower, 10 Metropolis Drive, Hung Hom, Kowloon, Hong Kong.

Mr. Ma is the Chief Executive Officer and a member of the Board of Directors of the Issuer (the “Board”).

Grow Grand, a British Virgin Islands company, is a holding company formed solely for the purpose of holding the Ordinary Shares and arranging related investment transactions.  Mr. Ma is the sole shareholder and sole director of Grow Grand.
 
Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), the Reporting Persons have entered into an agreement with respect to the joint filing of this Schedule 13D, a copy of which is attached hereto as an exhibit and incorporated herein by reference in its entirety.

During the last five years, none of the Reporting Persons has (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3.           Source and Amount of Funds or Other Consideration
 
The Ordinary Shares and options to purchase Ordinary Shares that the Reporting Persons beneficially own were acquired (i) in connection with the incorporation of the Issuer prior to the registration of the Issuer’s securities under Section 12 of the Act, and (ii) through grants of options to purchase Ordinary Shares pursuant to the Issuer’s share incentive plans.
 
 
 
 
5

 
 

 
Item 4.           Purpose of Transaction

On May 21, 2013, the Reporting Persons, together with Ms. Na Lai Chiu, the Chairwoman of the Board (“Ms. Chiu”), Valuetrue Investments Limited, a British Virgin Islands company wholly-owned by Ms. Chiu (“Valuetrue Investments”) and SC China Holdings Limited, a Cayman Islands company, on behalf of funds managed and/or advised by it and its and their affiliates (“Sequoia” and, together with the Reporting Persons, Ms. Chiu and Valuetrue Investments, the “Consortium”), submitted a preliminary, non-binding letter (the “Letter”) to the Board.  In the Letter, the Consortium outlined its proposal (“Proposal”) for the Transaction (as defined below).  Under the Proposal, members of the Consortium propose to acquire, through an acquisition vehicle to be formed by them, all of the outstanding share capital of the Issuer (other than the Shareholder Shares (as defined below), which will be rolled over in connection with the Transaction, and any other shares that will be rolled over in connection with the Transaction) for US$4.01 in cash per American Depositary Share of the Issuer (“ADS,” with each ADS representing 50 Ordinary Shares), or $0.0802 in cash per Ordinary Share, as the case may be.  In the Proposal, the Consortium stated that it has held discussions with financial institutions that have expressed interests in providing financing in connection with the Transaction.  The Proposal also provides that, among other things, (a) the Consortium’s financing providers will need to conduct customary legal, financial and accounting due diligence on the Issuer, and (b) the Consortium will negotiate with the Issuer to agree on, and enter into, definitive agreements with respect to the Transaction.  In the Proposal, members of the Consortium also stated that they expect that the Board will evaluate the Proposal independently through a committee of independent directors of the Board.

On May 21, 2013, in connection with the Proposal, the Reporting Persons entered into a consortium agreement (the “Consortium Agreement”) with Ms. Chiu, Valuetrue Investments and Sequoia, pursuant to which the Consortium will cooperate in good faith in connection with the Proposal to acquire all of the outstanding share capital of the Issuer through a going-private transaction (the “Transaction”) other than those shares beneficially owned by the members of the Consortium (the “Shareholder Shares”) or that will be rolled over by other shareholders in connection with the proposed Transaction.  The Consortium Agreement provides, among other things, for coordination in (i) performing due diligence, (ii) structuring and negotiating the Transaction and, if applicable, entering into definitive agreements with respect to the Transaction, and (iii) engaging advisors and sharing certain expenses.  During the period beginning on the date of the Consortium Agreement and ending on the earlier of (a) the one year anniversary of the date of the Consortium Agreement, and (b) the termination of the Consortium Agreement, members of the Consortium have agreed (i) to work exclusively with each other with respect to the Transaction, (ii) not to sell, pledge, encumber or otherwise transfer the Shareholder Shares except as contemplated by the Consortium Agreement, (iii) not to enter into any voting agreement with respect to the Shareholder Shares in support of a competing proposal, and (iv) to vote their respective Shareholder Shares against any competing proposal or matter that would facilitate a competing proposal and in favor of the Transaction.

References to the Consortium Agreement and the Letter in this Schedule 13D are qualified in their entirety by reference to the Consortium Agreement and the Letter themselves, each of which are attached hereto as exhibits and incorporated by reference as if set forth in their entirety herein.

 
 
 
6

 
 
 
If the Transaction is carried out and consummated, the ADSs will no longer be traded on the NASDAQ Global Select Market and the registration of the Ordinary Shares and the ADSs under Section 12 of the Act will be terminated.  No assurance can be given that any proposal, any definitive agreement or any transaction relating to a proposed Transaction will be entered into or be consummated.  The Letter provides that no binding obligation on the part of the Issuer or the Consortium shall arise with respect to the proposed Transaction unless and until definitive agreements have been executed.

The Reporting Persons reserve their right to change their plans and intentions in connection with any of the actions discussed in this Item 4.  Any action taken by the Reporting Persons may be effected at any time or from time to time, subject to any applicable limitations imposed thereon by any applicable law and the terms of the Consortium Agreement.

Depending on various factors, including, without limitation, the Issuer’s financial position and strategic direction, actions taken by the Board, price levels of the Ordinary Shares, other investment opportunities available to the Reporting Persons, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate, including, without limitation, changing their current intentions, with respect to any or all matters referred to in this Item 4 of Schedule 13D.  Subject to the terms of the Consortium Agreement, the Reporting Persons may, from time to time, acquire or cause affiliates to acquire additional Ordinary Shares, dispose of some or all of their Ordinary Shares, engage in short-selling or hedging or similar transactions with respect to the Ordinary Shares, and/or continue to hold Ordinary Shares.

