Kaixin Auto 8K CM Seven Star Announces Consummation of Business Combination with Renren Inc.’s Kaixin Auto Group | KXIN 6 May 19

Kaixin Auto (KXIN) 8-KCM Seven Star Announces Consummation of Business Combination with Renren Inc.’s Kaixin Auto Group

Exhibit 10.16

Equity Purchase Agreement

Regarding:

Target Company

between

Shanghai Jieying Auto Retail Co., Ltd.

as the Buyer

and

each Seller set out in the preamble section

as the Sellers

Date [ ]

1	INTERPRETATION	4

1.1	DEFINITION	4
1.2	RESPONSIBILITIES AND OBLIGATIONS	4
1.3	OTHER TERMINOLOGY	4

2	THE TARGET COMPANY	5

3	EQUITY TRANSFER AND CAPITAL INCREASE	5

3.1	EQUITY TRANSFER	5
3.2	CAPITAL INCREASE	5
3.3	PERCENTAGE OF SHAREHOLDING	5
3.4	CHANGE IN BUSINESS REGISTRATION	6

4	CONSIDERATION AND ARRANGEMENT OF PAYMENT	6

4.1	CONSIDERATION	6
4.2	ARRANGEMENT OF SHARE ISSUANCE	7
4.3	AGREEMENT ON PERFORMANCE	7

5	CONDITIONS PRECEDENT	8

5.1	CONDITIONS	8
5.2	SATISFACTION OR WAIVER OF CONDITIONS PRECEDENT	9

6	UNDERTAKINGS BEFORE CLOSING	10

6.1	BUSINESS ACTIVITIES	10
6.2	RESTRICTIONS	10
6.3	RESTRICTIONS ON THE SELLERS	11

7	CLOSING	12

7.1	TIME OF CLOSING	12
7.2	OBLIGATIONS OF CLOSING	12
7.3	DEFAULT OF CLOSING OBLIGATIONS	13

8	OBLIGATIONS AFTER CLOSING	13

8.1	OPERATION AND MANAGEMENT OF THE TARGET COMPANY	13
8.2	CONTINUOUS SERVICES	16
8.3	CANCELLATION OF THE ORIGINAL COMPANY	16
8.4	SHARES AND EQUITIES	16
8.5	USE OF THE TRADE NAME AND INTELLECTUAL PROPERTY RIGHTS	16
8.6	REGISTRATION AND TRANSFER OF INTELLECTUAL PROPERTY RIGHTS	16

9	UNDERTAKINGS	17

9.1	UNDERTAKINGS OF THE SELLERS	17
9.2	UNDERTAKINGS OF THE BUYER	18
9.3	LIABILITY FOR BREACH	18

10	INDEMNIFICATION	18

10.1	GENERAL PROVISIONS	18

10.2	LEGAL FEES	19
10.3	COLLABORATION	19

11	SHARE OF TRANSACTION FEES AND TAXES	19

11.1	SHARE OF COSTS FOR THE ESTABLISHMENT OF THE TARGET COMPANY	19
11.2	SHARE OF COSTS FOR DUE DILIGENCE	19
11.3	SHARE OF TAXES	19
11.4	RETURN OF ADVANCES	20

12	NON-COMPETITION	20

12.1	NON-COMPETITION OBLIGATIONS	20
12.2	LIABILITY TO INDEMNIFY	21

13	CONFIDENTIALITY	21

13.1	ANNOUNCEMENT	21
13.2	OBLIGATION OF CONFIDENTIALITY	21

14	MISCELLANEOUS	22

14.1	OBLIGATIONS OF COLLABORATION	22
14.2	ENTIRE AGREEMENT	23
14.3	NO TRANSFER	23
14.4	WAIVER	23
14.5	ENTRY INTO FORCE, MODIFICATION, CANCELLATION AND TERMINATION	23
14.6	THIRD-PARTY RIGHTS	24
14.7	NOTICE	24
14.8	INVALIDITY	25
14.9	RESOLUTION OF DISPUTES	25
14.10	APPLICABLE LAWS	25
14.11	LANGUAGE	25

APPENDIX I: DEFINITIONS	27

APPENDIX II: LIST OF EMPLOYEES	30

APPENDIX III: LIST OF MOTOR VEHICLES	31

APPENDIX IV: LIST OF LEASE CONTRACTS	32

APPENDIX V: LIST OF BUSINESS CONTRACTS (IF ANY)	33

APPENDIX VI: LIST OF ASSETS	34

APPENDIX VII: LIST OF INTELLECTUAL PROPERTY RIGHTS	35

APPENDIX VIII: UNDERTAKINGS OF THE SELLERS	36

APPENDIX IX: UNDERTAKINGS OF THE BUYER	43

APPENDIX X: CERTIFICATES	44

Equity Purchase Agreement

THE AGREEMENT IS ENTERED INTO BETWEEN

(1)

Shanghai Jieying Auto Retail Co., Ltd., a limited liability company established in Jiading District, Shanghai, the People’s Republic of China, with its registered office at Room 105, Level 1, Building 2, No. 333, Fengrao Road, Jiading District, Shanghai and the legal representative of which is Ji Chen (hereinafter referred to as the “Buyer”);

and

(2)

[ ], Chinese citizen, ID number [ ];

(3)

[ ], Chinese citizen, ID number [ ]

([ ] and [ ] individually referred to as the “Seller” and collectively referred to as the “Sellers”);

THE PARTIES AGREE AS FOLLOWS:

INTERPRETATION

In theAgreement, unless the context requires otherwise, the provisions in Article 1 apply to the entireAgreement.

1.1

Definition

The terms in bold set out in theAgreement, including those used in the preamble of thisAgreement, shall have the meanings specified in Appendix I (Definitions).

1.2

Responsibilities and obligations

1.2.1

In theAgreement, any reference to theSellers’ responsibilities and obligations shall be considered that eachSeller shall be obliged to ensure that allSellers shall assume the relevant responsibilities or perform relevant obligations in accordance with the terms and conditions set out in theAgreement.

1.3

Other terminology

1.3.1

In theAgreement, “include/includes/including” shall be deemed as “include/includes/including but not limited to”.

1.3.2

In theAgreement, “as of” shall be deemed to include the date and time as referred.

THE TARGET COMPANY

2.1

TheBuyer and theSellers hereby agree that, upon entering into theAgreement, theSellers shall proceed to establish a limited liability company (the “Target Company”) in [ ], [ ] Province immediately, in which the amount of paid-in capital and percentage of shareholding of each Seller are set out as follows:

2.2

The name of theTarget Company is [ ], whose scope of business is [ ], the legal representative is [ ], and the registered capital will be agreed otherwise by the parties.

EQUITY TRANSFER AND CAPITAL INCREASE

3.1

Equity transfer

After theTarget Company is established in accordance with the provisions of theAgreement, eachSeller will sell to theBuyer in the same proportion of equity held in in theTarget Company (the “Target Equity”) according to the specific requirements of relevant provisions of theAgreement and theBuyer will hereby purchase theTarget Equity from the Sellers.

3.2

Capital increase

Along with the aforesaid equity transfer, theBuyer shall increase the capital of theTarget Company by way of cash contribution. The amount of capital increase shall be three-sevenths (3/7) of the total paid-in capital amount of theSellers in theTarget Company.

3.3

Percentage of shareholding

Upon completion of the equity transfer and capital increase described in this Article 3, theBuyershall hold seventy percent (70%) of equity in theTarget Company. By then, each party will hold the percentage of shareholding in theTarget Company as follows:

Name of Shareholder	Percentage of shareholding
Shanghai Jieying Auto Retail Co., Ltd.	70	%
Total	100	%

3.4

Change in business registration

TheSellers shall promptly complete the formalities of change in business registration in respect of the equity change of theTarget Company as described in this Article 3 with competent Industry and Commerce Authority in cooperation with theBuyer.

