Document:

EXECUTION
VERSION

      

       

      SHARE
EXCHANGE AGREEMENT

       

      BY
AND AMONG:

       

      LI
YONGHUI,

       

      YAN
WANG,

       

      HONEST
BEST INT’L LTD,

       

      AUTOCHINA
GROUP INC,

       

      FANCY
THINK LIMITED,

       

      CHUANGLIAN,

       

      KAIYUAN
REAL ESTATE,

       

      HUIYIN
INVESTMENT,

       

      HUA
AN INVESTMENT,

       

      TIANMEI
INSURANCE,

       

      KAIYUAN
LOGISTICS,

       

      KAIYUAN
AUTO TRADE,

       

      CHUANGLIAN
AUTO TRADE,

       

      AND

       

      SPRING
CREEK ACQUISITION CORP.

       

      

       

      

       

      

       

      Dated:
February 4, 2009

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SHARE
EXCHANGE AGREEMENT

       

      SHARE
EXCHANGE AGREEMENT (this “Agreement”), dated
February 4, 2009, by and among Li Yonghui (“Founder”), Yan Wang
(“Wang”),
Honest Best Int’l Ltd, a company incorporated and existing under the laws of the
British Virgin Islands (“FounderCo”),
AutoChina Group Inc, a company incorporated and existing under the laws of the
Cayman Islands (“AutoChina”), Fancy
Think Limited, a limited liability company established in Hong Kong under the
Hong Kong Companies Ordinance (“Fancy Think”), Hebei
Chuanglian Trade Co., Ltd. (河北创联贸易有限公司), a
company established under the laws of the PRC (“Chuanglian”), Hebei
Kaiyuan Real Estate Development Co., Ltd. (河北开元房地产开发股份有限公司), a
company established under the laws of the PRC (“Kaiyuan Real
Estate”), Hebei Huiyin Investment Co., Ltd. (河北汇银投资有限责任公司), a
company established under the laws of the PRC (“Huiyin Investment”),
Hebei Hua An Investment Co., Ltd. (河北华安投资有限责任公司), a
company established under the laws of the PRC (“Hua An Investment”),
Hebei Tianmei Insurance Agency Co., Ltd. (河北天美保险代理有限公司), a
company established under the laws of the PRC (“Tianmei Insurance”),
Hebei Shijie Kaiyuan Logistics Co., Ltd. (河北世捷开元物流有限公司), a
company established under the laws of the PRC (“Kaiyuan Logistics”),
Hebei Shijie Kaiyuan Auto Trade Co., Ltd. (河北世捷开元汽车贸易有限公司), a
company established under the laws of the PRC (“Kaiyuan Auto Trade”),
Shanxi Chuanglian Auto Trade Co., Ltd. (山西创联汽贸公司), a
company established under the laws of the PRC (“Chuanglian Auto
Trade”), and Spring Creek Acquisition Corp., a corporation duly organized
and existing under the laws of the Cayman Islands (“SCAC”).  Each
of Founder, Wang, FounderCo, AutoChina, Fancy Think, Chuanglian, Kaiyuan Real
Estate, Huiyin Investment, Hua An Investment, Tianmei Insurance, Kaiyuan
Logistics, Kaiyuan Auto Trade, Chuanglian Auto Trade, and SCAC are referred to
herein each as a “Party” and
collectively as the “Parties.”

      

      Capitalized
terms used herein that are not otherwise defined shall have the meanings
ascribed to them in ARTICLE 10 hereof.

       

      RECITALS

       

      WHEREAS,
AutoChina owns and operates the Business in the PRC through Fancy Think, the
entities listed on Schedule A1 hereto,
each of which is a company established under the laws of the PRC (each, a “4S Store I” and
collectively, the “4S
Stores I”), the entities listed on Schedule A2 hereto,
each of which is a company established under the laws of the PRC (each, a “4S Store II” and
collectively, the “4S
Stores II”) (the 4S Stores I, together with the 4S Stores II,
collectively, the “4S
Stores”), the entities listed on Schedule A3 hereto,
each of which is a company established under the laws of the PRC (each, a “Transportation Company
I” and collectively, the “Transportation Companies
I”), the entities listed on Schedule A4 hereto,
each of which is a company established under the laws of the PRC (each, a “Transportation Company
II” and collectively, the “Transportation Companies
II”) (the Transportation Companies I, together with the Transportation
Companies II, collectively, the “Transportation
Companies”), the entities listed on Schedule A5 hereto,
each of which is a company established under the laws of the PRC (each, an
“Auto Service
Company” and collectively, the “Auto Service
Companies”), and the entities listed on Schedule A6 hereto
(collectively, with the 4S Stores, the Transportation Companies, and the Auto
Service Companies, the “PRC Subsidiaries” and
each, a “PRC
Subsidiary”);

       

      
        
          
          

        

        
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      WHEREAS,
the AutoChina Shareholders are the registered owners of all of the outstanding
shares of AutoChina (the “AutoChina
Shares”);

       

      WHEREAS,
subject to the terms and conditions of this Agreement, SCAC, at the Closing,
shall acquire all of the AutoChina Shares from the AutoChina Shareholders (the
“AutoChina
Acquisition”), representing one hundred percent (100%) of the issued
share capital of AutoChina; and

       

      WHEREAS,
following the Closing, SCAC will be renamed as AutoChina Group Limited or such
other name to be approved by SCAC.

       

      NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, and intending to be
legally bound hereby, the Parties agree as follows:

       

      ARTICLE
1 

       

      THE
AUTOCHINA ACQUISITION

       

      Section
1.01 Purchase and
Sale.  Upon the terms and subject to the conditions hereof, at
the Closing (as defined in Section 2.01), the AutoChina Shareholders shall sell,
transfer, assign and convey to SCAC, and SCAC shall purchase from the AutoChina
Shareholders, all of the right, title and interest of the AutoChina Shareholders
in and to the AutoChina Shares representing all of the outstanding shares of
AutoChina.

       

      Section
1.02 Purchase Price; Payment
Schedule.

       

      (a) Subject
to the terms and conditions set forth herein, the aggregate purchase price (the
“Purchase
Price”) to be paid by SCAC to the AutoChina Shareholders or their
designees for the AutoChina Shares shall consist of the allotment and issue to
the AutoChina Shareholders of a number of SCAC Ordinary Shares (the “Share Payment”)
pursuant to Section 1.02(b)(i), 1.02(b)(ii), 1.02(b)(iii), and 1.02(b)(iv)
(provided that the conditions stated in the applicable section is satisfied);
and

       

      (b) Subject
to Section 1.03 below, the Purchase Price shall be paid in the following
manner:

       

      (i) Net Upfront Consideration
Shares; Holdback Consideration Shares.

       

      (A) At the
Closing, SCAC shall allot and issue to each AutoChina Shareholder the number of
SCAC Ordinary Shares equivalent to (i) each AutoChina Shareholder’s shareholding
percentage (%) of the issued and outstanding share capital of AutoChina
immediately prior to the Closing multiplied by (ii) the Net Upfront
Consideration Shares (as defined below), issued in the name of such AutoChina
Shareholder.  “Net Upfront
Consideration” shall mean an amount equal to: (a) US$68,850,000 less (b)
US$6,885,000 in Holdback Consideration Shares (as defined below) (“Holdback
Consideration”).  “Net Upfront Consideration
Shares” shall mean SCAC Ordinary Shares in an amount calculated by
dividing (A) the Net Upfront Consideration by (B) US$8.00.

       

      
        
          
          

        

        
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      (B) At the
Closing, SCAC shall allot and issue and deposit with American Stock Transfer
& Trust Company (the “Escrow Agent”)
pursuant to the terms and conditions of a Share Escrow Agreement the form of
which is attached hereto as Schedule B, the
number of SCAC Ordinary Shares equivalent to the Holdback Consideration Shares
(as defined below), issued in the name of the AutoChina Shareholders on a pro
rata basis.  “Holdback Consideration
Shares” shall mean SCAC Ordinary Shares in an amount calculated by
dividing (A) the Holdback Consideration by (B) US$8.00.

       

      (ii) Earn-Out Share
Amounts.  If, on a consolidated basis, SCAC achieves or exceeds
certain Targeted EBITDA Growth in any of FY2009, FY2010, FY2011, FY2012, and
FY2013 (each fiscal year an “Earn-Out Period”),
each AutoChina Shareholder shall receive, and SCAC shall issue and deliver, the
number of SCAC Ordinary Shares equivalent to (a) each AutoChina Shareholder’s
shareholding percentage (%) of the issued and outstanding share capital of
AutoChina immediately prior to the Closing multiplied by (b) (A) the applicable
Earn-Out Consideration Percentage (%) set forth in the table attached herein as
Schedule C
multiplied by (B) the number of SCAC Ordinary Shares (excluding any issued and
outstanding SCAC Ordinary Shares that are issued in connection with
acquisitions, mergers, or like combinations, following the Closing) issued and
outstanding on December 31 of the fiscal year immediately prior to the
applicable Payment Date (as defined below) (the “Earn-Out
Shares”).  The aggregate number of Earn-Out Shares to be
awarded to the AutoChina Shareholders if SCAC achieves or exceeds the Targeted
EBITDA Growth shall be proportionately adjusted for (a) any increase or
decrease in the number of issued SCAC Ordinary Shares resulting from a share
split, share dividend, combination or reclassification of the SCAC Ordinary
Shares or similar transaction affecting the SCAC Ordinary Shares occurring
between December 31 of the fiscal year immediately prior to the applicable
Payment Date or (b) any other increase or decrease in the number of issued
SCAC Ordinary Shares effected following the Closing without receipt of
consideration by SCAC that occurs prior the date of the applicable Payment
Date.  

       

      (iii) Holdback Consideration
Payments.

       

      (A) Net FY2009 EBITDA Holdback
Consideration Payment.  If SCAC achieves (i) EBITDA Growth of
greater than thirty percent (30%) for FY2009 and (ii) FY2009 EBITDA in excess of
US$22,500,000 (the “FY2009 EBITDA Holdback
Consideration Release Target”), SCAC shall cause fifty percent (50%) of
the Holdback Consideration Shares to be released from the Escrow Agent and
transferred to the AutoChina Shareholders on a pro rata basis within twenty (20)
days following the delivery of SCAC’s audited consolidated financial statements
for FY2009 (the “FY2009 EBITDA Holdback
Consideration Release Date”) prepared in accordance with US GAAP (the
“FY2009 EBITDA
Holdback Consideration Shares”); less a number of SCAC Ordinary Shares in
an amount calculated by dividing (A) the amount required to satisfy the
Warrantors’ indemnification obligations pursuant to ARTICLE 11 based on the
aggregate amount of Damages claimed by an Indemnified Person to a Warrantor
pursuant to Section 11.02 on or prior to the FY2009 EBITDA Holdback
Consideration Release Date by (B) US$8.00 (such amount, the “Net FY2009 EBITDA Holdback
Consideration Shares”); provided, however, in no event shall the Net
FY2009 EBITDA Holdback Consideration Shares be less than zero (0).

       

      
        
          
          

        

        
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      (B) Net Remaining Holdback
Consideration Payment.  SCAC shall cause fifty percent (50%) of
the Holdback Consideration Shares to be released from the Escrow Agent and
transferred to the AutoChina Shareholders on a pro rata basis (the “Remaining Holdback
Consideration Shares”) on the later of the date (i) twenty (20) days
following the delivery of SCAC’s audited consolidated financial statements for
FY2009 prepared in accordance with US GAAP and (ii) one (1) year following the
Closing Date (the “Remaining Holdback
Consideration Release Date”); less a number of SCAC Ordinary Shares in an
amount calculated by dividing (A) the amount required to satisfy the Warrantors’
indemnification obligations pursuant to ARTICLE 11 based on the aggregate amount
of Damages claimed by an Indemnified Person to a Warrantor pursuant to Section
11.02 on or prior to the Remaining Holdback Consideration Release Date by (B)
US$8.00 (such amount, the “Net Remaining Holdback
Consideration Shares”); provided, however, in no event shall the Net
Remaining Holdback Consideration Shares be less than zero (0).

       

      (c) Determination of Earn-Out
Shares, Net FY2009 EBITDA Holdback Consideration Shares, and Net Remaining
Holdback Consideration Shares.

       

      (i) With
respect to determination of (A) the Earn-Out Shares or the Net FY2009 EBITDA
Holdback Consideration Shares, within twenty (20) days following the delivery of
SCAC’s audited consolidated financial statements for the applicable fiscal year
prepared in accordance with US GAAP, and (B) the Net Remaining Holdback
Consideration Shares, twenty (20) days prior to the Remaining Holdback
Consideration Release Date, SCAC shall determine the EBITDA Growth for the
applicable Earn-Out Period and deliver to the Warrantors notice of its
determination whether the minimum Targeted EBITDA Growth was satisfied, if
applicable, and the actual EBITDA for FY2009 or the applicable Earn-Out Period,
and the applicable number of Earn-Out Shares, Net FY2009 EBITDA Holdback
Consideration Shares, or Net Remaining Holdback Consideration Shares payable to
the AutoChina Shareholders (the “Shares
Calculation”).

       

      (ii) If the
AutoChina Shareholders disagree in good faith with the Shares Calculation, they
shall have ten (10) Business Days from SCAC’s delivery of notice of its
determination of the applicable Shares Calculation to deliver to SCAC written
objections to the applicable Shares Calculation.  The AutoChina
Shareholders may, by written notice to SCAC, waive or shorten such period for
objection.  After delivery of any such written objections, an
authorized representative of each of SCAC and the AutoChina Shareholders shall
promptly negotiate with respect to the applicable Shares Calculation and the
objections thereto, and if they are unable to reach an agreement within thirty
(30) days after delivery to SCAC of the objections to the applicable Shares
Calculation, the dispute shall be submitted to arbitration pursuant to
Section 12.09 hereof; and SCAC shall not be required to allot and issue and
deliver, or procure the delivery by the Escrow Agent of any Earn-Out Shares, Net
FY2009 EBITDA Holdback Consideration Shares, or Net Remaining Holdback
Consideration Shares, as applicable, until and to the extent it is so ordered to
do so in a final and binding award of an arbitration tribunal pursuant to such
arbitration.  Failure to submit a written objection within any
required time period shall constitute agreement by the AutoChina
Shareholders.  The applicable Shares Calculation, as so adjusted by
agreement or by the arbitrator (if required), shall be final and binding on the
Parties.

       

      (iii) Within
ten (10) Business Days after the determination of the relevant Earn-Out Shares,
Net FY2009 EBITDA Holdback Consideration Shares, or Remaining Holdback
Consideration Shares, as applicable, in accordance with this
Section 1.02(c) (whether pursuant to Section 1.02(c)(i), 1.02(c)(ii), or
12.09, as applicable) (such date, the “Payment Date”), SCAC
shall allot and issue and deliver to the AutoChina Shareholders the Earn-Out
Shares or instruct the Escrow Agent to release and deliver to the AutoChina
Shareholders the Net FY2009 EBITDA Holdback Consideration Shares or Net
Remaining Holdback Consideration Shares, as applicable.  All the
FY2009 EBITDA Holdback Consideration Shares or Remaining Holdback Consideration
Shares not released by the Escrow Agent as Net FY2009 EBITDA Holdback
Consideration Shares or Net Remaining Holdback Consideration Shares pursuant to
this paragraph shall be transferred to SCAC and shall be immediately cancelled
and retired by SCAC.

       

      
        
          
          

        

        
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      Section
1.03 Withholding.  If
SCAC is required under any provision of applicable Laws to deduct and withhold
any amounts with respect to the making of the payment of the Purchase Price,
SCAC shall be entitled to deduct and withhold from the payment of the Purchase
Price such amounts as required.  To the extent that amounts are so
withheld, such amounts will be treated for all purposes of this Agreement as
having been paid to the AutoChina Shareholders in respect of whom such deduction
and withholding were made by SCAC.

       

      ARTICLE
2

       

      THE
CLOSING

       

      Section
2.01 The
Closing.  Subject to the terms and conditions of this
Agreement, the consummation of the AutoChina Acquisition and the transactions
contemplated by this Agreement shall take place at a closing (the “Closing”) to be held
at 10:00 a.m., local time, on the Business Day on which the last of the
conditions to be fulfilled on or prior to the Closing under ARTICLE 8 is
fulfilled, at the offices of Morrison & Foerster, 34th Floor,
Edinburgh Tower, The Landmark, 15 Queen’s Road Central, Hong Kong, or at such
other time, date or place as the Parties may agree upon in
writing.  The date on which the Closing occurs is referred to herein
as the “Closing
Date.”

       

      Section
2.02 Deliveries.

       

      (a) AutoChina
Shareholders.  At the Closing, each AutoChina Shareholder will,
and the Warrantors shall cause each AutoChina Shareholder to, (i) assign and
transfer to SCAC all of such AutoChina Shareholder’s right, title and interest
in and to his, her or its respective portion of the AutoChina Shares by
delivering to SCAC the certificates representing such AutoChina Shares, together
with a duly executed instrument of transfer in respect thereof, and a copy of
the register of members of AutoChina as of the Closing Date written up to effect
such transfer, both certified by a director of AutoChina, the Secretary of
AutoChina, and AutoChina’s registered agent to be a true and complete copy
thereof, and (ii) deliver to SCAC the certificates, opinions and other
agreements contemplated by ARTICLE 8 hereof and the other provisions of this
Agreement.

       

      (b) SCAC.  At
the Closing, SCAC shall issue and deliver the Net Upfront Consideration Shares
to the AutoChina Shareholders, duly endorsed for transfer and free and clear of
all liens, and a copy of the register of members of SCAC as of the Closing Date
written up to effect such transfer, both certified by a director of SCAC and
SCAC’s registered agent to be a true and complete copy thereof, representing the
Purchase Price to which each of the AutoChina Shareholders is entitled pursuant
to Section 1.02(b)(i), and the certificates, opinions and other agreements and
instruments contemplated by ARTICLE 8 hereof and the other provisions of this
Agreement.

       

      
        
          
          

        

        
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      Section
2.03 Transaction
Documents.  At the Closing, the following agreements
(collectively, the “Transaction
Documents”) will have been executed, delivered or otherwise
effectuated:

       

      (a) this
Agreement;

       

      (b) the Share
Escrow Agreement;

       

      (c) the
Executive Employment Agreement with each of the Key Employees;

       

      (d) the
Indemnification Agreement with each Indemnitee;

       

      (e) the Labor
Contract with each of the employees;

       

      (f) the New
SCAC Articles;

       

      (g) the
Registration Rights Agreement;

       

      (h) the
Restructuring Agreements; and

       

      (i) the
Voting Agreement.

       

      Section
2.04 Further
Assurances.  Subject to the terms and conditions of this
Agreement, at any time or from time to time after the Closing, each of the
Parties hereto shall execute and deliver such other documents and instruments,
provide such materials and information and take such other actions as may
reasonably be necessary, proper or advisable, to the extent permitted by law, to
fulfill its obligations under this Agreement.

       

      ARTICLE
3 

       

      REPRESENTATIONS
AND WARRANTIES OF THE WARRANTORS 

       

      Subject
to the exceptions set forth in the Disclosure Schedule and except for the
representations and warranties set forth in Sections 3.35, 3.36, 3.37 and 3.38,
which are made solely by FounderCo to SCAC, each Warrantor, jointly and
severally, represents and warrants to SCAC as of the date hereof and as of the
Closing as follows:

       

      Section
3.01 Kaiyuan Real
Estate.  Founder, Li Ruiqi (李瑞其), Peng Jinyu
(彭晋瑜), and
Zhang Zhongwen (张仲文) are the
registered and beneficial owners of a ninety-nine and forty-two-hundredths
percent (99.42%), sixteen-hundredths percent (0.16%), twenty-six-hundredths
percent (0.26%), and sixteen-hundredths percent (0.16%) equity interest,
respectively, in Kaiyuan Real Estate, free and clear of all
Liens.  There are no options, warrants or other contractual rights
outstanding which give any Person except for its existing shareholders the
right to acquire or place any Lien against any of the equity interest of Kaiyuan
Real Estate owned by each of Founder, Li Ruiqi(李瑞其), Peng Jinyu
(彭晋瑜), and
Zhang Zhongwen (张仲文), whether or
not such rights are presently exercisable.  The registered capital of
Kaiyuan Real Estate and the equity ownership of Kaiyuan Real Estate are set
forth in ‎Section 3.01‎ of the Disclosure
Schedule.  All of the outstanding equity interest of Kaiyuan Real
Estate is validly issued and fully paid.  There are no options,
warrants or other contractual rights outstanding which give any Person except
for its existing shareholders the right to require and subscribe to any increase
of the registered capital of Kaiyuan Real Estate, whether or not such rights are
presently exercisable.  Kaiyuan Real Estate does not own or control,
directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, association, or other entity, except for a two percent
(2%) equity interest in Hebei Xuwei Trade Co., Ltd.(河北旭威贸易有限公司)
(“Xuwei
Trade”), an one percent (1%) equity interest in Hebei Shengrong Kaiyuan
Auto Parts Co., Ltd.(河北盛荣开元汽车配件有限公司)
(“Shengrong
Kaiyuan”), a sixty percent (60%) equity interest in Hebei Kaiyuan Doors
and Windows Manufacturing Co., Ltd. (河北开元门窗制造有限公司)
(“Kaiyuan Doors and
Windows”), a ninety-three percent (93%) equity interest in Hebei Lynch
Advertising Co., Ltd. (河北励志广告有限责任公司)
(“Hebei
Advertising”), and an one hundred percent (100%) equity interest in each
of Huiyin Investment, Hua An Investment, Kaiyuan Logistics, and Kaiyuan Auto
Trade.  Except for its operations in the auto business through each of
Kaiyuan Doors and Windows and Hebei Advertising, Kaiyuan Real Estate was formed
solely to acquire and hold an equity interest in each of Xuwei Trade, Shengrong
Kaiyuan, Huiyin Investment, Hua An Investment, Kaiyuan Logistics, and Kaiyuan
Auto Trade, and since its formation has not engaged in any business and has not
incurred any liability except in the ordinary course of acquiring, managing and
disposing its equity interest in each of Xuwei Trade, Shengrong Kaiyuan, Huiyin
Investment, Hua An Investment, Kaiyuan Logistics, and Kaiyuan Auto
Trade.

