PAX Global Technology Limited — Proxy Solicitation & Information Statement 2012

May 7, 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in PAX Global Technology Limited (the “Company”), you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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PAX GLOBAL TECHNOLOGY LIMITED 百富環球科技有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 327)

FRAMEWORK AGREEMENT FOR THE SUPPLY OF POS PRODUCTS – CONTINUING CONNECTED TRANSACTIONS

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter of recommendation from the Independent Board Committee is set out on pages 9 to 10 of this circular and a letter of recommendation from Guangdong Securities, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, is set out on pages 11 to 18 of this circular.

A notice convening the special general meeting (the “SGM”) of PAX Global Technology Limited to be held at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong on Wednesday, 23 May 2012 at 11:00 a.m. is set out on pages 24 to 25 of this circular.

A form of proxy for use at the SGM is enclosed with this circular. If you do not intend to attend the SGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to registered office of the Company at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong as soon as possible and in any event not less than twenty-four (24) hours before the time appointed for holding the SGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment of it, if you so wish.

7 May 2012

* For identification purpose only

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**LETTER FROM **	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
**LETTER FROM **	THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . .	9
**LETTER FROM **	GUANGDONG SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
APPENDIX –	GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
NOTICE OF SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		24

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

• “associate”

the meaning ascribed to it under the Listing Rules;

• “Board”

the board of Directors;

• “Company”

PAX Global Technology Limited, a company incorporated in Bermuda with limited liability whose shares are listed on the Stock Exchange;

• “Directors”

the directors of the Company;

• “Framework Agreement”

the framework agreement between the Company and Hi Sun dated 18 April 2012;

• “Group”

the Company and its subsidiaries;

• “Guangdong Securities” or “Independent Financial Adviser”

Guangdong Securities Limited, a licensed corporation to carry out type 1 (dealing in securities), type 2 (dealing in futures contracts), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities as defined under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Framework Agreement and the transactions contemplated thereunder;

• “Hi Sun”

Hi Sun Technology (China) Limited, a company incorporated in Bermuda with limited liability whose shares are listed on the Stock Exchange;

• “Hi Sun Group”

Hi Sun and its subsidiaries;

• “Hong Kong”

Hong Kong Special Administrative Region of the PRC;

• “Independent Board Committee”

an independent committee of the Board which comprises Mr. Yip Wai Ming, Dr. Wu Min and Mr. Man Kwok Kuen, Charles;

• “Independent Shareholders”

Shareholders other than Hi Sun, Hao Capital Fund II L.P. and Hao Capital China Fund L.P. and their respective associates;

– 1 –

DEFINITIONS

• “Latest Practicable Date” 2 May 2012, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein;

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange;

• “POS” electronic fund transfer point-of-sale;

• “PRC” People’s Republic of China; “SFO” the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong);

• “SGM” the special general meeting of the Company to be held on Wednesday, 23 May 2012 to consider, and if thought fit, approve the transactions contemplated under the Framework Agreement and related cap;

• “Shareholder(s)” holder(s) of Share(s);

• “Shares” shares of HK$0.10 each in the share capital of the Company;

• “Stock Exchange” The Stock Exchange of Hong Kong Limited; and “HK$” Hong Kong dollars, lawful currency of Hong Kong.

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LETTER FROM THE BOARD

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PAX GLOBAL TECHNOLOGY LIMITED 百富環球科技有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 327)

Executive Directors: Mr. NIE Guoming (Chairman) Mr. JIANG Hongchun (Chief Executive Officer) Mr. LI Wenjin

Registered Office and headquarters: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Independent Non-Executive Directors:

Mr. YIP Wai Ming Dr. WU Min Mr. MAN Kwok Kuen, Charles

Head Office and Principal Place of Business: Room 2416, 24th Floor Sun Hung Kai Centre 30 Harbour Road Wanchai Hong Kong 7 May 2012

To the Shareholders

Dear Sir or Madam,

FRAMEWORK AGREEMENT FOR THE SUPPLY OF POS PRODUCTS – CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

On 18 April 2012, the Company entered into the Framework Agreement with Hi Sun which sets out the basis upon which the Group will sell and the Hi Sun Group will purchase POS products.

