Universal Technologies Holdings Limited — Capital/Financing Update 2014

Oct 29, 2014

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.

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球 實 業 科 技 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1026)

MAJOR TRANSACTION AND RESUMPTION OF TRADING

On 29 October 2014, the Vendor and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which, inter alia, the Vendor conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Shares free from Encumbrances, together with the assignments of the Net Loans.

As the relevant percentage ratios of the Disposal (as defined in the Listing Rules) are more than 25% but less than 75%, the Disposal constitutes a major transaction for the Company under the Listing Rules and is therefore subject to reporting, announcement and shareholders’ approval requirements under the Listing Rules.

A circular containing, amongst other things, (i) further information regarding the Disposal; (ii) a notice of EGM; and (iii) other information as required under the Listing Rules will be dispatched to the Shareholders on or before 19 November 2014.

The Disposal is conditional upon the Company having obtained the necessary approval of the Shareholders at the EGM, and may or may not proceed to completion. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

RESUMPTION OF TRADING

Trading in the Shares was halted at the request of the Company with effect from 9: 00 a.m. on 29 October 2014 pending the release of this announcement. An application has been made by the Company for the resumption of trading in the shares with effect from 9: 00 a.m. on 30 October 2014.

THE DISPOSAL

As disclosed in the announcement of the Company dated 19 March 2014, the Company received a letter of intent from Harvest Dragon, in relation to the possible acquisition or investment in the Group’s payment solutions business and related assets. On 29 October 2014, the Vendor and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which, inter alia, the Vendor conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Shares free from Encumbrances, together with the assignments of the Net Loans for the Consideration. The key terms of the Sale and Purchase Agreement are set out below.

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The Sale and Purchase Agreement

Date: 29 October 2014

Parties:

(i) Universal Cyberworks International Ltd, as the Vendor; and (ii) H and R Group Limited, as the Purchaser

Consideration: The Cash Consideration, being HK$315,480,000 in cash, plus the VIE Tax Indemnity

Assets to be Disposed of

The assets to be disposed of by the Group under the Sale and Purchase Agreement consist of (a) the Sale Shares; and (b) the Net Loans, which is equivalent to the Loans less the Remaining Group Loans.

The Consideration

The Consideration was determined after arm’s length negotiations between the Purchaser and the Vendor with reference to: (i) the aggregate amount of the unaudited consolidated net asset value of the Property Co Group, the Timber Co Group and 49% proportionate interest of the Payment Co Group as at 30 June 2014; (ii) the book value of the outstanding amount of the Loans and the Remaining Group Loans as at the date of the Sale and Purchase Agreement; and (iii) the estimated amount of the VIE Tax Indemnity.

Due to PRC legal restrictions, the Group holds its interests in and controls VIE Co through the VIE Agreements. Pursuant to terms of the VIE Agreements, the VIE Co shareholders hold the equity interests in the VIE Co on trust for the Company and the Group is liable to indemnify the VIE Co shareholders against any liabilities arising from or in connection with their acting as the nominee shareholders of VIE Co. Given that the Disposal includes, inter alia, the disposal of 49% interests in Payment Co, the VIE Co shareholders are also required to transfer 49% equity interests in VIE Co to the Purchaser (or any party it designates) after Completion. As a result of the transfer of the 49% equity interests in VIE Co, the VIE Co shareholders would be subject to domestic income tax on the PRC capital gains derived therefrom and therefore the Group would have to indemnify the VIE Co shareholders against any such tax liabilities. Under the terms and conditions of the Sale and Purchase Agreement, the Purchaser would indemnify the Group against such tax liabilities under the VIE Tax Indemnity.

Pursuant to the Company’s estimates, which was reviewed by the tax consultant of the Company, the VIE Tax Indemnity is estimated to be approximately HK$19,859,000 at the maximum.

The Consideration of HK$335,339,000 represents a discount of approximately HK$2,856,000 or 0.84% to the Fair Tangible Value of HK$338,195,000.

