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.

PACIFIC ONLINE LIMITED 太 平 洋 網絡 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 543)

VOLUNTARY ANNOUNCEMENT -

THE AMENDED AND RESTATED PCONLINE STRUCTURE CONTRACTS

AND

THE AMENDED AND RESTATED PCLADY STRUCTURE CONTRACTS

On 10 September 2018, Lu Wu Qing, being one of the Existing GZ Yingxin Shareholders and the Existing GZ Yingyue Shareholders entered into the Equity Transfer Agreements with certain New GZ Yingxin Shareholders and New GZ Yingyue Shareholders, pursuant to which Lu Wu Qing agreed to transfer all of her respective equity interests in GZ Yingxin and GZ Yingyue.

The Amended and Restated PConline Structure Contracts and the Amended and Restated PClady Structure Contracts

Due to the transfers contemplated under the Equity Transfer Agreement, on 15 October 2018, GZP Computer, GZ Yingxin, GDP Internet, Lu Wu Qing, and the New GZ Yingxin Shareholders entered into the Termination Agreement (Existing PConline Structure Contracts), pursuant to which the parties thereto agreed that the Existing PConline Structure Contracts shall lapse automatically and the relevant parties shall enter into the Amended and Restated PConline Structure Contracts on the date thereto.

On the same day and immediately after the execution of the Termination Agreement (Existing PConline Structure Contracts), the Amended and Restated PConline Structure Contracts were entered into among GZP Computer, GZ Yingxin, the New GZ Yingxin Shareholders and GDP Internet. Pursuant to the Amended and Restated PConline Structure Contracts, the Company will operate its online business relating to the portals of Pconline, PCauto and PCbady through GZ Yingxin, GDP Internet, GZP Advertising and Shanghai Huanyu.

On the same day, GZFW Technology, GZ Yingyue, GZS Internet, Lu Wu Qing, and the New GZ Yingyue Shareholders entered into the Termination Agreement (Existing

PClady Structure Contracts), pursuant to which the parties thereto agreed that the

Existing PClady Structure Contracts shall lapse automatically and the relevant parties shall enter into the Amended and Restated PClady Structure Contracts on the date thereto.

On the same day and immediately after the execution of the Termination Agreement

(Existing PClady Structure Contracts), the Amended and Restated PClady Structure Contracts were entered into among GZFW Technology, GZ Yingyue, the New GZ

Yingyue Shareholders and GZS Internet. Pursuant to the Amended and Restated

PClady Structure Contracts, the Company will operate its online business relating to the PClady Portal through GZ Yingyue, GZS Internet and GZS Advertising.

As a result of the Amended and Restated PConline Structure Contracts and the Amended and Restated PClady Structure Contracts, the Group can continue to recognize and receive the economic benefits of the businesses and operations of the Domestic Entities. The Amended and Restated PConline Structure Contracts and the

Amended and Restated PClady Structure Contracts are also designed to provide the

Company with effective control over and (to the extent permitted by PRC law) the right to acquire the equity interests in Domestic Entities.

Listing Rules Implications

In preparation for the Listing, the Company has sought, and the Stock Exchange has granted, the waiver (the ''Waiver'') from strict compliance with the applicable reporting, announcement and independent shareholders' approval requirements relating to the annual caps, three years term and fee terms of Chapter 14A of the

Listing Rules in connection with the continuing connected transactions involving the Group in the form of the Existing PConline Structure Contracts subject to the

Conditions (the ''Conditions''). The Conditions include, among others, that on the basis that the Existing PConline Structure Contracts provide an acceptable framework for the relationship between the Company and its subsidiaries on the one hand, and

GZ Yingxin and GDP Internet, on the other hand, that framework may be renewed and/or ''cloned'' upon the expiry of the existing arrangements or in relation to any existing or new wholly foreign-owned enterprise or operating company that the Group may wish to establish, without obtaining the approval of the Shareholders.

The Directors are of the view that pursuant to the Conditions and on the basis that the Amended and Restated PConline Structure Contracts and the Amended and Restated PClady Structure Contracts, though entered into among different parties and with terms in compliance with the more updated and stringent requirements set out in the listing decision handed down by the Stock Exchange subsequent to the Existing PConline Structure Contracts, which are more beneficial to the Shareholders as a whole, have terms and conditions substantially the same as those of the Existing PConline Structure Contracts, they are merely clones of the Existing PConline Structure Contracts. As such, the Directors are of the view that the contractual arrangements underlying the Amended and Restated PConline Structure Contracts and the Amended and Restated PClady Structure Contracts are in compliance with the Conditions under which the Waiver was granted.

As such, the Company has sought, and the Stock Exchange has provided confirmation that:

  • . the Amended and Restated PConline Structure Contracts and the Amended and Restated PClady Structure Contracts will be exempt from the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules; and

  • . the transactions between the Company and each of GZ Yingxin, GDP Internet, GZ Yingyue and GZS Internet relating to the Amended and Restated PConline Structure Contracts and the Amended and Restated PClady Structure Contracts will be exempt from the continuing connected transaction requirements under Chapter 14A of the Listing Rules.