       

      
        
          
          

        

        
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      Section
3.02 Huiyin Investment; Hua An
Investment; Kaiyuan Logistics.

       

      (a) Huiyin
Investment.  (i) Kaiyuan Real Estate is the registered and
beneficial owner of an one hundred percent (100%) equity interest in Huiyin
Investment, free and clear of all Liens and (ii) except for the arrangements of
equity pledge and contractual rights set out in the Restructuring Agreements
there are no options, warrants or other contractual rights outstanding which
give any Person except for its existing shareholders the right to acquire or
place any Lien against any of the equity interest of Huiyin Investment owned by
Kaiyuan Real Estate, whether or not such rights are presently
exercisable.  The registered capital of Huiyin Investment and the
equity ownership of Huiyin Investment stock are set forth in ‎Section 3.02‎(a) of the
Disclosure Schedule.  All of the equity interest of Huiyin Investment
stock is validly issued and fully paid.  There are no options,
warrants or other contractual rights outstanding which give any Person the right
to require and subscribe to any increase of the registered capital of Huiyin
Investment, whether or not such rights are presently
exercisable.  Huiyin Investment does not own or control, directly or
indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity, except for the equity interest in each of
the 4S Stores I stock are set forth in Section 3.03(a) of the Disclosure
Schedule.  Huiyin Investment was formed solely to acquire and hold an
equity interest in each of the 4S Stores I and since its formation has not
engaged in any business and has not incurred any liability except in the
ordinary course of acquiring, managing and disposing its equity interest in each
of the 4S Stores I.

       

      (b) Hua An
Investment.  (i) Kaiyuan Real Estate is the registered and
beneficial owner of an one hundred percent (100%) equity interest in Hua An
Investment, free and clear of all Liens and (ii) except for the arrangements of
equity pledge and contractual rights set out in the Restructuring Agreements,
there are no options, warrants or other contractual rights outstanding which
give any Person the right to acquire or place any Lien against any of the equity
interest of Hua An Investment owned by Kaiyuan Real Estate, whether or not such
rights are presently exercisable.  The registered capital of Hua An
Investment and the equity ownership of Hua An Investment are set forth in ‎Section 3.02‎(b) of the
Disclosure Schedule.  All of the equity interest of Huiyin Investment
stock is validly issued and fully paid.  There are no options,
warrants or other contractual rights outstanding which give any Person except
for its existing shareholders the right to require and subscribe to any increase
of the registered capital of Hua An Investment, whether or not such rights are
presently exercisable.  Hua An Investment does not own or control,
directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, association, or other entity, except for the equity
interest in each of the 4S Stores II and Tianmei Insurance set forth in Section
3.03(b) and Section 3.03(c) of the Disclosure Schedule.  Hua An
Investment was formed solely to acquire and hold an equity interest in each of
the 4S Stores II and Tianmei Insurance and since its formation has not engaged
in any business and has not incurred any liability except in the ordinary course
of acquiring, managing and disposing its equity interest in each of the 4S
Stores II and Tianmei Insurance.

       

      
        
          
          

        

        
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      (c) Kaiyuan
Logistics.  (i) Kaiyuan Real Estate is the registered and
beneficial owner of an one hundred percent (100%) equity interest in Kaiyuan
Logistics, free and clear of all Liens and (ii) except for the arrangements of
equity pledge and contractual rights set out in the Restructuring Agreements,
there are no options, warrants or other contractual rights outstanding which
give any Person the right to acquire or place any Lien against any of the equity
interest of Kaiyuan Logistics owned by Kaiyuan Real Estate, whether or not such
rights are presently exercisable.  The registered capital of Kaiyuan
Logistics and the equity ownership of Kaiyuan Logistics stock are set forth in
‎Section
3.02‎(c) of
the Disclosure Schedule.  All of the equity interest of Kaiyuan
Logistics is validly issued and fully paid.  There are no options,
warrants or other contractual rights outstanding which give any Person except
for its existing shareholders the right to require and subscribe to any increase
of the registered capital of Kaiyuan Logistics, whether or not such rights are
presently exercisable.  Kaiyuan Logistics does not own or control,
directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, association, or other entity, except for an one hundred
percent (100%) equity interest in each of the Transportation Companies I and a
twenty percent (20%) equity interest in each of Daixian Shijie Transportation
and Xinzhou Shijie Transportation.  Kaiyuan Logistics was formed
solely to acquire and hold an equity interest in each of the Transportation
Companies I, Daixian Shijie Transportation, and Xinzhou Shijie Transportation,
and since its formation has not engaged in any business and has not incurred any
liability except in the ordinary course of acquiring, managing and disposing its
equity interest in each of the Transportation Companies I.

       

      Section
3.03 The 4S Stores I; The 4S
Stores II; Tianmei Insurance; The Transportation Companies I; Transportation
Companies II; Kaiyuan Auto Trade.

       

      (a) The 4S Stores
I.  Huiyin Investment is the registered and beneficial owner of
the equity interest in each of the 4S Stores I set forth in Section 3.03(a) of
the Disclosure Schedule, free and clear of all Liens.  Except for the
arrangements of equity pledge and contractual rights set out in the
Restructuring Agreements, there are no options, warrants or other contractual
rights outstanding which give any Person the right to acquire or place any Lien
against any of the equity interest each of the 4S Stores I owned by Huiyin
Investment, whether or not such rights are presently exercisable.  The
registered capital of each of the 4S Stores I and the equity ownership of each
of the 4S Stores I set forth in ‎Section 3.03‎(a) of the
Disclosure Schedule.  All of the equity interest of each of the 4S
Stores I is validly issued and fully paid.  There are no options,
warrants or other contractual rights outstanding which give any Person except
for its existing shareholders the right to require and subscribe to any increase
of the registered capital of each of the 4S Stores I, whether or not such rights
are presently exercisable.  Each of the 4S Stores I does not own or
control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association, or other entity.

       

      
        
          
          

        

        
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      (b) The 4S Stores
II.  Hua An Investment is the registered and beneficial owner
of the equity interest in each of the 4S Stores II set forth in Section 3.03(b)
of the Disclosure Schedule, free and clear of all Liens.  Except for
the arrangements of equity pledge and contractual rights set out in the
Restructuring Agreements, there are no options, warrants or other contractual
rights outstanding which give any Person the right to acquire or place any Lien
against any of the equity interest each of the 4S Stores II owned by Hua An
Investment, whether or not such rights are presently exercisable.  The
registered capital of each of the 4S Stores II and the equity ownership of each
of the 4S Stores II stock are set forth in ‎Section 3.03‎(b) of the
Disclosure Schedule.  All of the equity interest of each of the 4S
Stores II stock is validly issued and fully paid.  There are no
options, warrants or other contractual rights outstanding which give any Person
except for its existing shareholders the right to require and subscribe to any
increase of the registered capital of each of the 4S Stores II, whether or not
such rights are presently exercisable.  Except as specifically
described in Section 3.03(b) of the Disclosure Schedule, each of the 4S Stores
II does not own or control, directly or indirectly, any interest in any other
corporation, partnership, trust, joint venture, association, or other
entity.

       

      (c) Tianmei
Insurance.  Hua An Investment is the registered and beneficial
owner of an one hundred percent (100%) equity interest in Tianmei Insurance,
free and clear of all Liens.  Except for the arrangements of equity
pledge and contractual rights set out in the Restructuring Agreements, there are
no options, warrants or other contractual rights outstanding which give any
Person the right to acquire or place any Lien against any of the equity interest
of Tianmei Insurance owned by Hua An Investment, whether or not such rights are
presently exercisable.  The registered capital of Tianmei Insurance
and the equity ownership of Tianmei Insurance stock are set forth in ‎Section 3.03‎(c) of the
Disclosure Schedule.  All of the equity interest of Tianmei Insurance
stock is validly issued and fully paid.  There are no options,
warrants or other contractual rights outstanding which give any Person except
for its existing shareholders the right to require and subscribe to any increase
of the registered capital of Tianmei Insurance, whether or not such rights are
presently exercisable.  Tianmei Insurance does not own or control,
directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, association, or other entity.

       

      (d) The Transportation Companies
I.  Kaiyuan Logistics is the registered and beneficial owner of
an one hundred percent (100%) equity interest in each of the Transportation
Companies I, free and clear of all Liens.  Except for the arrangements
of equity pledge and contractual rights set out in the Restructuring Agreements,
there are no options, warrants or other contractual rights outstanding which
give any Person the right to acquire or place any Lien against any of the equity
interest each of the Transportation Companies I owned by Kaiyuan Logistics,
whether or not such rights are presently exercisable.  The registered
capital of each of the Transportation Companies I and the equity ownership of
each of the Transportation Companies I stock are set forth in ‎Section 3.03‎(d) of the
Disclosure Schedule.  All of the equity interest of each of the
Transportation Companies I stock is validly issued and fully
paid.  There are no options, warrants or other contractual rights
outstanding which give any Person except for its existing shareholders the right
to require and subscribe to any increase of the registered capital of each of
the Transportation Companies I, whether or not such rights are presently
exercisable.  Each of the Transportation Companies I does not own or
control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association, or other entity.

       

      
        
          
          

        

        
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      (e) Kaiyuan Auto
Trade.  Kaiyuan Real Estate is the registered and beneficial
owner of an one hundred percent (100%) equity interest in Kaiyuan Auto Trade,
free and clear of all Liens.  Except for the arrangements of equity
pledge and contractual rights set out in the Restructuring Agreements, there are
no options, warrants or other contractual rights outstanding which give any
Person the right to acquire or place any Lien against any of the equity interest
of Kaiyuan Auto Trade owned by Kaiyuan Real Estate, whether or not such rights
are presently exercisable.  The registered capital of Kaiyuan Auto
Trade and the equity ownership of Kaiyuan Auto Trade stock are set forth in
‎Section
3.03‎(e) of
the Disclosure Schedule.  All of the equity interest of Kaiyuan Auto
Trade stock is validly issued and fully paid.  There are no options,
warrants or other contractual rights outstanding which give any Person except
for its existing shareholders the right to require and subscribe to any increase
of the registered capital of Kaiyuan Auto Trade, whether or not such rights are
presently exercisable.  Except for the equity interest in Chuanglian
Auto Trade, Kaiyuan Auto Trade does not own or control, directly or indirectly,
any interest in any other corporation, partnership, trust, joint venture,
association, or other entity.

       

      (f) The Transportation Companies
II.  Chuanglian Auto Trade is the registered and beneficial
owner of an one hundred percent (100%) equity interest in each of the
Transportation Companies II, free and clear of all Liens.  There are
no options, warrants or other contractual rights outstanding which give any
Person the right to acquire or place any Lien against any of the equity interest
each of the Transportation Companies II owned by Chuanglian Auto Trade, whether
or not such rights are presently exercisable.  The registered capital
of each of the Transportation Companies II and the equity ownership of each of
the Transportation Companies II stock are set forth in ‎Section 3.03‎(f) of the
Disclosure Schedule.  All of the equity interest of each of the
Transportation Companies II stock is validly issued and fully
paid.  There are no options, warrants or other contractual rights
outstanding which give any Person except for its existing shareholders the right
to require and subscribe to any increase of the registered capital of each of
the Transportation Companies II, whether or not such rights are presently
exercisable.  Each of the Transportation Companies II does not own or
control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association, or other entity.

       

      Section
3.04 Chuanglian Auto
Trade.  Kaiyuan Auto Trade is the registered and beneficial
owner of a one hundred percent (100%) equity interest in Chuanglian Auto Trade,
free and clear of all Liens.  Except for the arrangements of equity
pledge and contractual rights set out in the Restructuring Agreements, there are
no options, warrants or other contractual rights outstanding which give any
Person the right to acquire or place any Lien against any of the equity interest
of Chuanglian Auto Trade owned by Kaiyuan Auto Trade, whether or not such rights
are presently exercisable.  The registered capital of Chuanglian Auto
Trade and the equity ownership of Chuanglian Auto Trade stock are set forth in
‎Section 3.04
of the Disclosure Schedule.  All of the equity interest of Chuanglian
Auto Trade stock is validly issued and fully paid.  There are no
options, warrants or other contractual rights outstanding which give any Person
except for its existing shareholders the right to require and subscribe to any
increase of the registered capital of Chuanglian Auto Trade, whether or not such
rights are presently exercisable.  Chuanglian Auto Trade does not own
or control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association, or other entity, except for the
equity interest in each of the Transportation Companies II stock are set forth
in Section 3.04 of the Disclosure Schedule.  Chuanglian Auto Trade was
formed solely to acquire and hold an equity interest in each of the
Transportation Companies II and since its formation has not engaged in any
business and has not incurred any liability except in the ordinary course of
acquiring, managing and disposing its equity interest in each of the
Transportation Companies II.

       

      
        
          
          

        

        
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      Section
3.05 FounderCo.  (i)
Wang is the registered and beneficial owner of all of the capital stock of
FounderCo, free and clear of all Liens and (ii) there are no options, warrants
or other contractual rights outstanding which give any Person the right to
acquire or place any Lien against any of the capital stock of FounderCo owned by
Wang whether or not such rights are presently exercisable.  The
authorized capital of FounderCo and the total number of the issued and
outstanding shares of FounderCo capital stock are set forth in ‎Section 3.05 of
the Disclosure Schedule.  All of the outstanding shares of FounderCo
capital stock are validly issued and fully paid.  There are no
options, warrants or other contractual rights outstanding which give any Person
the right to require and subscribe to any issuance of any capital stock of
FounderCo, whether or not such rights are presently
exercisable.  FounderCo does not own or control, directly or
indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity, except for 1,000 Shares in
AutoChina.  FounderCo was formed solely to acquire and hold an equity
interest in AutoChina and since its formation has not engaged in any business
and has not incurred any liability except in the ordinary course of acquiring,
managing and disposing its equity interest in AutoChina. 

       

      Section
3.06 AutoChina.  The
AutoChina Shareholders are the registered and beneficial owners of the AutoChina
Shares in the amounts set forth in Section 3.06 of the Disclosure Schedule, free
and clear of all Liens.  Such shares constitute all of the share
capital of AutoChina.  Except for the arrangements of equity pledge
and contractual rights set out in the Restructuring Agreements, there are no
options, warrants or other contractual rights outstanding which give any Person
the right to acquire or place any Lien against any of the AutoChina Shares owned
by the AutoChina Shareholders, whether or not such rights are presently
exercisable.  The authorized capital of AutoChina and the total number
of the issued and outstanding AutoChina Shares are set forth in Section 3.06 of
the Disclosure Schedule.  All of the outstanding AutoChina Shares are
validly issued and fully paid.  There are no options, warrants or
other contractual rights outstanding which give any Person except for its
existing shareholders the right to require and subscribe to any issuance of any
of the share capital of AutoChina, whether or not such rights are presently
exercisable.  AutoChina does not own or control, directly or
indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity, except for 10,000 shares
of a nominal or par value of HKD$1.00 each in Fancy Think.  AutoChina
was formed solely to acquire and hold an equity interest in Fancy Think and
since its formation has not engaged in any business and has not incurred any
liability except in the ordinary course of acquiring, managing and disposing its
equity interest in Fancy Think.

       

      Section
3.07 Fancy
Think.  AutoChina is the registered and beneficial owner of all
of the capital stock of Fancy Think, free and clear of all
Liens.  Except for the arrangements of equity pledge and contractual
rights set out in the Restructuring Agreements, there are no options, warrants
or other contractual rights outstanding which give any Person the right to
acquire or place any Lien against any of the capital stock of Fancy Think owned
by AutoChina, whether or not such rights are presently
exercisable.  The authorized capital of Fancy Think and the total
number of the issued and outstanding shares of Fancy Think capital stock are set
forth in ‎Section 3.07 of
the Disclosure Schedule.  All of the outstanding shares of Fancy Think
capital stock are validly issued and fully paid.  There are no
options, warrants or other contractual rights outstanding which give any Person
except for its existing shareholders the right to require and subscribe to any
issuance of any capital stock of Fancy Think, whether or not such rights are
presently exercisable.  Fancy Think does not own or control, directly
or indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity, except for an one hundred percent (100%)
equity interest in Chuanglian.  Fancy Think was formed solely to
acquire and hold an equity interest in Chuanglian and since its formation has
not engaged in any business and has not incurred any liability except in the
ordinary course of acquiring, managing and disposing its equity interest in
Chuanglian.

       

      
        
          
          

        

        
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      Section
3.08 Chuanglian.  Fancy
Think is the registered and beneficial owner of an one hundred percent (100%)
equity interest in Chuanglian, free and clear of all Liens.  Except
for the arrangements of equity pledge and contractual rights set out in the
Restructuring Agreements, there are no options, warrants or other contractual
rights outstanding which give any Person the right to acquire or place any Lien
against any of the equity interest of Chuanglian owned by Chuanglian, whether or
not such rights are presently exercisable.  The registered capital of
Chuanglian and the equity ownership of Chuanglian stock are set forth in ‎Section 3.08 of
the Disclosure Schedule.  All of the equity interest of Chuanglian is
validly issued and fully paid.  There are no options, warrants or
other contractual rights outstanding which give any Person except for its
existing shareholders the right to require and subscribe to any increase of the
registered capital of Chuanglian, whether or not such rights are presently
exercisable.  Chuanglian does not own or control, directly or
indirectly, any interest in any other corporation, partnership, trust, joint
venture, association, or other entity, except for (i) an one hundred percent
(100%) equity interest in each of the Auto Service Companies and (ii) Control
over all of the operations of each of Huiyin Investment, Hua An Investment,
Kaiyuan Logistics, and Kaiyuan Auto Trade (the “Chuanglian Controlled
Companies”), in each case through certain contractual arrangements as
described in details in ‎Section 3.08 of
the Disclosure Schedule.  Chuanglian exercises de facto control over
the operations of each of the Chuanglian Controlled Companies such that each of
the Chuanglian Controlled Companies qualify as a “special purpose entity” under
SIC 12, “Consolidation – Special Purpose Entities,” under IFRS or a “variable
interest entity” under FIN 46 of US GAAP and are required to be consolidated
with Chuanglian for financial statement reporting
purposes.  Chuanglian was formed solely to (i) acquire and hold an
equity interest in each of the Auto Service Companies and (ii) Control through
certain contractual arrangements each of Huiyin Investment, Hua An Investment,
Kaiyuan Logistics, and Kaiyuan Auto Trade, and since its formation has not
engaged in any business and has not incurred any liability except in the
ordinary course of acquiring, managing and disposing its (i) equity interest in
each of the Auto Service Companies and (ii) Control through certain contractual
arrangements with each of Huiyin Investment, Hua An Investment, Kaiyuan
Logistics, and Kaiyuan Auto Trade.

       

      Section
3.09 Organization of PRC
Subsidiaries.  Section 3.09 of the Disclosure Schedule sets
forth the name, the registered address, the legal representative, the date of
establishment, the directors, and the valid duration and the registered capital
of each PRC Subsidiary.  The registered capital of each of the PRC
Subsidiaries is fully paid as required in accordance with applicable PRC
laws.

       

      
        
          
          

        

        
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      Section
3.10 Organization of each Group
Company.  Each Group Company is duly organized, validly
existing and in good standing under the laws of its place of
incorporation.  Each Group Company is duly qualified to do business in
each of the jurisdictions in which the property owned, leased or operated by
such Group Company or the nature of the business which it conducts requires
qualification, or if not so qualified, such failure or failures, singly or in
the aggregate, would not have an AutoChina Material Adverse
Effect.  Each Group Company has all requisite power and authority to
own, lease and operate its Assets and Properties and to carry on its business as
now being conducted and as presently proposed to be conducted, subject to
necessary approvals of the relevant Governmental Authorities, as presently
contemplated to be conducted.  Section 3.10 of the Disclosure Schedule
sets forth the name of each of the directors of each Group Company (excluding
the PRC Subsidiaries).