The Cash Consideration shall be paid by the Purchaser in the following manner:

• i. within ten (10) Business Days from the date of the EGM Notice, the Purchaser shall pay, or procure the Part Payment of HK$30 million, in cleared funds, to the Vendor (or its designated payee); and

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• ii. on the Completion Date, the Purchaser shall pay, or procure the payment of, the balance of the Consideration (being the Cash Consideration less the Part Payment), in cleared funds, to the Vendor (or its designated payee).

Condition Precedent

Completion of the Sale and Purchase Agreement is conditional upon the Company having obtained the necessary shareholders’ approval at the EGM in relation to the Sale and Purchase Agreement and the matters contemplated therein.

The Parties shall use their best endeavours to satisfy the Condition by the Long Stop Date. If the Condition is not satisfied by the Long Stop Date, the Sale and Purchase Agreement shall terminate without prejudice to the right of any Party to claim against the other for antecedent breach of the Sale and Purchase Agreement and the Vendor shall refund the Part Payment to the Purchaser within five (5) Business Days after the Long Stop Date without interest.

GROUP STRUCTURE BEFORE AND AFTER THE DISPOSAL

The structure of the Group before the Disposal

==> picture [499 x 262] intentionally omitted <==

----- Start of picture text -----

Universal Technologies Hlds. Ltd. (Stock Code: 1026)
(Cayman)
100% 100%
Leading International Group Inc. Universal Cyberworks Int. Ltd.
(BVI) (BVI)
100% 100% 100% 100% 100% 100% 100% 100% 100%
Corp. Ltd. (HK)Billion Champ Ease2Pay Ltd.(HK) International PaymentSolutions (HK) Ltd. International PaymentSolutions Hlds. Ltd. Universal Technologies(HK) Ltd. Universal EnterpriseResources Ltd. Universal Property Hlds. Ltd. Investment Hlds. Ltd.Universal Enterprise Universal TechnologiesInvestment Ltd.
(HK) (HK) (HK) (HK) (HK) (HK) (HK)
100%
Shenzhen Huanye
Universal Technologies
Ltd. (PRC)
Controlled via VIE Agreements
100% 100% 100% 100%
Universal eCommerce International Payment Hyle Maestro Universal Investment
China Ltd. Solutions (CN ) Ltd. Wooding (SH) Ltd. China Ltd.
(PRC) (PRC) (PRC) (PRC)
100% 77.5% 100% 100% 100% 100% 100% 21.6%
Universal Unipass Ltd. Universal ECPAY Ltd. Information TechnologyShanghai Phetion Universal UnionCollection Ltd. Shanghai PulumaTrading Ltd. Shanghai Hong Mu YinXiang Art Furniture Shanghai Head HarvestInvestment Ltd. (Shanghai) Co. Ltd.OEC Consultant
(PRC) (PRC) Co. Ltd. (PRC) (PRC) (PRC) Ltd. (PRC) (PRC) (PRC)
100% 100% 100%
IPS E-Commerce Shanghai Chixing Shanghai Zhuofu
Hongkong Ltd. Property Mgt. Ltd. Technologies Co. Ltd.
(HK) (PRC) (PRC)
----- End of picture text -----

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The structure of the Group after the Disposal

==> picture [499 x 262] intentionally omitted <==

----- Start of picture text -----

Universal Technologies Hlds. Ltd. (Stock Code: 1026)
(Cayman)
100% 100%
Leading International Group Inc. Universal Cyberworks Int. Ltd.
(BVI) (BVI)
100% 100% 100% 51% 100% 100% 100%
International Payment International Payment Universal Technologies Universal Property Hlds. Universal Technologies
Billion Champ Corp. Ltd. Ease2Pay Ltd. Solutions (HK) Ltd. Solutions Hlds. Ltd. (HK) Ltd. Ltd. Investment Ltd.
(HK) (HK) (HK) (HK) (HK) (HK) (HK)
100%
Shenzhen Huanye
Universal Technologies
Ltd. (PRC)
Controlled via VIE Agreements
100% 100%
Universal eCommerce International Payment
China Ltd. Solutions (CN) Ltd.
(PRC) (PRC)
100% 77.5% 100% 100%
Universal Unipass Ltd. Universal ECPAY Ltd. Information TechnologyShanghai Phetion Universal UnionCollection Ltd.
(PRC) (PRC) Co. Ltd. (PRC) (PRC)
100% 100% 100%
IPS E-Commerce Shanghai Chixing Shanghai Zhuofu
Hongkong Ltd. Property Mgt. Ltd. Technologies Co. Ltd.
(HK) (PRC) (PRC)
----- End of picture text -----