CONSIDERATION AND ARRANGEMENT OF PAYMENT

4.1

Consideration

4.1.1

The restricted shares (the “Shares”) issued by theBuyerthrough its overseas holding company, Renren Auto Group, or its any other effective overseas holding company (the “Listing Entity”) after theListing to the Sellers or the special purpose company (SPV) established by theSellers outside the PRC and the other considerations stipulated in theAgreement below constitute the complete consideration for the acquisition of theTarget Equity (“Acquisition Consideration”).

4.1.2

The price of theShares issued to theSellers is that of the shares when theListing Entity makes the initial public offerings (“IPO”). The specific number of shares to be issued shall be calculated and determined based on the price of suchShares, and shall be adjusted in accordance with the specific provision under theAgreement and to the operating conditions and performance indicators of theTarget Company.

4.1.3

The aboveAcquisition Consideration is composed of Consideration 1 and Consideration 2, of which, Consideration 1 is calculated as follows: allNet Profits before tax generated from theTarget Company before theListing of theListing Entity x the percentage of shareholding held by theBuyer in theTarget Company; Consideration 2 is calculated as follows: the sum of theNet Profits before tax generated from theTarget Company during theBase Period of Business Results × the percentage of shareholding held by theBuyer in theTarget Company × 12.

4.1.4

TheAcquisition Price related to the acquisition and opening ofNew Stores by theTarget Company is calculated in the same method as above, but the commencing date of the specific performance evaluation period shall be determined by the Board of Directors of theTarget Company.

4.2

Arrangement of share issuance

4.2.1

Upon theListing of theListing Entity, theBuyer shall pay theAcquisition Consideration to theSellers which theSellers are entitled to receive based on the operating conditions and performance indicators of theTarget Company in the specific manner below:

(a)

Consideration 1 shall be paid within thirty (30) days after the completion of the quarterly audit on theListing;

(b)

Consideration 2 shall be paid to theSellers within thirty (30) days after the completion of the quarterly audit in every twelve (12) months after the last day of theBase Period of Business Results, and each time of the payment shall be made out of twenty percent (20%) of the total number of shares and the total number of shares shall be distributed in full in five (5) times;

(c)

in the event that the period commencing from thePerformance Inclusion Date of theTarget Company and ending on theListing Date covers a full twelve (12) months’ period, and the period commencing from thePerformance Inclusion Date of one or moreNew Stores and ending on the Listing Date is less than twelve (12) months’ period, the Base Period of Business Results of suchNew Stores and the relevant business results shall be separately accounted for in accordance with the aforesaid paragraph (b) of this Article and the relevant principles of Article 3.1.4 and Article 3.3.4 of theAgreement.

4.2.2

The number ofShares issued by theListing Entity to eachSeller shall be allocated in proportion of equity in theTarget Company sold by the correspondingSeller to theTarget Equity acquired by theBuyer and shall be issued to eachSeller simultaneously.

4.3

Agreement on performance

4.3.1

TheBuyer and theSellers hereby agree to adopt theNet Profits before tax of theTarget Company during theBase Period of Business Results as the benchmark; thereafter theNet Profits before tax of theTarget Company for every twelve (12) months (“Appraisal Year of Business Results”) shall be maintained at a compound growth rate of one hundred and ten percent (110%) (“Expected Net Profits”). The calculation formula of theExpected Net Profits for any appraisal year of theTarget Company is: the business results of the NthAppraisal Year of Business Results after the Base Period = theNet Profits before tax in theBase Period of Business Results × 110% to the power of (N-1).

4.3.2

In anyAppraisal Year of Business Results thereafter, if theTarget Company’sNet Profits for that year exceeds the correspondingExpected Net Profits, theBuyer shall increase the number ofShares issued to theSellers in the same proportion for the excess as the employee incentives to theSellers; but the number of additionalShares shall not exceed one-hundred and fifty percent (150%) of the number of Shares that shall be issued to theSellers for that year.

4.3.3

In anyAppraisal Year of Business Results thereafter, if theTarget Company’sNet Profits for that year is less than the correspondingExpected Net Profits, theBuyer shall reduce the number ofShares issued to theSellers in the same proportion for the shorter part, but such reduced issued Shares shall not be less than fifty percent (50%) of the Shares that shall be issued to theSellers for that year.

4.3.4

When theTarget Company opens aNew Store or acquires the business of other car dealers, the appraisal method for theNew Stores or acquired business will be agreed otherwise by both parties.

CONDITIONS PRECEDENT

5.1

Conditions

TheBuyer andSellers hereby agree that the followingConditions Precedent must be satisfied or waived before theClosing:

5.1.1

TheBuyer shall have completed due diligence on theTarget Company and theBuyer is satisfied with the results.

5.1.2

No Government Department shall have issued or enforced any Laws, judgments, orders or bans that will limit or prohibit the completion of theAgreement or Transaction prior toClosing.

5.1.3

Prior toClosing, there shall be no lawsuits or procedures initiated by anythird party (including anyGovernment Department) that is pending or potentially seeking to prohibit or limit the completion of theTransaction.

5.1.4

TheSellers shall have completed the following:

(a)

the key employees of theOriginal Company listed in(ii) section of Appendix II (List of Employees) have all been transferred to theTarget Company as newkey employees and each has signed a labour contract respectively with theTarget Company to the satisfaction of theBuyerand has not submitted resignation or notice of intent of resignation.

(b)

the vehicles listed inAppendix III (List of Motor Vehicles) shall have been transferred to theTarget Company;

(c)

in respect of the lease contracts listed inAppendix IV (List of Lease Contracts), theSellers and/or theOriginal Company shall have agreed in writing with the relevant lessor andTarget Companythat the lessee will be changed to theTarget Company;

(d)

in respect of the business contracts listed inAppendix V (List of Business Contracts), theSellersand/or theOriginal Company shall have agreed in writing with the relevant parties to the contracts and theTarget Company that the rights and obligations of theSellers and/or theOriginal Company under the contracts will be transferred to theTarget Company;

(e)

all assets of theOriginal Company (including all cash, equipment and other assets which are not accounted for in the company’s accounts but actually used for its operations, the particulars of which shall be subject toAppendix VI (List of Assets)) shall have been transferred to theTarget Company.

(f)

theTarget Company shall have completed the corresponding procedure of change in industrial and commerce registration or filing (including but not limited to theShareholders, directors and the revised articles of incorporation of theTarget Company) within thirty (30) days after theAgreement comes into effect, and the amended articles of incorporation and register of members have handed over to theBuyer.

5.1.5

There shall be serious default of theUndertakings of the Sellers and theSellers have not seriously breached any other obligations under theAgreement.

5.1.6

There have not occurred anyMajor Adverse Effects.

5.1.7

TheSellers have fully disclosed their external liabilities and theSellers have provided relevant solutions approved by theBuyer.

5.1.8

The resolution on theTransaction has beenpassed by the Board of Directors of theBuyer.

5.2

Satisfaction or waiver of Conditions Precedent

5.2.1

TheParties shall make their best efforts to satisfy the aforesaidConditions Precedent as soon as practicable. TheConditions Precedent described in Article 5.1 (excluding Article 5.1.8) can only be waived by theBuyer. TheConditions Precedent described in Article 5.1.8 can only be waived by theSellers.

5.2.2

IftheConditions Precedent described in Article 4.1 fail to be satisfied or are not waived within thirty days from the day on which establishment of theTarget Companyis completed, either theBuyer orSellersmay terminate theAgreementafter giving notice to the otherParties in writing. NeitherParty has the right to request any indemnification against otherParties for such termination. The provisions set out in Articles 1, 5.2.3, 13 and 14.2 to 14.11 of theAgreement shall remain valid after the termination of theAgreement.

5.2.3

If theConditions Precedent described in Article 5.1 have been fully satisfied or waived within thirty days after the day on which the establishment of theTarget Company is completed and theSellers (allSellersas aParty) or theBuyer refuses to complete theClosing in accordance with the provisions set out in Article 6.3.1. The DefaultingParty shall pay RMB ONE MILLION (1,000,000) to the other party as liquidated damages.