Except as set forth herein, or as would occur upon completion of any of the matters discussed herein, the Reporting Persons have no present plan or proposal that would relate to, or would result in, any of the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D (although they reserve the right to develop such plans).

Item 5.           Interest in Securities of the Issuer

(a)-(b)           The responses of the Reporting Persons to Rows (7) through (13) of the cover pages of this Schedule 13D are incorporated herein by reference.

As of the date hereof, (i) Mr. Ma directly owns (A) 20,000,000 Ordinary Shares, (B) options to purchase 36,699,667 Ordinary Shares that are currently exercisable, and (C) options to purchase 2,085,000 Ordinary Shares that will be exercisable within 60 days; and (ii) Grow Grand, of which Mr. Ma is the sole shareholder, directly owns 667,318,001 Ordinary Shares, together representing approximately 31.29% of the outstanding Ordinary Shares (such percentage being based on 2,281,430,300 Ordinary Shares outstanding as of June 30, 2012, based on information provided in the Form 20-F filed by the Issuer on November 23, 2012, plus 36,699,667 options that are currently exercisable and 2,085,000 options that will be exercisable within 60 days, in each case, held by Mr. Ma).

The Reporting Persons may be deemed to be a “group” with Ms. Chiu, Valuetrue Investments and Sequoia for purposes of Section 13(d) of the Act as a result of entering into the Consortium Agreement and the submission of the Proposal Letter (each as defined in Item 4).  However, each of the Reporting Persons expressly disclaims beneficial ownership for all purposes of the Ordinary Shares and ADSs held by Ms. Chiu, Valuetrue Investments and Sequoia.  The Reporting Persons are only responsible for the information contained in this Schedule 13D and assume no responsibility for information contained in any other Schedules 13D filed by Ms. Chiu, Valuetrue Investments and/or Sequoia.

(c)           To the best knowledge of each of the Reporting Persons, none of the Reporting Persons has effected any transactions relating to the Ordinary Shares during the past 60 days.

(d)           Not applicable.
 
 
 
 
7

 
 

 
(e)           Not applicable.

Item 6.           Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Items 4, 5 and 7 of this Schedule 13D are incorporated herein by reference.

To the best knowledge of the Reporting Persons, except as set forth herein, there are no contracts, arrangements, understandings or relationships (legal or otherwise), including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, between the persons enumerated in Item 2, and any other person, with respect to any securities of the Issuer, including any securities pledged or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities other than standard default and similar provisions contained in loan agreements.

Item 7.           Material to Be Filed as Exhibits
 
The following are filed herewith as exhibits to this Schedule 13D:

Exhibit 1
Joint Filing Agreement by and between the Reporting Persons, dated May 28, 2013.

Exhibit 2
Consortium Agreement by and among Ms. Chiu, Valuetrue Investments, Mr. Ma, Grow Grand and Sequoia, dated May 21, 2013.

Exhibit 3
Proposal Letter to the Issuer from Ms. Chiu, Valuetrue Investments, Mr. Ma, Grow Grand and Sequoia, dated May 21, 2013.
 
 
 
 
 

 
 
8

 


SIGNATURE

 
After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this Schedule 13D is true, complete and correct.
 


Dated:           May 28, 2013



 
SHING YUNG MA
   
 
/s/ Shing Yung Ma
 
Name:
Shing Yung Ma
   
   
   
 
GROW GRAND LIMITED
     
 
By:
/s/ Shing Yung Ma
 
Name:
Shing Yung Ma
 
Title:
Director



 
 
 


 
9
EX-99.1 2 mm05-2413ma_sc13de1.htm EX.1 - JOINT FILING AGREEMENT mm05-2413ma_sc13de1.htm

EXHIBIT 1

AGREEMENT REGARDING JOINT FILING
OF STATEMENT ON SCHEDULE 13D
 

The parties listed below agree that the Schedule 13D to which this agreement is attached as an exhibit, and all further amendments thereto, shall be filed on behalf of each of them.  This agreement is intended to satisfy Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended.  This agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.



Dated:           May 28, 2013




 
SHING YUNG MA
   
 
/s/ Shing Yung Ma
 
Name:
Shing Yung Ma
   
   
   
 
GROW GRAND LIMITED
     
 
By:
/s/ Shing Yung Ma
 
Name:
Shing Yung Ma
 
Title:
Director


EX-99.2 3 mm05-2413_sc13de2.htm EX.2 - CONSORTIUM AGREEMENT mm05-2413_sc13de2.htm
 

EXHIBIT 2

CONSORTIUM AGREEMENT
 
CONSORTIUM AGREEMENT, dated May 21, 2013 (this “Agreement”), among Ms. Na Lai Chiu (the “Chairwoman”), Valuetrue Investments Limited, a British Virgin Islands company wholly-owned by the Chairwoman (“Valuetrue Investments”), Mr. Shing Yung Ma (the “Founder”), Grow Grand Limited, a British Virgin Islands company wholly-owned by the Founder (“Grow Grand” and, together with the Chairwoman, Valuetrue Investments and the Founder, the “Founder Parties”) and SC China Holdings Limited, a Cayman Islands company, on behalf of funds managed and/or advised by it and its and their Affiliates (“Sequoia”). Each of Sequoia and the Founder Parties is referred to herein as a “Consortium Member” and, collectively, the “Consortium.” Unless otherwise defined herein, capitalized terms are defined in Section 10.1 hereof.
 