The purpose of this circular is (i) to provide you with further information in relation to the transactions contemplated under the Framework Agreement; (ii) to set out the opinions and recommendations of the Independent Board Committee and Guangdong Securities; and (iii) to give you notice of the SGM at which the resolutions set out therein will be proposed. The SGM will be held on Wednesday, 23 May 2012 for the purposes of,

* For identification purpose only

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LETTER FROM THE BOARD

among others, obtaining the approval from the Independent Shareholders for the transactions contemplated under the Framework Agreement and the cap in respect thereof by way of poll.

BACKGROUND, AND REASONS FOR AND BENEFITS OF THE FRAMEWORK AGREEMENT

With the issue of third party payment licences by The People’s Bank of China in 2011 to over 100 parties including China Mobile, the Company sees considerable potential demand for POS products as mobile payment service providers may seek to expand transactions into near-field-communication (NFC) while mobile payment services are currently dominated by short message service (SMS)/internet-based payment, and new entrants in the third party payment market may seek to establish payment platforms with associated payment network and operation services. Hi Sun Group, which constructed and maintains China Mobile’s nation-wide mobile payment platform and provides financial and payment solutions as part of its core businesses, also seeks to capitalise on the opportunities this presents. In view of Hi Sun Group’s track record as a financial and payment solutions provider and the Group’s established position in the POS products market, the Company sees the ability to provide POS products as part of the total payment solution to be offered by Hi Sun Group to have considerable potential for expanding the Group’s market position.

Hi Sun as a substantial Shareholder of the Company is a connected person of the Company under the Listing Rules, therefore transactions between members of the Hi Sun Group and the Group will constitute connected transactions of the Company. In order to ensure compliance with the Listing Rules whilst also allowing both groups of companies some flexibility in pursuing such business opportunities, the Company entered into the Framework Agreement with Hi Sun.

In view of the above, the Directors consider that the entering into of the Framework Agreement is expected to help expand the Group’s business in the PRC. The Directors consider that the transactions contemplated under the Framework Agreement and the cap are fair and reasonable, on normal commercial terms and in the interests of the Group and its Shareholders as a whole. Mr. Li Wenjin, being an executive director of Hi Sun, is regarded as having a material interest in the transactions under the Framework Agreement and accordingly abstained from voting on the board resolution approving the Framework Agreement and the cap in accordance with Rule 13.44 of the Listing Rules.

THE FRAMEWORK AGREEMENT

On 18 April 2012, the Company entered into the Framework Agreement with Hi Sun, pursuant to which the Group will sell and the Hi Sun Group will purchase POS products for Hi Sun Group’s mobile and other payment solutions services.

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LETTER FROM THE BOARD

The key terms of the Framework Agreement are as follows:-

Date: 18 April 2012

Parties: (1) the Company (2) Hi Sun

Subject matter: The Group will sell and the Hi Sun Group will purchase POS products in accordance with the terms of the Framework Agreement.

Individual agreements:

Relevant members of the Group and the Hi Sun Group will from time to time enter into individual agreements which will set out the terms of the sale and purchase of the relevant POS products. The terms of the individual agreements will be negotiated based on the following principles:–

• (a) the sale and purchase of POS products would be based on normal commercial terms;

• (b) the prices payable for the POS products would be agreed between the relevant seller and the relevant purchaser by reference to the prevailing market prices of products with similar specifications at the relevant time; and

• (c) the terms and conditions of such sales and purchases, including terms of settlement, shall be no less favourable to the Group than those available from independent third parties from time to time.

Undertaking:

Hi Sun will undertake in favour of the Company that the POS products purchased under the Framework Agreement will be supplied and installed by Hi Sun Group members at merchants as part of the mobile and other payment solutions services and/or platforms provided by Hi Sun Group. Hi Sun will provide a written confirmation as to compliance with such undertaking within 3 months after 31 December 2012.

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LETTER FROM THE BOARD

Non-competition: Hi Sun agrees and acknowledges that the entering into of the Framework Agreement does not constitute any waiver or release of any of Hi Sun’s obligations under the deed of non-competition dated 1 December 2010. Condition precedent: The transactions contemplated under the Framework Agreement are conditional upon the obtaining of approval from the Independent Shareholders at the SGM. Term: The Framework Agreement will be effective from the date on which approval has been obtained from the Independent Shareholders at the SGM and expire on 31 December 2012 (both days inclusive).

CAP UNDER THE FRAMEWORK AGREEMENT

The cap on the total contract value for the sale and purchase of POS products under the Framework Agreement from the effective date of the Framework Agreement to 31 December 2012 is HK$130,000,000.