       

      Section
3.11 Authority and Corporate
Action; No Conflict. 

       

      (a) Each
Warrantor has all necessary power and authority to enter into this Agreement and
any other Transaction Documents to which it is a party and to consummate the
AutoChina Acquisition and other transactions contemplated hereby and
thereby.  All action, corporate and otherwise, necessary to be taken
by any Warrantor to authorize the execution, delivery and performance of
Transaction Documents and all other agreements and instruments delivered by any
Warrantor in connection with the AutoChina Acquisition has been duly and validly
taken.  Each of this Agreement and any other Transaction Documents to
which any Warrantor is a party has been duly executed and delivered by any
Warrantor and constitutes the valid, binding, and enforceable obligation of each
Warrantor, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law or
in equity).

       

      (b) Neither
the execution and delivery of this Agreement or any other Transaction Documents
contemplated hereby by each Warrantor nor the consummation of the transactions
contemplated hereby or thereby will (i) conflict with, result in a breach or
violation of or constitute (or with notice or lapse of time or both constitute)
a default under, (A) the charter documents of any Warrantor or Group Company or
(B) any law, statute, regulation, order, judgment or decree or any instrument,
contract or other agreement to which any Warrantor or Group Company is a party
or by which it (or any of its Assets and Properties); (ii) result in the
creation of, or give any party the right to create, any Lien upon the Assets and
Properties of any Warrantor or Group Company; (iii) terminate or modify, or give
any third party the right to terminate or modify, the provisions or terms of any
contract to which any Warrantor or Group Company is a party; or (iv) result in
any suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, qualification, authorization or approval applicable to any Warrantor or
Group Company.

       

      Section
3.12 Consents and
Approvals.  The execution and delivery of this Agreement and
any other Transaction Documents by each Warrantor does not, and the performance
of this Agreement and any other Transaction Documents by it will not, require
any consent, approval, authorization or other action by, or filing with or
notification to, any Governmental Authority in PRC.

       

      
        
          
          

        

        
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      Section
3.13 Licenses, Permits,
Etc.  The Group Companies possess or will possess prior to the
Closing all Material Permits (for the purposes of this Section 3.13, “Material Permits”
shall mean all Permits necessary to own and operate the Business, except for
those the absence of which, singly or in the aggregate, would not have an
AutoChina Material Adverse Effect).  Such Material Permits possessed
as of the date of the Agreement are as set forth on Section 3.13 of the
Disclosure Schedule.  True, complete and correct copies of the
Material Permits issued to each of the Group Companies have previously been
delivered to SCAC.  All such Material Permits are in full force and
effect and each of the Group Companies and their respective officers, directors,
employees, representatives and agents has complied, and each Group Company will
comply, and shall cause its respective officers, directors, employees,
representatives and agents to comply, with all terms of such Material Permits
and will take any and all actions necessary to ensure that all such Material
Permits remain in full force and effect and that the terms of such Material
Permits are not violated through the Closing Date.  No Group Company
is in default under any of such Material Permits.  To the Best
Knowledge of the Warrantors, no event has occurred and no condition exists
which, with the giving of notice, the passage of time, or both, would constitute
a default thereunder.  Neither the execution and delivery of this
Agreement, other Transaction Documents or other documents contemplated hereby or
thereby nor the consummation of the transactions contemplated hereby or thereby
nor compliance by any Group Company with any of the provisions hereof or thereof
will result in any suspension, revocation, impairment, forfeiture or nonrenewal
of any Material Permit applicable to the Business.

       

      Section
3.14 Taxes, Tax Returns and
Audits.

       

      (a) To the
Best Knowledge of the Warrantors, all Tax Returns required to be filed in
respect of each of the Group Companies have been duly and timely filed, have
been prepared in compliance with all applicable Laws, and are true, correct and
complete in all material aspects.  All Taxes due and payable by each
of the Group Companies, whether or not shown as due on such Tax Returns, have
been fully paid when due, or, if at the direction of the relevant Governmental
Authorities.  Each of the Group Companies has established adequate
reserves on their respective books of account for all Taxes and for the
liability for deferred income Taxes payable in respect of each Group
Company.

       

      (b) There are
no agreements or applications of any Group Company existing for an extension of
time for the assessment or payment of any Pre-Closing Taxes and no waivers of
the statute of limitations in respect of such Taxes.  There are no Tax
Liens on any of the Assets and Properties of any Group Company except for Liens
for Taxes not yet due.  No Group Company has received any claim from
any taxing authority in a jurisdiction in which any Group Company is or may be
subject to taxation and in which any Group Company has failed to file Tax
Returns required by that jurisdiction.

       

      (c) No Group
Company has ever been a party to or bound by any Tax indemnity, Tax sharing or
similar agreement and no Group Company has any material liability for any Taxes
of any other Person.  Each Group Company has withheld or deducted, in
accordance with applicable Laws or the requirements of the relevant Governmental
Authorities, all Taxes or other amounts from payments to employees, independent
contractors, creditors, shareholders, or any other Persons from which Taxes are
required to be deducted or withheld and has timely paid over such Taxes or other
amounts to the appropriate Governmental Authorities to the extent due and
payable.

       

      
        
          
          

        

        
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      (d) No
Warrantor expects, and, to the Best Knowledge of the Warrantors, no officer or
director of any Group Company expects, any authority to assert a material claim
for additional Taxes for any period for which Tax Returns have been
filed.  Section 3.14(d) of the Disclosure Schedule lists all the
relevant Governmental Authorities in charge of taxation in which Tax Returns are
filed with respect to each Group Company.  No Group Company has filed
any Tax Return that is currently the subject of audit or has been audited since
January 1, 2004.  None of the Warrantors and the Group Companies has
received any notice that any Governmental Authority will audit or examine
(except for any general audits or examinations routinely performed by such
Governmental Authorities), seek information with respect to, or make material
claims or assessments with respect to any Taxes for any period.  The
Group Companies have delivered to SCAC correct and complete copies of all annual
Tax Returns, examination reports, and statements of deficiencies assessed
against or agreed to by any Group Company for and during FY2005, FY2006, and
FY2007, and all Tax Returns, examination reports and statements of deficiencies
assessed against or agreed to by any Group Company for the nine (9) month period
ended September 30, 2008.

       

      (e) No Group
Company (i) is currently engaged in the conduct of a trade or business within
the United States; (ii) is a corporation or other entity organized or
incorporated in the United States; (iii) has a branch or other permanent
establishment in any country outside its country of incorporation or
organization; or (iv) has United States real property interests described in
Section 897 of the United States Internal Revenue Code of 1986, as
amended.

       

      Section
3.15 Financial
Statements.  Prior to the execution of this Agreement, the
Warrantors have delivered to SCAC (a) the audited consolidated financial
statements of AutoChina audited by AutoChina’s Accountants, in accordance with
US GAAP for FY2005, FY2006 and FY2007 (the “FY2007 AutoChina
Consolidated Financials”), and (b) the consolidated unaudited financial
statements of AutoChina for the nine (9) month period ended September 30, 2008,
prepared in accordance with US GAAP (the “Interim
Financials”).  The FY2007 AutoChina Consolidated Financials and
the Interim Financials fairly present the financial condition and result of
operations of the Group Companies as of the respective dates thereof and for the
periods covered thereby.  The FY2007 AutoChina Consolidated Financials
and the Interim Financials are attached to this Agreement as Section 3.15 of the
Disclosure Schedule.  

       

      Section
3.16 Absence of Certain
Changes.  No Group Company has, since December 31,
2007:

       

      (a) issued,
delivered or agreed to issue or deliver any stock, bonds or other corporate
securities (whether authorized and unissued or held in the treasury), or granted
or agreed to grant any options (including employee stock options), warrants or
other rights for the issue thereof;

       

      (b) borrowed
or agreed to borrow any funds exceeding RMB3,000,000 (or other currency
equivalent);

       

      (c) incurred
any obligation or liability, absolute, accrued, contingent or otherwise, whether
due or to become due exceeding RMB1,000,000 (or other currency equivalent),
except current liabilities for trade obligations incurred in the ordinary course
of business and consistent with prior practice;

       

      (d) discharged
or satisfied any encumbrance exceeding RMB1,000,000 (or other currency
equivalent) other than those then required to be discharged or satisfied, or
paid any obligation or liability other than current liabilities shown on the
FY2007 AutoChina Consolidated Financials, and liabilities incurred since
December 31, 2007, in the ordinary course of business and consistent with prior
practice;

       

      
        
          
          

        

        
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      (e) sold,
transferred, leased to others or otherwise disposed of any Assets and Properties
exceeding RMB1,000,000 (or other currency equivalent), except for inventories
sold in the ordinary course of business and Assets and Properties no longer used
or useful in the conduct of its business, or canceled or compromised any debt or
claim of RMB1,000,000 or more, or waived or released any right of substantial
value;

       

      (f) received
any written notice of termination of any Material Contract, Lease or other
agreement, or suffered any damage, destruction or loss exceeding RMB1,000,000
(or other currency equivalent) (whether or not covered by insurance) which, in
any case or in the aggregate, has had, or might reasonably be expected to have,
an AutoChina Material Adverse Effect;

       

      (g) had any
material change in its relations with its employees, clients or insurance
carriers which has had or might reasonably be expected to have an AutoChina
Material Adverse Effect;

       

      (h) transferred
or granted any rights under, or entered into any settlement regarding the breach
or infringement of, any Intellectual Property or modified any existing rights
with respect thereto;

       

      (i) declared
or made, or agreed to declare or make, any payment of dividends or distributions
of any Assets and Properties of any kind whatsoever to any shareholder of any
Group Company or any affiliate of any shareholder of any Group Company, or
purchased or redeemed, or agreed to purchase or redeem, any of its share
capital, or made or agreed to make any payment to any shareholder of any Group
Company or any affiliate of any shareholder of any Group Company, whether on
account of debt, management fees or otherwise;

       

      (j) suffered
any other AutoChina Material Adverse Effect; or

       

      (k) entered
into any agreement or made any commitment to take any of the types of action
described in any of the foregoing clauses (other than clauses (f), (g) or
(j)).

       

      Section
3.17 No Undisclosed
Liabilities.  No Group Company has any other liabilities,
whether known or unknown, absolute, accrued, contingent or
otherwise.  

       

      Section
3.18 Tangible Personal
Property.  The Group Companies are in possession of and have
good title to, or have valid leasehold interests in or valid contractual rights
to use all tangible personal property used in the conduct of the Business,
including the tangible personal property reflected in the FY2007 AutoChina
Consolidated Financials and tangible personal property acquired since December
31, 2007 (collectively, the “Tangible Personal
Property”).  All Tangible Personal Property is free and clear
of all Liens, other than Permitted Liens, and is in good order and condition,
ordinary wear and tear excepted, and its use complies in all material respects
with all applicable Laws.  None of the Group Companies has granted any
lease, sublease, tenancy or license of any portion of the Tangible Personal
Property.  During the three (3) year period prior to the date hereof,
the operations of the Business, as a whole, or of any Group Company, have not
been interrupted for a period of more than twenty-four (24) consecutive hours in
any twelve (12) month period due to inadequate maintenance of the Tangible
Personal Property.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      Section
3.19 Non-Real Estate
Leases.  There are no Assets and Properties (other than Real
Property and Real Estate Leases) involving an annual rental payment of
RMB250,000 or more that are leased from any third party under an existing lease
that are possessed and used by any Group Company as of the date of this
Agreement in the operation of the Business.  All such leases are
referred to herein as the “Non-Real Estate
Leases.”  

       

      Section
3.20 Accounts
Receivable.  The accounts receivable of each Group Company
created after December 31, 2007, but prior to the Closing Date, are bona fide
accounts receivable, created in the ordinary course of business and subject to
historical rates of uncollected liabilities, as reserved against the concerned
Group Company’s financial statements.  To the Best Knowledge of the
Warrantors, these accounts receivable are collectible within periods of time
normally prevailing in the industry at the aggregate recorded amounts
thereof.

       

      Section
3.21 Inventory.  The
inventory of each Group Company consists of items of quality and quantity
useable or saleable in the ordinary course of business at regular sales prices,
subject to (a) changes in price levels as a result of economic and market
conditions and (b) changes as a result of any industry-wide requirements of any
relevant Governmental Authorities.  Save as otherwise provided for in
the relevant supply, purchase or sale contract regarding the inventory or by
operation of law, each of the Group Companies has good and marketable title to
all inventory used in its business.

       

      Section
3.22 Contracts.

       

      (a) Section
3.22(a) of the Disclosure Schedule (with paragraph references corresponding to
those set forth below) contains a true and complete list of each of the
following Contracts, to which any Group Company is a party or by which any of
its respective Assets and Properties is currently bound (including Contracts
that have expired by their terms or otherwise terminated but have liabilities
that continue to attach to any Group Company) (the “Material
Contracts”):

       

      (i) (A) any
Contract providing for a commitment of employment or consultation services for a
specified or unspecified term which involves payments of RMB100,000 or more per
year, the name, position and rate of compensation of each Person party to such a
Contract and the expiration date of each such Contract; and (B) any written or
unwritten promises or courses of conduct involving an obligation of any Group
Company to make payments to any employee, consultant, or agent of any Group
Company of RMB100,000 or more per year, other than with respect to salary or
incentive compensation payments in the ordinary course of business;

       

      (ii) all
Contracts with any Group Company containing a provision prohibiting or limiting
the ability of any Group Company to engage in any business activity, which
prohibition or limitation would result in, or could reasonably be expected to
result in, have an AutoChina Material Adverse Effect, or compete with any
Person;

       

      (iii) all
partnership, joint venture, shareholders’ or other similar Contracts with any
Person;

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (iv) all
Contracts relating to any Indebtedness of any Group Company in the amount of
RMB1,000,000 or more;

       

      (v) all
Contracts between any Group Company and all the top-10 suppliers of the Group
Companies in the aggregate;

       

      (vi) all
Contracts involving the grant of a license by any party (other than AutoChina)
and involving payments of RMB1,000,000 or more, except standard licenses
purchased by any Group Company for off-the-shelf software;

       

      (vii) all
Contracts relating to (A) the future disposition or acquisition of any
Assets and Properties with a value of RMB1,000,000 or more, other than
dispositions or acquisitions in the ordinary course of business consistent with
past practice, and (B) any Acquisition Proposal;

       

      (viii) any
Contract which involves payment by or to any Group Company in the amount of
RMB500,000 or more between or among any Group Company, on the one hand, and any
AutoChina Shareholder, or officer, director, Affiliate or Associate of AutoChina
Shareholder or any Associate of any such officer, director or Affiliate (other
than any Group Company), on the other hand;

       

      (ix) all
collective bargaining or similar Labor Contracts;

       

      (x) all
Contracts in which any Group Company agrees to provide
indemnification;

       

      (xi) all
Contracts that (A) limit or contain restrictions on the ability of any Group
Company (x) to declare or pay dividends on, to make any other distribution in
respect of or to issue or purchase, redeem or otherwise acquire its capital
shares, (y) to incur Indebtedness, to incur or suffer to exist any Lien or to
purchase or sell any Assets and Properties, in each case, the contractual value
thereof being RMB250,000 or more, (z) to change the lines of business in which
it participates or engages or to engage in any Acquisition Proposal or (B)
require any Group Company to maintain specified financial ratios or levels of
net worth or other indicia of financial condition;

       

      (xii) all other
Contracts (other than those executed in the ordinary course of business) that
are reasonably likely to involve the payment or potential payments, pursuant to
the terms of any such Contract, by or to any Group Company of more than
RMB1,000,000 in the aggregate and that involve rights or obligations that extend
for more than one year from the date of execution of such Contract;
and

       

      (xiii)  all
Contracts, including but not limited to, dealer or distributor agreements, and
franchise agreements, between any Group Company and the automobile suppliers
relating to the (i) sale of certain brands of vehicles and (ii) distribution or
supply of vehicles.

       

      (b) Each
Material Contract is in full force and effect and constitutes a legal, valid and
binding agreement, enforceable in accordance with its terms, of each party
thereto; and neither any Group Company nor, to the Best Knowledge of any
Warrantor, any other party to any Material Contract is, or has received notice
that it is, in material violation or breach of or default under any such
Material Contract (or with notice or lapse of time or both, would be in material
violation or material default under any such Material Contract) or that another
party to a Material Contract listed in Section 3.22(a) of the Disclosure
Schedule intends to cancel, terminate or refuse to renew such Material
Contract.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      (c) None of
the Group Companies is a party to or bound by any Contract that could result,
individually or in the aggregate with any other such Contracts, in an AutoChina
Material Adverse Effect.

       

      (d) AutoChina
has delivered to SCAC true and complete copies (or, if not in writing,
reasonably complete and accurate written descriptions) of each Material Contract
or other arrangement required to be listed on Section 3.22(a) of the Disclosure
Schedule, together with all amendments and supplements thereto.

       

      Section
3.23 Intellectual Property
Rights.

       

      (a) Each
Group Company (i) has independently developed and owns free and clear of all
claims, security interests, liens and other encumbrances, or (ii) has the valid
right or license, to use all products, materials, software, tools, software
tools, computer programs, specifications, improvements, discoveries, enterprise
or business names, logos, data, information and inventions, and all
documentation and media constituting, describing or relating to the foregoing
that is required or used in its business as currently conducted or as proposed
to be conducted together with all Proprietary Rights in or to all of the
foregoing (collectively, the “Group Company
Technology”).  The processes and methods employed, the services
provided, the businesses conducted, and the products manufactured, used or dealt
in by each Group Company does not, or at the time of being employed, provided,
conducted, manufactured, used or dealt in did not infringe the rights of any
other Person in any Proprietary Rights.  There is not, nor has there
been at any time, any unauthorized use or infringement by any Person of any of
the Group Company Technology.

       

      (b) Each of
the Group Company’s registered patents, copyrights, trademarks and service marks
are in full force and effect, are not subject to any taxes, and each Group
Company is current on all the maintenance fees with respect
thereto.

       

      (c) No
current or former employee, contractor or consultant of a Group Company has
developed any Group Company Technology that is subject to any agreement under
which such employee, contractor or consultant has assigned or otherwise granted
to any third party any rights in or to such Group Company
Technology.

       

      (d) Each
Group Company has used commercially reasonable efforts to maintain and
diligently enforce commercially reasonable procedures to protect all
confidential information relating to the Group Company Technology.

       

      (e) No Group
Company owns or possesses any Proprietary Rights.

       

      Section
3.24 Title to and Condition of
Assets.

       

      (a) Except as
set forth in Section 3.24(a) of the Disclosure Schedule, each of the Group
Companies has good and marketable title to all the Real Property owned by
it.  None of such Real Property is subject to any Lien, option to
purchase or lease, easement, restriction, covenant, condition or imperfection of
title or adverse claim of any nature.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      (b) To the
Best Knowledge of the Warrantors, all buildings, structures, improvements,
fixtures, facilities, equipment, all components of all buildings, structures and
other improvements included within the Real Property, including, but not limited
to, the roofs and structural elements thereof and the heating, ventilation, air
conditioning, plumbing, electrical, mechanical, sewer, waste water, storm water,
paving and parking equipment, systems and facilities included therein conform in
all material respects to all applicable Laws of every Governmental Authority
having jurisdiction over any of the Real Property, and every instrumentality or
agency thereof.  To the Best Knowledge of the Warrantors, there are no
unsatisfied requests for any repairs, restorations or improvements to the Real
Property from any Governmental Authority.  There are no outstanding
Contracts made by any Group Company for any improvements to the Real Property
for which there is an outstanding amount payable of RMB500,000 or
more.  No person, other than the Group Companies, owns any equipment
or other tangible assets or properties situated on the Real Property material to
the operation of the Business.

       

      (c) The use
and operation of the Real Property is in full compliance in all material
respects with all applicable Laws, covenants, conditions, restrictions,
easements, disposition agreements and similar matters affecting the Real
Property and, effective as of the Closing, each of the Group Companies shall
have the right under all applicable Laws to continue the use and operation of
the Real Property in the conduct of the Business.  During the three
(3) year period prior to the date hereof, no Group Company has received any
written notice of any material violation (or claimed material violation) of or
investigation of such material violation (or claimed material violation)
regarding any applicable Laws in relation to the Real Property, which notice or
investigation resulted in a penalty or fine in an amount equal to RMB10,000 or
more or resulted in any order restricting the use by any Group Company of any
Real Property.

       

      (d) To the
Best Knowledge of the Warrantors, none of the buildings, structures and other
improvements located on the Real Property, the appurtenances thereto or the
equipment therein or the operation or maintenance thereof violates any
restrictive covenant or encroaches on any property owned by others or any
easement, right of way or other encumbrance or restriction affecting or
burdening such Real Property in any manner, nor does any building or structure
of any third party encroach upon the Real Property or any easement or right of
way benefiting the Real Property.