WHEREAS, the Consortium Members propose to undertake an acquisition transaction (the “Transaction”) with respect to Le Gaga Holdings Limited, a company incorporated under the laws of the Cayman Islands with ADSs listed on the NASDAQ Global Select Market under the symbol “GAGA” (the “Target”), pursuant to which the Target would be delisted from the NASDAQ Global Select Market and deregistered under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”);
 
WHEREAS, (a) in connection with the Transaction, the Consortium Members propose to form a new company (“Holdco”) under the laws of the Cayman Islands, and to cause Holdco to form a direct, wholly-owned subsidiary (“Acquisition Company”) under the laws of the Cayman Islands, and (b) at the closing of the Transaction (the “Closing”), the Consortium Members intend that Acquisition Company will be merged with and into the Target, with the Target being the surviving company and becoming a direct, wholly-owned subsidiary of Holdco (the “Surviving Company”);
 
WHEREAS, on the date hereof, the Chairwoman, the Founder and Sequoia will submit a non-binding proposal, a copy of which is attached hereto as Schedule A (the “Proposal”), to the board of directors of the Target (the “Target Board”) in connection with the Transaction; and
 
WHEREAS, in accordance with the terms of this Agreement, the Consortium will conduct (a) an evaluation of the Target and its business, (b) discussions regarding the Proposal with the Target, and (c) the negotiation of the terms of definitive documentation in connection with the Transaction (in which negotiations the Consortium expects that the Target will be represented by a special committee of independent and disinterested directors of the Target Board (the “Special Committee”)), including, without limitation, an agreement and plan of merger among Holdco, Acquisition Company and the Target in form and substance to be agreed by the Consortium and the Target (the “Merger Agreement”), which shall be subject to the approval of the shareholders of the Target.
 
NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual agreements and covenants set forth herein, and
 
 
 
 

 
 
 
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Consortium Members, intending to be legally bound, hereby agree as follows:
 
1. Proposal; Holdco Ownership; Other Agreements
 
1.1 Participation in Transaction. The Consortium Members agree to participate in the Transaction on the terms set forth in this Agreement.
 
1.2 Proposal. On the date hereof, the Chairwoman, the Founder and Sequoia shall submit the Proposal to the Target Board. Thereafter, the Consortium shall (a) conduct an evaluation of the Target and its business; (b) engage in discussions with the Target regarding the Proposal; and (c) negotiate in good faith the terms of definitive documentation in respect of the Transaction, including, without limitation, the Merger Agreement.
 
The Consortium Members further agree to negotiate in good faith to reach agreement on a shareholders agreement that would, among other things, govern the relationship of the shareholders in Holdco following the Closing, and contain provisions customary for transactions of this type, as well as the terms of any other agreements among the Consortium Members required to support the Proposal or to regulate the relationship among the Consortium Members.
 
1.3 Holdco Ownership.
 
(a) Prior to the execution of the Merger Agreement, the Consortium Members shall (i) incorporate Holdco and shall cause Holdco to incorporate Acquisition Company, and (ii) negotiate in good faith the terms of the memorandum and articles of association of Holdco and Acquisition Company. The memorandum and articles of association of Acquisition Company shall become the memorandum and articles of association of the Surviving Company at the Closing.
 
(b) Each Consortium Member’s ownership percentage in Holdco shall be based on the amount of cash paid, and the agreed-upon value of any other consideration contributed, by it to Holdco relative to the aggregate amount of cash paid, and the aggregate agreed-upon value of any other consideration contributed, by all of the Consortium Members to Holdco in connection with the Transaction. Specifically, each Consortium Member agrees to contribute or cause to be contributed to Holdco at the Closing, in exchange for newly issued equity interests in Holdco, all of the Target Ordinary Shares then held by it (and its Affiliates) based on the same per share consideration as provided in the Merger Agreement, except as may otherwise be agreed by the Consortium Members. For the avoidance of doubt, the Consortium Members agree that the obligation of the Consortium Members to purchase and pay for any Holdco shares shall be subject to the satisfaction or waiver of the various conditions to the obligations of Holdco and Acquisition Company to be set forth in the Merger Agreement.
 
 
 
 
2

 
 
 
2. Participation in Transaction; Advisors; Approvals
 
2.1 Information Sharing and Roles. Each Consortium Member shall cooperate in good faith in connection with the Proposal and the Transaction, including, without limitation, by (a) complying with any information delivery or other requirements entered into by Holdco, a Consortium Member or an Affiliate of a Consortium Member, and shall not, and shall direct its Representatives not to, whether by their action or omission, breach such arrangements or obligations, (b) participating in meetings and negotiations with the Special Committee and its advisors, (c) executing and complying with any confidentiality agreements reasonably required by the Target, (d), sharing all information reasonably necessary to evaluate the Target and its business, (e) providing each other or Holdco with all information reasonably required concerning such Consortium Member or any other matter relating to such Consortium Member in connection with the Transaction and any other information a Consortium Member may reasonably require in respect of any other Consortium Member and its Affiliates for inclusion in any definitive documentation related to the Transaction, (f) providing timely responses to reasonable requests by any other Consortium Member for information, and (g) applying the level of resources and expertise that such Consortium Member reasonably considers to be necessary and appropriate to meet its obligations under this Agreement. Notwithstanding the foregoing, no Consortium Member is required to make available to the other Consortium Members any of its internal investment committee materials or analyses or any information which it considers commercially sensitive or which is otherwise held subject to an obligation of confidentiality. The Founder Parties shall not provide any information in breach of any of their obligations or fiduciary duties to the Target.
 