The cap is determined after taking into account the following:–

• (i) the market data showing the trends of the spread of NFC, SMS and internet payment amongst the mobile payment sector; and

• (ii) expected growth in the volume of on-site payment transactions of the third party payment services providers with the issue of third party payment licences by The People’s Bank of China in 2011.

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LETTER FROM THE BOARD

GENERAL INFORMATION AND LISTING RULES IMPLICATIONS

The Group is a POS terminal solutions provider principally engaged in the development and sale of POS products and provision of related services.

Hi Sun is an investment holding company and its subsidiaries are principally engaged in provision of telecommunication solutions, provision of financial solutions, provision of payment solutions and sales of electronic power meters and solutions.

As Hi Sun is a substantial shareholder of the Company interested in 444,000,000 Shares (representing approximately 42.8% of the Company’s issued share capital) as at the Latest Practicable Date, Hi Sun is a connected person of the Company within the meaning of the Listing Rules and the transactions under the Framework Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. Hi Sun will abstain from voting on the resolution to approve the transactions contemplated under the Framework Agreement at the SGM. None of Hi Sun’s associates are Shareholders as at the Latest Practicable Date.

As one or more of the applicable percentage ratios (other than the profits ratio) in respect of the cap on the total contract value for the sale and purchase of the POS products under the Framework Agreement from the effective date of the Framework Agreement to its expiration on 31 December 2012 exceeds 5% and HK$10,000,000, such continuing connected transactions are subject to the reporting, announcement, independent Shareholders’ approval and annual review requirements under Chapter 14A of the Listing Rules. An Independent Board Committee has been constituted to make a recommendation to the Independent Shareholders in respect of the resolution to approve the Framework Agreement.

The Company has appointed Guangdong Securities as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Framework Agreement are fair and reasonable so far as the Shareholders are concerned. Hao Capital Fund II L.P. and Hao Capital China Fund L.P. (being funds under common control) are, through their subsidiaries, currently substantial shareholders of the Company. Hao Capital Fund II L.P., through its subsidiary, is a holder of voting preference shares in a subsidiary of Hi Sun, Success Bridge Limited, which preference shares carry the right to exchange into 103,404,000 shares of Hi Sun. Hao Capital China Fund L.P., through its wholly-owned subsidiary, is interested in 34,467,618 shares of Hi Sun as at the Latest Practicable Date. Accordingly, Hao Capital Fund II L.P. and Hao Capital China Fund L.P. who together hold 236,800,000 Shares (representing approximately 22.82% of the Company’s issued share capital) as at the Latest Practicable Date are considered as having a material interest in the transactions contemplated under the Framework Agreement and each of them is required to abstain from voting on the relevant resolution at the SGM. Hao Capital Fund II L.P. and Hao Capital China Fund L.P. have confirmed that none of their other associates are Shareholders as at the Latest Practicable Date.

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LETTER FROM THE BOARD

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee as set out on pages 9 to 10 of this circular which contains its recommendation to the Independent Shareholders in respect of the ordinary resolution set out in the notice of SGM set out on pages 24 to 25 of this circular to approve the transactions contemplated under the Framework Agreement and the related cap.

The advice of Guangdong Securities to the Independent Board Committee and the Independent Shareholders as to whether the terms of the transactions contemplated under the Framework Agreement and the cap in respect thereof are fair and reasonable and in the interests of the Company and its Independent Shareholders as a whole is set out on pages 11 to 18 of this circular.

FURTHER INFORMATION

Your attention is drawn to the additional information set out in the Appendix to this circular.

Yours faithfully, By order of the Board LI Wenjin Executive Director

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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PAX GLOBAL TECHNOLOGY LIMITED 百富環球科技有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 327)

7 May 2012

To the Independent Shareholders

Dear Sir or Madam,

FRAMEWORK AGREEMENT FOR THE SUPPLY OF POS PRODUCTS – CONTINUING CONNECTED TRANSACTIONS

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders of PAX Global Technology Limited (the “Company”) in respect of the resolution to approve the transactions contemplated under the Framework Agreement subject to the cap in respect thereof, details of which are set out in the “Letter from the Board” contained in the circular of the Company (the “Circular”) of which this letter forms part. Unless the context otherwise requires, terms defined in the Circular shall have the same meanings when used in this letter.

Your attention is drawn to the “Letter from the Board”, the advice of Guangdong Securities in its capacity as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of whether (i) the terms of the transactions contemplated under the Framework Agreement are on normal commercial terms, in the ordinary and usual course of business of the Group, fair and reasonable and in the interests of the Company and its Independent Shareholders as a whole; and (ii) the cap to which the transactions contemplated under the Framework Agreement are subject is fair and reasonable so far as the Company and the Independent Shareholders are concerned, as set out in the “Letter from Guangdong Securities” as well as other additional information set out in other parts of the Circular.

