Amendment to Strategic Alliance Agreement

 

This Amendment (“Amendment”) to Strategic Alliance Agreement dated 10th June,
2013 (“Agreement”) by and between AIA International Limited Taiwan Branch
(“AIATW”), and Action Holdings Financial Limited (“Action”) is made and
effective as of the 30 day of September, 2014 (the “Effective Date”) by and
between AIATW and Action.

 

WHEREAS:

A. AIATW and Action have entered into the Agreement for the purpose of promotion
of life insurance business provided by AIATW in the territory of Taiwan; and

B. This Amendment is made by mutual consent of the parties to amend the
Agreement as set forth hereinafter.

 

NOW, THEREFORE, for good and sufficient consideration, AIATW and Action agree as
follows:

 

1.Section 3 of the Agreement shall be hereby deleted in its entirety and
replaced by the term set forth herein below:

This Agreement is effective from June 1, 2013 and to continue in full force and
effect until December 31, 2020.

 

2.Section 6.1 of the Agreement shall be amended as follows:

The amount of AFYP, calculated based on the recognized portion, for each
contract year of the new insurance contract negotiated by Appointed Broker/Agent
and underwritten by AIATW according to Article 2 shall meet the sales targets as
below.

Contract Year Sales Target First Year
(Aug. 1st, 2013- Dec. 31st,2014) NT 350,000,000 Second Year
(Jan. 1st, 2015- Dec. 31st,2015) NT 400,000,000 Third Year
(Jan. 1st, 2016- Dec. 31st,2016) NT 450,000,000

 

1

 

 

Contract Year Sales Target Fourth Year
(Jan. 1st, 2017- Dec. 31st,2017) NT 550,000,000 Fifth Year
(Jan. 1st, 2018- Dec. 31st,2018) NT 650,000,000

Sixth Year

(Jan. 1st, 2019- Dec. 31st,2019)

NT 750,000,000

Seventh Year

(Jan. 1st, 2020- Dec. 31st,2020)

NT 850,000,000

 

 

3.Section 7.2 and 7.3 of the Agreement shall be amended to read as follows:

7.2 The formula for calculating the returned Execution Fees to AIATW pursuant to
Article 7.1 is agreed as follows:

(i) First Year

A. "Annual Target Achievement Rate" is 49% -0%. Action shall return NT 40
million to AIATW.

B. "Annual Target Achievement Rate" is 99% -50%. Action shall return certain
amount to AIATW by the following formula: NT 40 million x (1 - Target
Achievement Rate) (rounded to the nearest whole number; same as below)

C. The formula for calculating "Annual Target Achievement Rate" is:

AFYP of first year/Sale Target of first year

 

(ii) Second Year to Seventh year

From the end of the second contract year, AIATW will calculate and recognize the
accumulated AFYP of the insurance contracts negotiated by each Appointed
Broker/Agent and agreed by AIATW every year from the first contract year to the
end of the current year (hereinafter referred to as "Cumulative Year") and
calculate "Accumulated Annual Target Achievement Rate" as accumulated
AFYP/accumulated Sales Target:

A."Accumulated Annual Target Achievement Rate" is 49% -0%. Action shall return
certain amount to AIATW by the following formula: NT 5 million + (NT 35 million
x cumulative number of years) – the Execution Fees shall be returned to AIATW
pursuant to Article 7.2 (i) A and B.

B."Accumulated Annual Target Achievement Rate" is 99% -50%. Action shall return
certain amount to AIATW by the following formula: NT 5 million + (NT 35 million
x cumulative number of years) x (1 - cumulative performance target achievement
rate) - the Execution Fees shall be returned to AIATW pursuant to Article 7.2
(i) A and B. In case the value calculated as described above is less than zero,
AIATW shall compensate Action the difference.

 

2

 

 

C."Accumulated Annual Target Achievement Rate" is over 100%. AIATW shall pay
back the returned Execution Fees which has be returned to AIATW pursuant to
Article 7.2 (i) A and B.

 

7.3 In the event at Action fails to meet the 13-Month Persistency Ratio (P)
Indicators set forth in Article 7.1, the returned Execution Fees shall be
calculated as NT 35.7 million x ratio (%) of returned Execution Fees. The
aforementioned ratio (%) of returned Execution Fees is agreed as the following
table:

 

13-Month Persistency Ratio (P) Indicators Ratio of returned Execution Fees (%) P
>= 80% 0% 70% <= P < 80% 10% 60% <= P < 70% 20% P < 60% 30%

 

4.It is agreed by the parties to add the following section into the Agreement.

CUIS acquired all of the issued and outstanding shares (100% of voting equity
interest) of Action together with its subsidiaries in Taiwan. Action, on April
30, 2012, acquired 65.95% ownership of Law Enterprise Co., Ltd. (“Law
Enterprise”), a company held 100% of Law Insurance Broker Co., Ltd. (“Law
Broker”). In the event that Action transfers above 30% of its shares or any
sales, pledge or transferring above 30% of its holdings shares of Law Broker,
AIATW may terminate this Agreement. Upon the termination of this Agreement due
to this Section, both parties agree to recalculate the Execution Fees according
to Section 8.3.

 

5.Except as expressly stated herein, all other terms, conditions and attachments
of the Agreement shall remain in full force and effect.

 

6.All initial capitalized terms used in this Amendment shall have the same
meaning as set forth in the Agreement unless otherwise provided.

 

7.The terms and conditions herein contained constitute the entire agreement
between the parties with respect to the subject matter hereof. This Amendment
shall be deemed part of the Agreement and is incorporated therein and made a
part thereof by this reference, but shall take precedence over and supersede any
provisions to the contrary contained in the Agreement.

 

3

 

 

8.This Amendment shall be executed in two identical counterparts, each of which
shall be an original and all of which shall together constitute one and the same
instrument.

 

IN WITNESS WHEREOF, the parties, being duly authorized to do so, have executed
this Amendment as of the date set forth above.

 

AIA International Limited Taiwan Branch

By: Tan, Kar-Hor

Title: General Manager

VAT number:

Address: 17F., No.333, Sec. 2, Dunhua S. Rd., Da’an Dist., Taipei City 106,
Taiwan (R.O.C.)

 

Action Holdings Financial Limited

By: Mao, Yi-Hsio

Address: 7F., No.311, Sec. 3, Nanjing E. Rd., Songshan Dist., Taipei City 105,
Taiwan (R.O.C.)

Tel:02-25455970

 

4