2.2 Appointment of Advisors.
 
(a) The Consortium Members shall agree to the scope and engagement terms of all joint Advisors to Holdco or the Consortium in connection with the Transaction. Weil, Gotshal & Manges LLP has been selected by the Consortium as international counsel to the Consortium for the Transaction.  The Consortium will engage PRC legal counsel and Cayman Islands counsel to the Consortium when required.
 
(b) If a Consortium Member requires separate representation in connection with specific issues arising out of the Proposal or the Transaction, such Consortium Member may retain other Advisors to advise it; provided, that such Consortium Member shall (i) provide prior notice to the other Consortium Members of such retention, and (ii) be solely responsible for the fees and expenses of such separate Advisors.
 
2.3 Approvals. Each Consortium Member shall use reasonable best efforts and provide all cooperation as may be reasonably requested by each other Consortium Member to obtain all applicable governmental, statutory, regulatory or other approvals, licenses, waivers or exemptions required or, in the reasonable opinion of such other Consortium Member, desirable for the consummation of the Transaction.
 
 
 
 
3

 
 
 
3. Transaction Costs
 
3.1 Expenses and Fee Sharing.
 
(a) Upon consummation of the Transaction, the Surviving Company shall reimburse the Consortium Members for, or pay on behalf of the Consortium Members, as the case may be, all of their out-of-pocket costs and expenses incurred in connection with the Transaction, including, without limitation, the reasonable fees, expenses and disbursements of Advisors retained by the Consortium (other than fees, expenses and disbursements of any separate Advisors retained by a Consortium Member pursuant to Section 2.2(b)).
 
(b) If the Transaction is not consummated (and Section 3.1(c) below does not apply), the Consortium Members agree that: (i) each Consortium Member shall bear all fees and out-of-pocket expenses separately incurred by it in connection with the Transaction (including, without limitation, any fees, expenses and disbursements of any separate Advisors retained by it pursuant to Section 2.2(b)); and (ii) each Consortium Member shall bear a percentage, equal to its planned equity beneficial ownership percentage of Holdco immediately after the consummation of the Transaction (“Planned Equity Participation”), of all fees and out-of-pocket expenses (A) payable in connection with the Transaction to Advisors to the Consortium retained by the Consortium Members as specified in Section 2.2(a) or any lender or other financing sources or (B) incurred by the Consortium in the defense, pursuit or settlement of any disputes or litigation relating to the Transaction.
 
(c) If the Transaction is not consummated due to the willful misconduct or unilateral breach of this Agreement by one or more Consortium Members, then the breaching Consortium Member(s) shall reimburse any non-breaching Consortium Member(s) for all of their out-of-pocket costs and expenses, including, without limitation, any fees, expenses and disbursements of Advisors retained by the Consortium Members (which shall include the fees, expenses and disbursements of any separate Advisors retained by a Consortium Member pursuant to Section 2.2(b)), without prejudice to any rights and remedies otherwise available to any non-breaching Consortium Member.
 
(d) Each Consortium Member shall be entitled to receive a percentage equal to its Planned Equity Participation of any termination, break-up or other fees or amounts payable to Holdco or Acquisition Company by the Target pursuant to the Merger Agreement, net of the costs and expenses incurred by the Consortium in connection with the Transaction, including, without limitation, the reasonable fees, expenses and disbursements of Advisors retained by the Consortium (other than fees, expenses and disbursements of any separate Advisors retained by a Consortium Member pursuant to Section 2.2(b)).
 
4. Exclusivity
 
4.1 Exclusivity Period. During the period beginning on the date hereof and ending on the earlier of (i) the date that is one year from the date hereof, and (ii) the termination of this Agreement pursuant to Article 5 (the “Exclusivity Period”), each Consortium Member shall:
 
 
 
4

 
 
 
(a) work exclusively with the other Consortium Members to implement the Transaction, including, without limitation, to (i) evaluate the Target and its business, (ii) prepare, negotiate and finalize definitive documentation in connection with the Transaction, and (iii) vote, or cause to be voted, at every shareholder or stakeholder meeting (whether by written consent or otherwise) all Target Ordinary Shares and Target Securities held or beneficially owned by such Consortium Member against any Competing Proposal or matter that would facilitate a Competing Proposal and in favor of the Transaction (and any actions required in furtherance thereof);
 
(b) not, without the written consent of the other Consortium Members, directly or indirectly, either alone or with or through any Affiliate or Representative authorized to act on such Consortium Member’s behalf (i) make a Competing Proposal, or seek, initiate, solicit, encourage, induce, facilitate or join with any other person in the making of, any Competing Proposal, (ii) provide any information to any third party with a view to the third party or any other person pursuing or considering to pursue a Competing Proposal, (iii) finance or offer to finance any Competing Proposal, including, without limitation, by offering any equity or debt financing, or contribution of Target Securities or provision of a voting agreement, in support of any Competing Proposal, (iv) enter into any written or oral agreement, arrangement or understanding (whether legally binding or not) regarding, or do, anything that is directly inconsistent with the provisions of this Agreement or the Transaction as contemplated under this Agreement, (v) acquire or dispose of any Target Securities or, directly or indirectly (A) sell, offer to sell, give, pledge, encumber, assign, grant any option for the sale of or otherwise transfer or dispose of, or enter into any agreement, arrangement or understanding to sell or otherwise transfer or dispose of, an interest in any Target Securities (“Transfer”) or permit any Transfer by any of its Affiliates of an interest in any Target Securities, in each case, except as expressly contemplated under this Agreement and the definitive documentation, (B) enter into any contract, option or other arrangement or understanding with respect to a Transfer or limitation on voting rights of any Target Securities, or any right, title or interest thereto or therein, or (C) deposit any Target Securities into a voting trust or grant any proxies or enter into a voting agreement, power of attorney or voting trust with respect to any Target Securities, (vi) take any action that would reasonably be expected to have the effect of preventing, disabling or delaying such Consortium Member from performing its obligations under this Agreement, or (vii) seek, initiate, solicit, encourage, induce, or facilitate any offer, inquiry or proposal from, or enter into any negotiation, discussion, agreement or understanding (whether or not in writing and whether or not legally binding) with, any other person regarding the matters described in Sections 4.1(b)(i) to 4.1(b)(vi);
 