* For identification purpose only

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account the advice of, and the principal factors and reasons considered by Guangdong Securities in relation thereto as stated in its letter, we consider the terms of the transactions contemplated under the Framework Agreement and the cap in respect thereof to be fair and reasonable and are in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM in respect of the transactions contemplated under the Framework Agreement.

Yours faithfully,

Independent Board Committee

Mr. Yip Wai Ming Dr. Wu Min Mr. Man Kwok Kuen, Charles Independent Non-executive Directors

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LETTER FROM GUANGDONG SECURITIES

Set out below is the text of a letter received from Guangdong Securities, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders regarding the Framework Agreement and the transactions contemplated thereunder for the purpose of inclusion in this circular.

Unit 2505-06, 25/F. Low Block of Grand Millennium Plaza 181 Queen’s Road Central Hong Kong 7 May 2012

• To: The independent board committee and the independent shareholders of PAX Global Technology Limited

Dear Sirs,

FRAMEWORK AGREEMENT FOR THE SUPPLY OF POS PRODUCTS – CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Framework Agreement and the transactions contemplated thereunder, details of which are set out in the letter from the Board (the “ Board Letter ”) contained in the circular dated 7 May 2012 issued by the Company to the Shareholders (the “ Circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

The Board announced on 18 April 2012 that on even date, the Company entered into the Framework Agreement with Hi Sun in relation to the sale of the POS products by the Group to the Hi Sun Group for the Hi Sun Group’s mobile and other payment solutions services during the period from the effective date of the Framework Agreement to its expiration on 31 December 2012 (the “ Term ”).

The total contract value for the sale and purchase of the POS products under the Framework Agreement during the Term is capped at the cap (the “ Cap ”).

The transactions contemplated under the Framework Agreement constitute non-exempt continuing connected transactions for the Company pursuant to Rule 14A.35 of the Listing Rules. The Framework Agreement is therefore subject to the reporting, announcement, independent shareholders’ approval and annual review requirements under Chapter 14A of the Listing Rules. The Company will convene the SGM at which resolution(s) will be proposed for the approval of the Framework Agreement and the transactions contemplated thereunder; whereby Hi Sun and each of Hao Capital Fund II

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LETTER FROM GUANGDONG SECURITIES

L.P. and Hao Capital China Fund L.P. which are considered to have material interest in the Framework Agreement, are required to abstain from voting.

An Independent Board Committee comprising Mr. Yip Wai Ming, Dr. Wu Min and Mr. Man Kwok Kuen, Charles (all being independent non-executive Directors) has been formed to advise the Independent Shareholders on (i) whether the terms of the Framework Agreement (including the Cap) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; (ii) whether the entering into of the Framework Agreement and the transactions contemplated under the Framework Agreement are in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote in respect of the relevant resolution(s) to approve the Framework Agreement and the transactions contemplated thereunder at the SGM. We, Guangdong Securities Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules.

The Directors have collectively and individually accepted full responsibility for the accuracy of the information contained in the Circular and have confirmed, having made all reasonable enquiries, which to the best of their knowledge and belief, that there are no other facts the omission of which would make any statement in the Circular misleading.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, Hi Sun, Hao Capital Fund II L.P., Hao Capital China Fund L.P. or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the entering into of the Framework Agreement. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material

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LETTER FROM GUANGDONG SECURITIES

change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. Nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, the sole responsibility of Guangdong Securities is to ensure that such information has been correctly extracted from the relevant sources.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Framework Agreement and the Cap, we have taken into consideration the following principal factors and reasons:

(1) Background of the Framework Agreement

Business overview of the Group

With reference to the Board Letter, the Group is a POS terminal solutions provider principally engaged in the development and sale of POS products and provision of relation services.

