HTC Investors

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Announcement:Disposal of 24.84% of Shares in Beats Electronics, LLC (“Beats”) by Company's Subsidiary, HTC Europe Co., Ltd., to Beats

1.Name and nature of the subject matter (if preferred shares,
 the terms and conditions of issuance shall also be indicated,
 e.g.dividend yield):Class B Units issued by Beats Electronics, LLC
2.Date of occurrence of the event: 2013/09/27
3.Volume, unit price, and total monetary amount of the transaction:
Original volume: 26,100 Class B Units (which represents 24.84% interest
right)
Volume sold: 26,100 Class B Units (which represents 24.84% interest right)
Unit price: approximately USD10,153.25
Total monetary amount of the transaction: USD265,000,000.
The shareholding percentage in Beats after the sale is zero (0) percent.
4.Counterpart to the trade and its relationship to the Company
  (if the trading counterpart is a natural person and furthermore
  is not an actual related party of the Company, the name of the
  trading counterpart is not required to be disclosed):
Counterpart to the trade: Beats Electronics, LLC
Relationship to the Company: related party to HTC and HTC Europe Co., Ltd.
(HTC recognized the net income or loss from the investment in Beats using
the equity method)
5.Where the counterpart to the trade is an actual related party,
  a public announcement shall also be made of the reason for choosing
  the related party as trading counterpart and the identity of the
  previous owner (including its relationship with the company and the
  trading counterpart), price of transfer, and date of acquisition:
Reason for choosing the related party as trading counterpart: Beats will
buy back the shareholdings via fundraising.
The identity of the previous owner: HTC's 100% owned subsidiary, HTC
America Holding Inc., which is a related party to Beats and HTC Europe
Co., Ltd.
Price of transfer, and date of acquisition: USD150,815,000; November 1,
2012.
6.Where a person who owned the property within the past five years
  has been an actual related person of the company, a public
  announcement shall also include the dates and prices of
  acquisition and disposal by the related person and the
  person's relationship to the company at those times: N/A
7.Matters related to the creditor's rights currently being disposed
  of (including types of collateral of the disposed creditor's rights;
  if the creditor's rights are creditor's rights toward a related
  person, the name of the related person and the book amount of the
  creditor's rights toward such related person currently being
  disposed of must also be announced): N/A
8.Anticipated profit or loss from the disposal (not applicable in
  cases of acquisition of securities) (where originally deferred, the
  status or recognition shall be stated and explained):
Anticipated profit from the disposal before tax is approximately
NTD2,520,036,000 (based on the Company's book value of the long term
investment in the financial report for the first half of 2013)
9.Terms of delivery or payment (including payment period and
  monetary amount), restrictive covenants in the contract, and
  other important stipulations:
(1) Terms of delivery or payment: Payment will be made after Beats
completes a new round of equity financing.
(2) Contractual limitations and other important terms:
a. Beats will repay on behalf of the Class A Unit holders all or a part of
the secured promissory notes in the total amount of USD150,000,000 plus
interest to HTC America Holding Inc. based on the instruction by Class A
Unit holders.
b. The parties agree to mutually waive any past and future legal claims
based on facts or circumstances occurring prior to the Closing of the
transaction, except for the following:
(i)Specific rights expressly reserved by each party under the agreement
between the parties for the disposal of shares in Beats ("Agreement");
and
(ii) Certain rights and obligations under the existing License Agreement.
c. Termination:
(i) The Agreement may be terminated upon mutual consent; or
(ii) A party who is not in material breach can terminate the Agreement if
the transaction is not closed by 12/31/2013 (or such other date as mutually
agreed by HTC and Beats).
10.The manner in which the current transaction was decided, the
   reference basis for the decision on price, and the decision-making
   department:
(1)The transaction price was assessed by the investment department of HTC
and negotiated by both parties. PWC issued a fairness opinion on the
transaction price which was commissioned by HTC according to relevant
regulations.
(2)The transaction was approved by the Board of Directors of HTC Europe
Co., Ltd. after its approval by the Board of Directors of HTC Corp.
11.Current cumulative volume, amount, and shareholding percentage
   of holdings of the security being traded (including the current
   trade) and status of any restriction of rights (e.g.pledges):
HTC Europe Co., Ltd.'s current cumulative shareholding in Beats
Electronics, LLC (including the current trade) is zero (0) shares.
12.Current ratio of long or short term securities investment
   (including the current trade) to the total assets and shareholder's
   equity as shown in the most recent financial statement and the
   operating capital as shown in the most recent financial statement:
(1)Ratio of the total amount of long or short term securities investment
(including the current trade) to the total assets on the financial
statement for the most recent period: For HTC Corporation: 2.32%
(2)Ratio of the total amount of long or short term securities investment
(including the current trade) to the shareholder's equity on the financial
statement for the most recent period: For HTC Corporation: 6.00%
(3)Operating capital as shown in the most recent financial statement: For
HTC Corporation: NTD9,466,875,000
13.Broker and broker's fee: None
14.Concrete purpose or use of the acquisition or disposition:
In alignment with its strategic planning and asset allocation.
15.Net worth per share of company underlying securities acquired
   or disposed of:
USD1,196.35 per Unit (based on Beats 2012 Audit Financial Report)
16.Do the directors have any objection to the present transaction?: None
17.Has the CPA issued an opinion on the unreasonableness of the price
   of the current transaction?: No
18.Any other matters that need to be specified: None