(c) immediately cease and terminate, and cause to be ceased and terminated, all existing activities, discussions, conversations, negotiations and other communications with all persons conducted heretofore with respect to a Competing Proposal; and
 
(d) promptly notify the other Consortium Members if it or, to its knowledge, any of its Representatives receives any approach or communication with respect to any Competing Proposal, including in such notice the identity of the other persons involved and the nature and content of the approach or communication, and provide the other Consortium Members with copies of any written communication.
 
 
 
 
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Notwithstanding the foregoing provisions of this Section 4.1, to the extent the Company specifically requests that the Chairwoman or the Founder cooperate in respect of a bona fide written Competing Proposal that was not made, sought, initiated, solicited, or encouraged, induced, facilitated or joined by the Chairwoman or the Founder, as the case may be, and the Chairwoman determines (solely in her capacity as Chairwoman or a member of the Board, and not in her capacity as a shareholder) or the Founder determines (solely in his capacity as the Chief Executive Officer or a member of the Board, and not in his capacity as a shareholder), as applicable, that, based on the written advice of Cayman Islands counsel to the Consortium, that she or he is obligated in such capacity to cooperate with the Company in order to comply with her or his fiduciary duties under Cayman Islands law, the Chairwoman or the Founder, as applicable, may provide such cooperation but only to the extent required to comply with such fiduciary duties in such capacity and in no event shall this clause be used as a means intended primarily to circumvent the exclusivity provisions hereof.
 
5. Termination
 
5.1 Termination Events. Subject to Section 5.2(a), this Agreement shall terminate with respect to all Consortium Members upon the earliest to occur of (a) a written agreement among the Consortium Members to terminate this Agreement, and (b) the Closing.
 
5.2 Effect of Termination.
 
(a) Upon termination of this Agreement pursuant to Section 5.1, Article 3 (Transaction Costs), Article 5 (Termination), Section 6.2 (Confidentiality), Article 7 (Notices) and Article 9 (Miscellaneous) shall continue to bind the Consortium Members and each Consortium Member shall be liable under Article 3 for its pro rata portion of any costs and expenses incurred by the Consortium Members prior to the termination of this Agreement, unless there was a breach of this Agreement by such Consortium Member prior to the termination, in which case Section 3.1(c) shall apply.
 
(b) Other than as set forth in Sections 5.2(a) or in respect of a breach of this Agreement by any Consortium Member prior to the termination of this Agreement with respect to such Consortium Member, the Consortium Members shall not otherwise be liable to each other in relation to this Agreement.
 
6. Announcements and Confidentiality
 
6.1 Announcements. The Consortium shall be responsible for any announcements regarding the subject matter of this Agreement and the Transaction (subject to each Consortium Member having a reasonable opportunity to review and comment upon such announcements), and no Consortium Member shall make any such announcements, except to the extent that any announcement is required by law, a court of competent jurisdiction, a regulatory body or international stock exchange, and then only after the form and terms of the announcement have been notified to the other Consortium Members and the other Consortium Members have had a reasonable opportunity to comment thereon, in each case to the extent reasonably practicable.
 
 
 
 
6

 
 
 
6.2 Confidentiality.
 
(a) Except as permitted under Section 6.3, each Consortium Member shall not, and shall direct its Affiliates and Representatives not to, without the prior written consent of the other Consortium Members, disclose any Confidential Information received by it (the “Recipient”) from any other Consortium Member (the “Discloser”) in any manner whatsoever. Each Consortium Member shall not and shall direct its Affiliates and Representatives not to, use any Confidential Information for any purpose other than for the purposes of giving effect to and performing its obligations under this Agreement or evaluating, negotiating and implementing the Transaction.
 
(b) Subject to Section 6.2(c), the Recipient shall return or destroy (in the Recipient’s sole discretion), upon written request of the Discloser, any Confidential Information which falls within clause (a) of the definition of Confidential Information; provided, that with respect to any electronic data that constitutes Confidential Information, the foregoing obligation shall not apply to any electronic data stored on the back-up tapes of the Recipient’s hardware.
 
(c) Each Consortium Member may retain copies of the Confidential Information referred to in Section 6.2(b) in order to comply with legal, regulatory or internal policy requirements.
 
(d) Each Consortium Member acknowledges that, in relation to Confidential Information received from the other Consortium Members, the obligations contained in this Section 6.2 shall continue to apply for a period of 12 months following termination of this Agreement pursuant to Article 5, unless otherwise agreed in writing.
 
6.3 Permitted Disclosures. A Consortium Member may disclose Confidential Information (a) to those of its Affiliates and Representatives as such Consortium Member reasonably deems necessary to give effect to, perform its obligations under or enforce this Agreement or evaluate, negotiate and implement the Transaction, but only on a confidential basis, or (b) if required by law or a court of competent jurisdiction, the United States Securities and Exchange Commission or any other regulatory body or international stock exchange having jurisdiction over a Consortium Member or pursuant to whose rules and regulations such disclosure is required to be made, but only after the form and terms of such disclosure have been notified to the other Consortium Members and the other Consortium Members have had a reasonable opportunity to comment thereon, in each case to the extent reasonably practicable.
 