Set out below are the audited financial information of the Group for the two years ended 31 December 2011 as extracted from the Company’s annual report for the year ended 31 December 2011 (the “ 2011 Annual Report ”):

Turnover – POS terminals – Consumer activated devices – Contactless devices – Services – Others Total	For the year ended 31 December 2011 HK$’000 945,107 116,206 19,904 13,749 8,214 1,103,180	For the year ended 31 December 2010 Year on year change from 2010 to 2011 HK$’000 % 623,448 52 52,650 121 22,695 (12) 14,260 (4) 10,557 (22) 723,610 52

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LETTER FROM GUANGDONG SECURITIES

From the above table, we noted that the turnover of the Group for the year ended 31 December 2011 recorded a significant growth of approximately 52% as compared to the prior year and the growth was mainly driven by the increase in sales of POS terminals as well as consumer activated devices. At present, the sales of POS terminals represent the largest proportion of total turnover of the Group. As advised by the Directors, financial institutions and merchant service providers have been aggressively building their POS networks in order to capture the benefits from the rising usage of electronic payment and high levels of retail consumption in the PRC. In addition, recent state policies of the PRC government have also encouraged the building of electronic transaction networks. With this being the case, the Directors are optimistic on the future prospects of the sales of POS terminals.

Given the principal business of the Group, we concur with Directors that the transactions contemplated under the Framework Agreement are in the ordinary and usual course of business of the Company.

Information on Hi Sun

As extracted from the Board Letter, Hi Sun, being a substantial shareholder (as defined under the Listing Rules) of the Company, is an investment holding company and its subsidiaries are principally engaged in the provision of telecommunication solutions, provision of financial solutions, provision of payment solutions and sales of electronic power meters and solutions.

Reasons for the entering into of the Framework Agreement

As referred to in the Board Letter, with the issue of third party payment licences by The People’s Bank of China in 2011 to over 100 parties including China Mobile, the Company sees considerable potential demand for the POS products as mobile payment service providers may seek to expand transactions into near-field-communication (NFC) while mobile payment services are currently dominated by short message service (SMS)/internet-based payment, and new entrants in the third party payment market may seek to establish payment platforms with associated payment network and operation services. The Hi Sun Group, which constructed and maintains China Mobile’s nation-wide mobile payment platform and provides financial and payment solutions as part of its core businesses, also seeks to capitalise on the opportunities this presents. In view of the Hi Sun Group’s track record as a financial and payment solutions provider and the Group’s established position in the POS products market, the Company believes that the ability to provide the POS products as part of the total payment solution to be offered by the Hi Sun Group to have considerable potential for expanding the Group’s market position.

Having considered the possible upcoming business potential to the Group leveraging on the latest development of the mobile and other payment market as aforementioned, we concur with the Directors that the entering into of the Framework Agreement and the transactions contemplated under the Framework Agreement are in the interests of the Company and the Shareholders as a whole.

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LETTER FROM GUANGDONG SECURITIES

(2) Principal terms of the Framework Agreement

The following table tabulates a summary of the major terms of the Framework Agreement (details of which are contained under the section headed “The Framework Agreement” of the Board Letter):

Date: 18 April 2012

Parties: (1) the Company (2) Hi Sun

Subject matter:

The Group will sell and the Hi Sun Group will purchase the POS products in accordance with the terms of the Framework Agreement.

Individual agreements:

Relevant members of the Group and the Hi Sun Group will from time to time enter into individual agreements which will set out the terms of the sale and purchase of the relevant POS products. The terms of the individual agreements will be negotiated based on the following principles:

• (a) the sale and purchase of the POS products would be based on normal commercial terms;

• (b) the prices payable for the POS products would be agreed between the relevant seller and the relevant purchaser by reference to the prevailing market prices of products with similar specifications at the relevant time; and

• (c) the terms and conditions of such sales and purchases, including terms of settlement, shall be no less favourable to the Group than those available from independent third parties from time to time.

Undertaking:

Hi Sun will undertake in favour of the Company that the POS products purchased under the Framework Agreement will be supplied and installed by the Hi Sun Group members at merchants as part of the mobile and other payment solution services and/or platforms provided by the Hi Sun Group. Hi Sun will provide a written confirmation as to compliance with such undertaking within three months after 31 December 2012.

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LETTER FROM GUANGDONG SECURITIES

Non-competition: Hi Sun agrees and acknowledges that the entering into of the Framework Agreement does not constitute any waiver or release of any of Hi Sun’s obligations under the deed of non-competition dated 1 December 2010.

Condition precedent: The transactions contemplated under the Framework Agreement are conditional upon the obtaining of approval from the Independent Shareholders at the SGM. Term: The Framework Agreement will be effective from the date on which approval has been obtained from the Independent Shareholders at the SGM and expire on 31 December 2012 (both days inclusive).