       

      (e) No Group
Company has received written notice of, or otherwise had knowledge of, any
condemnation, fire, health, safety, building, environmental, Hazardous
Substances, pollution control, zoning or other land use regulatory proceedings
instituted but not settled which would have an effect on the ownership, use and
operation of any portion of the Real Property for its intended purpose or the
value of any material portion of the Real Property.

       

      (f) To the
Best Knowledge of the Warrantors, all the facilities and utilities required by
the operations of the Business or otherwise required by any applicable Law are
installed to the property lines of the Real Property, are connected pursuant to
valid permits to municipal or public utility services or proper drainage
facilities to permit full compliance with the requirement of all
Laws.  As of the date hereof, no Group Company has received any
written notice notifying the existence of any fact or circumstance which could
result in the termination or reduction of the current access from the Real
Property to existing roads or to sewer or other utility services presently
serving the Real Property.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      (g) All
Permits, certificates, easements and rights of way, including proof of
dedication, as applicable, required from all Governmental Authorities having
jurisdiction over the Real Property for the use and operation of the Real
Property in the conduct of the Business and to ensure vehicular and pedestrian
ingress to and egress from the Real Property have been obtained.

       

      (h) No Group
Company has received written notice and has any knowledge of any pending or
threatened condemnation proceeding affecting the Real Property or any part
thereof or of any sale or other disposition of the Real Property or any part
thereof in lieu of condemnation.

       

      (i) No
portion of the Real Property, during the three (3) year period prior to the date
hereof, has suffered any material damage by fire or other casualty which has not
heretofore been completely repaired and restored to its original
condition.

       

      (j) To the
Best Knowledge of the Warrantors, there are no encroachments or other facts or
conditions affecting the Real Property which would, individually or in the
aggregate, interfere in any material respect with the use, occupancy or
operation thereof as used, occupied and operated in the conduct of the
Business.

       

      (k) Section
3.24(k) of the Disclosure Schedule contains an accurate and complete list and
description of all real estate and the improvements (including buildings and
other structures) located on such real estate (collectively, “Real Property”)
currently or to be in the possession of any Group Company or used by any Group
Company in its business and operation, including (a) all Real Property owned by
any Group Company (the “Owned Real Property”)
and (b) all Real Property leased by any Group Company from third parties (the
“Leased Real
Property”).  No Group Company is the owner or lessee of, or
subject to any agreement or option to own or lease, any real property or any
interest in any real property which is used or to be used in the business of
such Group Company, other than the Real Property.

       

      (i) With
respect to Owned Property:

       

      (A) the
relevant Group Company holds valid, good and marketable title free and clear of
any Encumbrance, has obtained proper land use right certificates and/or building
ownership certificates and all such title and certificates are legal, valid,
binding and enforceable;

       

      (B) the Owned
Real Property can be sold, leased or mortgaged to third parties according to the
ordinary PRC legal procedures;

       

      (C) the Owned
Real Property was acquired or constructed in accordance with all applicable
laws.  All agreements or contracts pursuant to which the Owned Real
Property was acquired (the “Property Acquisition
Contracts”) were duly executed and constitute legal, valid and binding
obligations of and enforceable against the relevant parties in accordance with
their respective terms.  Each Group Company, as the case may be, has
duly performed and complied in all respects with each of its obligations under
the Property Acquisition Contracts, has duly and fully paid the land premium,
land or building transfer prices and all taxes and fees in connection with such
acquisition.  All authorizations required for the construction of any
Owned Real Property have been duly obtained.  No circumstance exists
that any Owned Real Property may be treated as illegal
construction.  There are no outstanding claims, disputes, complaints,
notices, orders or proceedings relating to or affecting any Owned Real Property;
and

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      (D) no Owned
Real Property, nor its location, use, operation or maintenance for the purpose
of carrying on the business of any Group Company, violates any restrictive
covenant or any provision of any law or encroaches on any property owned by any
other Person.  No condemnation or expropriation proceeding is pending
or, to the knowledge of the Group Companies, threatened which would preclude or
impair the use of any of the Owned Real Property for the purposes for which they
are currently used.

       

      (ii) With
respect to the Leased Real Property:

       

      (A) true
copies of all lease agreements in relation to the Leased Real Property (the
“Real Estate
Leases”) have been provided to SCAC;

       

      (B) each Real
Estate Lease is in good standing, creates a good and valid leasehold estate in
the Leased Real Property thereby demised and is in full force and effect without
amendment and enforceable against the relevant parties in accordance with their
respective terms, except where the failure to be in such good standing, full
force and effect would not have an AutoChina Material Adverse
Effect;

       

      (C) each Real
Estate Lease has been properly registered in the competent authority, except
where the failure for such payment would not have an AutoChina Material Adverse
Effect;

       

      (D) all rents
and additional rents have been duly paid;

       

      (E) no
waiver, indulgence or postponement of the lessee’s obligations has been granted
by the lessor;

       

      (F) there
exists no event of default or event, occurrence, condition or act which, with
the giving of notice, the lapse of time or the happening of any other event or
condition, would become a default under the Real Estate Lease;

       

      (G) to the
knowledge of each Group Company, as the case may be, all of the covenants to be
performed by any other party under each Real Estate Lease have been fully
performed; and

       

      (H) there are
no circumstances, to the knowledge of the Group Companies, which may give rise
to the termination of any Real Estate Lease or the termination of the continued
possession, occupation, use or enjoyment of the Leased Real
Property.  None of the Group Companies has received any notice from
any PRC governmental entities alleging that its lease, possession or use of any
of the Leased Real Property is in violation of any applicable laws in the
PRC.

       

      
        
          
          

        

        
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      Section
3.25 Employee Plans; Labor
Matters.  Other than statutory social insurance plans operated
under the Laws of the PRC or any statutory employee benefits under the Laws of
the PRC, none of the Group Companies provides or is obligated to provide any
retirement, social insurance, life insurance, medical, dental or other welfare
benefits provided on ill-health, injury, death disability or on termination of
employment (whether voluntary or involuntary) to any current or former
employees, officers, consultants, independent contractors or agents of any Group
Company.  None of the Group Companies is a party to or is bound by any
currently effective deferred compensation agreement, bonus plan, incentive plan,
profit sharing plan, retirement agreement, vacation, hospitalization, medical or
other plan, policy, trust or arrangement or other employee compensation
agreement (other than those statutorily required under the Laws of the
PRC).  Except as specifically described in the Section 3.25 of the
Disclosure Schedule, each of the Group Companies has complied with all
applicable Laws relating to any of the Benefit Plans, all such contributions and
payments required to be made by any employees of the Group Companies with
respect to the employee benefits have been fully deducted and paid to the
relevant Governmental Authority, and no such deductions have been challenged or
disallowed by any Governmental Authority or any employee of any Group
Company.  Each Group Company has executed labor contracts with all of
its employees and discharged its obligations as employer in accordance with such
labor contracts and Laws of the PRC and forms of each such labor contract
currently in effect.  Section 3.25 of the Disclosure Schedule contains
an accurate and complete list of each Group Company, all the employees of such
Group Company, and indicates whether or not each employee has entered into a
labor contract with such Group Company, in form(s) that have been reviewed by
SCAC.

       

      Section
3.26 Compliance with
Law.  Except as set forth in Section 3.26 of the Disclosure
Schedule, all consents, licenses, approvals, orders, authorizations or
registrations, qualifications, designations, declarations or filings with any
Governmental Authority (“Governmental
Authorizations”) on the part of each Warrantor or Group Company required
in connection with the consummation of the transactions contemplated herein and
by the Transaction Documents to which it is a party have been obtained and are
effective as of the date of this Agreement or shall be effective as of the
Closing Date.  None of the Group Companies or the Warrantors is in
violation of any applicable statute, rule, regulation, order or restriction of
any domestic or foreign government or any instrumentality or agency thereof
(including but not limited to SAFE, the Ministry of Commerce, the State
Administration for Industry and Commerce and the China Securities Regulatory
Commission and their respective provincial and local branches) in respect of the
conduct of its business or the ownership of its properties.  Each
Group Company has all franchises, permits, licenses and any similar authority
necessary for the conduct of its business as currently conducted and as proposed
to be conducted.  None of the Group Companies is in default under any
of such franchises, permits, licenses or other similar authority.  All
applicable laws of the PRC, including but not limited to (i) the Provisions for
Foreign Investors to Merge and Acquire Domestic Enterprises (关于外国投资者并购境内企业的规定(2006年第10号)) jointly
promulgated by the Ministry of Commerce, the State-owned Assets Supervision and
Administration Commission, China Securities Regulatory Commission, the State
Administration for Industry and Commerce, the State Administration of Taxation
of the PRC and SAFE on August 8, 2006, with effect from September 8, 2006, (ii)
the SAFE Circulars (to the extent they are applicable), and (iii) the
Anti-Unfair Competition Law (反不正当竞争 法) issued by the
Standing Committee of the National People’s Congress on September 2, 1993 with
effect from December 2, 1993, to the extent applicable, including approvals to
operate its business from (A) the Ministry of Commerce in accordance with the
Measures for the Implementation Rules for Management of Brand-specific Auto
Sales, and (B) each of the Ministry of Communications and the Ministry of
Commerce in accordance with the Provisions on the Administration of
Foreign-funded Road Transport Services, have been and will continue to be fully
complied with, and all requisite registrations and/or receipt of approvals of
the relevant PRC government agencies required in connection therewith, including
such registrations as is required under the SAFE Circulars, to the extent
applicable, in relation thereto have been duly and lawfully obtained and are in
full force and effect and there exist no grounds on which any such approval may
be cancelled or revoked or the PRC Subsidiaries or their legal representatives
may be subject to liability or penalties for material misrepresentation or
failure to disclose material information to the issuing SAFE
authority.  To the extent applicable, each ultimate individual
beneficial owner of the shares of any Group Company and any other party who is
required to comply with the SAFE Circulars has obtained registration with SAFE,
indicating, to the extent applicable, his or her indirect interest in any Group
Company in accordance with the SAFE Circulars and other applicable laws of the
PRC.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      Section
3.27 Compliance with Foreign
Corrupt Practices Act and PRC Anti-Corruption Laws.  None of
the Group Companies nor its directors or officers has, and to the Best Knowledge
of the Warrantors, no Warrantor’s or Group Company’s employees, representatives
or agents has, to obtain or retain business, directly or indirectly offered,
paid or promise to pay, or authorized the payment of, any money or other thing
of value (including any fee, gift, sample, travel expense or entertainment with
a value in excess of US$100 in the aggregate to any one individual in any year)
or any commission payment to: (i) any person who is an official, officer, agent,
employee or representative of any Governmental Authorities or any existing or
prospective customer (whether or not government owned); (ii) any political party
or official thereof; (iii) any candidate for political or political party
office; or (iv) any other individual or entity; while knowing or having reason
to believe that all or any portion of such money or thing of value would be
offered, given, or promised, directly or indirectly, to any such official,
officer, agent, employee, representative, political party, political party
official, candidate, individual, or any entity affiliated with such customer,
political party or official or political office.  No Group Company nor
its respective directors or officers has, and to the Best Knowledge of the
Warrantors, none of their employees, representatives or agents has violated any
applicable PRC Laws that prohibit directly or indirectly making any payment
(including any kick-back or commission) or giving other thing of value
(including any fee, gift, travel expense or entertainment) to any person who is
an official, officer, agent, employee or representative of any Governmental
Authority or any existing or prospective customer (whether or not
government-owned) in order to gain any business, commercial or financial
advantage or benefit.

       

      Section
3.28 Related-Party
Transactions.  Except for compensation to employees for
services rendered and as disclosed in the financial statements of each of the
Group Company, as of the date of this Agreement, (a) there are no inter-company
Liabilities between any Group Company, on the one hand, and any shareholder of a
Group Company, or officer, director, Affiliate or Associate of any Group Company
or any Associate of a shareholder of a Group Company or such officer, director
or Affiliate (other than any Group Company), on the other, (b) neither any
shareholder of a Group Company or any such officer, director, Affiliate or
Associate provides or causes to be provided any material Assets and Properties,
services or facilities to any Group Company, (c) none of the Group Companies
provides or causes to be provided any material Assets and Properties, services
or facilities to any shareholder of a Group Company or any such officer,
director, Affiliate or Associate and (d) none of the Group Companies
beneficially owns, directly or indirectly, any Investment Assets of any
shareholder of a Group Company or any such officer, director, Affiliate or
Associate.  No shareholder of a Group Company or any such officer,
director, Affiliate or Associate has any direct or indirect interest in excess
of one percent (1%) in any corporation, firm, association or business
organization which is a present (or potential) competitor, supplier or customer
of any Group Company nor, to the Best Knowledge of the Warrantors, does any such
Person receive income from any source other than any Group Company which relates
to the Business, or should properly accrue to, the relevant Group
Company.

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      Section
3.29 Environmental
Matters.  Except as specifically described in the Section 3.29
of the Disclosure Schedule, prior to the date hereof: 

       

      (a) each
Group Company has complied with all then applicable Laws in relation to
environment protections;

       

      (b) the
properties currently owned or operated by the Group Companies (including soils,
groundwater, surface water, buildings or other structures) are not contaminated
with any Hazardous Substances;

       

      (c) no Group
Company is subject to liability for any Hazardous Substance disposal or
contamination on any third party property;

       

      (d) no Group
Company has been associated with any release or treat of release of any
Hazardous Substance;

       

      (e) no Group
Company has received any outstanding notice, demand, letter, claim or request
for information alleging that it may be in violation of or liable under any
environmental Laws;

       

      (f) no Group
Company is subject to any orders, decrees, injunctions or other arrangements of
any Governmental Authority or is subject to any indemnity or other agreement
with any third party relating to liability under any environmental Laws of the
PRC or relating to Hazardous Substances; and

       

      (g) there are
no circumstances or condition involving any Group Company that could reasonably
be expected as of the date hereof to result in any claims, liability,
investigations, costs or restrictions on the ownership, sue or transfer of any
property of any Group Company pursuant to any environmental Laws of the PRC,
that would have an AutoChina Material Adverse Effect.

       

      Section
3.30 Records.  The
books of account, minute books and shareholder records of each Group Company are
complete and correct in all material respects, and there have been no material
transactions involving any Group Company which are required to be set forth
therein and which have not been so set forth.

       

      Section
3.31 Bank and Brokerage Accounts;
Investment Assets.  Section 3.31 of the Disclosure Schedule
sets forth (a) a true and complete list of the names and locations of all
banks and other financial institutions at which any Group Company has an account
or safe deposit box or maintains a banking or other similar relationship;
(b) a true and complete list and description of each such account, box and
relationship, indicating in each case the account number; and (c) a list of
the name of the record and beneficial owner thereof.

       

      Section
3.32 No Powers of
Attorney.  None of the Group Companies has any powers of
attorney or comparable delegations of authority currently outstanding, that
materially affects such Group Company.

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      Section
3.33 Insurance.  Section
3.33 of the Disclosure Schedule sets forth a complete list and complete and
accurate description of all insurance policies involving insurance premiums of
RMB50,000 or more maintained by each of the Group Companies which are in force
as of the date hereof and the amounts of coverage thereunder.  During
the three (3) year period prior to the date hereof, no Group Company has been
refused insurance in connection with the Business, nor has any claim of
RMB100,000 or more been made in respect of any such agreements or
policies.  

       

      Section
3.34 Litigation.  There
are no Actions by any Governmental Authority or Person by or against any Group
Company, nor, to the Best Knowledge of the Warrantors, any currently
contemplated potential Action by any Governmental Authority or Person against
any Group Company.  None of the Group Companies or any of their
respective Assets and Properties is subject to any Action by a Governmental
Authority or Person which would cause an AutoChina Material Adverse
Effect.

       

      Section
3.35 Disclosure of SCAC
Information.  FounderCo acknowledges that it has received all
the information that it has required relating to SCAC and the acquisition of the
SCAC Ordinary Shares.  FounderCo further represents that it has had an
opportunity to ask questions and receive answers from SCAC regarding the terms
and conditions of its acquisition of the SCAC Ordinary Shares.  The
foregoing, however, does not limit or modify the representations and warranties
of the Warrantors in this Agreement, in the other Transaction Documents or
elsewhere, or the right of SCAC to rely thereon.

       

      Section
3.36 Purchase for Own
Account.  The SCAC Ordinary Shares to be received by FounderCo
are being acquired for investment for FounderCo’s own account and not with a
view to the resale or distribution of any part thereof.  FounderCo has
no present intention of selling, granting any participation in, or otherwise
distributing the same and is subject to a six (6) month lock-up period with
respect to his/her sale or disposal of SCAC Ordinary Shares pursuant to Section
5.09 hereof. 

       

      Section
3.37 No
Registration.  FounderCo is aware that the SCAC Ordinary Shares
acquired by it under this Agreement have not been registered under the
Securities Act, that their offer and sale pursuant to this Agreement are
intended to be exempt from registration under the Securities Act and the rules
promulgated thereunder by the SEC, and that such SCAC Ordinary Shares cannot be
sold, assigned, transferred, or otherwise disposed of unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available.  FounderCo is also aware that the SCAC
Ordinary Shares acquired by it have not been registered or qualified in any
jurisdiction, that sales or transfers of such SCAC Ordinary Shares may be
further restricted by non-US securities laws, the provisions of this Agreement,
the other Transaction Documents, SCAC Articles, and the New SCAC Articles, as
the case may be, and that the certificates for such SCAC Ordinary Shares will
bear appropriate legends describing the restrictions on their
transfer.  FounderCo has no immediate need for liquidity in connection
with the acquisition of SCAC Ordinary Shares, and does not anticipate that it
will be required to sell his or her SCAC Ordinary Shares in the foreseeable
future.

       

      Section
3.38 Suitability of
Investment.

       

      (a)
FounderCo has not and will not, directly or indirectly, offer, sell, transfer,
assign, exchange or otherwise dispose of all or any part of the SCAC Ordinary
Shares, except as otherwise permitted under applicable Laws, including, but not
limited to, securities laws, as well as the provisions of this Agreement, the
other Transaction Documents, the New SCAC Articles, as the case may be, as long
as such documents remain in effect; and

       

      
        
          
          

        

        
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      (b) FounderCo
has determined that the SCAC Ordinary Shares are a suitable investment for
FounderCo and that FounderCo can bear the economic risk of the acquisition of
SCAC Ordinary Shares; and

       

      (c)
FounderCo (i) certifies that FounderCo is not a “US person” within the
meaning of Rule 902 of Regulation S, and that FounderCo is not
acquiring the SCAC Ordinary Shares for the account or benefit of any such US
person, (ii) agrees to resell the SCAC Ordinary Shares only in accordance
with the provisions of Regulation S, pursuant to registration under the
Securities Act, or pursuant to an available exemption from registration and
agrees not to engage in hedging transactions with regard to such SCAC Ordinary
Shares unless in compliance with the Securities Act, (iii) agrees that any
certificates for any SCAC Ordinary Shares issued to FounderCo shall contain a
legend to the effect that transfer is prohibited except in accordance with the
provisions of Regulation S, pursuant to registration under the Securities
Act or pursuant to an available exemption from registration and that hedging
transactions involving such SCAC Ordinary Shares may not be conducted unless in
compliance with the Securities Act, and (iv) agrees that SCAC is hereby
required to refuse to register any transfer of any SCAC Ordinary Shares issued
to FounderCo not made in accordance with the provisions of Regulation S,
pursuant to registration under the Securities Act, or pursuant to an available
exemption from registration.

       

      Section
3.39 Brokers.  No
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Warrantors or the
Group Companies.

       

      Section
3.40 Disclosure.  No
representation or warranty by any Warrantor contained in this Agreement and no
information contained in any Schedule or other instrument furnished or to be
furnished to SCAC pursuant to this Agreement or in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained therein not misleading.

       

      Section
3.41 Proposed Business
Plan.  Prior to the date hereof, AutoChina has delivered to
SCAC a proposed business plan that contains, among others, detailed proposed
financial projections (including all the relevant assumptions), capital
expenditure plan, operational budgets and financial plan for FY2009 and FY2010
on an annual basis (the “Proposed Business
Plan”).  The Proposed Business Plan and the financial and other
projections contained therein were prepared in good faith based on AutoChina’s
management’s experience in the industry and on assumptions of fact and opinion
as to future events which they, at the date of the issuance of the Proposed
Business Plan, believed to be reasonable, consistent with past practice and on a
realistic basis after careful examination and due consideration of all other
relevant factors.  As of the date hereof, no facts have come to the
attention of AutoChina or the management of AutoChina which would be reasonably
expected to require the material revision of the assumptions underlying such
projections, estimates and other forward-looking information or the conclusions
derived therefrom.

       

      
        
          
          

        

        
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      Section
3.42 Survival of Representations
and Warranties.  The representations and warranties of the
Warrantors set forth in this Agreement shall survive until the Remaining
Holdback Consideration Release Date.