7. Notices
 
7.1 Any notice, request, instruction or other document to be provided hereunder by any Consortium Member to another Consortium Member shall be in writing and delivered personally or sent by facsimile, overnight courier or electronic mail, to the address, facsimile number or electronic mail address provided under the other Consortium Member’s signature page hereto, or to any other address, facsimile number or electronic mail address as a Consortium Member may hereafter specify for the purpose by notice to the other Consortium Members. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. (local time) on a Business Day in the place of receipt.
 
 
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Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day in the place of receipt.
 
8. Representations and Warranties
 
8.1 Representations and Warranties. Each Consortium Member hereby represents and warrants, on behalf of such Consortium Member only, to the other Consortium Members that (a) it has the requisite power and authority to execute, deliver and perform this Agreement; (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary action on the part of such Consortium Member and no additional proceedings are necessary to approve this Agreement; (c) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of such Consortium Member enforceable against it in accordance with the terms hereof; (d) its execution, delivery and performance (including, without limitation, the provision and exchange of information) of this Agreement will not (i) conflict with, require a consent, waiver or approval under, or result in a breach of or default under, any of the terms of any material contract or agreement to which such Consortium Member is a party or by which such Consortium Member is bound, or any office such Consortium Member holds, (ii) violate any order, writ, injunction, decree or statute, or any rule or regulation, applicable to such Consortium Member or any of its properties and assets, or (iii) result in the creation of, or impose any obligation on such Consortium Member to create, any lien, charge or other encumbrance of any nature whatsoever upon such Consortium Member’s properties or assets; and (e) no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Transaction based upon arrangements made by or on behalf of such Consortium Member.
 
8.2 Target Ordinary Shares. As of the date of this Agreement, (a) the Consortium Members hold (i) of record the number of Target Ordinary Shares set forth under the heading “Target Ordinary Shares” next to their names on Schedule B hereto, (ii) the number of ADSs set forth under the heading “ADSs” next to their names on Schedule B hereto, and (iii) the number of outstanding Target Securities (other than Target Ordinary Shares and ADSs) set forth under the heading “Other Target Securities” next to their names on Schedule B hereto, in each case free and clear of any encumbrances or restrictions; (b) the Chairwoman, as the director of Valuetrue Investments, has the sole right to control the voting and disposition of the Target Ordinary Shares, ADSs and any other Target Securities held by Valuetrue Investments; (c) the Founder, as the director of Grow Grand, has the sole right to control the voting and disposition of the Target Ordinary Shares, ADSs and any other Target Securities held by Grow Grand; and (d) none of the Consortium Members or their respective Affiliates owns, directly or indirectly, any Target Ordinary Shares, ADSs or other Target Securities, other than as set forth on Schedule B hereto. For purposes of Section 8.2(d), “owns” means a Consortium Member (x) is the record holder of such security or (y) is the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of such security.
 
8.3 Reliance. Each Consortium Member acknowledges that the other Consortium Members have entered into this Agreement on the basis of and reliance upon (among other things) the representations and warranties in Sections 8.1 and 8.2 and have been induced by them to enter into this Agreement.
 
 
 
 
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9. Miscellaneous
 
9.1 Entire Agreement. This Agreement constitutes the entire agreement among the Consortium Members and supersedes any previous oral or written agreements or arrangements among them or between any of them relating to its subject matter.
 
9.2 Further Assurances. Each Consortium Member shall use all reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Consortium Members in doing, all things necessary, proper or advisable to carry out the intent and purposes of this Agreement.
 
9.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the Consortium Members to the maximum extent possible. In any event, the invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.
 
9.4 Amendments; Waivers. Neither this Agreement nor any term hereof may be amended or otherwise modified other than by an instrument in writing signed by each of the Consortium Members. No provision of this Agreement may be waived, discharged or terminated other than by an instrument in writing signed by the Consortium Member against whom the enforcement of such waiver, discharge or termination is sought. No failure or delay by any Consortium Member in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
 
9.5 Assignment; No Third Party Beneficiaries. Other than as provided herein, the rights and obligations of each Consortium Member shall not be assigned without the prior consent of the other Consortium Members; provided, however, that Sequoia may assign its rights and obligations under this Agreement, in whole or in part, to any affiliated investment funds of Sequoia, any investment vehicle of Sequoia or such funds or any other co-investors of Sequoia or such funds (as the case may be) so long as Sequoia shall remain subject to its obligations under this Agreement. This Agreement shall be binding upon the respective heirs, successors, legal representatives and permitted assigns of the Consortium Members. Nothing in this Agreement shall be construed as giving any person, other than the Consortium Members and their heirs, successors, legal representatives and permitted assigns any right, remedy or claim under or in respect of this Agreement or any provision hereof.
 
9.6 No Partnership or Agency. The Consortium Members are independent and nothing in this Agreement constitutes a Consortium Member as the trustee, fiduciary, agent, employee, partner or joint venturer of any other Consortium Members.
 
9.7 Counterparts. This Agreement may be executed in counterparts and all counterparts taken together shall constitute one document.
 
 
 
 
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9.8 Governing Law. This Agreement and all matters arising out of or relating to this Agreement shall be governed in all respects by the laws of Hong Kong, without reference to any conflicts of law provisions.
 