As confirmed by the Directors, the Directors consider that the terms of the Framework Agreement (including the Cap) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

Given that it is set forth under the Framework Agreement that (i) the terms of the individual agreements to be entered into between the Group and the Hi Sun Group with regard to the sale and purchase of the relevant POS products shall be based on normal commercial terms; (ii) the prices payable for the POS products would be agreed between the relevant seller and the relevant purchaser by reference to the prevailing market prices of products with similar specifications at the relevant time; and (iii) the terms and conditions of such sales and purchases, including terms of settlement, shall be no less favourable to the Group than those available from independent third parties from time to time, we are of the view that the terms of the Framework Agreement are fair and reasonable so far as the Independent Shareholders are concerned.

(3) Basis of the proposed Cap

The Cap of the total contract value for the sale and purchase of the POS products under the Framework Agreement from the effective date of the Framework Agreement to 31 December 2012 is HK$130,000,000.

According to the Board Letter, the Cap was determined by the Company after taking into account of (i) the market data showing the trends of the spread of NFC, SMS and internet payment amongst the mobile payment sector; and (ii) the expected growth in the volume of on-site payment transactions of the third party payment services providers with the issue of third party payment licences by The People’s Bank of China in 2011.

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LETTER FROM GUANGDONG SECURITIES

In assessing the fairness and reasonableness of the Cap, we have discussed with the Directors regarding the underlying bases and assumptions for the Cap, and obtained from the Company the relevant market data showing the trends of the spread of NFC, SMS and internet payment amongst the mobile payment sector as well as the expected growth in the volume of on-site payment transactions of the third party payment services providers, with reference to researches (the “ Researches ”) [(Note)] conducted in the recent six-month period by iResearch Global Inc., a research organisation focusing on in-depth research in the PRC’s internet industry which includes, amongst others, e-commerce, mobile internet and wireless value-added services. As referred to in the Researches, NFC payment will become increasingly common amongst the mobile payment sector. In particular, in 2012, it is expected that NFC payment will share 4.1% (as compared to 3.4% in 2011) of the mobile payment market. At the same time, the transaction scale of both of the mobile payment and internet payment markets is expected to expand by 151.2% and 67.0% respectively in 2012 as compared to 2011. According to the Researches, as driven by, namely (i) the introduction of regulations to the third party payment services sector by the PRC government and the granting of the third party payment licences by The People’s Bank of China; (ii) the increase in popularity of different means of wireless payment in the market; and (iii) the broadening of business scope offered by the third party payment services providers, the size of the mobile and other payment markets is expected to grow. We have further discussed with the Directors to understand the market environment of the mobile and other payment sector, including the number of market participants, competition and possible entry barriers. Having considered the Hi Sun Group’s market share in the mobile and other payment sector as estimated by the Company, we concur with the Directors that the aggregate projected sale and purchase amount of the POS products during the Term is reasonable.

Besides that, when determining the Cap, we noticed that the Company has estimated the price of the POS products during the Term based on the range of the current market prices of the POS products. In this regard, we have requested and were provided with the existing price list of the POS products by the Company as supporting document.

In light of the foregoing basis of the proposed Cap, we consider that the Cap is fair and reasonable so far as the Independent Shareholders are concerned.

Note:

http://news.iresearch.cn/Zt/161283.shtml http://www.iresearchchina.com/views/3960.html http://ec.iresearch.cn/54/20111215/159183.shtml

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LETTER FROM GUANGDONG SECURITIES

(4) Listing Rules implication

The Directors confirmed that the Company shall comply with the requirements of Rules 14A.37 to 14A.41 of the Listing Rules pursuant to which (i) the value of the POS products purchased and to be purchased must be restricted by the Cap during the Term; (ii) the terms of the Framework Agreement (including the Cap) must be reviewed by the independent non-executive Directors annually; and (iii) details of the independent non-executive Directors’ annual review on the terms of the Framework Agreement (including the Cap) must be included in the Company’s subsequent published annual reports and financial accounts. Furthermore, it is also required by the Listing Rules that the auditors of the Company must provide a letter to the Board confirming, among other things, that the transactions contemplated under the Framework Agreement are carried out in accordance with the pricing policies of the Company, and the Cap is not being exceeded. In the event that the total amount of the POS products purchased and to be purchased exceeds the Cap, or that there is any material amendment to the terms of the Framework Agreement, the Company, as confirmed by the Directors, shall comply with the applicable provisions of the Listing Rules governing continuing connected transactions.

