Pax Global Technology : Discloseable Transaction Acquisition of Up to 80% Issued Share Capital of Target Company

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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) DISCLOSEABLE TRANSACTION ACQUISITION OF UP TO 80% ISSUED SHARE CAPITAL OF TARGET COMPANY THE ACQUISITION

The Board is pleased to announce that after trading hours on 3 July 2017, the Purchaser, an indirect wholly-owned subsidiary of the Company, entered into the Share Purchase Agreement with the Target Company and the Vendors, pursuant to which the Vendors have conditionally agreed to sell and the Purchaser has conditionally agreed to acquire up to 176,000 shares of the Target Company, representing 80% of the Target Company's issued share capital, at an aggregate consideration of up to US$6,400,000 in up to 4 tranches.

The Purchaser, subject to fulfillment of the Conditions Precedent, shall acquire from the Vendors an aggregate of 51% of the Target Company's issued share capital upon Completion of the First Tranche at a consideration of US$4,080,000. Immediately after Completion of the First Tranche, the Target Company shall become an indirect subsidiary of the Company and the accounts of the Target Company shall be consolidated to the accounts of the Company.

Subject to fulfillment of the Performance Targets and other terms and conditions set out in the Share Purchase Agreement, the Purchaser shall further acquire from one of the Vendors 9%, 10% and 10% of the Target Company's issued share capital respectively at the respective consideration of US$720,000, US$800,000 and US$800,000 upon Completion of the Second Tranche, Third Tranche and Final Tranche respectively.

* For identification purpose only

Pursuant to the Share Purchase Agreement, all equity interests to be acquired by the Purchaser in respect of the Acquisition shall be taken up by PAX KOREA, the Purchaser's wholly-owned subsidiary having been newly incorporated under the laws of the Republic of Korea for the purpose of acquiring the shares of the Target Company.

IMPLICATIONS UNDER THE LISTING RULES

As the highest applicable percentage ratio (as defined under the Listing Rules) in respect of the Acquisition is more than 5% and all applicable percentage ratios are less than 25%, the Acquisition constitutes a discloseable transaction for the Company which is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules.

The Board wishes to announce that after trading hours on 3 July 2017, the Purchaser, the Target Company and the Vendors entered into the Share Purchase Agreement in respect of the Acquisition.

The major terms of the Share Purchase Agreement are set out as follows:

THE SHARE PURCHASE AGREEMENT

Date: 3 July 2017 Parties:

1. The Vendors;

2. The Target Company; and

3. The Purchaser.

   (collectively as "Parties" or individually as "Party")

   The Vendors are individuals who are shareholders of the Target Company in aggregate holding the entire issued share capital in the Target Company as at the date of the Share Purchase Agreement.

   To the best of the Directors' knowledge, information and belief and having made all reasonable enquiry, the Target Company, each of the Vendors and their respective ultimate beneficial owners, if any, are third parties independent of the Company and connected persons of the Company.

   Subject matter

   The Vendors have conditionally agreed to sell and the Purchaser has conditionally agreed to acquire up to 176,000 shares of the Target Company, representing an aggregate of 80% of the Target Company's issued share capital, in 4 tranches as set out below:

   Number of Sale Shares to be Acquired by the Purchaser in each tranche of the Acquisition Vendor First Tranche 112,200 (representing an aggregate of

   51% of the Target Company's issued share capital)

   Vendor A, Vendor B,

   Vendor C and Vendor D

   Second Tranche 19,800 (representing 9% of the Target

   Company's issued share capital)

   Vendor A

   Third Tranche 22,000 (representing 10% of the Target

   Company's issued share capital)

   Vendor A

   Final Tranche 22,000 (representing 10% of the Target

   Company's issued share capital)

   Vendor A

   Total number of Sale Shares to be Acquired by the Purchaser 176,000 (representing an aggregate of 80% of the Target Company's issued share capital)

   Pursuant to the Share Purchase Agreement, the Vendors shall, as legal and beneficial owners, sell and the Purchaser shall acquire the Sale Shares, free from all Encumbrances and together with all rights then or thereafter attaching thereto at any time since the date of the Share Purchase Agreement up to Completion of, as the case may be, the First Tranche, Second Tranche, Third Tranche and Final Tranche respectively.

   All equity interests to be acquired by the Purchaser in respect of the Acquisition shall be taken up by PAX KOREA, a wholly-owned subsidiary of the Purchaser having been newly incorporated under the laws of the Republic of Korea for the purpose of acquiring the shares of the Target Company.

   Consideration

   The Consideration of the Acquisition shall be payable by the Purchaser to the Vendors in the following manner:

4. First Tranche Consideration shall be payable to the Vendors in cash within 5 Business Days from the date of Completion of the First Tranche;

5. Second Tranche Consideration shall be payable to Vendor A in cash within 5 Business Days from the date of Completion of the Second Tranche;

6. Third Tranche Consideration shall be payable to Vendor A in cash within 5 Business Days from the date of Completion of the Third Tranche; and

7. Final Tranche Consideration shall be payable in cash to Vendor A within 5 Business Days from the date of Completion of the Final Tranche.

   The Consideration shall be financed by internal resources of the Group and was arrived at after arm's length negotiations between the Vendors and the Purchaser taking into account a number of factors, including but not limited to:

8. the operating performance of the Target Group;

9. the business prospect of the Target Group and the opportunity for the Company to strengthen its market presence in the Korean market as a result of the Acquisition, details of which are set out in the paragraph headed "Reasons for and Benefits of the Acquisition" below;

10. the latest unaudited net asset value of the Target Group; and

11. the Performance Targets of the Target Company.