9.9 Dispute Resolution.
 
(a) Any disputes, actions and proceedings (“Disputes”) against any Consortium Member or arising out of or in any way relating to this Agreement shall be resolved through consultation between the parties to the Dispute. Consultation shall begin immediately after one party to the Dispute has delivered to the other party to the Dispute a request for consultation (the “Request for Consultation”).
 
(b) Any Dispute not resolved by the parties within 30 days after delivery of a Request for Consultation will be subject to the exclusive jurisdiction of any court of competent jurisdiction in Hong Kong. The Consortium Members irrevocably and unconditionally submit to the jurisdiction of any such court and waive any defenses based on lack of personal jurisdiction, venue or inconvenient forum.
 
(c) Any Consortium Member may, to the extent permitted under the laws of the jurisdiction where application is made, seek an interim injunction from a court or other authority with competent jurisdiction and, notwithstanding that this Agreement is governed by the laws of Hong Kong, a court or authority hearing an application for injunctive relief may apply the procedural law of the jurisdiction where the court or other authority is located in determining whether to grant the interim injunction.
 
9.10 Specific Performance. Each Consortium Member acknowledges and agrees that the other Consortium Members would be irreparably injured by a breach of this Agreement by it and that money damages alone are an inadequate remedy for actual or threatened breach of this Agreement. Accordingly, each Consortium Member shall be entitled to specific performance or injunctive or other equitable relief (without posting a bond or other security) to enforce or prevent any violations of any provision of this Agreement, in addition to all other rights and remedies available at law or in equity to such Consortium Member, including, without limitation, the right to claim money damages for breach of any provision of this Agreement.
 
9.11 Limitation on Liability. The obligation of each Consortium Member under this Agreement is several (and not joint or joint and several).
 
10. Definitions and Interpretations
 
10.1 Definitions. In this Agreement, unless the context requires otherwise:
 
ADSs” means the Target’s American Depositary Shares, each representing 50 Target Ordinary Shares.
 
 
 
 
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Advisors” means any advisors or consultants of Holdco, Acquisition Company, and the Consortium Members, in each case appointed in connection with the Transaction.
 
Affiliate” means, with respect to any person, any other person that, directly or indirectly, Controls, is Controlled by or is under common Control with such specified person and “Affiliates” shall be construed accordingly.
 
Business Day” means any day (other than a Saturday or a Sunday) on which banks generally are open in the People’s Republic of China, Hong Kong and in New York, New York, for the transaction of normal banking business.
 
Competing Proposal” means a proposal, offer or invitation to the Target, Sequoia, any of the Founder Parties or any of their respective Affiliates (other than the Proposal), that involves the direct or indirect acquisition of 10% or more of any class of Target Securities, a sale of all or any significant amount of the assets of the Target, a merger, business combination, consolidation, restructuring, reorganization, or recapitalization involving the Target, a change of control of the Target or any other transaction that could adversely affect, prevent or materially reduce the likelihood of the consummation of the Transaction with the Consortium.
 
Confidential Information” includes (a) all written, oral or other information obtained in confidence by one Consortium Member from any other Consortium Member in connection with this Agreement or the Transaction, unless such information (i) is already known to such Consortium Member or to others not known by such Consortium Member to be bound by a duty of confidentiality, (ii) is or becomes publicly available other than through a breach of this Agreement by such Consortium Member or its Representatives, or (iii) is independently developed by such Consortium Member or its Representatives without use of Confidential Information, and (b) the existence or terms of, and any negotiations or discussions relating to, this Agreement, the Proposal and any definitive documentation, including, without limitation, the Merger Agreement.
 
Control” means the possession, directly or indirectly, of the power to direct the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.
 
Representative” of a Consortium Member means that Consortium Member’s employees, directors, officers, partners, members, nominees, agents, advisors (including, without limitation, legal counsel, accountants, consultants and financial advisors), potential sources of equity or debt financing, and any representatives of the foregoing. The Representatives shall include the Advisors.
 
Target Ordinary Shares” means the issued and outstanding ordinary shares, par value US$0.01 per share, of the Target.
 
Target Securities” means shares, warrants, options and any other securities or instruments which are convertible into or exercisable for shares or other equity of the Target, including, without limitation, the Target Ordinary Shares and the ADSs.
 
 
 
 
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10.2 Headings. Section and paragraph headings are inserted for ease of reference only and shall not affect construction.
 
[Signature Pages Follow]
 
 
 
 
 
 
 
 
 

 
 

 
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IN WITNESS WHEREOF, the Consortium Members have caused this Agreement to be executed and delivered as of the date first written above.
 
  FOUNDER PARTIES:  
     
 
NA LAI CHIU
 
     
 
 /s/ Na Lai Chiu  
         
 
 
  VALUETRUE INVESTMENTS LIMITED  
     
 
By:
/s/ Na Lai Chiu  
    Name: Na Lai Chiu   
    Title: Director   
         

 
 
SHING YUNG MA
 
     
 
 /s/ Shing Yung Ma  
         
 
 
 
GROW GRAND LIMITED
     
 
By:
 /s/ Shing Yung Ma  
    Name: Shing Yung Ma   
    Title: Director   
         
 
 
Address for the Founder Parties:
 
Le Gaga Holdings Limited
Unit 1105, The Metropolis Tower
10 Metropolis Drive
Hung Hom, Kowloon, Hong Kong
 
Attention:    Na Lai Chiu and Shing Yung Ma
Fax:            +852 3167 7227
 
         
 

 


 
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  SEQUOIA:  
     