UNDERTAKINGS BEFORE CLOSING

6.1

Business activities

TheSellers and theShareholders shall ensure that during period between theExecution and theClosing, theTarget Company:

(a)

shall normally carry out business activities as a continuing business enterprise;

(b)

shall maintain itsExisting Businesses, organizational structure, business model and its relationship with customers and otherEntities;

(c)

prepare and manage the financial books and records of theTarget Company in accordance with the latestAccounting Standards for Enterprises under the Accounting Standards for Enterprises by designating the finance staff in cooperation with theBuyer; and

(d)

allow theBuyer or the third-party intermediary appointed by theBuyer to inspect the information and materials concerning the business, financial, sales and operation of theTarget Company during the business hours of theTarget Company.

6.2

Restrictions

Without prejudice to the provisions set out in Article 6.1, theSellers shall ensure that during the period between theExecution of theAgreement andClosing, without the prior written consent of theBuyer, theTarget Companyshall not:

(a)

enter into an agreement or making a commitment in a cumulative amount of more than RMB10,000 (TEN THOUSAND);

(b)

borrow any money or bear any other debt, except for borrowings or debts arising from normal business activities;

(c)

provide loans or guarantees to external entities;

(d)

enter into, revise or renew any labour contract, or terminate the labour contracts with the key employees in any way, except in emergencies;

(e)

make major adjustments to the organizational structure of theTarget Company, except as required by theBuyer;

(f)

increase the remuneration of employees (salaries, subsidies, bonuses, social security or any other form of remunerations) in any manner except for the increase in salary in normal business based on past practice;

(g)

increase or decrease the registered capital of theTarget Company, transfer or pledge theTarget Equity in whole or in part to anyEntity, or issue any title certificate that gives the holder the right to obtain the equity of theTarget Company;

(h)

decide on, execute or pay profits or other distributions to theSellers or any otherEntity;

(i)

take any measure to amend the articles of incorporation of theTarget Company, or to merge, split, dissolve or liquidate it;

(j)

in addition to resolutions relating to the Transaction and other matters stipulated in thisAgreement, pass any other resolution of general meeting or of the Board of Directors;

(k)

in addition to normal business activities, conduct any transaction or enter into any contract;

(l)

engage in any transaction or enter into any contract with any of theSellers or their respectiveRelated Parties;

(m)

in addition to the contracts related to normal business activities, revise or terminate any contract that has been entered into by theTarget Company;

(n)

refuse to participate in the business cooperation proposed by theBuyer without reasonable grounds;

(o)

cancel or waive any creditor’s right or claim of right of theTarget Companyagainst otherEntities;

(p)

acquire or invest in any Entity’s assets or equities;

(q)

establish partnership, joint venture or business partnership with anyEntity engaged in the same or similar business as theBuyer or theExisting Businesses, whether or not theEntity is principally engaged in such business, including cooperation in respect of business development, sales channels, marketing and government relations, etc.;

(r)

file, settle or withdraw from any litigation, arbitration or other proceedings; and

(s)

enter into any agreement or make any (verbal or written) commitment to engage in any activity which is prohibited by theAgreement or breaches theAgreement.

6.3

Restrictions on the Sellers

6.3.1

During the period betweenExecution andClosing, theSellers undertake that (i) if theSellers receive any request or inquiry (whether or not the request or inquiry is related to a contract theSellers has entered into) regarding theExisting Businesses made by any customer, theSellers must notify such request or inquiry to theTarget Company, (ii) theSellers inform the customers or prospective customers that theExisting Businesses are carried out by theTarget Company, and the request or inquiry will be handled by theTarget Company, and (iii) if appropriate, theSellers make proper arrangement with theTarget Companyto facilitate theTarget Company’s response to customer’s request or inquiry.

6.3.2

If theSellers receive payment from customers during the period betweenExecution andClosing and the payment is related to the provision of the trading or brokerage services of used motor vehicles of theExisting Businesses after theBase Date, theSellers shall transfer such payment to theTarget Company, or urge the customers to pay to theTarget Company directly.

CLOSING

7.1

Time of Closing

In the case of satisfaction (or waiver in accordance with Article 5.2.1) of theConditions Precedent, theClosingshall take place on the fifth (5th) working day from the day on which the lastCondition Precedent is satisfied or waived, or on the other date as otherwise agreed by the Sellers and the Buyer in writing.

7.2

Obligations of Closing

7.2.1

UponClosing, theSellers andShareholders shall submit or ensure other parties submit to theBuyer the following documents or certificates and guarantee the authenticity and validity thereof:

(a)

the notice issued by the Industry and Commerce Authority that approves the change in equity;

(b)

the capital contribution certificate supporting theSellers’ ownership to the Target Equity;

(c)

the capital contribution certificate supporting the purchase of the Target Equity by theBuyer;

(d)

the register of members of theTarget Company affixed with the official seal of theTarget Company dated theClosing Date, reflecting theBuyer’s ownership of theTarget Equity;

(e)

the supporting documents dated theClosing Date and signed by theSellers, the form and content of which is satisfactory to theBuyer and which proves that each of the Conditions Precedent listed in Article 5.1 has been satisfied;

(f)

the accounts of theTarget Company; and

(g)

the full set of seals of theTarget Company (including official seal, contract seal, finance seal, legal representative seals (if any)) and other original registration documents and licenses.

7.2.2

On theClosing Date, theSellers shall ensure that all assets (including motor vehicles) of theOriginal Company transferred to theTarget Company are its own assets and are obtained using its own funds; if there are any asset obtained using funds from the third parties, theSellers shall notify theBuyer prior to theClosing Date and, with the consent of theBuyer, deal with it in one or more of the following ways:

(a)

such asset will be excluded from the assets of theOriginal Company that shall be transferred to theTarget Company;

(b)

theSellers, after repaying the borrowings or advances due to the third party with their own funds, transfer the corresponding asset to theTarget Company; or

(c)

after theBuyer has agreed and signed the corresponding written agreement, theBuyer purchases the asset and the relevant consideration will be used to repay the borrowings or advances due to the third party.

7.2.3

In the event that theSellers fail to disclose to theBuyertruthfully that, among the assets transferred or to be transferred into theTarget Company, there is any asset obtained using funds from any third party, theBuyer, once has knowledge of such fact, or claim against theTarget Company or the assets of theTarget Companythrough any third party, theBuyer may deem that theSellers have constituted a major breach of this agreement and has the right to implement the relevant provisions under this agreement concerning false undertaking, default, indemnification and termination.

7.3

Default of Closing obligations

7.3.1

In the event that theSellers breach any of their obligations relating toClosing as set out in Article 7.2, theBuyer (without prejudice to other remedies it may have, including the right to claim indemnification) has the right to, upon giving notice on or after theClosing Date:

(a)

terminate theAgreement (excluding the provisions under Articles 1, 13 and 14.3 to 14.14), in which case the Parties shall immediately take all necessary measures to cancel any action already taken under Article 7.2;

(b)

proceed with theClosing as far as practical, depending on the circumstances of breach; or

(c)

determine a newClosing Date, in which case the provisions under Articles 7.2 and 7.3 shall apply to the deferred closing.

OBLIGATIONS AFTER CLOSING

8.1

Operation and management of the Target Company

8.1.1

After theBuyer has collectively formulated the financial system, internal organizational structure, business process and other standardized rules and regulations of theTarget Company, the same shall be implemented through resolutions passed with a two-thirds majority at the first Board of Directors of theTarget Company; if any modification or supplement is necessary to be made to the aforesaid financial system based on the specific conditions of theTarget Company, such modification or supplement shall also be implemented through resolutions passed with a two-thirds majority of the Board of Directors.

8.1.2

TheTarget Company shall replace its original management system with theSaaS System provided by theBuyer to manage theTarget Company’s financial and business operations; theBuyer is to provide theTarget Company with theSaaS System as well as corresponding technical support to theTarget Company.