       

      Section
3.43 Restructuring.  The
Restructuring has been completed in all respects and in compliance with all
applicable laws.  All Restructuring Agreements have been executed by
each of the parties thereto in accordance with the Restructuring
Plan.  The Restructuring has been fully completed pursuant to such
Restructuring Agreements in compliance with applicable PRC laws and
regulations.

       

      ARTICLE
4

       

      REPRESENTATIONS
AND WARRANTIES OF SCAC

       

      SCAC
represents and warrants to the Warrantors as of the date hereof and as of the
Closing as follows:

       

      Section
4.01 Organization.  SCAC
is a corporation duly organized, validly existing and in good standing under the
law of the Cayman Islands.  

       

      Section
4.02 SCAC
Subsidiaries.  Except as contemplated by the AutoChina
Acquisition, SCAC does not have any subsidiaries, branches and representative
offices.

       

      Section
4.03 Authority and Corporate
Action; No Conflict.  SCAC has all necessary corporate power
and authority to enter this Agreement and the other Transaction Documents to
which it is a party and, subject to the requirement to obtain shareholder
approval, to consummate the AutoChina Acquisition and transactions contemplated
hereby and thereby.  All Board actions necessary to be taken by SCAC
to authorize the execution, delivery and performance of this Agreement, the
other Transaction Documents and all other agreements delivered in connection
with the AutoChina Acquisition has been duly and validly taken.  Each
of this Agreement and the other Transaction Documents to which SCAC is a party
has been duly executed and delivered by SCAC and constitutes the valid, binding,
and enforceable obligation of SCAC, enforceable in accordance with its terms,
except (i) as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar laws of
general application now or hereafter in effect affecting the rights and remedies
of creditors and by general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity), (ii) as
enforceability of any indemnification provision may be limited by federal and
state securities laws and public policy and (iii) as enforceability may be
limited by the absence of shareholder approval.

       

      Section
4.04 Organizational
Documents.  The Memorandum of Association and Articles of
Association (the “SCAC
Articles”) as of the date hereof are in the form attached as Schedule D and
no action has been taken to amend or repeal the M&A, provided, however
the New SCAC Articles shall take effect on the Closing Date.  SCAC is
not in violation or breach of any of the provisions of the SCAC
Articles.

       

      Section
4.05 Capitalization.  As
of the date hereof, the authorized share capital of SCAC consists of 51,000,000
shares of which (i) 50,000,000 shares are designated as SCAC’s Ordinary Shares,
of which 6,468,750 shares are issued and outstanding and (ii) 1,000,000 shares
are designated as preferred shares, of which no shares are issued and
outstanding.  All issued and outstanding shares of SCAC’s Ordinary
Shares are duly authorized, validly issued, fully paid and non-assessable, and
have not been issued in violation of any preemptive or similar
rights.  At the Closing Date, SCAC will have sufficient authorized and
unissued SCAC’s Ordinary Shares to consummate the transactions contemplated
hereby.  As of the date hereof, except as for the Warrants and the
Purchase Option, there are no outstanding options, warrants, purchase
agreements, participation agreements, subscription rights, conversion rights,
exchange rights or other securities or contracts that could require SCAC to
issue, sell or otherwise cause to become outstanding any of its authorized but
unissued shares or any securities convertible into, exchangeable for or carrying
a right or option to purchase shares or to create, authorize, issue, sell or
otherwise cause to become outstanding any new class of shares.  There
are no outstanding shareholders’ agreements, voting trusts or arrangements,
registration rights agreements, rights of first refusal or other contracts
pertaining to the shares or other securities of SCAC.

       

      
        
          
          

        

        
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      Section
4.06 Valid Issuance of SCAC
Ordinary Shares.  At the Closing, the SCAC Ordinary Shares to
be issued to the AutoChina Shareholders hereunder will be duly and validly
authorized and, when issued and delivered in accordance with the terms hereof
for the consideration provided for herein, will be validly issued and will have
been issued in compliance with all applicable US federal and state securities
laws and the Laws of the Cayman Islands.

       

      Section
4.07 No Redemption
Requirements.  Except for SCAC’s redemption rights with respect
to the outstanding Warrants and any warrants issuable upon the exercise of the
Purchase Option, which rights are subject to the satisfaction of certain
conditions, including but not limited to the prior consent of EarlyBirdCapital,
Inc. (“EarlyBirdCapital”)
there are no outstanding contractual obligations (contingent or otherwise) of
SCAC to retire, repurchase, redeem or otherwise acquire any outstanding shares,
or other ownership interests in, SCAC or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
other Person.

       

      Section
4.08 No Brokers of
Finders.  No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of SCAC or any of its principal shareholders.

       

      ARTICLE
5

       

      COVENANTS
OF THE WARRANTORS

       

      Section
5.01 Conduct of the
Business.  Each Warrantor covenants and agrees that, from the
date hereof through the Closing Date, except as otherwise required as set forth
in this Agreement or with the prior written consent of SCAC, they shall, and
shall use their best efforts to cause each Group Company to:

       

      (a) conduct
the Business only in the ordinary course and in a manner consistent with the
current practice of the Business, to preserve substantially intact the business
organization of each Group Company, to keep available the services of the
current management employees of each Group Company, to preserve, for the best
interest of any Group Company, the current relationships of each Group Company
with customers and other persons with which each Group Company has significant
business relations and to comply with all Laws in all material
aspects;

       

      
        
          
          

        

        
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      (b) not
pledge, sell, transfer, dispose or otherwise encumber or grant any rights or
interests to others of any kind with respect to all or any part of the share
capital or any equity interest of any Group Company, or enter into any
discussions or negotiations with any other party to do so;

       

      (c) not
pledge, sell, lease, transfer, dispose of or otherwise encumber any Assets and
Properties of any Group Company, other than consistent with past practices and
in the ordinary course of business of such Group Company or enter into any
discussions or negotiations with any other party to do so;

       

      (d) not issue
any stock or increase the registered capital, as applicable, or any other class
of securities, whether shares or debt (other than debt incurred in the ordinary
course of business and consistent with past practice) or equity, of any Group
Company or any options therefor or any securities convertible into or
exchangeable for share capital or equity interests of any Group Company or enter
into any agreements in respect of the ownership or control of such share capital
or equity interests;

       

      (e) not
declare any dividend or make any distribution in cash, securities or otherwise
on the outstanding share capital or equity interests of any Group Company or
directly or indirectly redeem, purchase or in any other manner whatsoever
advance, transfer (other than in payment for goods received or services rendered
in the ordinary course of business), or distribute to any of their affiliates or
otherwise withdraw cash or cash equivalents in any manner inconsistent with
established cash management practices, except to pay existing indebtedness of
any Group Company;

       

      (f) not make,
agree to make or announce any general wage or salary increase or, unless
provided for on or before the date of this Agreement, increase the compensation
payable or to become payable to any management employee of any Group Company or
adopt or increase the benefits of any bonus, insurance, pension or other
employee benefit plan, payment or arrangement, except for those increases,
consistent with past practices, normally occurring as the result of regularly
scheduled salary reviews and increases, and except for increases directly or
indirectly required as a result of changes in applicable law or
regulations;

       

      (g) not to
amend the charter documents (or other organizational documents) of any Group
Company;

       

      (h) not to
merge or consolidate with, or acquire all or substantially all the Assets and
Properties of, or otherwise acquire any business operations of, any
Person;

       

      (i) not to
make any payments outside the ordinary course of business; and

       

      (j) not make
any capital expenditures, except in accordance with prudent business and
operational practices consistent with prior practice.

       

      
        
          
          

        

        
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      Section
5.02 Access to
Information.

       

      (a) Between
the date of this Agreement and the Closing Date, subject to SCAC’s undertaking
to keep confidential and protect the Trade Secrets of the Group Companies
against any illegal disclosure, each Warrantor will (i) permit SCAC and its
Representatives reasonable access to all of the books, records, reports and
other related materials, offices and other facilities and Assets and Properties
of each Group Company and the Business which are necessary for the preparation
and amendment of The Proxy Statement, the verification of the disclosures
therein pursuant to the Securities Act as well as the rules and requirements of
SEC and in response to inquiries from relevant Governmental Authorities
regarding the AutoChina Acquisition; (ii) permit SCAC and its Representatives to
make such inspections thereof as SCAC may reasonably request; and (iii) furnish
SCAC and its Representatives with such financial and operating data (including
without limitation the work papers of AutoChina’s Accountants) and other
information with respect to each Group Company and the Business as SCAC may from
time to time request pursuant to the Securities Act as well as the rules and
requirements of SEC for the preparation and amendment of The Proxy Statement and
the verification of the disclosures therein, in response to inquiries from
SCAC’s accountants, and in response to inquiries from relevant Governmental
Authorities regarding the AutoChina Acquisition.

       

       

      (b) Between
the date of this Agreement and the Closing Date, SCAC shall be permitted to meet
with and interview, during normal business hours upon prior written notice, all
officers, directors and employees of each Group Company.

       

      Section
5.03 Audited Financial
Statements.  The Warrantors shall, as soon as practicable after
the date hereof, deliver to SCAC the consolidated unaudited financial statements
of the AutoChina for the twelve (12) month period ended December 31, 2008,
including a balance sheet, income statement and statement of cash flows prepared
in accordance with US GAAP, together with footnotes.  

       

      Section
5.04 Insurance.  Through
the Closing Date, the Warrantors shall cause each Group Company to maintain
insurance policies providing insurance coverage for the Business and the Assets
and Properties of each Group Company of the kinds, in the amounts and against
the risks as are commercially reasonable for the businesses and risks
covered.

       

      Section
5.05 Employment
Agreements.  The Warrantors shall procure that, prior to the
Closing: 

       

      (a) each of
Founder, Chen Lei, Wei Xing, Johnson Lau, and any other “key” employees
designated by Founder (collectively, the “Key Employees”) shall
have entered into an executive employment agreement (the “Executive Employment
Agreement”) in the form of Schedule E with
SCAC, AutoChina and any other relevant Group Companies.  These
agreements generally are to provide employment terms of three (3) years include
Intellectual Property assignment and Non-Competition Period set forth in Section
5.06(g)(ii) hereof.

       

      (b) all other
employees of the Group Companies shall have entered into a labor contract (the
“Labor
Contract”) with the relevant Group Company, as the case may be in a form
or forms approved by SCAC attached hereto as Schedule F.

       

      Section
5.06 Protection of Confidential
Information; Non-Competition.

       

      (a) Confidential
Information.  FounderCo acknowledges that:

       

      (i) As a
result of his or her share ownership of and, in some cases, employment by the
Group Companies, it has obtained secret and confidential information concerning
the Business including, without limitation, financial information, trade secrets
and “know-how,” customers, and certain methodologies (“Confidential
Information”).

       

      
        
          
          

        

        
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      (ii) the Group
Companies will suffer substantial damage which will be difficult to compute if
FounderCo should divulge Confidential Information or enter a business which is
competitive with that of the Group Companies.

       

      (iii) The
provisions of this Section are reasonable and necessary for the protection of
the Business.

       

      (b) Maintain
Confidentiality.  Each Warrantor agrees to not at any time
after the date hereof divulge to, or to permit any Group Company to divulge to,
any person or entity any Confidential Information obtained or learned as a
result of share ownership of AutoChina and employment by any Group Company
except (i) with the express written consent of SCAC on or before the Closing
Date and of the Board thereafter; (ii) to the extent that any such information
is in the public domain other than as a result of a breach of any obligations
hereunder; or (iii) where required to be disclosed by court order, subpoena or
other government process.  If the Warrantors or the Group Companies
shall be required to make disclosure pursuant to the provisions of clause (iii)
of the preceding sentence, each Warrantor will promptly, but in no event more
than eight (8) hours after learning of such subpoena, court order, or other
government process, notify, by personal delivery or by electronic means,
confirmed by mail, AutoChina or the relevant Group Company and, at AutoChina or
the relevant Group Company’s expense, shall: (i) take all reasonably necessary
steps required by AutoChina or the relevant Group Company to defend against the
enforcement of such subpoena, court order or other government process, and (ii)
permit AutoChina or the relevant Group Company to intervene and participate with
counsel of its choice in any proceeding relating to the enforcement
thereof.

       

      (c) Records.  At
the Closing, each AutoChina Shareholder who is not a director or an officer or
an current employee of any Group Company will, and the Warrantors shall cause
such AutoChina Shareholder to, promptly deliver to AutoChina all original
memoranda, notes, records, reports, manuals, formula and other documents
relating to the Business, which he or she then possess or have under his or her
control; provided, however, that they shall be entitled to retain copies of such
documents reasonably necessary to document their financial relationship with
AutoChina and the relevant Group Company.

       

      (d) Non-Compete.  FounderCo,
and each of the Warrantors (for so long as FounderCo directly or indirectly
holds any SCAC Ordinary Shares) shall cause each director, officer or manager of
each Group Company, during the period that he or she maintains a relationship
with any Group Company as a director, officer, consultant or employee and during
the Non-Competition Period, without the prior written permission of a majority
of the Board, which majority must include an affirmative vote from at least one
(1) SCAC Nominated Director, shall not, anywhere in the PRC, Hong Kong and
Taiwan, directly or indirectly, (i) enter into the employ of or render any
services to any Person engaged in any business which is a “Competitive Business”
(as defined below); (ii) engage in any Competitive Business for his own account;
(iii) become associated with or interested in any Competitive Business as an
individual, partner, shareholder, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor or in any other relationship or capacity;
(iv) employ or retain, or have or cause any other person or entity to employ or
retain, any person who was employed or retained by any Group Company in the six
(6) month period prior to the date that all relationships of such person
terminates with any Group Company; or (v) solicit, interfere with, or endeavor
to entice away from any Group Company, for the benefit of a Competitive
Business, any of its customers or other persons with whom any Group Company has
a business relationship.  However, nothing in this Agreement shall
preclude FounderCo or any director, officer or manager of any Group Company from
investing his or her personal assets in the securities of any corporation or
other business entity which is engaged in a Competitive Business if such
securities are traded on an internationally recognized stock exchange, such
investment does not result in his or her beneficially owning, at any time, more
than one percent (1%) of the publicly-traded equity securities of such
Competitive Business, and such person does not have any other relationship with
such Competitive Business.  

       

      
        
          
          

        

        
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      (e) Injunctive
Relief.  If FounderCo or any director, officer or manager of
any Group Company breaches, or threatens to breach, any of the provisions of
Section 5.06 (b), (c) or (d), SCAC shall have the right and remedy to have the
provisions of this Section 5.06 specifically enforced by any Governmental
Authority, it being acknowledged and agreed by each Warrantor that any such
breach or threatened breach will cause irreparable injury to SCAC and the Group
Companies and that money damages will not provide an adequate
remedy.

       

      (f) Modification of
Scope.  If any provision of Section 5.06(b), Section 5.06(c) or
Section 5.06(d) is held to be unenforceable because of the scope, duration or
area of its applicability, the Governmental Authority making such determination
shall have the power to modify such scope, duration, or area, or all of them,
and such provision or provisions shall then be applicable in such modified
form.

       

      (g) Competitive
Business.  As used in this Agreement,

       

      (i) “Competitive Business”
shall mean any business which operates in any aspect of the Business;
and

       

      (ii) “Non-Competition
Period” shall mean the period beginning on the Closing Date and ending on
one (1) year after the date all relationships between FounderCo or a director or
an officer of any Group Company, on one hand, and SCAC and any Group Company, on
the other hand, have been terminated, including relationships as a director,
officer, consultant or employee.

       

      Section
5.07 Post-Closing
Assurances.  The Warrantors from time to time after the Closing
will take such other actions and execute and deliver such other documents,
certifications and further assurances as SCAC shall reasonably require in order
to manage and operate the Group Companies and the Business, including but not
limited to executing such certificates as may be reasonably requested by SCAC’s
accountants in connection with any audit of the financial statements of any
Group Company for any period through the Closing Date.

       

      Section
5.08 No Other
Negotiations.

       

      (a) For a
period commencing from the date of this Agreement until the Closing Date, the
Warrantors will not take, nor will they permit any Group Company (or authorize
or permit any investment banker, financial advisor, attorney, accountant or
other Person retained by or acting for or on behalf of any Group Company, and/or
FounderCo) to take, directly or indirectly, any action to initiate, assist,
solicit, receive, negotiate, encourage or accept any offer, inquiry or proposal
from any Person (i) to engage in any Acquisition Proposal with any Group
Company and/or FounderCo, (ii) to reach any agreement or understanding
(whether or not such agreement or understanding is absolute, revocable,
contingent or conditional) for, or otherwise attempt to consummate, any
Acquisition Proposal with any Group Company and/or FounderCo or (iii) to
participate in discussions or negotiations with or to furnish or cause to be
furnished any information with respect to any Group Company or afford access to
the Assets and Properties or Books and Records of any Group Company to any
Person (other than as contemplated by Section 5.02) who any Warrantor (or any
such Person acting for or on their behalf) knows or has reason to believe is in
the process of considering any Acquisition Proposal relating to any Group
Company.

       

      
        
          
          

        

        
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      (b) For a
period commencing from the date of this Agreement until the Closing Date, the
Warrantors will,
and will cause any Group Company to, immediately cease any and all existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the actions set forth in Section 5.08(a) above, if
applicable.  The Warrantors will promptly (i) notify
SCAC if any Group Company and/or any AutoChina Shareholder receives any proposal
or inquiry or request for information in connection with an Acquisition Proposal
or potential Acquisition Proposal and (ii) notify SCAC of the significant terms
and conditions of any such Acquisition Proposal including the identity of the
party making an Acquisition Proposal.

       

      Section
5.09 Lock-up.  FounderCo
hereby undertakes that it will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any SCAC Ordinary Shares received
by it under Section 1.02 of this Agreement, enter
into a transaction that would have the same effect, or enter into any swap,
hedge or other arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of such SCAC Ordinary Shares, whether any of
these transactions are to be settled by delivery of any such SCAC Ordinary
Shares, in cash or otherwise, or publicly disclose the intention to make any
offer, sale, pledge or disposition, or to enter into any transaction, swap,
hedge or other arrangement, for a period of six (6) months from the date of
issuance of such SCAC Ordinary Shares.  

       

      Section
5.10 No Securities
Transactions.  None of FounderCo or any of their Affiliates,
directly or indirectly, shall engage in any transactions involving the
securities of SCAC prior to the time of the making of a public announcement of
the transactions contemplated by this Agreement.  Each of the Group
Companies shall cause each of its officers, directors, employees, agents and
representatives to comply with the foregoing requirement.

       

      Section
5.11 Fulfillment of
Conditions.  The Warrantors shall use their best efforts to
fulfill the conditions specified in ARTICLE 8 to the extent that the fulfillment
of such conditions effectuates and consummates the AutoChina
Acquisition.  The foregoing obligation includes (a) the execution and
delivery of documents necessary or desirable to consummate the transactions
contemplated hereby and (b) taking or refraining from such actions as may be
necessary to fulfill such conditions (including using their best efforts to
conduct the Business in such manner that on the Closing Date the representations
and warranties of the Warrantors contained herein shall be accurate as though
then made, except as contemplated by the terms hereof).

       

      Section
5.12 Disclosure of Certain
Matters.  From the date hereof through the Closing Date, each
Warrantor shall give SCAC prompt written notice of any event that occurs that
(a) would be required to be disclosed under this Agreement, (b) would cause any
of the representations and warranties of each Warrantor contained herein to be
inaccurate or otherwise misleading, (c) gives any Warrantor any reason to
believe that any of the conditions set forth in ARTICLE 8 will not be satisfied,
(d) would likely result in an AutoChina Material Adverse Effect or (e) would
require any amendment or supplement to the Proxy Statement. 

       

      
        
          
          

        

        
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      Section
5.13 Regulatory and Other
Authorizations; Notices and Consents.

       

      (a) The
Warrantors shall use their best efforts to obtain all authorizations, consents,
orders and approvals of all Governmental Authorities and officials that may be
or become necessary for their execution and delivery of, and the performance of
their obligations pursuant to, this Agreement and any other Transaction
Documents and will cooperate fully with SCAC in promptly seeking to obtain all
such authorizations, consents, orders and approvals.

       

      (b) The
Warrantors shall give promptly such notices to third parties and use its or
their best efforts to obtain such third party consents and estoppel certificates
as SCAC may in its reasonable discretion deem necessary or desirable in
connection with the transactions contemplated by this Agreement.

       

      (c) SCAC
shall cooperate and use all reasonable efforts to assist each Warrantor in
giving such notices and obtaining such consents and estoppel certificates;
provided, however, that SCAC shall have no obligation to give any guarantee or
other consideration of any nature in connection with any such notice, consent or
estoppel certificate or to consent to any change in the terms of any agreement
or arrangement which SCAC in its sole discretion may deem adverse to the
interests of SCAC, AutoChina or the Business.

       

      Section
5.14 Related
Tax.  Each AutoChina Shareholder covenants and agrees to pay,
and the Warrantors shall cause each AutoChina Shareholder to pay, any tax and
duties assessed by any Governmental Authority of the PRC on such AutoChina
Shareholder’s receipt of any Share Payment and other consideration paid by SCAC
pursuant to this Agreement. 