INFORMATION OF THE SALE SHARES

The Sale Shares comprise: (i) the entire issued share capital of Timber Co; (ii) the entire issued share capital of Property Co; and (iii) 49% of the issued share capital of Payment Co.

Timber Co is an investment holding company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company. The Timber Co Group is principally engaged in the trading of timber. The unaudited consolidated net liabilities of the Timber Co Group as at 30 June 2014 amounted to approximately HK$45,014,000.

Property Co is an investment holding company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company. The principal asset of the Property Co Group is the Shanghai Property. The Payment Co Group employs certain part of the Shanghai Property for its own use and the remaining part of the Shanghai Property for investment purposes. The unaudited consolidated net asset value of the Property Co Group as at 30 June 2014 (taking into account the Adjustments) was approximately HK$158,078,000.

Payment Co is an investment holding company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company. The Payment Co Group (including the VIE Group which was effectively controlled through the VIE Structure) is principally engaged in the payment solutions business in the PRC. The unaudited consolidated net asset value of the Payment Co Group as at 30 June 2014 (taking into account the Adjustments) was approximately HK$174,589,000.

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The unaudited consolidated net profit/(loss) before and after taxation of the Timber Co Group, the Property Co Group and the Payment Co Group, respectively, for the two years ended 31 December 2012 and 2013 are set out as follows:

	For the	financial	For the	financial
	year	ended	year	ended
	31 December 2013		31 December 2012
	HK$’000		HK$’000
	(unaudited)		(unaudited)
	(before	(after	(before	(after
	taxation)	taxation)	taxation)	taxation)
Timber Co Group	(18,035)	(18,041)	(1,194)	(1,332)
Property Co Group	(316)	(1,056)	10,729	8,071
Payment Co Group	37,077	27,415	32,780	32,544

INFORMATION OF THE LOANS AND THE REMAINING GROUP LOANS

The Loans represent all loans and advances due from members of the Property Co Group and the Timber Co Group to members of the Remaining Group as at the date of the Sale and Purchase Agreement, which amounted to approximately HK$149,728,000.

The Remaining Group Loans represent all loans and advances due from members of the Remaining Group to members of the Property Co Group and the Timber Co Group as at the date of the Sale and Purchase Agreement, which amounted to approximately HK$10,146,000. The Net Loans amounted to approximately HK$139,582,000.

Pursuant to the terms of the Sale and Purchase Agreement, the Vendor shall assign or procure the assignment of the Loans to the Purchaser at Completion, while the Purchaser shall procure the assignment of the Remaining Group Loans to the Vendor.

INFORMATION OF THE VENDOR

The Vendor is an investment holding company incorporated in the British Virgin Islands with limited liability and a wholly-owned subsidiary of the Company. It is the holding company of each of Timber Co, Property Co and Payment Co.

INFORMATION OF THE PURCHASER

The Purchaser is an investment holding company incorporated in the British Virgin Islands with limited liability. Based on the information provided by the Purchaser, the Purchaser is owned as to 10% by Harvest Dragon and 90% by Ms. Ren Lili, who is also the sole director of the Purchaser. Based on the information provided by the Purchaser, Harvest Dragon is an investment holding company and is owned as to 50% by Mr. Lu Weisong and 50% by Ms. Ren Lili.