8.1.3

After theClosing, the Board of Directors (the “Board of Directors”) of theTarget Company shall consist of three (3) directors (“Directors”), of which, one (1) shall be nominated by theSellers (“Director of Sellers”), and two (2) shall be nominated by theBuyer (“Directors of Buyer”); theChairman shall be assumed by theDirector nominated by theBuyer; both theBuyer and theSellers shall vote at theTarget Company’s general meeting in order to approve the appointment of the directors nominated in accordance with the above principles; eachDirector has a term of three (3) years and is eligible to be re-elected by reappointment by the original nominating shareholders.

8.1.4

The meetings of theBoard of Directors shall be convened and presided over by theChairman; the resolutions of the Board shall be voted by using a system of one person, one vote. Any valid resolution shall be passed only when all directors are present and two-thirds of the directors vote for it; the Board may also convene the meetings by way of telephone conferences or e-mail communications and execute the resolutions of meetings of theBoard of Directors by post.

8.1.5

TheBoard of Directors has the power to determine major or regulatory matters with regard to the operation and management of theTarget Company, including but not limited to the following:

(a)

to approve the appointment or promotion of the General Manager, finance leader, sales leader, procurement leader, and branch manager of theTarget Company;

(b)

to approve the borrowing of any external debt by theTarget Company;

(c)

to adopt the financial system, internal organization structure, business process, personnel remuneration system and other standardized rules and regulations formulated by theBuyer and provided to theTarget Company, and to make appropriate modifications or supplements to the above-mentioned rules and regulations based the actual conditions of theTarget Company;

(d)

to develop a process for the procurement of used cars by theTarget Company, including the pricing scope;

(e)

to develop a process for the sale of used cars by theTarget Company, including the pricing scope;

(f)

to approve the purchase or sale of other assets other than used cars by theTarget Company;

(g)

to approve the identification and use of theTarget Company’s trade name and trademark;

(h)

to approve release of advertisements by theTarget Company;

(i)

to approve the remuneration, benefits and rewards of employees of theTarget Company;

(j)

to approve share of revenue, commissions, shares, bonuses, etc. offered by theTarget Companyfor cooperation with external parties;

(k)

to approve the setup of branches includingNew Storesby theTarget Company;

(l)

to approve the acquisition of other used car stores, businesses or related legal entities by theTarget Company;

(m)

to approve theTarget Company to carry out businesses than other used car business;

(n)

to approve business transactions between theTarget Company and shareholders, their relatives, nominees or other stakeholders;

(o)

to approve the reduction and expansion of store space, or change of address of theTarget Company;

(p)

to conduct monthly or quarterly audits on the business results of theGeneral Manager and theTarget Company’s management and to pass regulations regarding the treatment;

(q)

to decide on the way of storage and use procedures of all seals of theTarget Company;

(r)

to deal with other material matters that have been determined at the Board Meeting or the general meeting.

8.1.6

The role of legal representative of the Target Company shall be performed by the General Manager.

8.1.7

The General Manager of the Target Company shall be appointed by the Board of Directors in accordance with the following provisions:

(a)

the General Manager (the “General Manager”) of theTarget Company is assumed by theSellersor the person appointed by them, and enters into a labour contract in standard form with theBuyeror with theTarget Company according to the direction of theBuyer;

(b)

theGeneral Manager is responsible to theBoard of Directors, takes charge of the normal business activities of theTarget Company and exercises its duties as stipulated in the articles of incorporation of theTarget Company; in addition to the matters to be resolved by theBoard of Directors as stipulated in Article 8.1.6 under theAgreement, theShareholders of theTarget Company shall not interfere with theGeneral Manager’s daily management of theTarget Company.

8.1.8

The provisions under the articles of incorporation of theTarget Company shall be consistent with this Article 8.1; in case of any conflict, all shareholders of theTarget Company shall agree to make corresponding amendments to it.

8.2

Continuous services

TheSellers undertake that they will devote their time and efforts to the business development of theTarget Company beyond their duties, and will not hold any position in any other company or organization simultaneously without the approval of the Board of Directors, and will not resign on a voluntary basis from theTarget Companyin the period of five (5) years after theListing commencing from theClosing Date.

8.3

Cancellation of the Original Company

TheSellers undertake that theOriginal Company under its control shall begin the formal liquidation procedures within thirty days from the day on which the establishment of theTarget Company is completed.

8.4

Shares and equities

8.4.1

Without the written consent of theBuyer, theSellers shall not transfer the equity interests in theTarget Company they hold to any third party, nor shall it pledge, guarantee the equity interest or otherwise imposing any restriction on the same.

8.4.2

TheBuyer undertakes that it will not pledge, guarantee the equity interests in theTarget Company it holds or otherwise imposing any restriction on the same.

8.5

Use of the trade name and Intellectual Property Rights

Subsequent to theClosing Date, theTarget Company will use the wording “Renren Auto Group + [original brand]” as the trade name, and its ownership and trademark registration rights is belong to theTarget Company. Commencing from theClosing Date, theSellers shall, and in accordance with the explicit authorization of theTarget Company, ensure that it and any of itsRelated Parties do not use anyIntellectual Property Right, trade name, domain name, registered or unregistered trademarks, logo of theTarget Company, or use in any way the name of theTarget Company, any abbreviation of the name of theTarget Company, or any name or phrase similar to the name of theTarget Company.

8.6

Registration and transfer of Intellectual Property Rights

8.6.1

From theClosing Date until the cancellation of theOriginal Company, theSellers and itsOriginal Company shall take further measures and sign all necessary documents at the request of the Buyer, so that the Target Company can legally obtain all the Intellectual Property Rights listed inAppendix VII (List of Intellectual Property Rights). Legal ownership, and assist the Target Company in registering the ownership of Intellectual Property Rights with the competent registration authority of copyright, patent, trademark, domain name, design or other Intellectual Property Rights (the cost shall be borne by the Sellers).

8.6.2

From the Closing Date, the Sellers shall exercise their rights in relation to Intellectual Property Rights only in accordance with the Buyer’s requirements until the Target Company acquires full legal ownership of the Intellectual Property Rights.

8.6.3

The Sellers and the Shareholders agree that the company name and trade name associated with the [original brand] are an integral part of the transferred business and shall be vested in the Target Company. The Sellers and the Original Company shall assist the Target Company in applying for registration of any new trademarks, domain names or other Intellectual Property Rights related to the [original brand], including providing the necessary consent or letter of abstention.

8.6.4

If all of the Target Company’s equity interests held by the Sellers are transferred, or any Seller completely withdraws from the Target Company or resigns from theTarget Company, theBuyer and theTarget Company agree to assist in transferring the trademark, domain name or otherIntellectual Property Rightsrelated to the [original brand] to theSellers or its Related Parties.

UNDERTAKINGS

9.1

Undertakings of the Sellers

9.1.1

TheSellers represent and undertake to theBuyer that the statements listed inAppendix VIII (Undertakings of the Sellers) are true and accurate at the time of signing.

9.1.2

TheSellers represent and undertake to theBuyer and the statements listed inAppendix VIII (Undertakings of the Sellers) remain true and accurate on theClosing Date, as if each of the statements is completely restated on theClosing Date.

9.1.3

TheSellers represent and undertake to theBuyer that the following interested parties do not have any relationship with theSellers’ capital contribution to theTarget Company and the transferred business and assets, or have terminated such relationship:

(a)

the owners of theOriginal Company (including but not limited to the creditors of theOriginal Company, product/service providers, etc.);

(b)

the owner of theSellers (including but not limited to the person who appointed a nominee for the equity, creditors, etc.);

In the event that any third party claims any rights against theTarget Company, or against the shareholders or assets of theTarget Company, theSellers shall assume all responsibilities; and indemnify for any loss suffered by theTarget Company.

9.1.4

TheSellers represent and undertake to theBuyer that the contribution of theSellers to theTarget Company is actual capital contribution made by it, and that there is no nominee arrangement, neither there is any risks involving any third party claiming any rights or disputes over any equity or property of theTarget Company.