With the stipulation of the above requirements for continuing connected transactions pursuant to the Listing Rules, we are of the view that there are adequate measures in place to monitor the transactions contemplated under the Framework Agreement (including the Cap) and hence the interest of the Independent Shareholders would be safeguarded.

RECOMMENDATION

Having taken into account the above factors and reasons, we are of the opinion that (i) the terms of the Framework Agreement (including the Cap) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; (ii) the entering into of the Framework Agreement and the transactions contemplated under the Framework Agreement are in the ordinary and usual course of business of the Company and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant resolution(s) to be proposed at the SGM to approve the Framework Agreement and the transactions contemplated thereunder and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully, For and on behalf of

Guangdong Securities Limited Graham Lam

Managing Director

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APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the directors of the issuer collectively and individually accept full responsibility, includes particulars given in compliance with the 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 circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.

2. DISCLOSURE OF INTERESTS

I. Interests of Directors

As at the Latest Practicable Date, so far as the Directors of the Company are aware and based on the Company’s register required to be maintained pursuant to Section 352 of the SFO, none of the Directors of the Company has interests and short positions in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange.

II. Interests of Shareholders discloseable pursuant to the SFO

As at the Latest Practicable Date, so far as is known to the Directors and based on the Company’s register required to be maintained pursuant to section 336 of the SFO, the following persons (other than a Director of the Company) had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or who were, directly or indirectly, interested in 10 per cent. or more of the

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APPENDIX

GENERAL INFORMATION

nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group are as follows:

(a) Interests in the Shares

				Approximate
		Class of	Total number	percentage of
Name of shareholders	Nature of interest	securities	of Shares	shareholding
			(Note 1)	(Note 2)
Hi Sun Technology	Beneficial owner	Ordinary	444,000,000 (L)	42.79%
(China) Limited (Note 3)
Digital Investment Limited	Beneficial owner	Ordinary	118,400,000 (L)	11.41%
(Note 4)
HAO Capital China	Corporate interest	Ordinary	118,400,000 (L)	11.41%
Fund L.P. (Note 4)
891 Venture Limited (Note 5)	Corporate interest	Ordinary	118,400,000 (L)	11.41%
Dream River Limited (Note 6)	Beneficial owner	Ordinary	118,400,000 (L)	11.41%
HAO Capital Fund II L.P.	Corporate interest	Ordinary	118,400,000 (L)	11.41%
(Note 6)
HAO Partners L.P. (Note 7)	Corporate interest	Ordinary	118,400,000 (L)	11.41%
Hao Partners (Holdings)	Corporate interest	Ordinary	118,400,000 (L)	11.41%
Limited (Note 8)
Liu Yangsheng (Note 9)	Corporate interest	Ordinary	236,800,000 (L)	22.82%
Bao Lei (Note 10)	Spouse interest	Ordinary	236,800,000 (L)	22.82%
FIL Limited	Investment manager	Ordinary	93,626,000 (L)	9.02%

Notes:

1. The letter “L” denotes a long position in Shares, the letter “S” denotes a short position in Shares.

2. The percentage is calculated based on the total number of issued shares of the Company as at the Latest Practicable Date.

3. Mr. Li Wenjin, an executive director of the Company, is an executive director of Hi Sun Technology (China) Limited.

4. Digital Investment Limited is owned as to 95% by HAO Capital China Fund L.P. and 5% by Mr. Max Burger. As such, HAO Capital China Fund L.P. is deemed to be interested in the 118,400,000 Shares owned by Digital Investment by virtue of the SFO.

5. 891 Venture Limited is incorporated in the Cayman Islands and is the general partner of HAO Capital China Fund L.P. As such, 891 Venture Limited is deemed to be interested in 118,400,000 Shares owned by Digital Investment by virtue of the SFO.

6. Dream River Limited is wholly owned by HAO Capital Fund II L.P. As such, HAO Capital Fund II L.P. is deemed to be interested in 118,400,000 Shares owned by Dream River by virtue of the SFO.

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APPENDIX

GENERAL INFORMATION

1. HAO Partners L.P. is the general partner of HAO Capital Fund II L.P. As such, HAO Partners L.P. is deemed to be interested in 118,400,000 Shares owned by Dream River by virtue of the SFO.

2. Hao Partners (Holdings) Limited is incorporated in the Cayman Islands and is the general partner of HAO Partners L.P. As such, Hao Partners (Holdings) Limited is deemed to be interested in 118,400,000 Shares owned by Dream River by virtue of the SFO.