Mr. Lu Weisong is a director of IPS E-Commerce Hongkong Limited, an insignificant subsidiary (as defined in Rule 14A.09(1) of the Listing Rules) of the Company. Ms. Ren Lili is a manager of operations of Shanghai Head Harvest Investment Ltd, a subsidiary of the Company but is not a director or chief executive of any member of the Group. In addition, Ms. Ren Lili was an Executive Director of the Company between 20 July 2009 and 12 March 2012 and has ceased to be a Director for more than 12 months. Therefore, both Mr. Lu Weisong and Ms. Ren Lili are not connected persons of the Company pursuant to the Listing Rules.

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Save as disclosed above, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are independent of the Company and its connected persons.

FINANCIAL EFFECT OF THE DISPOSAL

Following Completion, Timber Co Group and the Property Co Group will cease to be subsidiaries of the Company and the financial results of the Timber Co Group and the Property Co Group will no longer be consolidated in the accounts of the Group. Following Completion, the Payment Co will become a 51%-owned subsidiary of the Company and the financial results of the Payment Co Group will continue to be consolidated in the accounts of the Group.

As a result of the disposal of the Property Co Group and the Timber Co Group, the Company is expected to recognise a gain of approximately HK$56,013,000 in the statement of profit or loss, which represents the difference between the notional amount of the Consideration attributed to the disposal of the entire interest in the Property Co Group and the Timber Co Group, and the aggregate amount of the unaudited consolidated net asset value of the Property Co Group and the Timber Co Group as at 30 June 2014.

The Company is also expected to record a loss of approximately HK$21,361,000 in equity on the disposal of 49% interests in the Payment Co Group, which represents the difference between the notional amount of the Consideration attributed to the disposal of 49% interests of the Payment Co Group and 49% of the unaudited consolidated net asset value as at 30 June 2014.

The consideration for assignment of the Net Loans is based on a dollar-to-dollar basis and therefore the Company does not expect the assignment of the Net Loans to have any financial effect on the Group.

Based on the Company’s estimation which was reviewed by the Company’s tax consultant, the maximum income tax effect as a result of the disposal of Sale Shares is expected to be approximately HK$20,860,000.

Shareholders should note that the above figures are for illustrative purpose only. The actual gain or loss on the Disposal may be different from the above and will be determined based on the financial position of the Property Co Group, the Timber Co Group and the Payment Co Group on the Completion Date and the review by the Group’s auditors upon finalisation of the consolidated financial statements of the Group for the year ending 31 December 2014.

USE OF PROCEEDS

Following Completion, the Group will continue its business in the provision of payment solutions and related services in Hong Kong and in the PRC. The Group currently intends to use the net proceeds from the Disposal as its general working capital and for potential investment in new business. As at the date of this announcement, the Group has no plan for any acquisition of business or assets.

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REASONS FOR THE DISPOSAL

The principal activity of the Company is investment holding. Its subsidiaries are principally engaged in investment holding, provision of payment solutions and related services, timber trading and furniture manufacturing, system integration and technical platform services, property investment and building management.

The performance of the timber trading business of the Group has been unsatisfactory over the years. The Company considers that it is desirable to terminate the Group’s timber trading business.

The disposal of the Property Co Group in substance is the disposal of the Shanghai Property by the Company that would allow the Company to realise its unrealised gains in the Shanghai Property as a result of the appreciation in its market value.

On 19 March 2014, the Company announced that it received a letter of intent from Harvest Dragon in relation to the possible acquisition or investment in the Group’s payment solutions business and related assets. As Ms. Ren Lili, a major shareholder of the Purchaser, was also a former director of a number of companies within the Payment Co Group, the Directors are in the view that such investment in the Payment Co Group by a former management of the Payment Co Group would enhance the management incentives which might in turn improve the results of the Payment Co Group. The Directors also considers that the proceeds from the Disposal would provide additional funding to the Company for its general working capital and investment purposes.

Having considered all of the above factors, the Board is of the view that the terms of the Sale and Purchase Agreement are on normal commercial terms and are fair and reasonable, and that the entering into of the Sale and Purchase Agreement is in the interests of the Company and Shareholders as a whole.

