CROSSTEC : CONTINUING CONNECTED TRANSACTIONS MASTER SERVICES AGREEMENT

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CROSSTEC Group Holdings Limited

易緯集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3893) CONTINUING CONNECTED TRANSACTIONS MASTER SERVICES AGREEMENT MASTER SERVICES AGREEMENT

On 11 August 2017, CROSSTEC International (contracting for itself and all other members of the Group) as service provider and Mr. Lee (contracting for Lee Group) as service recipient entered into the Master Services Agreement in respect of the provision of interior design proposal and interior design solutions by the Group for the restaurants of Lee Group in Hong Kong, which shall be for a term commencing from the date of the Company's obtaining the Independent Shareholders' approval on the Master Services Agreement, the Continuing Connected Transactions and the proposed Annual Caps and ending on 30 June 2020. The Continuing Connected Transactions will be subject to the proposed Annual Caps in respect of the three years ending 30 June 2020.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Mr. Lee is the chairman, executive Director and chief executive officer of the Company and is a controlling shareholder of the Company, through CGH (BVI), controls 75% of the issued share capital of the Company. As such, each of Mr. Lee and his associates is a connected person of the Company for the purposes of the Listing Rules. The transactions between the members of the Group and members of Lee Group under the Master Services Agreement will therefore constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios under the Listing Rules in relation to the proposed Annual Caps are expected to exceed 25%, the Continuing Connected Transactions will therefore be subject to the reporting, announcement and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

GENERAL

An EGM will be convened and held for the Independent Shareholders to consider and, if thought fit, to approve the Master Services Agreement, the Continuing Connected Transactions and the proposed Annual Caps for each of the three years ending 30 June 2020.

An Independent Board Committee, comprising all three independent non-executive Directors, has been established to advise the Independent Shareholders in respect of the Master Services Agreement, the Continuing Connected Transactions and the proposed Annual Caps. In this connection, the Company will appoint the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

A circular containing, among others, (i) details of the Master Services Agreement, the Continuing Connected Transactions and the proposed Annual Caps; (ii) a letter from the Independent Board Committee containing its recommendations to the Independent Shareholders; (iii) a letter of advice from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders; and (iv) the notice convening the EGM, is expected to be despatched to the Shareholders on or before 29 September 2017, which is more than 15 business days after the publication of this announcement, so as to allow sufficient time for the preparation of the relevant information for inclusion in the circular.

THE MASTER SERVICES AGREEMENT

On 11 August 2017, CROSSTEC International (contracting for itself and all other members of the Group) as service provider and Mr. Lee (contracting for Lee Group) as service recipient entered into the Master Services Agreement in respect of the provision of interior design proposal and interior design solutions by the Group for the restaurants of Lee Group in Hong Kong, which shall be for a term commencing from the date of the Company's obtaining the Independent Shareholders' approval on the Master Services Agreement, the Continuing Connected Transactions and the proposed Annual Caps and ending on 30 June 2020.

Principal terms of the Master Services Agreement are set out below.

Date:	11 August 2017
Parties:	Service provider: CROSSTEC International (contracting for itself and all other members of the Group) Service recipient: Mr. Lee (contracting for Lee Group)
Continuing Connected Transactions:	Pursuant to the Master Services Agreement, the parties agreed that the detailed descriptions of the Services to be provided by the Group to Lee Group shall be defined in the statement of work, which shall be signed by the relevant member of the Group providing the Services and the relevant member of Lee Group receiving such Services to confirm the detail of work at each order in accordance with the principles set out in the Master Services Agreement. The transactions under the Master Services Agreement and further agreements to be entered into pursuant to the Master Services Agreement in respect of each engagement will be subject to the proposed Annual Caps, detailed terms of which shall be on normal commercial terms and on terms no more favourable to Lee Group than those available to the Independent Third Parties from the Group
Term:	The Master Services Agreement is for a term commencing from the date of the Company's obtaining the Independent Shareholders' approval on the Master Services Agreement, the Continuing Connected Transactions and the proposed Annual Caps and ending on 30 June 2020, unless terminated earlier in accordance with the Master Services Agreement
Pricing:	The prices payable by Lee Group will be agreed between the relevant member of the Group and the relevant member of Lee Group from time to time on an arm's length basis, which shall be determined by reference to: (i) Interior solutions (fit-out) The Group adopts cost-plus pricing model for the determination of total quotation sum, the percentage of mark-up will be in line with other interior design solutions projects of the Group

(ii) Design services For project where the Group is engaged for both interior design proposal (concept design) and interior design solution (including fit-out construction services, millworks provision and façade development and fabrication services), total quotation sum for the interior design proposal project represents 5-10% of the total quotation sum for the interior design solutions project
Payment Schedule:	In consideration for the Services to be provided by the Group under the Master Services Agreement, Lee Group shall pay to the Group the service fee in the following manner, subject to further negotiation and agreement by the parties (if necessary): Interior solutions (fit-out) 50% deposit upon confirmation of a quotation Design services 50% deposit upon confirmation of a quotation 50% upon the sign off (final agreement) of the drawing  20% upon 50% completion of the project  20% upon practical completion  5% payment after completion of all rectification work  5% as retention money which will be paid after one year of full completion of project
Penalty:	5% interest per month of the invoice amount will be charged for any outstanding balance overdue for more than 30 days

Internal Control

In order to ensure that the prices and terms of the transactions under the Master Services Agreement will be no more favourable to Lee Group than those entered into between the Group and Independent Third Parties, the Group will conduct checks as to pricing and payment terms prior to the entering into any new transaction with Lee Group to review and assess whether the Services provided are in accordance with the terms of the relevant agreement and is no more favourable to Lee Group than those available to Independent Third Parties from the Group. In addition, the finance department of the Company will monitor the actual transaction amounts against any excess of the approved annual caps, and the Company will engage the auditors of the Company to conduct an annual review of the continuing connected transactions of the Company to assess whether such transactions have been carried out in accordance with the relevant terms of the agreement entered into by the Group. The