9.2

Undertakings of the Buyer

9.2.1

TheBuyer undertakes to theSellers that all the statements listed inAppendix IX (Undertakings of the Buyer) are true and accurate at the time ofSigning.

9.2.2

TheBuyer further represents and undertakes to theSellers that the statements listed inAppendix IX (Undertakings of the Buyer) remain true and accurate on theClosing Date, as if each of the statements is completely restated on theClosing Date.

9.3

Liability for breach

9.3.1

Without prejudice to the provisions of Articles 5.2.3 and 7.3.1(a), if any of theSellers is in breach of theAgreement, theBuyer has the right to terminate or cancel theAgreement. If theBuyer decides not to terminate or cancel theAgreement and theClosing is completed, theBuyer has the right to be indemnified against any loss suffered after theClosing Date as a result of any breach on the part of the Sellers.

9.3.2

If, during the term of theAgreement and without the prior consent of theBuyer, theSellers enter into any agreement in relation to equity, investment, mergers and acquisitions, pledges and other agreements, which involve major changes in the equity and business of the company, theBuyer has the right to request theSellers to make compensation of not less than RMB TEN MILLION (RMB10,000,000) (such amount inclusive), and has the right to unilaterally terminate theAgreement, without the need to return the profits generated from the operation of theTarget Companyto the originalSellers.

9.3.3

If theBuyer is in breach of theAgreement, theSellers, as their sole and exclusive remedy, are entitled to be indemnified against anyLoss suffered by theSellers.

INDEMNIFICATION

10.1

General provisions

Since from completion ofClosing, theSellers shall be liable unconditionally and jointly to indemnify theBuyer or itsRelated Parties for anyLoss due to the following reasons:

theSellers or theOriginal Company is in breach of the representations or undertakings as set out inAppendix VIII (Undertakings of the Sellers);

anySeller is in breach of its undertakings or obligations under theAgreement;

theTarget Company is in breach of its undertakings or obligations under theAgreement prior to theClosing.

10.2

Legal fees

For the avoidance of doubt, theLoss referred to in Article 10.1 shall include any legal costs incurred by theBuyer or itsRelated Parties in response to a claim by aThird Party in relation to the circumstances mentioned in Article 10.1. TheSellers shall pay such legal fees to theBuyer and/or theBuyer’sRelated Parties after theBuyer’s request for indemnification, or pay such legal fees directly to the persons such as the lawyer engaged by theBuyer and/or theBuyer’sRelated Parties.

10.3

Collaboration

TheSellers and theShareholders shall cooperate with theBuyer in accordance with theBuyer’s request to deal with matters relating to any claim made by anyThird Party as mentioned in Article 10.1.

In the event of a breach of theAgreement by theSellers or theShareholders, theBuyer shall ensure that reasonable measures are taken to avoid or mitigate theLoss.

SHARE OF TRANSACTION FEES AND TAXES

11.1

Share of costs for the establishment of the Target Company

The costs incurred by the Sellers in setting up theTarget Company and transferring the assets and business from theOriginal Company to theTarget Company shall be borne by theTarget Company. If theTarget Companyfails to be established successfully or the cooperation under theAgreement fails to be completed, any resultant cost shall be borne by theSellers.

11.2

Share of costs for due diligence

11.2.1

The costs incurred by theBuyer in conducting due diligence on theTarget Company and its used car business and related assets shall be borne by theSellers, which shall be paid in advance by theBuyer and returned by theSellers to theBuyer after listing.

11.2.2

If theTarget Company fails to establish a success or the cooperation under theAgreement fails to be completed, the cost shall be borne equally by both parties.

11.3

Share of taxes

11.3.1

Both theBuyer and theSellers shall bear and pay their respective taxes and fees for the transaction in accordance with relevant laws and regulations.

11.3.2

TheSellers shall bear all taxes and fees related to all events, accruals, or receipts of theTarget Company’s obtained, accrued, or received by theTarget Company before theClosing Date prior to theClosing Date, unless the tax is paid. A sufficient amount of reserves, provisions for taxes or reserves have been made in the accounts of theTarget Company.

11.3.3

Seventy percent (70%) of the total turnover tax generated by theTarget Company prior to the listing of the company shall be borne by theSellers, which shall be paid in advance by theBuyer and be returned to theBuyer by theSellers afterListing.

11.4

Return of advances

11.4.1

If theBuyer advances any fees or taxes on behalf of theSellers in accordance with the relevant provisions of Article 11 of theAgreement, theSellers shall return the full amount to theBuyer afterListing.

11.4.2

TheSellers may return the fees or taxes to theBuyer by way of cash or shares.

11.4.3

If theSellers elect to pay theBuyer a fee or tax by way of cash, the full amount of cash shall be paid into theBuyer’s designated account within thirty (30) days after the date of its listing.

11.4.4

If theSellers elects to return the fees or taxes to theBuyer by way of shares, theBuyer shall calculate the number of shares that theSellers shall return to theBuyer based on the share price at the time ofListing. TheBuyer shall inform theSellers and theBuyer shall fully deduct from the number of shares due to theSellers at the second time that it issues shares to theSeller

NON-COMPETITION

12.1

Non-competition obligations

From the effective date of the Agreement, until the date when theSellers no longer hold any equity in theTarget Company, do not hold position with theTarget Company and do not constitute a related party of theListing Entity, noSeller shall, without the prior written consent of theBuyer, and must not allow their respectiveRelated Partiesto do the following:

to induce or attempt to induce any customer or prospective customer of theTarget Company to terminate its contract or business relationship with theTarget Company; or

to (i) induce or attempt to induce anyRestricted Employee to terminate his/her employment relationship with theBuyer or itsRelated Parties (including theTarget Company); (ii) induce others to hire anyRestricted Employee; or (iii) employ and engage anyRestricted Employee as the manager, employee, consultant, independent contractor, or any other position, whether or not suchRestricted Employee has violated his labour contract or service contract.

to directly or indirectly engage in any business identical to, similar to or competing with theTarget Company’s business;

to directly or indirectly have any interest in any entity that competes with theTarget Company or engages in other activities that are detrimental to the interests of theTarget Company.

for existing competing business activities, theSellers or the actual controller of theOriginal Companyshall agree with theBuyer to develop a decision plan and rectify it as soon as possible to the satisfaction of theBuyer.

theSellers shall devote all efforts and time for the development and operation of the businesses of theTarget Company and shall not engage in any other business, whether or not such business is competing with the businesses of theTarget Company.

12.2

Liability to indemnify

12.2.1

If theSellers or itsRelated Parties violate any of the obligations stipulated in Article 12.1 under theAgreement, theSellers shall, based on common and joint liability, make the following indemnification to theBuyer: (i) firstly, make one-off indemnification in the amount of RMB TWO HUNDRED AND FIFTY THOUSAND (RMB250,000) to theBuyer, (ii) during the period when the situations of breach of the agreed obligations under Article 12.1 under theAgreementon the part of theSellers or itsRelated Parties, make indemnification to theBuyer in the amount of RMB FIFTY THOUSAND (50,000) for each additional day lapsed.

12.2.2

If the actual loss suffered by theBuyer as a result of the breach of the obligations under Article 12.1 of theAgreement on the part of theSellers or theirRelated Parties, theSellers and theShareholders shall indemnify theBuyer for the actual losses suffered therefrom.

12.2.3

The exercise of any right to claim under this Article 12.2 by theBuyer does not affect the exercise of other rights or remedies (including the application for injunctions).

CONFIDENTIALITY

13.1

Announcement

Neither theBuyer nor theSellers may make any announcement or notice regarding theAgreement or the matters covered by theAgreement without the prior written permission of the otherParty. This provision does not affect the announcement or notice under theLaws or the rules of a stock exchange on which the shares of anyParty or any of itsRelated Parties are listed, provided that theParty who is obliged to make such announcement or notice shall negotiate with the otherParty before performing such obligation where possible.

