Joy Spreader Group Inc. — Capital/Financing Update 2011

Nov 21, 2011

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

This announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Shares.

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AGTech Holdings Limited 亞博科技控股有限公司 [*]

(incorporated in Bermuda with limited liability)

(Stock Code: 8279)

SUPPLEMENTAL AGREEMENT IN RELATION TO DISCLOSEABLE TRANSACTION-PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL AND A SHAREHOLDER’S LOAN OF FORTUNE HAPPY INVESTMENT LIMITED

Reference is made to the announcements of the Company dated 23 May 2011 and 31 May 2011 respectively (the “ Announcements ”) in relation the Proposed Acquisition. Unless otherwise expressly indicated, the capitalised terms used herein shall have the same meaning as those defined in the Announcements.

THE SUPPLEMENTAL SALE AND PURCHASE AGREEMENT

On 21 November 2011 (after trading hours of the Stock Exchange), the Purchaser, the Vendors and the Guarantors have entered into a supplemental sale and purchase agreement (the “ Supplemental Agreement ”) to amend certain terms and conditions of the Sale and Purchase Agreement as follows:–

(a) Change in the Consideration

The Consideration of the Proposed Acquisition shall be reduced to HK$58,500,000 which will be satisfied wholly by the issue of 130,000,000 Consideration Shares at the issue price of HK$0.45 per Consideration Share to the Vendors upon Completion, credit as fully paid up. The Consideration Shares, once allotted and issued, shall be held in escrow by the Escrow Agent, and only be released to the Vendors in the following manner:–

• (i) 50% of the Consideration Shares, being 65,000,000 Consideration Shares (among which 5,317,310 Consideration Shares would be allotted and issued to Vendor A and 59,682,690 Consideration Shares would be allotted and issued to Vendor B) shall be held in escrow by the Escrow Agent and be released to the Vendors six months after Completion; and

* For identification purpose only

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• (ii) the remaining 50% of the Consideration Shares (the “ Second Tranche Consideration Shares ”) being 65,000,000 Consideration Shares (among which 5,317,310 Consideration Shares would be allotted and issued to Vendor A and 59,682,690 Consideration Shares would be allotted and issued to Vendor B) shall be held in escrow by the Escrow Agent and be released to the Vendors two years after Completion.

The Consideration Shares represent approximately 3.50% of the existing issued share capital of the Company as at the date of this announcement, and approximately 3.38% of total issued share capital of the Company as enlarged by the issue of the Consideration Shares. The Consideration Shares will be issued under the general mandate granted by the Shareholders to the Board at the general meeting held on 4 May 2011.

(b) Change in Adjustment to the Consideration

Pursuant to the Supplemental Agreement, a Deed of Non-Competition Undertakings will be entered by each of the Current Managing Members (except Mr. CHEN Yange) upon Completion. If any of the Deed of Non-Competition Undertakings is breached within a specified period, the Consideration shall be adjusted in the following manner for better protection of the Company’s interest:

For Vendor A:

Conditions

Adjustment to the Consideration

1. If the Deed of Non-Competition Undertakings signed by Mr. LI Yongpeng continues and remains in full force and effective for a period of not less than 2 years after Completion.

No adjustment to the Consideration shall be made.

1. If Mr. LI Yongpeng is in breach of the Deed of Non-Competition Undertaking within a period of 6 months after Completion.

10,218,620 Consideration Shares shall be deducted from the Consideration Shares to be issued and allotted to Vendor A and be disposed of in accordance with the mechanism provided under the section headed “Disposal of Consideration Shares”.

1. If Mr. LI Yongpeng is in breach of the Deed of non-Competition Undertaking after a period of 6 months but within a period of 2 years after Completion.

5,109,310 Consideration Shares shall be deducted from the Second Tranche Consideration Shares to be issued and allotted to Vendor A and be disposed of in accordance with the mechanism provided under the section headed “Disposal of Consideration Shares”.

For Vendor B:

Conditions

Adjustment to the Consideration

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1. If the Deed of Non-Competition Undertakings signed by Mr. WEI Zhixiong continues and remains in full force and effective for a period of not less than 2 years after Completion.

No adjustment to the Consideration shall be made.

1. If Mr. WEI Zhixiong is in breach of the Deed of Non-Competition Undertakings within a period of 6 months after Completion.

58,118,112 Consideration Shares shall be deducted from the Consideration Shares to be issued and allotted to Vendor B and be disposed of in accordance with the mechanism provided under the section headed “Disposal of Consideration Shares”.

1. If Mr. WEI Zhixiong is in breach of the Deed of Non-Competition Undertakings after a period of 6 months but within a period of 2 years after Completion.

29,059,056 Consideration Shares shall be deducted from the Second Tranche Consideration Shares to be issued and allotted to Vendor B and be disposed of in accordance with the mechanism provided under the section headed “Disposal of Consideration Shares”.