  SC CHINA HOLDINGS LIMITED  
     
 
By:
/s/ Kok Wai Yee  
    Name: Kok Wai Yee   
    Title: Authorized Signatory   
         
 
 
 
Address for Sequoia:
 
SC China Holdings Limited
Suite 2215, 22/F, Two Pacific Place
88 Queensway Road
Hong Kong
     
  Attention:  Kok Wai Yee (Wendy)
  Fax: +852 2501 5249
     
   
 
In each case, with a copy to:
 
Weil, Gotshal & Manges LLP
29/F, Alexandra House
18 Chater Road
Central, Hong Kong
     
  Attention: Akiko Mikumo
    Steve Xiang
  Fax: +852 3015 9354
         
 


 
 
 
14
EX-99.3 4 mm05-2413_sc13de3.htm EX.3 - PROPOSAL LETTER TO THE ISSUER mm05-2413_sc13de3.htm
 
 

EXHIBIT 3

May 21, 2013
 
The Board of Directors
Le Gaga Holdings Limited
Unit 1105, The Metropolis Tower
10 Metropolis Drive
Hung Hom, Kowloon
Hong Kong

Dear Members of the Board of Directors:
 
We, Na Lai Chiu (the “Chairwoman”), Shing Yung Ma (the “Founder”) and SC China Holdings Limited, on behalf of funds managed and/or advised by it (together with its and their affiliates, “Sequoia” and, together with the Chairwoman and the Founder, the “Consortium”), are pleased to submit this preliminary non-binding proposal to acquire all of the outstanding shares of Le Gaga Holdings Limited (the “Company”) that are not already directly or indirectly beneficially owned by us in a going private transaction on the principal terms and conditions described in this letter (the “Transaction”). Collectively, the Consortium beneficially owns 1,117,921,001 ordinary shares of the Company, which represents 50.84% of the total outstanding ordinary shares of the Company, as of the date hereof.
 
We believe that our proposal of US$4.01 in cash per American Depositary Share of the Company (“ADS,” with each ADS representing 50 ordinary shares of the Company), or $0.0802 in cash per ordinary share of the Company, as the case may be, provides a very attractive opportunity to the Company’s shareholders. Our proposal represents a premium of 16.57% over the closing price of the ADSs on May 20, 2013 and a premium of 20.67% over the volume-weighted average closing price of the ADSs during the last 30 trading days.
 
The terms and conditions upon which we are prepared to pursue the Transaction are set forth below.
 
1.  
Consortium. Members of the Consortium have entered into a consortium agreement dated as of the date hereof, pursuant to which we will form an acquisition company for the purpose of implementing the Transaction and have agreed to work with each other exclusively in pursuing the Transaction.
 
2.  
Purchase Price. The consideration payable in the Transaction will be US$4.01 in cash per ADS and $0.0802 in cash per ordinary share (in each case other than those ADSs or ordinary shares held by members of the Consortium and other shareholders that are expected to be rolled over in connection with the Transaction).
 
3.  
Financing. We have held discussions with financial institutions that have expressed interests in providing financing in connection with the Transaction and are confident that we will secure adequate financing to consummate the Transaction.
 
4.  
Due Diligence. We are ready to move expeditiously to complete the Transaction as soon as practicable and believe that, with the full cooperation of the Company, our financing providers can complete customary legal, financial and accounting due diligence in a timely manner and in parallel with discussions on the Definitive Agreements (as defined below).
 
 
 
 
 

 
 
 
5.  
Definitive Agreements. We are prepared to promptly negotiate and finalize definitive agreements (the “Definitive Agreements”) in respect of the Transaction. These agreements will provide for representations, warranties, covenants and conditions that are typical, customary and appropriate for transactions of this type.  We have engaged Weil, Gotshal & Manges LLP as legal advisor to the Consortium in connection with the Transaction.
 
6.  
Process. Given the involvement of the Chairwoman, the Founder and Sequoia as members of the Consortium in the Transaction, we believe it is prudent and in the best interests of the Company for the Company’s Board of Directors to establish a special committee of independent directors to consider the Transaction (the “Special Committee”). We also expect that the Special Committee would retain independent advisors, including an independent financial advisor, to assist it in its work.
 
In considering our offer, you should be aware that we are interested only in acquiring the outstanding ordinary shares of the Company that members of the Consortium do not already beneficially own and which are not expected to be rolled over in connection with the Transaction, and that we do not intend to sell our stake in the Company to a third party.
 
7.  
Confidentiality. We will ensure that this letter and the consortium agreement are promptly filed and disclosed to the public in accordance with applicable securities regulations. However, we are sure you will agree that it is in all of our interests to ensure that we proceed in a strictly confidential manner, unless otherwise required by law, until we have executed the Definitive Agreements or terminated our discussions.
 
8.  
No Binding Commitment. This letter constitutes only a preliminary indication of interest and does not constitute an offer capable of acceptance or any binding commitment with respect to the Transaction. A binding commitment will result only from the execution of the Definitive Agreements, and then will be on terms and conditions provided in such documentation.
 

 
*    *    *    *
 

 
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In closing, we would like to express our commitment to working together to bring the Transaction to a successful and timely conclusion. Should you have any questions regarding this proposal, please do not hesitate to contact us. We look forward to hearing from you.
 
Very truly yours,
 
 
 /s/ Na Lai Chiu  
Na Lai Chiu
 
 
 
 /s/ Shing Yung Ma  
Shing Yung Ma
 
 
 
SC China Holdings Limited
   
By:
 /s/ Kok Wai Yee  
 Name:
Kok Wai Yee
 
 Title:
Authorized Signatory
 
 


 

 
 
 
 
 
3