13.2

Obligation of confidentiality

13.2.1

Each of the parties to theAgreement shall treat any information received or obtained under theAgreementor by reason of the signing of theAgreement (or other agreements entered into hereunder) or in connection with the following as being strictly confidential and may not be disclosed or used:

the terms of theAgreement and other agreements entered into under theAgreement;

negotiations and discussions related to theAgreement (or any such other agreement); or

business activities conducted by one of anyParty to theAgreement or by the party or any of itsRelated Parties.

13.2.2

Article 13.2.1 under theAgreement does not prohibit the disclosure or use of information in the following circumstances:

disclosure or use in accordance with the law or the requirements of any stock exchange on which the shares of anyParty are listed;

disclosure or use as required to achieve the rights and interests of anyParty to theAgreement under theAgreement;

disclosure or use as required for any legal action or arbitration arising from theAgreement or other agreements entered into pursuant to theAgreement or disclosure to theTax Authority in respect of the taxation matters of the disclosing party;

disclosure to a professional adviser of anyParty to theAgreement, provided that the professional adviser undertakes to comply with the provisions of Article 13.2.1 on such information as if it were a party to theAgreement;

information already known to the public (except for disclosures made in violation of theAgreement);

the other party has previously agreed in writing to disclose or use; or

information independently developed afterClosing.

Prior to the disclosure or use of any information under Articles 13.2.2(a), 13.2.2(b) or 13.2.2(c) of theAgreement, the relevantParty to theAgreementshall promptly notify the other party the requirements for disclosure or use, so that the other party has the opportunity to refute or discuss the timing and content of such disclosure or use.

MISCELLANEOUS

14.1

Obligations of collaboration

EachParty shall from time to time and in accordance with the reasonable requests of the otherParty, execute necessary relevant documents and take necessary actions in order to complete the transfer of theTarget Equity to theBuyer and realize all the interests of theParties under theAgreement.

14.2

Entire Agreement

TheAgreement constitutes the entire agreement between theParties regarding the matters covered by theAgreement and supersedes any previous, agreement, whether oral or written, between theParties regarding the matters covered by theAgreement.

14.3

No transfer

Without the prior written consent of theBuyer, theSellers may not transfer or otherwise transfer any of their rights and obligations under theAgreement, whether in whole or in part.

14.4

Waiver

Any waiver of any provision of theAgreement shall be made in writing and shall not be valid until the signing of theParty entitled to waive the right.

14.5

Entry into force, modification, cancellation and termination

14.5.1

TheAgreement shall become effective at the time of signing and shall have effect upon all parties.

14.5.2

Any amendment to theAgreement shall be made in writing and shall only be valid after signing by all parties.

14.5.3

If, due to the reason of theBuyer, theListing Entity fails to complete the IPO within three (3) years after theClosing is completed, either party has the right to propose to terminate theAgreement.

If theAgreement is terminated, theTarget Company shall be liquidated. TheBuyer and theSellers shall distribute the assets of theTarget Company according to the proportion of their respective actual capital contributions. If theBuyer provides financial support to theTarget Company at a price significantly lower than the market price during the process of controlling theTarget Company, the preferential amount shall be paid to the Buyer when the two parties terminate relationship in respect of the cooperation and the equity.

14.5.4

In the event of any of the following circumstances, the Buyer has the right to terminate the Agreement, in which case the Target Company shall be liquidated. The Buyer and Sellers or their respective heirs and legal representatives shall distribute the assets of the Target Company according to the proportion of their respective actual capital contributions:

death or incapacity of theSellers;

due to third-party reasons or force majeure, theListing Entity fails to complete the initial public offering within three (3) years after theClosing is completed;

other reasons as agreed by both parties.

14.5.5

If theSellers encounter the following circumstances, theBuyer has the right to terminate theAgreement, in which case theTarget Company shall be liquidated. TheBuyer and theSellers shall distribute the assets of theTarget Company according to their respective actual capital contributions; but the share of assets theSellers are entitled to shall be first used to indemnify theBuyer against the loss:

there is any significant personal integrity issue with the management of theSellers or theTarget Company;

the Board of Directors of theTarget Company determines that the performance of theTarget Company is severely not meeting expectations;

theSellers change the Target Equity due to the pledge, marriage, or inheritance of such equity;

theSellersare found to be criminally liable by the public security organ, the procuratorate or the court;

theSellers substantially violate the obligations under theAgreement.

14.6

Third-party rights

Except as otherwise expressly provided in theAgreement, theAgreement does not confer any rights on anyThird Party.

14.7

Notice

14.7.1

Any notice related to theAgreement shall :

made in writing (including in the form of e-mail);

written in Chinese; and

sent by hand, fax, registered mail or courier.

14.7.2

Notices to theBuyer shall be sent to theBuyer at the following address, or to any other person or address notified to theSellers and theShareholders from time to time by theBuyer:

[Buyer]

[ ]

E-mail: [ ];

14.7.3

Notices to theSellers shall be sent to theSellers’ representative at the following address, or to any other person or address notified by theSellers’Representatives from time to time:

E-mail: [●]

14.7.4

Notifications under theAgreement shall become effective immediately upon receipt and shall be deemed to have been served in the following circumstances:

(a)

it will be deemed as served at the time of delivery if sent by hand, registered mail or courier;

(b)

It will be deemed as served after it has been clearly transmitted if sent by facsimile.

14.8

Invalidity

If, pursuant to anyLaw, all or part of the content of theAgreement is deemed to be illegal, invalid or unenforceable:

the provision or such related parts will be deemed not to constitute the content of theAgreement, and the legality, validity or enforceability of other content of theAgreement will not be affected;

theSellers and theBuyer shall use their reasonable efforts to agree on a legally valid and enforceable alternative clause, and the content of the alternative clause shall be as close as possible to the original intention of the illegal, invalid or unenforceable clause.

14.9

Resolution of disputes

14.9.1

TheBuyer and theSellers shall endeavor to resolve any dispute (“Dispute”) arising out of or relating to theAgreement through negotiation and in good faith as soon as possible.

14.9.2

If aDispute cannot be resolved through negotiation, the dispute shall be submitted to the Beijing-based China International Economic and Trade Arbitration Commission (the “Arbitration Commission”) and settled in arbitration in Beijing in accordance with the then effective arbitration rules. The arbitral award shall be final and binding on each of theParties. The language of arbitration is to be Chinese, and the supporting documents are to be submitted in Chinese.

14.9.3

The arbitration shall be conducted by three (3) arbitrators. TheBuyer shall appoint one arbitrator, theSellers shall appoint one arbitrator, and the third arbitrator shall be jointly appointed by a named arbitrator appointed by both parties. If the arbitrator appointed by bothParties cannot agree on the candidate for the third arbitrator, the third arbitrator is to be appointed by the chairman of the arbitration commission.

14.10

Applicable Laws

TheAgreement and all documents executed under theAgreement shall be governed by and construed in accordance with theLaws of China.

14.11

Language

TheAgreement has been drafted in Chinese.

Agreed and signed on [●]:

Buyer


Authorised Representative

Sellers


[ ]

[ ]

Appendix I: Definitions

“Accounting Standards for Enterprises” means the latest version of Accounting Standards for Enterprises promulgated and revised by the Ministry of Finance of the People’s Republic of China;

“Related Party(ies)” means the otherEntities that, for the purposes of anyEntity, in control of, is controlled bythe Entity, or under common control with it by others. For the purposes of this definition, “control” on anyEntity means owning the rights of, directly or indirectly, and actually determining the entity’s business decisions, whether through shareholding or schemes of arrangement or otherwise. The “Agreement” means this equity purchase agreement and all its Appendixes;

“Working Day” means any date which is not a Saturday, Sunday or legal holiday inPRC;

“Closing” means the completion of theTransaction under theAgreement;

“Closing Date” means the date on which theClosing takes place;

“Performance Inclusion Date” means the first day of the next month of the date when the first income of theTarget Company is included in theBuyer’s account.