GENERAL

As the relevant percentage ratios of the Disposal (as defined in the Listing Rules) are more than 25% but less than 75%, the Disposal constitutes a major transaction for the Company under the Listing Rules and is therefore subject to reporting, announcement and shareholders’ approval requirements under the Listing Rules.

To the best knowledge, information and belief of the Directors having made all reasonable enquires with the Purchaser, the Purchaser confirmed to the Company that:

• (a) Ms. Ren Lili owns 390,000 Shares;

• (b) Harvest Dragon owns 76,450,000 Shares; and

• (c) Mr. Lu Weisong owns 7,200,000 Shares.

As disclosed in the section headed ‘‘Information of the Purchaser’’ of this announcement, the Purchaser is owned by Ms. Ren Lili and Harvest Dragon as to 90% and 10%, respectively, and Harvest Dragon is owned by Ms. Ren Lili and Mr. Lu Weisong as to 50% each. Accordingly, Ms. Ren Lili, Harvest Dragon and Mr. Lu Weisong (together the ‘‘Interested Shareholders’’) are deemed to be interested in the Disposal and shall abstain from voting on the resolution to be proposed at the EGM to approve the Disposal. To the best knowledge, information and belief of the Directors having made all reasonable enquiries, none of the Shareholders (save

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and except the Interested Shareholders) has any material interest in the Disposal and therefore, no Shareholder (save and except the Interested Shareholders) is required to abstain from voting on the resolution to be proposed at the EGM to approve the Disposal.

A circular containing, amongst other things, (i) further information regarding the Disposal; (ii) a notice of EGM; and (iii) other information as required under the Listing Rules is expected to be dispatched to the Shareholders on or before 19 November 2014.

The Disposal is conditional upon the Company having obtained the necessary approval of the Shareholders at the EGM, and may or may not proceed to completion. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

RESUMPTION OF TRADING

Trading in the Shares was halted at the request of the Company with effect from 9: 00 a.m. on 29 October 2014 pending the release of this announcement. The Company has applied to the Stock Exchange for the trading in the Shares to resume from 9: 00 a.m. on 30 October 2014.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following respective meanings:

‘‘Adjustments’’ adjustments in (i) the change in fair value of self-use property; (ii) deferred tax related to the change in fair value of the self-use property; and (iii) excluding any goodwill recorded therein (The related goodwill was recognised upon the acquisition of certain members of the Payment Co Group by the Group in the previous years and was recorded in the amount of approximately HK$77,097,000 as at 30 June 2014) ‘‘Board’’ the board of Directors ‘‘Business Day’’ a day (excluding Saturday, Sunday, public holiday and any day on which a tropical cyclone warning no. 8 or above is hoisted or remains hoisted between 9: 00 a.m. and 5: 00 p.m. and is not lowered at or before 5: 00 p.m. or on which a ‘‘black’’ rainstorm warning is hoisted or remains in effect between 9: 00 a.m. and 5: 00 p.m. and is not discontinued at or before 5: 00 p.m.) on which licensed banks in Hong Kong are generally open for business throughout their normal business hours

‘‘Company’’ Universal Technologies Holdings Limited, a company incorporated in the Cayman Islands with limited liability whose issued Shares are listed on the Main Board of the Stock Exchange (stock code: 1026) ‘‘Completion’’ completion of the Disposal

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• ‘‘Completion Date’’ the third Business Day after the satisfaction of the Condition, or such later date as agreed by the Parties in writing prior to Completion

• ‘‘Condition’’ the condition precedent for the Completion, as set out in the paragraph headed ‘‘Condition Precedent’’ of this announcement

• ‘‘connected have the meaning ascribed to it in the Listing Rules person(s)’’

• ‘‘Cash the amount of HK$315,480,000 payable by the Purchaser pursuant to Consideration’’ the Sale and Purchase Agreement

• ‘‘Consideration’’ the Cash Consideration, being HK$315,480,000 in cash, plus the VIE Tax Indemnity

• ‘‘Director(s)’’ director(s) of the Company from time to time ‘‘Disposal’’ disposal of the Sale Shares together with the assignment of the Net Loans pursuant to the terms and conditions of the Sale and Purchase Agreement