       

      Section
5.15 AutoChina
Information.  As a condition to SCAC (a) filing with the SEC
the Proxy Statement and (b) calling and holding the SCAC Shareholders’ Meeting
(as hereinafter defined), as well as making other filings or submissions with
the SEC with respect to the transactions contemplated herein, the Warrantors
will furnish to SCAC such information as is reasonably required by SCAC for the
preparation and amendment of the Proxy Statement and such other filings or
submissions in accordance with the requirements and requests of the SEC,
including full and accurate descriptions of the Business, material agreements
affecting the Business, the Group Companies, the AutoChina Shareholders and the
FY2007 Combined Financials as required by the rules and regulations of the SEC
for Proxy Statement disclosure (collectively, “AutoChina
Information”).  The AutoChina Information will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements in the AutoChina Information not misleading.

       

      Section
5.16 Interim Financial
Information.  From the date of this Agreement until the
Closing, the Group Companies shall provide to SCAC a copy of a monthly balance
sheet, income statement and cash flow statement on an individual and
consolidated basis for the Group Companies, together with such further
explanation and information with respect thereto as may be reasonably requested
by SCAC.  The above interim financial information shall be delivered
to SCAC within thirty (30) days following the end of each monthly
period.  The Group Companies will prepare the above financial
information in good faith in accordance with PRC GAAP.  Upon
reasonable request of SCAC in writing based on the requirements of the
Securities Act or the rules and requirements of the SEC, the Warrantors shall,
within forty-five (45) days after the date of such written request of SCAC,
deliver to SCAC unaudited interim consolidated financial statements of each of
AutoChina, reviewed by the AutoChina’s Accountants in accordance with US GAAP
for such interim period as stated in the written request.

       

      
        
          
          

        

        
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      Section
5.17 Chuanglian.

       

      (a) Prior to
the Closing, the Warrantors shall have provided evidence to the satisfaction of
SCAC that Chuanglian’s business scope is broad enough to enable it to provide
the services contemplated under the contractual agreements with the Chuanglian
Controlled Operating Companies.

       

      (b) At the
request of the Board, the Warrantors shall use their best efforts to cause
Chuanglian, on the one hand, to enter into certain contractual agreements with
each of the 4S Stores, Tianmei Insurance, the Transportation Companies, and
Chuanglian Auto Trade (the “Chuanglian Controlled
Operating Companies”), on the other hand, within one hundred eighty (180)
days of the Closing, that provide Chuanglian the ability to exercise de facto
control over the operations of each of the Chuanglian Controlled Operating
Companies such that each of the Chuanglian Controlled Operating Companies
qualify as a “special purpose entity” under SIC 12, “Consolidation – Special
Purpose Entities,” under IFRS or a “variable interest entity” under FIN 46 of US
GAAP and are required to be consolidated with Chuanglian for financial statement
reporting purposes and such contractual agreements shall be in compliance with
applicable PRC laws and regulations.

       

      Section
5.18 Inter-Group Company Leases
or Money Transfers.  Prior to the Closing, the Warrantors shall
provide written evidence to the satisfaction of SCAC that any Group Company
leasing land from another Group Company has entered into a lease agreement with
such other Group Company under arm’s-length terms and conditions to the
satisfaction of SCAC, and following the Closing no Group Company shall lease
land, borrow money, or withdraw a registered capital contribution from another
Group Company without the approval of a majority of the Board, which majority
must include an affirmative vote from at least one (1) SCAC Nominated
Director.

       

      Section
5.19 Real
Property.  The Warrantors shall provide written evidence to the
satisfaction of:

       

      (a) SCAC
within six (6) months from the date of this Agreement, that each of the
following leases set forth on Schedule G has
been terminated; and

       

      (b) at least
one (1) SCAC Nominated Director within (i) eighteen (18) months of the Closing,
that (i) (A) all collectively-owned land used by any Group Company for
non-agricultural purposes has been transferred to a competent PRC Government
Authority and such PRC Governmental Authority shall have granted land use rights
to the relevant Group Company and (B) each Group Company has received building
ownership certificates for all the premises it has built on leased land or (ii)
twelve (12) months of the Closing, that an alternative plan unanimously approved
by the Board has been established to deal with the land use issues set forth in
Section 5.19(b)(i) (the “Alternative Plan”)
and a PRC legal opinion unanimously approved by the Board has been issued with
respect to the Alternative Plan.

       

      
        
          
          

        

        
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      Section
5.20 Alternative
Plan.  The Warrantors covenant and agree to execute the
Alternative Plan pursuant to the terms set forth in the Alternative
Plan.

       

      Section
5.21 4S
Stores.  As soon as practicable after the date hereof, the
Warrantors shall have provided written evidence to the satisfaction of SCAC that
each 4S Store has obtained the proper authorizations to operate its business,
including but not limited to the (i) receipt of an authorized business scope to
sell the relevant brand of automobiles, (ii) inclusion on the list of Brand Auto
Sales Enterprises published by the State Administration of Industry and
Commerce, and (iii) entrance into a dealership authorization agreement or
receipt of an authorization letter from the relevant brand of
automobiles.

       

      Section
5.22 Auto Trade
Documents.  Following the date of the Agreement, the Warrantors
covenant and agree to use each of the Purchase Order Contract, Vehicle Sales
Contract, and Vehicle Operation and Service Contract attached hereto as Schedule H for
all sales under the auto trade business, and agree that such forms shall not be
changed without the approval of a majority of the Board, which majority must
include an affirmative vote from at least one (1) SCAC Nominated
Director.

       

      ARTICLE
6

       

      COVENANTS
OF SCAC

       

      Section
6.01 Proxy Statement
Filing.  SCAC shall use commercially reasonable efforts to file
with the SEC, within three (3) months after the delivery to SCAC of the FY2007
Combined Financials, the Proxy Statement (as defined in Section 6.02) for the
calling and holding of the SCAC Shareholders’ Meeting (as defined in Section
6.02).

       

      Section
6.02 SCAC Shareholders’
Meeting.  SCAC shall use commercially reasonable efforts to
cause a meeting of its shareholders (the “SCAC Shareholders’
Meeting”) to be duly called and held as soon as reasonably practicable
for the purpose of voting on the adoption and approval of, among others, this
Agreement, the AutoChina Acquisition, the New SCAC Articles and the Equity
Incentive Plan.  In connection with such meeting, SCAC (a) will use
commercially reasonable efforts to file with the US Securities and Exchange
Commission (the “SEC”) as promptly as
practicable a proxy statement meeting the requirements of the Exchange Act (the
“Proxy
Statement”) and all other proxy materials for such meeting, (b) upon
receipt of approval from the SEC, will mail to its shareholders the Proxy
Statement and other proxy materials, (c) will use commercially reasonable
efforts to obtain the necessary approvals by its shareholders of this Agreement
and the transactions contemplated hereby, and (d) will use commercially
reasonable efforts to otherwise comply with all legal requirements applicable to
such meeting.  As a condition to the filing and distribution to the
SCAC Ordinary Shareholders of the Proxy Statement, SCAC will have received the
AutoChina Information. 

       

      
        
          
          

        

        
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      ARTICLE
7

       

      ADDITIONAL
AGREEMENTS AND COVENANTS OF THE PARTIES

       

      Section
7.01 Other
Information.  If in order to properly prepare documents
required to be filed with any Governmental Authority or financial statements of
any Group Company, it is necessary that any Party be furnished with additional
information relating to any Group Company or the Business, and such information
is in the possession of any other Party or Parties, such Party may request such
other Party or Parties to, and such other Party or Parties hereby agree to use
its or their best efforts to, furnish such information in a timely manner to the
requesting Party, at the cost and expense of the requesting Party.

       

      Section
7.02 Further
Action.  Each of the Parties shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby.  Upon the terms and subject to the conditions hereof, each of
the Parties shall use commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all other things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated by the Transaction Documents.  Without
limiting the generality of the foregoing, the Warrantors agree to use their best
efforts to cooperate with SCAC in order to obtain shareholder approval of the
transactions contemplated by the Transaction Documents, including approving
amendments to the Transaction Documents or SCAC’s SEC filings from time to time,
as may be requested by SCAC’s shareholders after filing the Proxy
Statement.

       

      Section
7.03 Public
Announcements.  From the date of this Agreement until the
Closing or termination, SCAC and each Warrantor shall cooperate in good faith to
jointly prepare all press releases and public announcements pertaining to this
Agreement and the transactions governed by it, and none of the foregoing shall
issue or otherwise make any public announcement or communication pertaining to
this Agreement or the transaction without the prior consent of SCAC (in the case
of each Warrantor) or AutoChina (in the case of SCAC), except as required by Law
or by the rules and regulations of, or pursuant to any agreement of a stock
exchange or trading system.  Each Party will not unreasonably withhold
approval from the others with respect to any press release or public
announcement.  If any Party determines with the advice of counsel that
it is required to make this Agreement and the terms of the transaction public or
otherwise issue a press release or make public disclosure with respect thereto,
it shall at a reasonable time before making any public disclosure, consult with
the other Parties regarding such disclosure, seek such confidential treatment
for such terms or portions of this Agreement or the transaction as may be
reasonably requested by the other Parties and disclose only such information as
is legally compelled to be disclosed.  This provision will not apply
to communications by any Party to its counsel, accountants and other
professional advisors.

       

      Section
7.04 The Board and Board of
Directors of AutoChina.

       

      (a) Immediately
following the Closing Date, the authorized size of the Board will consist of
seven (7) persons.  The Proxy Statement of SCAC will present the
following persons as nominees for election as directors for a period commencing
from the Closing Date until the next annual general meeting of SCAC, or until
each director’s successor is elected and takes office: two (2) persons nominated
by the AutoChina Shareholders’ Representative (the “AutoChina Nominated
Directors”), two (2) persons nominated by the SCAC Shareholders’
Representative (the “SCAC Nominated
Directors”) and three (3) persons as independent non-executive director
(the “Independent
Non-Executive Directors”), provided that the Independent Non-Executive
Director candidates who are actually nominated shall be mutually agreed upon by
the AutoChina Shareholders’ Representative and the SCAC Shareholders’
Representative.  The Warrantors agree that for a period commencing
from the Closing Date and ending December 31, 2011, they shall use their best
efforts to nominate or to cause their Affiliates to nominate the directors to
the Board pursuant to this Section 7.04, subject to any obligations imposed by
law, rule or regulation on any nominating committee.  In addition, the
AutoChina Shareholders agree, and the Warrantors shall cause the AutoChina
Shareholders to agree, that, for a period commencing from the Closing Date and
ending December 31, 2011, they shall vote all SCAC Ordinary Shares then owned by
them in favor of the persons nominated as directors by the SCAC Shareholders’
Representative pursuant to this Section 7.04.  Each of AutoChina and
SCAC shall procure that the composition of the board of directors of
AutoChina after the Closing shall be identical to that of
SCAC.  

       

      
        
          
          

        

        
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      (b) The Board
shall, immediately following the Closing, establish an audit committee, a
nomination committee and a compensation committee.  Prior to December
31, 2011, each such committee shall consist of two (2) members, one being an
independent non-executive director nominated based on the recommendation of the
AutoChina Shareholders’ Representative and the other being the independent
non-executive director nominated based on the recommendation of the SCAC
Shareholders’ Representative.  In any event that the two (2) members
in any such committee fails to reach a consensus with respect to any matter,
such matter shall be submitted to and decided by the Board by the affirmative
consent or approval of at least six (6) members of the Board.

       

      Section
7.05 Corporate Governance
Practice. 

       

      (a) Each of
the Parties hereby agrees and undertakes that, following the Closing, it or he
or she (as the case may be) shall fully comply with, and shall cause to be
complied with, the code of business conduct, the insider trading policy, the
related party transaction procedures, the anti-corruption manual, the audit
committee charter, the compensation committee charter and the nomination
committee charter and other corporate governance policies, procedures, rules and
requirements of SCAC adopted or to be adopted from time to time by the Board
(collectively, the “Corporate Governance
Rules”).

       

      (b) Effective
immediately following the Closing, no director, officer, committee member,
employee, agent of SCAC or any Group Company or any of their respective
delegates shall, without the affirmative consent or approval of at least six (6)
members of the Board, not take, nor shall they cause or permit SCAC or any Group
Company to take, any of the following actions (whether in a single transaction
or a series of related transactions):

       

      (i) the
authorization, creation or issuance of any equity or debt securities, warrants,
options or other rights to acquire shares of SCAC or any Group Company, other
than grants of securities, stock options or warrants to directors or employees
of SCAC or any Group Company pursuant to the Equity Incentive Plan and the
issuance of shares upon the exercise of such options or warrants;

       

      (ii) the
declaration or payment of a distribution or dividend with respect to any of the
shares in SCAC or any Group Company, including, without limitation, the
repurchase or redemption of any such shares or equity interest (or any warrants,
options or other rights to acquire any such shares or equity
interest);

       

      
        
          
          

        

        
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      (iii) the
merger, amalgamation or consolidation of SCAC or any Group Company with any
person or any transaction in which SCAC or any Group Company immediately before
such transaction together with their affiliates do not own or control at least a
majority of the voting power of the surviving entity immediately after such
transaction (excluding any transaction effected solely for tax purposes or to
change SCAC’s or any Group Company’s domicile);

       

      (iv) the sale,
lease, exchange, transfer, contribution, mortgage, pledge, encumbrance or other
disposition of all or substantially all of the Assets and Properties of SCAC or
any Group Company (other than mortgages of Assets and Properties to banks to
secure loans in the ordinary course of business consistent with past practice
and sound business practice), or the purchase or other acquisition by SCAC or
any Group Company (whether individually or collectively) of all or substantially
all of the Assets and Properties of another Person (except for such purchase or
acquisition within the amount set forth in the annual business plan approved by
the Board);

       

      (v) the
making of any joint venture or partnership arrangement, or the formation of any
subsidiary, each involving capital commitment of RMB5,000,000 or more (except
for such joint venture or partnership arrangement made or any subsidiary formed
involving capital commitment within the amount set forth in the annual business
plan approved by the Board), or any voluntary dissolution, winding-up,
liquidation of any subsidiary;

       

      (vi) the
reduction of the authorized share capital or the registered capital, as the case
may be, of SCAC or any Group Company;

       

      (vii) the
effectuation of any recapitalization, reclassification, reorganization,
split-off, spin-off, or filing for bankruptcy with respect to SCAC or any Group
Company;

       

      (viii) the
approval or material amendment of the annual budget, business plan, or operating
plan (including any capital expenditure budget, operating budget and financial
plan) of SCAC or any Group Company;

       

      (ix) the
incurrence of any indebtedness for borrowed money or the issuance, assumption,
guarantee or creation of any liability for borrowed money, the aggregate
outstanding amount of which at any given time equal to RMB5,000,000 or more
unless such liability is incurred pursuant to the then current business
plan;

       

      (x) any
change in the size or composition of the Board or any Group Company or any
committee thereof;

       

      (xi) any
material amendment to the terms of the Share Exchange Agreement, the
Registration Rights Agreement, any executive employment agreement or any
indemnification agreement; or

       

      (xii) any
material amendment to the Corporate Governance Rules then in
effect.

       

      
        
          
          

        

        
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      Section
7.06 Equity Incentive
Plan.  The Proxy Statement of SCAC will present an equity
incentive plan (the “Equity Incentive
Plan”) substantially in the form and substance set forth in Schedule I
attached hereto for approval at the SCAC Shareholders’ Meeting.  SCAC
shall use its reasonable best efforts to ensure that, after the Closing, the
number of SCAC Ordinary Shares issuable under the Equity Incentive Plan (the
“EIP Shares”)
shall constitute ten percent (10%) of the number of (i) SCAC Ordinary Shares
issued and outstanding immediately following the Closing plus (ii) the EIP
Shares.

       

      Section
7.07 New SCAC
Articles.  The Proxy Statement of SCAC will present the New
SCAC Articles for approval at the SCAC Shareholders’ Meeting.  The New
SCAC Articles shall provide for, among others, the authorized share capital that
consists of 50,000,000 SCAC Ordinary Shares and 1,000,000 preferred shares as of
the Closing Date.  

       

      Section
7.08 Approvals of PRC
Governmental Authorities.  As soon as practicable after the
date hereof, each of the Warrantors shall take all such actions as may be
required to obtain all the required Licenses and Permits of the relevant PRC
Governmental Authorities, including but limited to (i) the approval of MOFCOM in
connection with the Restructuring and the transactions contemplated hereby, (ii)
the successful completion of filing procedures with the provincial authority of
commerce by each 4S Store that engages in secondhand automobile transactions,
(iii) the successful completion of filing procedures with the original authority
of examination and approval by Chuanglian for its establishment of each Auto
Service Company, (iv) the receipt of the social insurance certificate by each
Group Company, (v) the completion of the renewals of the concurrent-business
insurance agent certificates and road transportation operation permits by each
Group Company.

       

      Section
7.09 New
Subsidiaries.  Each Warrantor covenants and agrees, if at any
time after the date hereof, any Warrantor forms, owns or acquires an entity
stake in any entity that is engaged in or related to the Business, to take all
action necessary to cause such entity to become a Subsidiary (direct or
indirect) of SCAC (a “New
Subsidiary”).

       

      Section
7.10 Survival of
Covenants.  The covenants of the Warrantors set forth in this
Agreement shall survive the Closing.

       

      ARTICLE
8

       

      CONDITIONS
TO CLOSING

       

      Section
8.01 Conditions to Each Party’s
Obligations.  The respective obligations of each Party to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or waiver, at or prior to the Closing, of each of the following
conditions.

       

      (a) Permits of PRC Governmental
Authorities.  All the Permits of the relevant PRC Governmental
Authorities required in connection with the AutoChina Acquisition to the extent
that they are required to be obtained prior to the Closing under applicable PRC
Laws, shall have been duly obtained.

       

      (b) Approval by SCAC’s
Shareholders.  This Agreement and the transactions contemplated
hereby shall have been approved by the holders of a majority of the outstanding
SCAC Ordinary Shares, in accordance with the SCAC Articles and the aggregate
number of SCAC Ordinary Shares held by public shareholders of SCAC who (i)
exercise their rights to convert their SCAC Ordinary Shares to cash and (ii)
vote against the transactions contemplated hereby shall not constitute forty
percent (40%) or more of the SCAC Ordinary Shares sold in SCAC’s Public
Offering.

       

      
        
          
          

        

        
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      (c) Litigation.  No
order, stay, judgment or decree shall have been issued by any Governmental
Authority preventing, restraining or prohibiting in whole or in part, the
consummation of the transactions contemplated hereby or instrumental to the
consummation of the transactions contemplated hereby, and no action or
proceeding by any Governmental Authority shall be pending or threatened
(including by suggestion through investigation) by any person, firm,
corporation, entity or Governmental Authority, which questions, or seeks to
enjoin, modify, amend or prohibit (a) the Restructuring, (b) the ownership of
the Group Companies, (c) the purchase of the AutoChina Acquisition Shares in
consideration for the issuance of the SCAC Ordinary Shares, (d) the SCAC
Shareholders’ Meeting and use of the Proxy Statement by SCAC, or (g) the conduct
or ownership (direct or indirect or beneficial) in any material respect the
Business as a whole or any material portion of the Business conducted or to be
conducted by the Warrantors.

       

      (d) Transaction
Documents.  Each of the Transaction Documents shall have been
executed and delivered at the Closing to each relevant Party.

       

      Section
8.02 Conditions to Obligations of
the Warrantors.  The obligations of each Warrantor to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or waiver, at or prior to the Closing, of each of the following
conditions: 

       

      (a) Representations and
Warranties; Covenants.  Without supplementation after the date
of this Agreement, the representations and warranties of SCAC contained in this
Agreement shall be true and correct as of the Closing, with the same force and
effect as if made as of the Closing, and all the covenants contained in this
Agreement to be complied with by SCAC on or before the Closing shall have been
complied with.

       

      Section
8.03 Conditions to Obligations of
SCAC.  The obligations of SCAC to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment or waiver, at
or prior to the Closing, of each of the following conditions:

       

      (a) Representations and
Warranties; Covenants.  The representations and warranties of
each Warrantor contained in this Agreement, except to the extent a
representation or warranty is expressly limited by its terms to another date,
shall be true and correct in all respects as of the Closing, with the same force
and effect as if made as of the Closing, and all the covenants contained in this
Agreement (including, but not limited to, ARTICLE 5 and ARTICLE 7 hereof) to be
complied with by each Warrantor on or before the Closing shall have been
complied with, and SCAC shall have received at the Closing a certificate of each
Warrantor to such effect.

       

      (b) Legal
Opinions.  SCAC shall have received from (i) PRC counsel to the
Warrantors a legal opinion addressed to SCAC with respect to PRC legal matters
in the form attached hereto as Schedule J and
(ii) AutoChina’s Cayman counsel a legal opinion addressed to SCAC with respect
to Cayman legal matters in the form attached hereto as Schedule K, in
each case dated as of the Closing Date.