“Net profits” means the net profits arising from theTarget Company’s business in theTarget Company or theBuyer and its designated companies, of which the amount is based on the management report of theTarget Company issued by theBuyer

“Base Period of Business Results” shall be twelve (12) months prior to the listing if theTarget Company is being for twelve (12) months from itsPerformance Inclusion Date to the date of listing; and shall be twelve (12) months following itsPerformance Inclusion Date if theTarget Company is being less than twelve (12) months from itsPerformance Inclusion Date to the date of listing.

“Conditions Precedent” means the conditions set forth in Clause 5.1; andthe“Condition Precedent” means any one of theConditions Precedent or a certainCondition Precedent (as the context requires);

“Employee(s)” means the key employees and other employees set forth in Appendix II;

“Encumbrance(s)” means claims, guarantees, pledges, mortgages, liens, options, power of sales, usufructs, retentions of title, rights of pre-emption, rights of first refusal or any other types of third party right or security interests or agreements to create any of the foregoing;

“Government Department(s)” means legislative, judicial and administrative authorities and departments of the central government, provincial, municipal or other governments and their branches in thePRC;

“Guarantee(s)”means the guarantee or warranty provided by theEntity of one party for the obligations of otherEntity (actual or potential) through the way of guarantees, undertaking indemnity, securities, comfort letters or other guarantees, securities, rights of set-off, undertaking joint liabilities or commitments, whether directly or through counter-indemnity or otherwise;

“Intellectual Property Rights” means the rights to register, apply for, and apply for registration of trademarks, trade names, domain names, patents, copyrights and all other similar rights and the rights to register, apply for, and apply for registration of such rights;

“Law(s)” means all applicable regulations, laws, administrative regulations, ordinances, decrees, judgments, rules, or orders ofGovernment Department, including, for the avoidance of doubt,Laws in relation toTaxes;

“Liability(ies)” means all types of all liabilities, duties and obligations, whether they are derived from contractual,Laws or other requirements, or existing or future, actual or potential, identified or unidentified, or controversial or non-controversial liabilities, and whether or not they are separate or joint liabilities, or arising based on principal or secured debt; while a “Liability” means any one of the liabilities or a certain liability thereof (as the context requires);

“Loss” includes all damages, losses,Liabilities, costs (including reasonable lawyer fees and expert and consultant fees), charges and fees;

“Major Adverse Effect(s)” means any event or situation that shall or may affect theTarget Company’s legal existence, operation management, business license, product registration, business operation, financial position, business reputation or other material aspects (including but not limited to any proceedings, arbitral procedures, tax verification, tax penalties, or any investigation or penalty procedure conducted by other Government Department against the company that may have a material adverse effect on theTarget Company);

“Party(ies)” means the combination of theBuyerand theSellers;the“Party” means any party of such parties or a certain party thereof (as the context requires);

“Entity(ies)” means any individual, company, enterprise, individual entrepreneurs, unincorporated associate, partnership, association, trust or other forms of entity or organization;

“PRC” means the People’s Republic of China (for the purposes of theAgreement, excluding Hong Kong and the Macau Special Administrative Regions of the PRC and Taiwan);

“Industry and Commerce Authority” means the State Administration for Industry and Commerce of thePRC or its subsidiaries;

“Existing Businesses” means all the business activities of theTarget Company at theExecution Date, including the purchase and sales of old motor vehicles, as well as the related consulting and brokerage services.

“New Store(s)” means the business that theTarget Company establishes or obtains following theClosing Date, with independent entrance, addresses, business systems, lease contracts, and business personnel.

“SaaS System for Used Cars” means the software provided by theBuyer to theSellers for the management of used car transactions.

“Restricted Employee(s)” means anyEmployeehired by theBuyer or itsRelated Parties upon or after theClosing, and theEmployee:

accesses to the trade secrets or other confidential information of theTarget Companies; or

participates in discussions related to theTransaction; or

is akey Employee;

“Undertakings of the Sellers” means the undertakings given by theSellers to theBuyer pursuant to Clause 10.1 andAppendix VIII(Undertakings of the Sellers), and the “Undertaking of the Sellers” means any one of suchUndertakings of the Sellers or a certainUndertaking of the Sellers (as the context requires);

“Original Company” means[ ]and its related parties;

“Execution Date” means the date on which the lastParty executed theAgreement;

“Taxes” means all kinds of taxes collected and received by theTax Authority from anyEntity in compliance with applicableLaws(including value added tax, consumption tax, business tax, income tax, stamp duty, and other collected taxes or charges), which include all penalties, charges, costs and interest related thereto.;

“Tax Authority” means the authority or otherGovernment Departments responsible for the collection ofTaxes or for the management and/or the collection ofTaxes or the implementation ofTaxes related thereto as theLaws and regulations require;

“Transaction” means theBuyer’s acquisition of theTarget Company and any subsidiary arrangements related thereto;

“Transfer of Intellectual Property Rights” is defined in Clause 7.2 ofAppendix VIII(Undertakings of the Sellers);

Appendix II: List of Employees

(i)

List of key employees

(ii)

List of other employees

Appendix III: List of Motor Vehicles

Appendix IV: List of Lease Contracts

Address	Lease term	Lessor	Area (square meters)	Annual rental

Appendix V: List of Business Contracts (if any)

Appendix VI: List of Assets

Asset types	Brand	Quantity
Computer

Server

Printer

Photocopier

Air conditioner

Television

Office furniture

Office software

Car washer

Servicing equipment

Others

Appendix VII: List of Intellectual Property Rights

Type	Brief Description	Whether registration has been obtained
Copyright

Patent

Trademark

Trade name

Domain name

Design

Others

Appendix VIII: Undertakings of the Sellers

Provision of information and authenticity

All information provided by theSellers to theBuyerrelated to making an investment decision, is true, accurate, complete in all material respects and not misleading.

Civil capacity and authority

2.1

EachSeller is a natural person with civil capacity in accordance with thePRC Law.

2.2

TheSellers have full authority to enter into and perform theAgreement, and any other documents proposed pursuant, or related to theAgreement, which executed by theSellers. The above agreements and documents will constitute a binding obligation to theSellers in accordance with their respective terms upon the execution thereof.

Information about company

3.1

Target Company

TheTarget Company is a legal person duly established, validly existing and duly operating in accordance with the PRC law;

The copy of articles of association of theTarget Company provided by theSellers to theBuyer is the newest and is true and accurate.

The original and copy of the business license of theTarget Company provided by theSellers to theBuyer is the latest and true;

All registrations, filings, publicities and other procedures submitted or processed by theTarget Companyto the administrative department for industry and commerce have been submitted or processed on time as the laws require.

3.2

Target Equity

(a)

TheSellers are the statutory and equity owners of theTarget Equity stipulated in Clause 2.1 of theAgreement.

(b)

TheTarget Equity has been legally and effectively subscribed for and paid in full. There is no any situation or risk thatEntitywho has or claims to any rights (including capital conversion, issuance, registration, sale or transfer, repurchase and corresponding security interests) to the registered capital of theTarget Company in accordance with any options, agreements or other arrangements (including conversion rights and priorities).

(c)

NoEncumbrance has been created on any part of theTarget Equity.

(d)

No any dispute or potential ownership dispute is involved in theTarget Equity.

Accounts

4.1

All accounts have been prepared in accordance with the accounting principles and practices ofAccounting Standards for Enterprises,based on which theAccounts accurately reflect the financial position, assets and liabilities, and profit and loss of theTarget Company as of thedate of the accounts.

Guarantees

There is no guarantee, pending indemnification or security interest which is still valid that was:

made by theTarget Company; or

made in favour of theTarget Company.

Assets owned or leased

6.1

Property

TheTarget Company does not own, nor does it have the right to purchase, any real estate or property;

6.2

Lease

Appendix IV(List of Lease Contracts) sets forth all the real estate leased by theSellers or theOriginal Company upon the execution (“Leased Property”).

NoEncumbrance has been created on anyLeased Property.

6.3

Ownership of Motor Vehicles

Appendix III (List of Motor Vehicles for Transfer of Ownership to be Confirmed) sets out all motor vehicles (“Motor Vehicles”) actually controlled by theSellersorOriginal Company upon the execution.

