China Innovationpay : CONTINUING CONNECTED TRANSACTIONS –(1) THIRD PARTY PAYMENT SERVICES FRAMEWORK AGREEMENT;(2) LOAN AGREEMENT; AND(3) WEBSITE SERVICES AGREEMENT

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China Innovationpay Group Limited

中國創新支付集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083) CONTINUING CONNECTED TRANSACTIONS -

1. THIRD PARTY PAYMENT SERVICES FRAMEWORK AGREEMENT;
2. LOAN AGREEMENT; AND
3. WEBSITE SERVICES AGREEMENT

CONTINUING CONNECTED TRANSACTIONS

Reference is made to the announcement of the Company dated 28 March 2017 in relation to, among others, the Acquisition.

THIRD PARTY PAYMENT SERVICES FRAMEWORK AGREEMENT

On 8 April 2017, Beijing Gaohuitong and Hangzhou Youzan entered into the Third Party Payment Services Framework Agreement pursuant to which Beijing Gaohuitong would provide a range of third party payment services to Hangzhou Youzan.

LOAN AGREEMENT

On 8 April 2017, the Company entered into the Loan Agreement with Youzan, pursuant to which the Company has conditionally agreed to grant to Youzan an unsecured loan facility up to HK$200,000,000 (inclusive of the principal loan amount and interest) and subject to the terms and conditions set out therein.

WEBSITE SERVICES AGREEMENT

As mentioned in the paragraph headed "Continuing connected transactions" in the Announcement, Hangzhou Qima and Hangzhou Youzan shall enter into the Website Services Agreement, pursuant to which, Hangzhou Qima shall continue to promote the e-commerce applications on its "youzan.com" in return for services fee of not more than RMB200,000 per year.

IMPLICATIONS UNDER THE GEM LISTING RULES

Upon completion of the Sale and Purchase Agreement, Whitecrow Investment Ltd. and its ultimate shareholder will become a substantial shareholder of the Company, while Youzan would become a non wholly-owned subsidiary of the Company which is owned as to 51% by the Company and 12.8% by Whitecrow Investment Ltd. and its ultimate shareholder. Therefore, Youzan and its subsidiaries, including Hangzhou Youzan, will become connected subsidiaries and connected persons of the Company under Rule 20.07(5) of the GEM Listing Rules. At the same time, Hangzhou Qima, a company owned as to 54.41% by the ultimate shareholder of Whitecrow Investment Ltd., will become a connected person of the Company under Rule 20.07(4) of the GEM Listing Rules.

In respect of the proposed annual caps under each of the Third Party Payment Services Framework Agreement and the Loan Agreement, as one or more applicable percentage ratio(s) (as defined in Rule 19.07 of the GEM Listing Rules) (other than the profits ratio) with respect to the transactions contemplated under each of the Third Party Payment Services Framework Agreement and the Loan Agreement is more than 25% and the annual caps in respect of the transactions contemplated under both the Third Party Payment Services Framework Agreement and the Loan Agreement are expected to be more than HK$10,000,000, the transactions contemplated under each of the Third Party Payment Services Framework Agreement and the Loan Agreement will be subject to the reporting, annual review, announcement and independent shareholders' approval requirements under Chapter 20 of the GEM Listing Rules.

The Company will seek approval from the Independent Shareholders for the Third Party Payment Services Framework Agreement and the Loan Agreement and the proposed annual caps thereto at the SGM.

In relation to the Website Services Agreement, as each of the applicable percentage ratios in respect of the services fee payable under the Website Services Agreement is less than 5% while the annual aggregate services fee payable by Hangzhou Youzan is expected to be less than HK$3,000,000, the transactions contemplated thereunder are exempt from the reporting, annual review, announcement and independent shareholders' approval requirements under Chapter 20 of the GEM Listing Rules.

GENERAL

An Independent Board Committee comprising all the independent non-executive Directors, will be established to advise the Independent Shareholders in relation to the Third Party Payment Services Framework Agreement and the Loan Agreement and the proposed annual caps thereto. The Independent Financial Adviser will be appointed to advise the Independent Board Committee and the Independent Shareholders of the same.

The SGM will be convened to consider and, if thought fit, to approve, among other matters, (i) the Third Party Payment Services Framework Agreement and the transactions contemplated thereunder;

(ii) the proposed annual caps in respect of the transactions contemplated under the Third Party Payment Services Framework Agreement; (iii) the Loan Agreement and the transactions contemplated thereunder; and (iv) the proposed annual caps in respect of the transactions contemplated under the Loan Agreement.

A circular containing, among other matters, (i) further information on the Third Party Payment Services Framework Agreement; (ii) further information on the Loan Agreement; (iii) a letter from the Independent Board Committee; (iv) a letter from the Independent Financial Adviser; and (v) the notice convening the SGM and a form of proxy will be despatched to the Shareholders on or before 28 April 2017.

Reference is made to the announcement of the Company dated 28 March 2017 in relation to, among others, the Acquisition.

As mentioned in the paragraph headed "Continuing connected transactions" in the Announcement, upon completion of the Sale and Purchase Agreement, Whitecrow Investment Ltd. and its ultimate shareholder will become a substantial shareholder of the Company, while Youzan would become a non wholly- owned subsidiary of the Company which is owned as to 51% by the Company and 12.8% by Whitecrow Investment Ltd. and its ultimate shareholder. Therefore, Youzan and its subsidiaries, including Hangzhou Youzan, will become connected subsidiaries and connected persons of the Company under Rule 20.07(5) of the GEM Listing Rules. At the same time, Hangzhou Qima, a company owned as to 54.41% by the ultimate shareholder of Whitecrow Investment Ltd., will become a connected person of the Company under Rule 20.07(4) of the GEM Listing Rules.

As such, it is expected that the transactions which will be entered into between the Group with each of Youzan, Hangzhou Youzan and Hangzhou Qima upon or after completion of the Sale and Purchase Agreement will constitute continuing connected transactions for the Company under Chapter 20 of the GEM Listing Rules.

(1) THIRD PARTY PAYMENT SERVICES FRAMEWORK AGREEMENT Date:

8 April 2017

Parties:

1. Beijing Gaohuitong; and

2. Hangzhou Youzan

Conditions precedent

The commencement of the Third Party Payment Services Framework Agreement is conditional upon fulfillment of (i) completion of the Acquisition; (ii) the obtaining of the approval from the Independent Shareholders by the Company in relation to the transactions contemplated under the Third Party Payment Services Framework Agreement and the related transactions contemplated thereunder in accordance with the GEM Listing Rules; and (iii) the approval from the board of directors of Youzan in relation to the Third Party Payment Services Framework Agreement and the related transactions contemplated thereunder.

Term

The Third Party Payment Services Framework Agreement is of a term commencing from the date on which the above conditions precedent are fulfilled and ending on 31 December 2019 (both days inclusive).

Scope of services

Beijing Gaohuitong shall provide the following types of third party payment services to Hangzhou Youzan subject to the terms and conditions of the Third Party Payment Services Framework Agreement:

1. offline integrated payment transactions services, including but not limited to, point of sales based business handling services for bank cards for offline transactions;

2. online payment services for "WeiMall", including but not limited to express checkout, Wechat Pay and Alipay services;