• ‘‘EGM’’ the extraordinary general meeting of the Shareholders to be convened by the Company to consider and approve, among others, the Sale and Purchase Agreement and the matters contemplated therein

• ‘‘EGM Notice’’ notice of the EGM ‘‘Encumbrances’’ any claim, charge, mortgage, security, lien, option, equity, power of sale, hypothecation or other third party rights, retention of title, right of pre-emption, right of first refusal or security interest of any kind

• ‘‘Fair Tangible the fair tangible value of the net assets under the Disposal, which is Value’’ the aggregate amount of (i) the unaudited net asset value of the Timber Co Group, the Property Co Group and 49% proportionate interest of the Payment Co Group as at 30 June 2014 (after Adjustments made to the Property Co Group and the Payment Co Group, respectively); and (ii) the Net Loans

• ‘‘Group’’ the Company and its subsidiaries ‘‘Harvest Dragon’’ Harvest Dragon Holdings Limited, based on the information provided by the Purchaser, an investment holding company incorporated in the British Virgin Islands with limited liability and is owned as to 50% by Mr. Lu Weisong and 50% by Ms. Ren Lili

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Hong Kong’’ or the Hong Kong Special Administrative Region of the PRC ‘‘HK’’

– 9 –

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• ‘‘Loans’’ collectively, the Property Co Loans and the Timber Co Loans ‘‘Long Stop Date’’ 31 December 2014, or such later date as agreed by the Parties in writing

• ‘‘Net Loans’’ being the surplus of the Loans less the Remaining Group Loans ‘‘Part Payment’’ the amount of HK$30 million, being part of the Consideration payable by the Purchaser

• ‘‘Parties’’ collectively, the Vendor and the Purchaser, and a ‘‘Party’’ shall mean either of them

• ‘‘Payment Co’’ International Payment Solutions Holdings Limited 環球國際支付控股 有限公司, a limited liability company incorporated in Hong Kong and a wholly owned subsidiary of the Company

• ‘‘Payment Co Group’’ Payment Co and its subsidiaries and associate companies and ‘‘member of the Payment Co Group’’ shall be construed accordingly

• ‘‘Payment Co Sale 47,951,400 ordinary shares in Payment Co, representing 49% of the Shares’’ issued share capital of Payment Co

• ‘‘PRC’’ the People’s Republic of China

• ‘‘Property Co’’ Universal Enterprise Investment Holdings Limited 中國金網(集團)有 限公司, a limited liability company incorporated in Hong Kong and a wholly owned subsidiary of the Company

• ‘‘Property Co Group’’ Property Co and its subsidiaries and associate companies and ‘‘member of the Property Co Group’’ shall be construed accordingly

• ‘‘Property Co Loans’’ all loans and advances due from members of the Property Co Group to members of the Remaining Group as at the date of the Sale and Purchase Agreement

• ‘‘Property Co Sale 9,306,740 ordinary shares in Property Co, representing the entire Shares’’ issued share capital of Property Co

• ‘‘Purchaser’’ H and R Group Limited, a company incorporated in the British Virgin Islands with limited liability, based on the information provided by the Purchaser, being the Purchaser in the Sale and Purchase Agreement

• ‘‘Remaining Group’’ collectively, all the companies under the Group excluding the Property Co Group and the Timber Co Group and ‘‘member of the Remaining Group’’ shall be construed accordingly

• ‘‘Remaining Group collectively, the Remaining Group Property Co Loans and the Loans’’ Remaining Group Timber Co Loans

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• ‘‘Remaining Group all loans and advances due from members of the Remaining Group to Property Co Loans’’ members of the Property Co Group as at the date of the Sale and Purchase Agreement

• ‘‘Remaining Group all loans and advances due from members of the Remaining Group to Timber Co Loans’’ members of the Timber Co Group as at the date of the Sale and Purchase Agreement

• ‘‘Sale Shares’’ collectively, the Payment Co Sale Shares, the Property Co Sale Shares and the Timber Co Sale Shares