3. As Mr. Liu Yangsheng controls more than one-third of the voting power at the general meetings of 891 Venture Limited and Hao Partners (Holdings) Limited respectively, he is deemed to be interested in an aggregate of 236,800,000 Shares owned by Digital Investment Limited and Dream River Limited by virtue of the SFO.

4. Bao Lei, the spouse of Liu Yangsheng, is deemed to be interested in Liu Yangsheng’s interest.

5. (b) Substantial Shareholders of other members of the Group

The Directors of the Company are not aware that there is any person (other than a Director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10 per cent. or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at a general meeting of any other member of the Group.

III. Directors’ interests in assets and contracts of the Group

As at the Latest Practicable Date:

• (i) none of the Directors had any direct or indirect interests in any assets which have since 31 December 2011 (being the date to which the latest published audited consolidated financial statements of the Group were made up) been acquired or disposed of by or leased to any members of the Group, or are proposed to be acquired or disposed of by or leased to any members of the Group;

• (ii) none of the Directors was materially interested in any contracts or arrangements entered into by any members of the Group subsisting as at the Latest Practicable Date which is significant in relation to the business of the Group.

IV. Directors’ interests in competing business

As at the Latest Practicable Date, so far as is known to the Directors of the Company, no Director or any of their respective associates had any interests in a business, which competes or may compete with the business of the Group.

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APPENDIX

GENERAL INFORMATION

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors or proposed Directors had entered into or proposed to enter into any service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

4. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011, being the date up to which the latest published audited consolidated financial statements of the Group were made up.

5. EXPERT

The following is the qualification of Guangdong Securities, which has given its opinion or advice which is contained in this circular:

Name Qualification Guangdong Securities a licensed corporation to carry out type 1 (dealing in Limited securities), type 2 (dealing in futures contracts), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO

As at the Latest Practicable Date, Guangdong Securities did not have:

• (a) any direct or indirect interest in any assets which have since 31 December 2011 (being the date to which the latest published audited consolidated financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group; and

• (b) any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

Guangdong Securities has given and has not withdrawn its consent to the issue of this circular with the inclusion of its letter and reference to its name in the form and context in which they respectively appear.

6. MISCELLANEOUS

In any event of inconsistency, the English language text of this circular shall prevail over the Chinese language text.

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APPENDIX

GENERAL INFORMATION

7. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the Framework Agreement will be available for inspection during normal business hours on any weekday (except public holidays) at the principal place of the Company in Hong Kong at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong from the date of this circular, for a period of 14 days.

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NOTICE OF SGM

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PAX GLOBAL TECHNOLOGY LIMITED 百富環球科技有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 327)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the “SGM”) of PAX Global Technology Limited (the “Company”) will be held at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong on Wednesday, 23 May 2012 at 11:00 a.m. for the purposes of considering and, if thought fit, passing, with or without modifications, the following resolution of the Company:

ORDINARY RESOLUTION

1. “ THAT :

2. (A) the transactions contemplated under the framework agreement entered into between the Company and Hi Sun Technology (China) Limited on 18 April 2012 (the “Framework Agreement”) (a copy of which is produced to the meeting marked “A” and initialled by the chairman for the purpose of identification) and the cap for the period ending 31 December 2012 in respect of the sale and purchase of electronic fund transfer point-of-sale products in accordance with the terms of the Framework Agreement further described on pages 5 to 6 of the shareholders’ circular dated 7 May 2012 issued by the Company be and are hereby approved; and

3. (B) the directors of the Company be and are hereby authorised to take all actions and execute all documents which they deem necessary, desirable or appropriate in order to implement or give effect to the Framework Agreement and transactions contemplated thereunder.”

By order of the Board of Li Wenjin Executive Director

7 May 2012

* For identification purpose only

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NOTICE OF SGM

Notes:

• (1) Any member of the Company entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member of the Company who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member of the Company.

• (2) Delivery of an instrument appointing a proxy shall not preclude a member of the Company from attending and voting in person at the meeting convened and in such event, the instrument appointing a proxy shall be deemed to be revoked.

• (3) The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to at the principal place of the business of the Company at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjourned meeting (as the case may be).

• (4) All votings on the resolutions in this notice by the members at the meeting shall be conducted by poll.

As at the date of this notice, the Board consists of three executive Directors, namely, Mr. Nie Guoming, Mr. Jiang Hongchun, Mr. Li Wenjin and three independent non-executive Directors, namely Mr. Yip Wai Ming, Dr. Wu Min, Mr. Man Kwok Kuen, Charles.

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