Memorandum of Understanding, dated as of January 9, 2012



 Exhibit 10.1 
 Memorandum of Understanding 
 WHEREAS, Wonder Auto Technology, Inc. (the “WATG”)
and Worthy Talent Development Limited (the “Worthy Talent”) have agreed to enter into a collaborative agreement in which Worthy Talent will provide a loan at amount of US$6,000,000 to WATG, while WATG will issue a Promissory Note to Worthy
Talent, and 
 WHEREAS, both parties herein desire to enter into a Memorandum of Understanding (the “MOU”) setting forth the main
terms of the Promissory Note (the “Note”) as followings: 
  

	 	•	 	 Note issuance date: within two months since the signature of this MOU, the Note is unsecured and mature after two years since the issuance of the Note;



  

	 	•	 	 The aggregate principal amount of the Note is US$6,000,000, paid in cash. The Note bear interest at a rate of 8.0% per annum, payable in cash in
arrears on a calendar semi-annual basis beginning June 30, 2012, and the default rate is 15%; 


  

	 	•	 	 The Note is convertible at the holders’ option into ordinary shares of WATG at an initial conversion price of $2.00 per share or equity interest
in WATG’s wholly owned subsidiary, Wonder Auto Limited (“WAL”), calculated by the conversion price (the equity interests of WAL issuable upon conversion of the Note shall compromise the same proportionate ownership of WAL as the
common stock issuable upon conversion of the Note compromise of WATG), subject to the following reset. The conversion price is subject to reset if the average of the daily volume weighted average price (“VWAP”) of WATG’s ordinary
shares for the five consecutive trading days ending on each two-month anniversary of the issuance date of the notes until maturity (each a “Reset Date”) is less than $1.50. In that event, the conversion price is reset to a price equal to
100% of the arithmetic average of the daily VWAP of WATG’s ordinary shares for any five consecutive trading days during this two-month period selected by the holder on the Reset Date. 



 

	 	•	 	 The Note cannot be converted if, after giving effect to such conversion, the holders of the notes (together with their affiliates) would beneficially
own in excess of 19.99% of WATG’s ordinary shares or 19.99% of WAL’s equity interest outstanding immediately after giving effect to the conversion; 



 

	 	•	 	 The Note requires an automatic re-pricing of the conversion price if WATG make certain sales of its ordinary shares or ordinary share equivalents in a
capital-raising transaction at a price below the conversion price, then the conversion price reset to the capital-rising transaction price; 










	 	•	 	 In the event of change of control and certain other fundamental transactions, the holders of the Note have the right to require WATG to redeem all or
any portion of the Note at a price equal to the greater of (i) the amount to be redeemed multiplied by a redemption premium of 200% and (ii) the amount to be redeemed multiplied by the quotient determined by dividing the closing bid price
of WATG’s ordinary shares on the date immediately preceding such event by the conversion price of the Note; 


  

	 	•	 	 WATG is required under the terms of the Registration Rights Agreement to file with the Securities and Exchange Commission (“SEC”) a
registration statement to register the ordinary shares issuable upon the conversion of the Note to permit the resale of such ordinary shares to the public. 


 No warrants will be issued with the purchase of the Note. 
 We, the undersigned have read and
agree with this MOU. Further, we have reviewed the main terms of the Promissory Note. 
  

			
	WONDER AUTO TECHNOLOGY, INC.
		
	By	 	 /s/ Qingjie Zhao

		 	Qingjie Zhao, Director

 Address: No. 16 Yulu Street, Taihe District, Jinzhou City, 
 Liaoning Province, People’s
Republic of China, 121013 
 Facsimile: +86 416 2661186 

			
	
	WORTHY TALENT DEVELOPMENT LIMITED
		
	By	 	 /s/ Qingdong Zen

		 	Qingdong Zen, Chairman

 Address: PALM GROVE HOUSE, P. O. BOX 438, ROAD TOWN, TORTOLA, 
 BRITISH VIRGIN ISLANDS 

Facsimile: +86 10 84785079