       

      
        
          
          

        

        
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      (c) Waivers and
Consents.  Each Warrantor shall have obtained and delivered to
SCAC waivers and consents of all third parties required for the consummation of
the AutoChina Acquisition set forth in Schedule L.

       

      (d) Regulatory
Approvals.  Any Governmental Authority whose approval or
consent is required in connection with the Restructuring and other transactions
contemplated hereby, including, but not limited to, the approval of MOFCOM,
shall have approved of the transactions contemplated by this
Agreement.  The registrations, filings and updates with any
Governmental Authorities as required in connection with the transactions
contemplated by this Agreement, including, but not limited to, the filings by
each of the AutoChina Shareholders or their beneficial owners with SAFE (if
required), shall have been duly completed and SCAC shall have cleared all the
comments of SEC with respect to the Proxy Statement and shall have filed with
SEC the Proxy Statement.  SCAC shall have received written
confirmation of such approvals, registrations, filings and updates.

       

      (e) No Adverse
Change.  At the Closing, as duly certified by a director of
each of the Warrantors, there shall have been no material adverse change in the
Assets and Properties, liabilities, financial condition or prospects of the
Group Companies or the Business from that shown or reflected in the FY2007
AutoChina Consolidated Financials and as described in the Proxy
Statement.  Between the date of this Agreement and the Closing Date,
there shall not have occurred an event which, in the reasonable opinion of SCAC,
would have an AutoChina Material Adverse Effect.

       

      (f) Necessary
Proceedings.  All proceedings, corporate or otherwise, to be
taken by each Warrantor in connection with the consummation of the transactions
contemplated by this Agreement shall have been duly and validly taken, and
copies of all documents, resolutions and certificates incident thereto, duly
certified by each Warrantor, as appropriate, as of the Closing, shall have been
delivered to SCAC.

       

      (g) AutoChina
Information.  The AutoChina Information, at the time of
distribution or effectiveness of each filing or submission with the SEC
containing any such information and at Closing, will accurately reflect the
Business, the Group Companies, and the AutoChina Shareholders, and the AutoChina
Information will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements in the AutoChina
Information not misleading.

       

      (h) Employment
Agreements.  Each of the Key Employees shall have executed and,
at the Closing, delivered the Executive Employment Agreement with SCAC and/or
the relevant Group Companies and each of all the other full-time employees of
the Group Companies shall have executed and delivered each of the Labor
Contracts.

       

      (i) Equity Incentive
Plan.  The Equity Incentive Plan shall have been approved at
the SCAC Shareholders’ Meeting.

       

      (j) Restructuring.  The
Warrantors shall have delivered evidence to the satisfaction of SCAC that the
Restructuring has been completed in all respects and in compliance with all
applicable laws including, but not limited to, providing updated licenses and
certificates of each Group Company, including but not limited to a foreign
exchange registration certificate and such other licenses and certificates as
the Investor may reasonably request.  All Restructuring Agreements
shall have been executed by each of the parties thereto in accordance with the
Restructuring Plan.  The Restructuring shall have been fully completed
pursuant to such Restructuring Agreements in compliance with applicable PRC laws
and regulations and the Warrantors shall have delivered evidence to the
satisfaction of SCAC that Chuanglian exercises de facto control over the
operations of the Chuanglian Controlled Companies such that each of the
Chuanglian Controlled Companies qualify as a “special purpose entity” under SIC
12, “Consolidation – Special Purpose Entities,” under IFRS or a “variable
interest entity” under FIN 46 of US GAAP and are required to be consolidated
with Chuanglian for financial statement reporting purposes.

       

      
        
          
          

        

        
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      ARTICLE
9

       

      TERMINATION
AND ABANDONMENT

       

      Section
9.01 Methods of
Termination.  The transactions contemplated herein may be
terminated and/or abandoned at any time but not later than the Closing:

       

      (a) by mutual
written consent of the Parties;

       

      (b) by either
SCAC or any Warrantor, if the Closing has not occurred by August 31,
2009;

       

      (c) by any
Warrantor, (i) if SCAC shall have breached any of its covenants in ARTICLE 6 or
ARTICLE 7 hereof in any respect or (ii) if the representations and warranties of
SCAC contained in this Agreement shall not be true and correct, at the time
made, or (iii) if such representations and warranties shall not be true and
correct at and as of the Closing Date as though such representations and
warranties were made again at and as of the Closing Date, except to the extent
that such representations are made herein as of a specific date prior to the
Closing Date, and in any such event, if such breach is subject to cure, SCAC has
not cured such breach within ten (10) Business Days of any Warrantor’s notice of
an intent to terminate; 

       

      (d) by SCAC,
(i) if any Warrantor shall have breached any of the covenants in ARTICLE 5 or
ARTICLE 7 hereof in any respect or (ii) if the representations and warranties of
any Warrantor contained in this Agreement shall not be true and correct, at the
time made, or (iii) if such representations and warranties shall not be true and
correct at and as of the Closing Date as though such representations and
warranties were made again at and as of the Closing Date, except to the extent
that such representations are made herein as of a specific date prior to the
Closing Date, and in any such event, if such breach is subject to cure, and the
Warrantors have not cured such breach within ten (10) Business Days of SCAC’s
notice of an intent to terminate;

       

      (e) by either
SCAC or any Warrantor, if at the SCAC Shareholders’ Meeting (including any
adjournments thereof), this Agreement and the transactions contemplated hereby
fail to be approved and adopted by the affirmative vote of the requisite number
of holders of SCAC Ordinary Shares, including a majority-in-interest of the SCAC
Ordinary Shares voted by the public shareholders, in accordance with the SCAC
Articles and the aggregate number of SCAC Ordinary Shares held by public
shareholders of SCAC who (i) exercise their rights to convert their SCAC
Ordinary Shares to cash in accordance with the SCAC Articles and (ii) vote
against the transactions contemplated hereby constitute forty percent (40%) or
more of the SCAC Ordinary Shares sold in SCAC’s Public Offering; or

       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

       

      (f) by either
SCAC or any Warrantor, if this Agreement and the transactions contemplated
hereby fail to be approved and adopted by the affirmative vote of the requisite
number of the holders of SCAC Ordinary Shares in accordance with the SCAC
Articles within ninety (90) days from the date of this Agreement.

       

      Section
9.02 Effect of
Termination.

       

      (a) In the
event of termination and abandonment by SCAC or by any Warrantor, or both,
pursuant to Section 9.01 hereof, written notice thereof shall forthwith be given
to the other Party, and except as set forth in this Section 9.02, all further
obligations of the Parties shall terminate, no Party shall have any right
against the other Party hereto, and (i) Founder and FounderCo shall bear the
costs and expenses of each of the Warrantors and (ii)  SCAC shall bear
its own costs and expenses.

       

      (b) Consequence of
Termination.  If the transactions contemplated by this
Agreement are terminated and/or abandoned as provided herein:

       

      (i) each
Party hereto will return all documents, work papers and other material (and all
copies thereof) of the other Party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the Party
furnishing the same; and

       

      (ii) all
confidential information received by each Party hereto with respect to the
business of any other Party hereto shall be treated in accordance with Section
5.06(b) hereof, which shall survive such termination or
abandonment.

       

      ARTICLE
10

       

      DEFINITIONS

       

      Section
10.01 Certain Defined
Terms.  As used in this Agreement, the following terms shall
have the following meanings:

       

      “Acquisition Proposal”
shall mean (a) a proposal for any transaction pursuant to which any Person
proposes to acquire any beneficial ownership of the outstanding equity
securities of any Group Company (including as part of any capital raising
transaction), whether from any Group Company or pursuant to a tender offer,
exchange offer, recapitalization, reorganization or otherwise; (b) a proposal
for any merger, consolidation, establishment of or investment in another legal
entity or other business combination involving any Group Company; (c) a proposal
for any other transaction or series of related transactions (including any sale,
lease, exchange, mortgage, pledge, license, transfer or other disposition)
pursuant to which any Person proposes to acquire or control a material portion
of the Assets and Properties of any Group Company; or (iv) any public
announcement of a proposal, plan, or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.

       

      “Action” shall mean
any Claim, action, suit, litigation, arbitration, proceeding or investigation by
or pending before any Governmental Authority.

       

      “Affiliate” shall mean
any Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person
specified.  For purposes of this definition, control of a Person means
the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by Contract or otherwise and, in
any event and without limitation of the previous sentence, any Person owning
fifty percent (50%) or more of the voting securities of a second Person shall be
deemed to control that second Person.  For the purposes of this
definition, a Person shall be deemed to control any of his or her immediate
family members.

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

       

      “Agreement” shall have
the meaning set forth in the Preamble hereof.

       

      “Assets and
Properties” of any Person shall mean all assets and properties of every
kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including cash, cash equivalents,
Investment Assets, accounts and notes receivable, chattel paper, documents,
instruments, general intangibles, real estate, equipment, inventory, goods and
Intellectual Property.

       

      “Associate” shall
mean, with respect to any Person, any corporation or other business organization
of which such Person is an officer or partner or is the beneficial owner,
directly or indirectly, of five percent (5%) or more of any class of equity
securities, any trust or estate in which such Person has a substantial
beneficial interest or as to which such Person serves as a trustee or in a
similar capacity and any relative or spouse of such Person, or any relative of
such spouse, who has the same home as such Person.

       

      “AutoChina Material Adverse
Effect” shall mean any event, change or effect that, when taken
individually or together with all other adverse changes and effects, is or is
reasonably likely to be materially adverse to the Business, Assets and
Properties, Real Property, operations, financial condition, liquidity or
prospects of the Group Companies, in each case taken as a whole, or to prevent
or materially delay consummation of the AutoChina Acquisition or otherwise to
prevent the Warrantors from performing their obligations in any material
respects under this Agreement.

       

      “AutoChina
Shareholders” shall mean FounderCo and any other registered owner of
share capital of AutoChina prior to the Closing.

       

      “AutoChina Shareholders’
Representative” shall mean Wang or such other individual as designated by
FounderCo in writing, who has been irrevocably and fully authorized to act on
behalf of all of the AutoChina Shareholders with respect to such matters as
designated herein.

       

      “AutoChina’s
Accountants” shall mean Grobstein, Horwath & Company
LLP.

       

      “Benefit Plan” shall
mean any Plan established by any Group Company, or any predecessor or Affiliate
of them, existing at the Closing Date or prior thereto, to which any Group
Company contributes or has contributed or may have liability, or under which any
employee, former employee or director of any Group Company or any beneficiary
thereof is covered, is eligible for coverage or has benefit rights whether
provided by any Group Company or pursuant to any governmental program, or
otherwise.

       

      “Best Knowledge” shall
mean the actual or constructive knowledge that would have been acquired after
inquiry in a reasonable and diligent manner, of a Person.

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

       

      “Board” shall mean the
board of directors of SCAC.

       

      “Books and Records”
shall mean all files, documents, instruments, papers, books and records relating
to the Business of any Group Company including financial statements, Tax Returns
and related work papers and letters from accountants, budgets, pricing
guidelines, ledgers, journals, deeds, title policies, minute books, stock
certificates and books, stock transfer ledgers, Contracts, licenses, customer
lists, computer files and programs, retrieval programs, operating data and plans
and environmental studies and plans.

       

      “Business” shall mean
all the material businesses and operations conducted by the Group Companies,
including, but not limited to, the wholesale and retail sale of vehicles
(including auto trading), vehicle parts and vehicle accessories; vehicle repair
and maintenance; insurance agency; vehicle trade-in business; used car sales
business; and vehicle consulting services and vehicle storage
services.

       

      “Business Day” shall
mean a day of the year on which banks are not required or authorized to be
closed in the City of New York, Hong Kong and the PRC.

       

      “Claim” shall mean any
claim, demand, suit, proceeding or action.

       

      “Contracts” shall mean
any contract, agreement, arrangement, plan, lease, license or similar
instrument.

       

      “Control” shall mean
the possession, directly or indirectly, or as trustee or executor, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, as trustee or executor, by
contract or credit arrangement or otherwise.

       

      “Copyrights” shall
mean all copyrights, including rights in and to works of authorship and all
other rights corresponding thereto throughout the world, whether published or
unpublished, including rights to prepare, reproduce, perform, display and
distribute copyrighted works and copies, compilations and derivative works
thereof.

       

      “Disclosure Schedule”
shall mean the Disclosure Schedule attached hereto as Schedule M,
dated as of the date hereof.

       

      “EBITDA” shall mean
earnings before interest, taxes, depreciation, amortization and any adjustment
for minority interests. on a consolidated basis calculated based on the audited
financial statements prepared by the Independent Auditors in accordance with US
GAAP for any twelve (12) month period ended December 31 but for the purposes of
this Agreement excluding from any such calculation of EBITDA, any EBITDA (a)
generated by the operations of any entities acquired by or merged with SCAC
following the Closing or from one-time gains or one-time losses, including, but
not limited to, one-time gains or losses from the divestiture of any assets or
entities and (b) any impacts on such financial statements as a result of any
change of US GAAP occurring after the date such final statements were
prepared.  For the avoidance of doubt, for purposes of this Agreement,
EBITDA for FY2009 shall exclude the losses of SCAC in FY2009 incurred prior to
the Closing and shall be calculated on the assumption that the Group Companies
became subsidiaries of AutoChina as of January 1, 2009.

       

      “EBITDA Growth” shall
mean year-over-year EBITDA growth.

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

       

      “Exchange Act” shall
mean the US Securities Exchange Act of 1934, as amended.

       

      “FY2005,” “FY2006,” “FY2007,” “FY2008” “FY2009,” “FY2010,” “FY2011,” “FY2012,” and “FY2013.” shall mean,
respectively, the financial year ended December 31 of 2005, 2006, 2007, 2008,
2009, 2010, 2011, 2012, and 2013.

       

      “Governmental
Authority” shall mean any PRC or non-PRC national, supranational, state,
provincial, local or similar government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal or
judicial or arbitral body.

       

      “Governmental Order”
shall mean any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental
Authority.

       

      “Group Companies”
shall mean AutoChina, Fancy Think, the PRC Subsidiaries, the New Subsidiaries,
and any other direct or indirect Subsidiary of the foregoing, variable interest
entity or otherwise, if any.

       

      “Hazardous Substance”
shall mean any substances of whatever description which may cause or have a
harmful effect on the environment or the health of a person or any other living
organism including, without limitation, all pollutants, contaminants and wastes
and all poisonous, toxic, noxious, dangerous and offensive
substances.

       

      “Historical Tax
Liabilities” shall mean any Taxes that were incurred by any Group Company
or their direct or indirect shareholders on or before the Closing.

       

      “Hong Kong” shall mean
the Hong Kong Special Administrative Region of the PRC.

       

      “Indebtedness” of any
Person shall mean all obligations of such Person (i) for borrowed money,
(ii) evidenced by notes, bonds, debentures or similar instruments,
(iii) for the deferred purchase price of goods or services (other than
trade payables, installment payments or accruals incurred in the ordinary course
of business), (iv) under capital leases, or (v) in the nature of
guarantees of the obligations described in clauses (i) through
(iv) above of any other Person.

       

      “Indemnification
Agreement” shall mean the indemnification agreement to be entered into
between SCAC and each Indemnitee in the form of Schedule N
attached hereto.

       

      “Indemnitee” shall
mean each of the Board members, Founder, and other individuals as designated by
the Board.

       

      “Independent Auditors”
shall mean the then current outside independent auditors of SCAC or any
subsidiary of SCAC, as applicable.

       

      “Intellectual
Property” shall mean any intellectual property rights, including, without
limitations, Patents, Copyrights, service marks, moral rights, Trade Secrets,
Trademarks, designs and Technology, together with (a) all registrations and
applications for registration therefore, if applicable, and (b) all rights to
any of the foregoing (including (i) all rights received under any license or
other arrangement with respect to the foregoing, (ii) all rights or causes of
action for infringement or misappropriation (past, present or future) of any of
the foregoing, (iii) all rights to apply for or register any of the foregoing),
(iv) domain names and URL’s of or relating to the Business and variations of the
domain names and URL’s, (v) Contracts which related to any of the foregoing,
including invention assignment, intellectual property assignment,
confidentiality, and non-competition agreements, and (vi) goodwill of any of the
foregoing.

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

       

      “Investment Assets”
shall mean all debentures, notes and other evidences of indebtedness, stocks,
securities (including rights to purchase and securities convertible into or
exchangeable for other securities), interests in joint ventures and general and
limited partnerships, mortgage loans and other investment or portfolio
assets.

       

      “Laws” shall mean all
statutes, rules, regulations, ordinances, circulars, orders, official responses,
writs, injunctions, judgments, decrees, awards, restrictions and other generally
applicable official documents of any Governmental Authorities of the PRC, Hong
Kong, USA, the Cayman Islands or other applicable jurisdictions, including,
without limitation, applicable statutes, rules, regulations, orders and
restrictions relating to securities, taxation, investment, zoning, land use,
safety, health, environment, Hazardous Substances, pollution controls,
employment and employment practices and access by the handicapped.

       

      “Liabilities” shall
mean all Indebtedness, obligations and other liabilities of a Person (whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become
due).

       

      “Lien” shall mean any
mortgage, pledge, assessment, security interest, lease, lien, adverse claim,
levy, charge or other encumbrance of any kind, or any condition sale Contract,
title retention Contract or other Contract to give any of the
foregoing.

       

      “MOFCOM” shall mean
the Ministry of Commerce of the PRC.

       

      “New SCAC Articles”
shall mean the Amended and Restated Memorandum and Articles of Association of
SCAC in the form of Schedule O
attached hereto.

       

      “Patents” shall mean
all United States and foreign patents and utility models and applications
therefore and all reissues, divisions, re-examinations, renewals, extensions,
provisionals, continuations and continuations-in-part thereof, and equivalent or
similar rights anywhere in the world in inventions and discoveries.

       

      “Permits” shall mean
all governmental registrations, licenses, permits, authorizations and
approvals.

       

      “Permitted Lien” shall
mean (a) any Lien for Taxes not yet due or delinquent or being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with US GAAP, (b) any statutory Lien arising in
the ordinary course of business by operation of Law with respect to a Liability
that is not yet due or delinquent and (c) any minor imperfection of title
or similar Lien which individually or in the aggregate with other such Liens
does not materially impair the value of the Assets and Properties subject to
such Lien or the use of such Assets and Properties in the conduct of the
Business.

       

      “Person” shall mean an
individual, partnership, corporation, joint venture, unincorporated
organization, cooperative or a governmental entity or agency
thereof.

       

      “Plan” shall mean any
employment, consulting, change of control bonus, incentive compensation,
deferred compensation, pension, profit sharing, retirement, stock purchase,
stock option, stock ownership, stock appreciation rights, phantom stock, leave
of absence, layoff, vacation, day or dependent care, legal services, cafeteria,
life, health, accident, disability, workmen’s compensation or other insurance,
severance, separation or other employee benefit plan, practice, policy agreement
or arrangement of any kind, whether written or oral, and whether or not required
by applicable Law.

       

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

       

      “PRC” shall mean the
People’s Republic of China, for the purposes of this Agreement, excluding the
Hong Kong Special Administrative Region, the Macao Special Administrative Region
and Taiwan.

       

      “PRC GAAP” shall mean
generally accepted accounting principles in the PRC, consistently applied with
past periods..

       

      “Pre-Closing Period Tax
Returns” shall mean all Tax Returns of the Group Companies for all
taxable periods of the Group Companies which are required to be filed on or
prior to the Closing Date.

       

      “Pre-Closing Taxes”
shall mean all Taxes payable with respect to the Pre-Closing Period Tax Returns
or Taxes with respect to Tax Returns filed after the Closing Date that relate
back to any tax period ending prior to the Closing Date.

       

      “Proprietary Rights”
shall mean all Intellectual Property and other proprietary rights, including,
without limitation, any and all foreign and domestic trade name, know-how and
all associated rights, and any and all registrations, applications, renewals,
extensions and continuations (in whole or in part) of any of the foregoing,
together with all goodwill associated therewith and all rights and causes of
action for infringement, misappropriation, misuse, dilution, unfair trade
practice or otherwise associated therewith.

       

      “Purchase Option”
shall mean the option granted to EarlyBirdCapital to purchase up to a total of
450,000 units of SCAC securities at US$8.80 per unit.  Each unit
issuable upon exercise of such option consists of one (1) SCAC Ordinary Share
and one (1) warrant that is identical to a Public Offering Warrant.

       

      “Registration Rights
Agreement” shall mean a Registration Rights Agreement by and between SCAC
and FounderCo in the form of Schedule P
attached hereto.

       

      “Release” shall mean
any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the
environment.

       

      “Representatives” of
each Party shall mean such Party’s employees, accountants, auditors, actuaries,
counsel, financial advisors, bankers, investment bankers and
consultants.