• ‘‘Sale and Purchase the conditional sale and purchase agreement dated 29 October 2014 Agreement’’ entered into between the Vendor and the Purchaser in relation to the sale and purchase of the Sale Shares and the assignment of the Net Loans

• ‘‘Shanghai Property’’ Universal Industrial Centre, situated at No. 1178 Tianyaoqiao Road, Xuhui District, Shanghai, the PRC (中國上海市徐匯區天鑰橋路1178 號環球實業大廈)

• ‘‘Share(s)’’ ordinary share(s) of HK$0.01 each in the issued share capital of the Company

• ‘‘Shareholder(s)’’ holder(s) of the Shares

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘subsidiaries’’ include (a) companies or business undertakings which fall under the definition of ‘‘subsidiary’’ in the Companies Ordinance (Cap 622) of Hong Kong, and (b) companies whose financial results and economic benefit are effectively captured under a VIE (variable interest entity), management or operative contracts or any other similar structures, and a ‘‘subsidiary’’ shall be construed accordingly

• ‘‘tax’’ or ‘‘taxation’’ all forms of tax, levy, duty, impost, deductions or withholding of any nature imposed, levied, withheld or assessed by any taxing or other similar authority in any part of the world and includes any interest, additional tax, penalty or other charges payable in respect thereof

• ‘‘Timber Co’’ Universal Enterprise Resources Limited 寰宇企業投資有限公司, a limited liability company incorporated in Hong Kong and a wholly owned subsidiary of the Company

• ‘‘Timber Co Group’’ Timber Co and its subsidiaries and associate companies and ‘‘member of the Timber Co Group’’ shall be construed accordingly

• ‘‘Timber Co Loans’’ all loans and advances due from members of the Timber Co Group to members of the Remaining Group as at the date of the Sale and Purchase Agreement

• ‘‘Timber Co Sale 2 ordinary shares in Timber Co, representing the entire issued share Shares’’ capital of Timber Co

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‘‘Vendor’’

• Universal Cyberworks International Ltd., a wholly-owned subsidiary of the Company incorporated in the British Virgin Islands with limited liability

• ‘‘VIE Agreements’’ the agreements entered into by Mr. Liu Ruisheng and Madam Luan Yumin and Shanghai Lanpu Information Technology Co., Ltd. as nominee shareholders of VIE Co, VIE Group and certain members of the Payment Co Group for the purpose of establishing the VIE Structure

• ‘‘VIE Co’’ Universal eCommerce China Limited 上海環迅電子商務有限公司, a company incorporated in the PRC with limited liability and a wholly owned subsidiary of the Company

• ‘‘VIE Group’’ Universal eCommerce China Limited 上海環迅電子商務有限公司 and its subsidiaries, including Universal ECPAY Limited 迅付信息科技有 限公司, Shanghai Chixing Property Management Company Limited 上海馳星物業管理有限公司, IPS E-Commerce Hongkong Limited 環 迅支付電子商務有限公司 and Universal Unipass Limited 上海迅卡信 息科技有限公司

• ‘‘VIE Structure’’ the contractual arrangements through which the financial results of the VIE Group are consolidated with the financial results of the Company

• ‘‘VIE Tax Indemnity’’ the indemnity provided by the Purchaser in relation to the PRC income tax payable on the PRC capital gains by the domestic nominee shareholders of VIE Co, being part of the Consideration

• ‘‘%’’

• per cent

By Order of the Board UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED Chau Cheuk Wah Chief Executive Officer

• 29 October 2014

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As at the date of this announcement, the Board comprises:

Executive Directors: Mr. Chen Jinyang (Chairman) Mr. Chau Cheuk Wah (Chief Executive Officer) Mr. Chen Runqiang Mr. Chow Cheuk Lap Mr. Zhou Jianhui

Non-Executive Director: Ms. Fan Man Yee Alice

Independent Non-Executive Directors: Dr. Cheung Wai Bun, Charles, J.P. Mr. David Tsoi Mr. Chan Chun Kau Mr. Chao Pao Shu George

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