If the Purchaser, relying on any actual evidence, could reasonably conclude that the respective Current Managing Member (except Mr. CHEN Yange) is in breach of the relevant Deed of Non-Competition Undertakings, the Purchaser may apply to the relevant court in the PRC to claim against the relevant breaching party. In the event that the Purchaser successfully obtained the notice of case-filed from the relevant court, the Purchaser will be entitled to request the Escrow Agent to withhold the relevant Consideration Shares in accordance with the terms and conditions of the Escrow Agreements. Upon the obtaining of a judgment and depending on the result, the parties and the Escrow Agent shall, either (i) adjust the Consideration in accordance with the abovementioned adjustment mechanism in the event that the Purchaser succeeded in obtaining a judgment against the relevant breaching party; or (ii) release the Consideration Shares to the Vendors in the event that the relevant Current Managing Members succeeded in defending the claim.

Disposal of Consideration Shares

In the event that the Purchaser shall have the right to adjust the Consideration in accordance with the conditions mentioned above, and the Escrow Agent shall release the share certificates in relation to the relevant Consideration Shares on behalf of the Purchaser to an entity, which is duly licensed for type 1 regulated activity under the Securities and Future Ordinance, to dispose of the relevant Consideration Shares, and the proceed obtained therefrom shall be paid to the Purchaser in order to compensate the loss suffered by the Purchaser.

Mechanism of Compensation to Vendors

In the event that the Purchaser filed a claim for breach of the Deed of Non-Completion Undertakings against the relevant Current Managing Members in accordance with the

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above-mentioned mechanism, but (i) has failed to obtain judgment against the relevant Current Managing Members, (ii) such claim causes the late receipt of the relevant Consideration Share by the relevant Vendor at a date (the “ Actual Release Date ”) later than the original date of release (the “ Original Release Date ”) as provided in the section “Change in Consideration” above, and (iii) the 5-day Average Closing Price of the Consideration Shares is lower than the Average Highest Price during the period between the Original Release Date and the Actual Release Date (both days inclusive) (the “ Withholding Period ”), the relevant Vendor shall be entitled to receive a compensation being the difference between the Average Highest Price of the Consideration Shares during the Withholding Period, and the 5-day Average Closing Price of the Consideration Shares when the relevant Vendor could actually received the released Consideration Shares, in an amount calculated in accordance with the following formula as compensation:

C = (P1 – P2) x N

Where:

• C = Compensation amount

• P1 = the Average Highest Price

• P2 = the 5-day Average Closing Price

• N = the number of Consideration Shares withheld in accordance with the terms and conditions under the Escrow Agreements

For the avoidance of doubt, when C is a negative value, it denotes that the relevant Vendor does not suffer any loss and hence is not entitled to any compensation from the Purchaser. Also, in the event that the claim happened and was adjudicated before the Original Release Date, the relevant Vendor shall only receive the withheld Consideration Shares on the Original Release Date but not earlier, and in this circumstance the relevant Vendor also will not be entitled to any compensation from the Purchaser.

Effect on Shareholding Structure of the Company

Assuming (i) no Shares will be issued and/or repurchased by the Company from the date of this announcement up to Completion; and (ii) a total of 130,000,000 Consideration Shares will be issued after Completion with no adjustment to the Consideration, the shareholding structure of the Company as at the date of this announcement and immediately after the allotment and issue of the Consideration Shares is as follows:

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Name of Shareholder Mr. SUN Ho (Note 3) Mr. BAI Jinmin (Note 3) Mr. Robert Geoffrey RYAN_(Note 3) Mr. LIANG Yu(Note 3) Ms. YANG Yang(Note 3) Mr. WANG Ronghua (Note 3) Mr. HUA Fengmao (Note 3)_ Vendor A Vendor B Public Total	Existing Shareholding 2,033,328,000 (Note 1) 51,564,100 (Note 2) 3,347,750 6,187,500 414,375 2,275,000 1,355,000 – – 1,615,481,650 3,713,953,375	Approximately Immediately after the allotment and issue of the Consideration Shares % 54.75 2,033,328,000 1.39 51,564,100 0.09 3,347,750 0.17 6,187,500 0.01 414,375 0.06 2,275,000 0.04 1,355,000 – 10,634,620 – 119,365,380 43.49 1,615,481,650 100.00 3,843,953,375	Approximately % 52.90 1.34 0.08 0.16 0.01 0.06 0.03 0.28 3.11 42.03
			100.00

Notes:

1. These 2,033,328,000 Shares were held as to 2,006,250,000 Shares in the name of MAXPROFIT GLOBAL INC., which is beneficially and wholly-owned by Mr. SUN Ho, and as to 27,078,000 Shares in his own name.

2. These 51,564,100 Shares were held as to 44,876,600 Shares in the name of Fine Bridge International Limited, which is beneficially and wholly-owned by Mr. BAI Jinmin indirectly, and as to 6,687,500 Shares in his own name.

3. (i) Mr. SUN Ho, Mr. BAI Jinmin, Mr. Robert Geoffrey RYAN and Mr. LIANG Yu are executives Directors; (ii) Ms. YANG Yang is a non-executive Director; and (iii) Mr. WANG Ronghua and Mr. HUA Fengmao are independent non-executive Directors as at the date of this announcement.