BACKGROUND

References are made to the Prospectus and the announcements (the ''Announcements'') of the Company dated 2 July 2015 and 7 August 2018. As disclosed in the section headed ''Structure Contracts'' in the Prospectus and in the Announcements, due to the limitation of applicable PRC laws and regulations on foreign ownership of companies that provide internet content services, the Group conducts its internet multi-portals and online advertising business through GDP Internet, GZS Internet and GZ Shangcong Online, the operating ICP companies, pursuant to the contractual arrangements underlying the Existing PConline Structure Contracts, the Existing PClady Structure Contracts and the PChouse Structure Contracts.

The Group does not have direct ownership of GZ Yingxin, GZ Yingyue and GZ Yingyou, whose sole purpose is to hold the entire interest in GDP Internet, GZS Internet and GZ Shangcong Online respectively. The contractual arrangements under the Existing PConline Structure Contracts, the Existing PClady Structure Contracts and the PChouseStructure Contracts allow the Group to effectively control GZ Yingxin, GZ Yingyue, GZ Yingyou, GDP Internet, GZS Internet and GZ Shangcong Online and therefore recognize and receive the economic benefits of their businesses and operations.

The Company has sought, and the Stock Exchange has granted or has confirmed, the Waiver from strict compliance with the applicable reporting, announcement and independent shareholders' approval requirements relating to the annual caps, three year term and fee terms of Chapter 14A of the Listing Rules in connection with the continuing connected transactions involving the Group in the form of the Existing PConline Structure Contracts, the Existing PClady Structure Contracts and the PChouse Structure Contracts on a number of Conditions.

The corporate structure of the Group under the structure contracts arrangements before the Transfers (as defined below) is set out in Schedule A of this announcement.

THE EQUITY TRANSFER AGREEMENTS AND THE REASONS FOR ENTERING INTO THE AMENDED AND RESTATED PCONLINE STRUCTURE CONTRACTS AND THE AMENDED AND RESTATED PCLADY STRUCTURE CONTRACTS

Since Lu Wu Qing, who is one of the Existing GZ Yingxin Shareholders and the Existing GZ Yingyue Shareholders, has resigned from her position of chief administrative officer of the Group. As such, on 10 September 2018, Ms. Lu Wu Qing entered into the Equity Transfer Agreements to transfer her equity interests in each of GZ Yingxin and GZ Yingyue to other employees of the Group (the ''Transfers''). The table below shows the details of the Transfers.

Shareholders of GZ Yingxin

Shareholders of GZ Yingyue

and their respective

and their respective

shareholding in GZ Yinxin

shareholding in GZ Yingyue

Before the Proposed

.

Zhang Cong Min: 40%

.

Zhang Cong Min: 60%;

Transfers

.

Lu Wu Qing: 30%; and

and

.

Fan Zeng Chun: 30%

.

Lu Wu Qing: 40%

After the Proposed

.

Zhang Cong Min: 70%;

.

Zhang Cong Ming: 60%;

Transfers

and

and

.

Fan Zeng Chun: 30%

.

Yang Tian Ying: 40%

-4-

Due to the change in shareholding structure in GZ Yingxin and GZ Yingyue subsequent to the Transfers and the fact that Lu Wu Qing previously entered into certain agreements under the Existing PConline Structure Contracts and the Existing PClady Structure Contracts, in her capacity of shareholder of GZ Yingxin and GZ Yingyue respectively, on 15 October 2018, the Termination Agreement (Existing PConline Structure Contracts) and the Termination Agreement (Existing PClady Structure Contracts) were entered into, the principal terms of which are set out as follows:

Termination Agreement (Existing PConline Structure Contracts)

Parties: (i) GZP Computer

  • (ii) GZ Yingxin

  • (iii) GDP Internet

  • (iv) Lu Wu Qing

  • (v) New GZ Yingxin Shareholders

Subject Matter:

The parties agreed that the Existing PConline Structure Contracts shall lapse automatically from the date of signing of the Termination Agreement (Existing PConline Structure Contracts).

The relevant parties to the Termination Agreement (Existing PConline Structure Contracts) shall enter into the Amended and Restated PConline Structure Contracts.

Termination Agreement (Existing PClady Structure Contracts)

Parties

  • (i) GZFW Technology

  • (ii) GZ Yingyue

  • (iii) GZS Internet

  • (iv) Lu Wu Qing

  • (v) the New GZ Yingyue Shareholders

Subject Matter

The parties agreed that the Existing PClady Structure Contracts shall lapse automatically from the date of signing of the Termination Agreement (Existing PClady Structure Contracts).

The relevant parties to the Termination Agreement (Existing PClady Structure Contracts) shall enter into the Amended and

Restated PClady Structure Contracts.

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Pacific Online Limited published this content on 17 October 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 17 October 2018 07:17:02 UTC