NoEncumbrance has been created on theMotor Vehicles.

6.4

Other assets

All assets used by theSellers other than theLeased Property and assets for disposal or realisation in the normal course of business:

are legally owned by theSellers which being the equity owners thereof;

are owned or controlled by theSellers; and

there are not anyEncumbrance.

Intellectual Property Rights

7.1

TheIntellectual Property Rights set out in Annex VII (List of Intellectual Property Rights) are the entireTransfer of Intellectual Property Rights.

7.2

Transfer of Intellectual Property Rights(or if the pending application, may owned after registration) and all otherIntellectual Property Rights derived fromTransfer of Intellectual Property Rights or related toTransfer of Intellectual Property Rights are owned solely and legally by theTarget Company. NoEntity shall own any ownership, joint ownership, exclusive licensing right and any other right overTransfer of Intellectual Property Rights and there is no risk that anyEntity will obtain any of the aforesaid rights due toTransfer of Business to theTarget Company or theTransaction.

Contracts and other agreements

All the business contracts valid onBase DateofSellers are set out in Annex V (List of Business Contracts).

8.1

Equity joint ventures and other cooperation arrangements

TheTarget Company is not and has not agreed to be a member of any joint venture, group, partnership or other affiliated organisation (apart from the general accepted industry association where theTarget Company has no other liability and obligation other than annual membership fee or membership fee payment).

8.2

Agreements withRelated Party

There is no contract where theTarget Company served as a party and any of itsRelated Parties orShareholdersserved as the other party.

TheTarget Company has not signed any contract with any of its current or former employees, directors or managements, or theRelated Party of any of the aforesaid persons or the third parties who have any direct or indirect interest.

8.3

Compliance with agreements

All of the contracts to which theTarget Company is a party are valid and binding upon all the parties thereto, and theTarget Company and any other party of such contracts have complied with the terms thereto. There is no written notice of termination or proposed termination of such contracts.

Employees and Employee Benefits

9.1

Employees and terms of employment

Annex II (List of Employees) (i) contains:

(a)

The names of all theEmployees employed by theTarget Company at the end of theWorking Day before theExecution Date; and

(b)

The salaries, other benefits and consecutive employment terms of all theEmployees employed by theTarget Company at the end of theWorking Day before theExecution Date.

9.2

Termination of employment

TheTarget Company has not received any written notice of resignation from anyKey Employees.

With respect to actual or proposed termination of employment of anEmployee or theTarget Company or a former employee of theSellers, theTarget Company has not made or agreed to make any payment or provided any benefit to anyEmployee or former employee of theTarget Companyor any of theSellers, or to the family members of any suchEmployee or former employee

9.3

Compliance with Labour Law

Regarding all personnel ofTarget Company, theTarget Company has complied with all the applicableLaws in relation to employment, employee benefit and labour issue, including but not limited to labour contracts signed with every employee. The term of the labour contracts signed between theTarget Company and its employees are in compliance with requirements ofLaws.

There is no circumstance where theTarget Company may be required to pay damages or indemnification, be fined, or be required to take remedial measures or be subject to any form of penalties in accordance with any relevant labourLaws. There are no existing, pending and potential claims of any form raised by any of the current of former employees of theTarget Company or against theTarget Company.

TheTarget Company has withheld and paid all the social insurance funds, housing funds, payments, benefits and allowances in accordance with applicableLawsand labour contracts.

9.4

Labour disputes

TheTarget Company does not have any strike, labour conflict, labour dispute, or any dispute or negotiation in relation to demands of claim against the employees of theTarget Company or labour union or other organisation on behalf of its employees.

9.5

Bonus and other arrangements in respect of profits

Save for performance-related bonuses, theTarget Company does not have any equity incentive, share option, profits sharing, bonus or other incentive arrangements.

Abidance by Laws

10.1

Licences and Consents

The Target Company possesses all important licences, permissions, consents, authorizations, certificates and registrations for carrying outthe Existing Businesses. All above are currently effective and have abided by the regulations of them in all important aspects. As far asthe Sellers know, there is no reason to suspend or revoke any of them.

10.2

Compliance with Laws

The Target Company has complied with allLaws when carrying out itsExisting Businesses.

There is no pending investigation, professional disciplinary procedures or inquiry againstthe Target Company or anyEntity which may attribute its conduct or fault tothe Target Company carried out by court, tribunal, arbitrator, government agency or regulator, or an order, adjudication, decision or judgment issued by court, tribunal, arbitrator, government agency or regulator.

The Target Company has not received written notice issued by any court, tribunal, arbitrator, government agency or regulator involving the violation and/or the failure to abide byLaws bythe Target Company, or the requirements for its act or omission.

Lawsuit

11.1

Whether as a plaintiff, defendant of other party,the Target Company is not involved in any claims, legal procedures, lawsuit, accusation, investigation, inquiry or arbitration (excluding as a plaintiff to recover the debts incurred in its normal business process).

11.2

To the knowledge ofthe Sellers, there are not any potential claims, legal proceedings, lawsuit, accusations, investigation, inquiry or arbitration againstthe Target Company.

Used Motor Vehicle Transactions

Regarding any used motor vehicles or services sold or provided bythe Target Company orthe Seller,the Target Company andthe Seller have not received any single claim for an amount exceeding RMB100,000 within the 12-month period prior to theExecution Date.

Taxes

13.1

The Target Companyhas duly paid up all taxes when the related taxes are due and the related department requests payment.The Target Company does not and is not expected to be involved in any tax-related disputes.

13.2

The Tax Authority has not investigated or shown its intention to investigate the taxes matters ofthe Target Company.

Events occurring since the Base Date

14.1

The financial condition ofthe Target Company has not hadMajor Adverse Effects since theBase Date.

14.2

The Existing Businesses have been continuously in normal operation without any significant interruption or significant changes in their nature, scope or manner of operation since theBase Date.

14.3

The Target Company has not decided, executed or paid any profit or other allocations tothe Sellers or otherEntities since theBase Date.

Information disclosure

The following information is provided bythe Sellers at a responsible manner, andthe Sellers had not intentionally provided any false information or deliberately concealed any matters, the results of which would cause the disclosures be materially untrue or inaccurate;

All disclosures in accordance withthe Disclosure Letter; and

All information offered tothe Buyer and all answers to the questions put forward bythe Buyerin its due diligence process.

Existence

16.1

The Target Company is legally incorporated and validly existing underthe Chinese Laws.

16.2

The Target Companyis not bankrupt or is unable to pay the debts payable that are due under the applicableLaws.

16.3

The Target Company does not have any reconciliation or restructuring arrangements with creditors, nor are there any liquidation, bankruptcy or other bankruptcy-related legal procedures againstthe Target Company. Furthermore, as far asthe Sellers know, any events which may cause the occurrence of such legal procedures have never happened before.

16.4

NoEntity has taken any measures to exercise security rights regarding assets ofthe Target Company, and further, no events which may cause the possible exercise of that security right have occurred.

Appendix IX: Undertakings of the Buyer

Authority, Power and Establishment

Being validly existing,the Buyer is a company legally incorporated under theLaws of its location of registration.

The Authority to Sign this Agreement

The Buyer has full power and authorization to enter into and perform theAgreement and any other documents signed bythe Buyer under or in relation to theAgreement. The above agreement and documents, after being signed and obtained the approval of thePRC’s examining and approving authority (if applicable), shall constitute effective obligations binding tothe Buyer pursuant to their respective terms.

The Buyerhas obtained or will obtain all necessary company authorizations prior toClosing, authorizing it to fulfil theAgreement and any other documents signed bythe Buyerunder or in relation to the Agreement.

Appendix X: Certificates

Business license of the Buyer

Copy of the ID card of the Seller

Names of Sellers

Paid-in Capital (RMB)

Percentage of shareholding

as agreed otherwise by the parties to theAgreement

as agreed otherwise by the parties to theAgreement

as agreed otherwise by the parties to theAgreement

as agreed otherwise by the parties to the Agreement