WAIVER OF SHAREHOLDER’S LOAN

As at the date of the Supplemental Agreement, the Shareholder’s Loan has already been waived by the Vendors, and the Target Company is no longer owed to the Vendor the amount of the Shareholder’s Loan, hence no Shareholder’s Loan would be assigned upon Completion.

THE DEED OF RELEASE

The parties to the Sale and Purchase Agreement have agreed to release Mr. CHEN Yange from his guarantees and obligations as a Guarantor to the Sale and Purchase Agreement. As at the date of the Supplemental Agreement, the parties to the Sale and Purchase Agreement executed a deed of release in favour of Mr. CHEN Yange, pursuant to which Mr. CHEN Yange ceased to be a party under the Sale and Purchase Agreement and be released from his obligations and undertakings as a Guarantor. The remaining Guarantors Mr. WEI Zhixiong and Mr. LI Yongpeng will remain as guarantors under the Sale and Purchase Agreement.

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REASON FOR THE CHANGE IN CONSIDERATION

Upon the completion of due diligence review conducted by the Purchaser on the assets, liabilities, operation, matters and recent business development of the Target Group, and taking into account of the recent slowdown of the global economy, the Board formed the opinion that more time and resources would be needed to devote to the Target Group for its business development than originally expected. Nevertheless, the Board remains confident in the long term development of the sports lottery business in the PRC and the Proposed Acquisition will remain beneficial to the business of the Group by offering an opportunity to the Group to strengthen its business development in the sports lottery business in the PRC. Moreover, the Shareholders’ Loan has already been waived as at the date of the Supplemental Agreement and hence the liability of the Target Company diminished. Taking these factors into account, the parties agree to adjust the Consideration downward after arm’s length negotiation.

GENERAL

The Board foresees that the conditions precedent of the Sale and Purchase Agreement shall be fulfilled within a short period of time from the date of this announcement and the parties will proceed to Completion in accordance with the terms and conditions of the Sale and Purchase Agreement and the Supplemental Agreement.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings when used herein:

“5-day Average Closing Price” the average of the closing prices of the Shares on the Actual Release Date, together with those on the 4 trading days immediately preceding the Actual Release Date

“Actual Release Date”

as defined in the section headed “Mechanism of compensation to the Vendors”, and in any event, shall be a date within three business days after the Purchaser serves a notice to the Escrow Agent informing the obtaining of a written judgment from the relevant PRC court in favour of the relevant Vendor, and instruct the Escrow Agent to release the withheld Consideration Shares in accordance with the terms and conditions of the Escrow Agreements

“Average Highest Price” the average of (i) the closing price of the Shares on a day between the Original Release Date and the Actual Release Date which represents the highest closing price during the Withholding Period, (ii) the closing prices of the Shares of the 5 trading days immediately preceding the trading day with the highest closing price, and (iii) the closing prices of the Shares of the 5 trading days immediately after the trading day with the highest closing price

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“Consideration”

“Consideration Shares”

“Deed of Non-Competition Undertakings”

“Escrow Agent”

“Escrow Agreements”

“Second Tranche Consideration

Shares”

“Supplemental Agreement”

“Withholding Period”

the original consideration of HK$86,870,000 for the Proposed Acquisition provided in the Sale and Purchase Agreement and to be adjusted and satisfied in the manner as described in this announcement under the section headed “Change in the Consideration”

a maximum of 130,000,000 new Shares to be issued at HK$0.45 per Consideration Share, credited as fully paid up, to be allotted and issued to the Vendors after Completion and in the manner specified in the section headed “Change in the Consideration” and subject to adjustment specified in the section headed “Change in Adjustment to the Consideration”

The deed of non-competition undertaking(s) entered into by each of the Current Managing Members (except Mr. CHEN Yange) respectively

the escrow agent for the Consideration Shares to be appointed by the Purchaser and each of the Vendors

the escrow agreements to be entered into among the Purchaser, the Escrow Agent and each of the Vendors upon completion, setting out the terms and conditions of the withholding and releasing of the Consideration Shares by the Escrow Agent, as well as the obligations of the parties thereto

as defined in the section headed “Change in the Consideration”

as defined in the section headed “The Supplemental Sale and Purchase Agreement”

as defined in the section headed “Mechanism of compensation to the Vendors”

By Order of the Board AGTech Holdings Limited SUN Ho Chairman & CEO

Hong Kong, 21 November 2011

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As at the date of this announcement, the Board comprises (i) Mr. SUN Ho, Mr. Robert Geoffrey RYAN, Mr. BAI Jinmin and Mr. LIANG Yu as executive Directors; (ii) Ms. YANG Yang as non-executive Director; and (iii) Mr. WANG Ronghua, Mr. HUA Fengmao and Mr. KWOK Wing Leung Andy as independent non-executive Directors.

This announcement, for which the Directors collectively and individually accept full responsibilities, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material aspects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the “Latest Company Announcement” page of the GEM website operated by the Stock Exchange at www.hkgem.com for at least seven days from the day of its posting and will be published on the website of the Company at www.agtech.com.

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