       

      “Restructuring” shall
mean the reorganization of the capital, ownership, and organizational structure
of the Group Companies and related transactions pursuant to the Restructuring
Agreements and as contemplated by the Memorandum on the Overseas Private Equity
Financing and IPO Structure of Kaiyuan Auto Sales Group prepared by Zhong Lun
Law Firm dated August 26, 2008 (the “Restructuring Plan”),
as may be amended or supplemented from time to time with the consent of SCAC and
AutoChina.

       

      “Restructuring
Agreements” means those certain agreements relating to the Restructuring
and governing the relationships by and among the Group Companies and their
respective shareholders following the Restructuring as more specifically set
forth in the Restructuring Plan.

       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

       

      “RMB” shall mean the
official currency of the PRC.

       

      “SAFE” shall mean the
State Administration of Foreign Exchange of the PRC, including any of its
branches or divisions.

       

      “SAFE Circulars” shall
mean the Circular on Issues Relating to the Administration of Foreign Exchange
Concerning Fund Raising and Round-Trip Investment by Domestic Residents through
Offshore Special Purpose Vehicles (《关于境内居民通过境外特殊目的公司融资及返程投资外汇管理相关问题的通知》[汇发(2005)75号]) issued by SAFE
with effect from November 1, 2005, and the Circular on the Release of Operative
Directives for the Circular of the State Administration of Foreign Exchange on
Issues Relating to the Administration of Foreign Exchange Concerning Fund
Raising and Round-Trip Investment by Domestic Residents through Offshore Special
Purpose Vehicles (国家外汇管理局综合司关于印发《国家外汇管理局关于境内居民通过境外特殊目的公司融资及返程投资外汇管理有关问题的通知》操作规程的通知
[汇综发 (2007)
106号]) issued
by the General Affairs Department of SAFE with effect from May 29,
2007.

       

      “SCAC Material Adverse
Effect” shall mean any event, change or effect (excluding  any
event, change or effect resulting in any disturbance or adverse change in or to
international financial markets, international foreign exchange markets, the
international banking system or any stock, bond, futures or commodities markets
in the PRC (including Hong Kong), the USA, Europe or Asia) that, when taken
individually or together with all other adverse changes and effects, is or is
reasonably likely to be materially adverse to the business, Assets and
Properties, Real Property, operations, financial condition, liquidity or
prospects of SCAC, taken as a whole, or to prevent or materially delay
consummation of the AutoChina Acquisition or otherwise to prevent SCAC from
performing its obligations under this Agreement.

       

      “SCAC Ordinary Shares”
shall mean ordinary shares of SCAC, par value US$0.001 per share.

       

      “SCAC’s Public
Offering” shall mean the initial public offering of SCAC, in which SCAC
sold 5,175,000 units of SCAC securities (including the underwriter’s exercise of
the over-allotment option) at a price of US$8.00 per unit.  Each unit
sold consisted of one (1) SCAC Ordinary Share and one (1) Public Offering
Warrant (as defined below).

       

      “SCAC Shareholders’
Representative” shall mean James Sha or such other individual as
designated by a majority of the existing shareholders of SCAC that were also
shareholders of SCAC prior to the Closing, such designation in writing, who has
been irrevocably and fully authorized to act on behalf of all of the
shareholders of SCAC with respect to such matters as designated
herein.

       

      “Securities Act” shall
mean the US Securities Act of 1933, as amended.

       

      “Software” shall mean
all software, in object, human-readable or source code, whether previously
completed or now under development, including programs, applications, databases,
data files, coding and other software, components or elements thereof,
programmer annotations, and all versions, upgrades, updates, enhancements and
error corrections of all of the foregoing.

       

      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

      

       

      “Subsidiary” or “subsidiary” shall
mean, with respect to any subject entity (the “subject entity”), (i)
any company, partnership or other entity (x) more than fifty percent (50%) of
whose shares or other interests entitled to vote in the election of directors or
(y) more than a fifty percent (50%) of whose interest in the profits or capital
of such entity are owned or controlled directly or indirectly by the subject
entity or through one or more Subsidiaries of the subject entity; (ii) any
entity whose assets, or portions thereof, are consolidated with the net earnings
of the subject entity and are recorded on the books of the subject entity for
financial reporting purposes in accordance with US GAAP; (iii) any entity
respect to which the subject entity has the power to otherwise direct the
business and policies of that entity directly or indirectly through another
subsidiary; and (iv) any branch companies.  Notwithstanding the above,
for the purpose of the Transaction Documents, as applied to AutoChina after the
Closing, the term “Subsidiary” or “subsidiary” includes, without limitation,
Fancy Think, the PRC Subsidiaries, the New Subsidiaries and any of their
respective Subsidiaries, if any.

       

      “Targeted EBITDA
Growth” shall mean EBITDA Growth of the percentages set forth in Schedule C.

       

      “Tax” or “Taxes” shall mean all
income, gross receipts, sales, stock transfer, excise, bulk transfer, use,
employment, social housing, social insurance, social security, franchise,
profits, property or other taxes, tariffs, imposts, fees, stamp taxes and
duties, assessments, levies or other charges of any kind whatsoever (whether
payable directly or by withholding), together with any interest and any
penalties, additions to tax or additional amounts imposed by any government or
taxing authority with respect thereto.

       

      “Tax Return” shall
mean any declaration, statement, report, return, information return or claim for
refund relating to Taxes (including information required to be supplied to a
governmental entity in respect of such report or return) including, if
applicable, combined or consolidated returns for any group of entities that
includes the Group Companies or SCAC.

       

      “Technology” shall
mean any know-how, confidential or proprietary information, name, data,
discovery, formulae, idea, method, process, procedure, other invention, record
of invention, model, research, Software, technique, technology, test
information, market survey, website, or information or material of a like
nature, whether patentable or unpatentable and whether or not reduced to
practice.

       

      “Trade Secrets” shall
mean all trade secrets under applicable law and other rights in know-how and
confidential or proprietary information, processing, manufacturing or marketing
information, including new developments, inventions, processes, ideas or other
proprietary information that provides advantages over competitors who do not
know or use it and documentation thereof (including related papers, blueprints,
drawings, chemical compositions, formulae, diaries, notebooks, specifications,
designs, methods of manufacture and data processing software and compilations of
information) and all claims and rights related thereto.

       

      “Trademarks” shall
mean any and all United States and foreign trademarks, service marks, logos,
trade names, corporate names, trade dress, Internet domain names and addresses,
and all goodwill associated therewith throughout the world.

       

      “US” or “United
States” shall mean the United States of America.

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

       

      “US$” shall mean the
official currency of the United States.

       

      “US GAAP” shall mean
generally accepted accounting principles in the United States, consistently
applied with past periods.

       

      “Voting Agreement”
shall mean a Voting Agreement by and between SCAC and FounderCo in the form of
Schedule Q
attached hereto.

       

      “Warrantors” shall
mean Founder, Wang, FounderCo, AutoChina, Fancy Think, Chuanglian, Kaiyuan Real
Estate, Huiyin Investment, Hua An Investment, Kaiyuan Logistics, Tianmei
Insurance, Kaiyuan Auto Trade, and Chuanglian Auto Trade.

       

      “Warrants” shall mean
the (i) 5,175,000 warrants issued by SCAC, pursuant to which one (1) warrant
will entitle the holder thereof to purchase one (1) SCAC Ordinary Share from
SCAC at an exercise price of US$5.00 commencing on the later of (a) the
completion of a business combination such as the AutoChina Acquisition or (b)
February 26, 2013, or earlier upon redemption (the “Public Offering
Warrants”) and (ii) 1,430,000 warrants issued by SCAC to its founding
shareholders (the “Insider Warrants”),
the Insider Warrants are identical to the Public Offering Warrants except that
if SCAC calls the Insider Warrants for redemption, the Insider Warrants may be
exercised on a cashless basis so long as the Insider Warrants are held by SCAC’s
founding shareholders or their affiliates.

       

      ARTICLE
11

       

      INDEMNIFICATION

       

      Section
11.01 Indemnification.

       

      (a) Indemnification
Obligations.  Subject to the limitations set forth in this
Section 11, from and after the date hereof, each of the Warrantors shall jointly
and severally protect, defend, indemnify and hold harmless SCAC, officers,
directors, employees, (each, an “Indemnified Person”
and collectively, the “Indemnified Persons”)
from and against any and all losses, costs, amounts paid or payable, damages,
liabilities, fees (including without limitation reasonable attorneys’ fees) and
expenses (collectively, the “Damages”), that any
of Indemnified Persons incurs by reason of or in connection with:

       

      (i) any
claim, demand, action or cause of action alleging misrepresentation, breach of,
or default in connection with, any of the representations, warranties, or
agreements of any of the Warrantors contained in the Transaction Documents and
all other agreements in connection with the AutoChina Acquisition to which any
Warrantor is a party and any exhibits or schedules attached hereto or thereto;
and

       

      (ii) any
failure of any of the Warrantors to perform any of its covenants under the
Transaction Documents and all other agreements in connection with the AutoChina
Acquisition to which any Warrantor is a party and any exhibits or schedules
attached hereto or thereto.

       

      In
determining the amount of any Damages in respect of the failure of any
representation or warranty to be true and correct, any materiality standard or
qualification (including an AutoChina Material Adverse Effect qualification)
contained in such representation or warranty shall be
disregarded.  The Warrantors shall have no right of contribution,
indemnification or similar right from SCAC or its Affiliates.  Each of
the Warrantors is individually referred to in this ARTICLE 11 as the “Indemnifying Person,”
and collectively, the “Indemnifying
Persons.”

       

      
        
          
          

        

        
          53

          
            

          

        

        
          
          

        

      

       

      (b) Limitations.

       

      (i) The
Warrantors shall not be required to indemnify an Indemnified Person or be liable
to SCAC or its Affiliates for any Liability under the Transaction Documents and
all other agreements in connection with the AutoChina Acquisition to which any
Warrantor is a party and any exhibits or schedules attached hereto or thereto
unless the aggregate amount of all Damages exceeds US$100,000 (“Basket”), after which
the Warrantors shall be responsible for all Damages, including the Basket;
provided, however, the maximum Liability of the Warrantors shall be limited to
an amount equivalent to US$68,850,000, except for fraud, intentional
misrepresentation and taxes;

       

      (ii) All
indemnification claims shall have been asserted prior to the Remaining Holdback
Consideration Release Date; provided, however, indemnification claims based on
(A) fraud and intentional misrepresentation and taxes shall survive indefinitely
and (B) Known Liabilities set forth in each of Sections 11.01(c)(i) and
11.01(c)(ii) shall survive until the fifth anniversary of the Closing
Date;

       

      (iii) With
regard to a third party claim, an Indemnifying Person shall not have any
obligation to indemnify or hold harmless an Indemnified Person(s) for any
settlement entered into by such Indemnified Persons without the Indemnifying
Person’s prior written consent after the Closing of this Agreement, which shall
not be unreasonably withheld; and

       

      (iv) In
satisfying any or all claims under the Transaction Documents and all other
agreements in connection with the AutoChina Acquisition to which any Warrantor
is a party and any exhibits or schedules attached hereto or thereto, SCAC may
elect, at its sole discretion, to have the relevant claim satisfied (in whole or
in part) by transfer of such number of SCAC Ordinary Shares to the Indemnified
Person, provided, that the value of the SCAC Ordinary Shares shall be equal to
the product of (A) the number of SCAC Ordinary Shares being used to satisfy such
claim and (B) the average closing price of SCAC Ordinary Shares for fifteen (15)
consecutive trading days ending on the first (1st) trading day prior to the date
such shares are actually delivered to the Indemnified Person.

       

      (c) Known
Liabilities.  “Known Liabilities”
shall mean all Damages incurred related to any of the items listed in this
Section 11.01(c) and shall be considered Damages without regard to whether or
not such Damages are disclosed on the Disclosure Schedule and without regard to
whether or not amounts have been accrued for such Damages in the
financials:

       

      (i) Real
Property, including but not limited to, any Group Company’s (I) use of
collectively-owned land for non-agricultural purposes, (II) failure to obtain
building ownership certificates and proper construction approvals for any
premises it has built on leased land, (III) failure to properly register any
lease with the applicable governmental authorities, and (IV) any payment
obligations or liabilities that arise pursuant to any lease set forth on Schedule
G;

       

      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      

       

      (ii) Restructuring,
including but not limited to, any Group Company’s failure to execute all
applicable control agreements, any failure of payment of share transfer prices
related to the Restructuring by any Group Company, and the failure of any Group
Company to notify or obtain consent from the relevant parties for the
Restructuring;

       

      (iii) any
inter-company lending or withdrawal of registered capital contribution by any
Warrantor or Group Company in violation of applicable laws;

       

      (iv) Licenses
and Permits, including but not limited to, the failure of any Group Company to
have the appropriate business scope or to receive the appropriate
qualifications, including but not limited to road transportation operations
permits and insurance agency permits for the operation of its business, the
failure of any Warrantor or Group Company to register with SAFE pursuant to the
SAFE Circulars, and the failure of any Warrantor or Group Company to obtain the
Licenses and Permits set forth in Sections 7.08 and 7.09;

       

      (v) the
failure of any Group Company to obtain consents for its investments that are
required pursuant to the guarantee agreements set forth on Schedule R;

       

      (vi) the
failure of any Group Company to enter into labor contracts with all of its
employees or to make mandatory social insurance contributions for all of its
employees; and

       

      (vii) any
Historical Tax Liabilities or the failure to make adequate social insurance
contributions, housing fund contributions, or related employment taxes and
liabilities.

       

      Section
11.02 Method of Asserting
Claims.  Upon presentation of a written notice from an
Indemnified Person to a Warrantor for indemnification which states a good faith
determination of the amount of its Damages (“Damages
Determination”), the Indemnified Person shall have the right to recover
its Damages from the Warrantors.  Such notice shall include facts
constituting the basis for such claim, provided, that failure to give such
notice shall not affect any rights or remedies of the Indemnified Person
hereunder with respect to the indemnification of Damages except to the extent
the Indemnifying Party is materially and irrevocably prejudiced
thereby.  If the Warrantors disagree in good faith with the Damages
Determination from the Indemnified Person, they shall have ten (10) days from
the Indemnified Person’s delivery of notice of its Damages Determination to
deliver to the Indemnified Person written objections to the Damages
Determination.  The Warrantors may, by written notice to the
Indemnified Person, waive or shorten such period for objection.  After
receipt of any such written notice, an authorized representative of each of the
Warrantors and the Indemnified Person shall promptly negotiate with respect to
the Damages Determination and the objections thereto, and if they are unable to
reach an agreement within thirty (30) Business Days after delivery to the
Indemnified Person of the objections to the Damages Determination, the dispute
shall be submitted to arbitration pursuant to Section 12.09
hereof.  Any disputed portion of the Damages Determination amount that
is subsequently paid by the Warrantors shall bear interest at the rate of ten
percent (10%) per annum from the date such payment otherwise would have been
made in the absence of such dispute. 

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

       

      Section
11.03 Setoff.  In
connection with Sections 1.02(b)(iv) and 11.02, any and all amounts claimed by
an Indemnified Person pursuant to Section 11.02 above in connection with Damages
for which the Indemnified Person has delivered a notice to the Warrantors may be
set-off, at SCAC’s sole direction, against any unpaid amounts by SCAC due to the
Warrantors.  In the event the Warrantors object to SCAC’s set-off, the
dispute shall be subject to Section 12.09, provided, that SCAC shall not be
required to make any unpaid amounts that it has set-off unless, until and to the
extent it is so ordered to do so in a final and binding award of an arbitration
tribunal pursuant to an arbitration conducted in accordance with Section
12.09.  

       

      ARTICLE
12

       

      GENERAL
PROVISIONS

       

      Section
12.01 Expenses.  Except
as otherwise provided herein, all costs and expenses, including, without
limitation, fees and disbursements of the Warrantors, incurred in connection
with the preparation of this Agreement and the transactions contemplated hereby
shall be paid by Founder and FounderCo incurring such costs and expenses,
whether or not the Closing shall have occurred.  The Parties hereto
acknowledge and agree that certain expenses of SCAC will be deferred until the
Closing to be paid out of funds currently held in the trust account referred to
in Section 12.13.

       

      Section
12.02 Notices.  All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered or mailed if delivered personally or by nationally recognized courier
or mailed by registered mail (postage prepaid, return receipt requested) at the
following addresses (or at such other address for a Party as shall be specified
by like notice, except that notices of changes of address shall be effective
upon receipt):

       

      
        	
                 
      

              	
                (a)

              	
                If
      to the Group Companies:

              

      

       

      No.322
Zhong Shan East Road,

      Shijiazhuang
City, Hebei 050011, People’s Republic of China

      Attention:
Chief Executive Officer

       

      
        	
              	
                (b) 

              	
                If
      to FounderCo:

              

      

       

      Room
3713, The Center, 99 Queen’s Road Central, Hong Kong

      Attention:
Lynch Consultancy Limited

       

      
        	
              	
                (c) 

              	
                If
      to Founder:

              

      

       

      7375
Union St.,

      Burnaby
BC, V5A, 1J1, Canada

      Attention:
Li Yonghui

       

      
        	
              	
                (d) 

              	
                If
      to Wang:

              

      

       

      7375
Union St.,

      Burnaby
BC, V5A, 1J1, Canada

      Attention:
Yan Wang

       

      
        	
              	
                (e) 

              	
                If
      to SCAC:

              

      

       

      10F,
Room#1005, Fortune Int’l Building, No. 17

      North
DaLiuShu Road, Hai Dian District

      Beijing
100081, People’s Republic of China

      Attention:
James Sha

       

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      

       

      Section
12.03 Amendment.  This
Agreement may not be amended or modified except by an instrument in writing
signed by the Parties.  Notwithstanding the foregoing, the Warrantors
hereby agree that any New Subsidiary may become party to this Agreement as a
“Group Company”, “Subsidiary”, and “Warrantor”, by executing a counterpart of
this Agreement, without any amendment of this Agreement, pursuant to this
Section 12.03 or any consent or approval of any Party.

       

      Section
12.04 Waiver.  At
any time prior to the Closing, each Party may (a) extend the time for the
performance of any of the obligations or other acts of the any other Party, (b)
waive any inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto and (c) waive compliance with any of
the agreements or conditions contained herein.  Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the Party to be bound thereby.

       

      Section
12.05 Headings.  The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.

       

      Section
12.06 Severability.  If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any Party.  Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.

       

      Section
12.07 Entire
Agreement.  This Agreement and the Schedules hereto constitute
the entire agreement and supersede all prior agreements and undertakings, both
written and oral, between the Warrantors and SCAC with respect to the subject
matter hereof and, except as otherwise expressly provided herein, are not
intended to confer upon any other person any rights or remedies hereunder.

       

      Section
12.08 Benefit.  This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Parties. 

       

      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      

       

      Section
12.09 Arbitration.

       

      (a) Any
dispute, controversy or claim arising out of or relating to this Agreement, or
the interpretation, breach, termination or validity hereof, shall be resolved in
accordance with this Section 12.09.  Any dispute, controversy or claim
arising out of or relating to this Agreement, or the interpretation, breach,
termination or validity hereof, shall be initially be resolved through
consultation.  Such consultation shall begin immediately after one
Party hereto has delivered to the other Parties hereto a written request for
such consultation.  If within thirty (30) days following the date on
which such notice is given the dispute cannot be resolved, the dispute shall be
resolved by arbitration.

       

      (b) The
arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “Centre”).  There
shall be three arbitrators.  SCAC, on the one hand, and the Warrantors
that are party to the dispute (the “AutoChina Parties”),
on the other hand, shall each select one (1) arbitrator within thirty (30) days
after giving or receiving the demand for arbitration.  The Chairman of
the Centre shall act as the third arbitrator.  If SCAC or the
AutoChina Parties that are parties to the dispute do not appoint an arbitrator
who has consented to participate within thirty (30) days after selection of the
first arbitrator, the relevant appointment shall be made by the Chairman of the
Centre.

       

      (c) The
arbitration proceedings shall be conducted in English.  The
arbitration tribunal shall apply the UNCITRAL Arbitration Rules in effect at the
time of the arbitration.  However, if such rules are in conflict with
the provisions of this Section 12.09 including the provisions concerning the
appointment of arbitrators, the provisions of this Section 12.09 shall
prevail.

       

      (d) The
arbitrators shall decide any dispute submitted by the Parties to the arbitration
strictly in accordance with the substantive law of the State of New York and
shall not apply any other substantive law, except to the extent required by the
terms of this Agreement.

       

      (e) Each
Party hereto shall cooperate with the others in making full disclosure of and
providing complete access to all information and documents requested by the
others in connection with such arbitration proceedings, subject only to any
confidentiality obligations binding on such Party.

       

      (f) The award
of the arbitration tribunal shall be final and binding upon the disputing
Parties, and any Party may apply to a court of competent jurisdiction for
enforcement of such award.

       

      (g) Each
Party shall cooperate and use their respective best efforts to take all actions
reasonably required to facilitate the prompt enforcement in the PRC or in any
other jurisdiction of any arbitration award made by the tribunal.

       

      (h) A Party
shall be entitled to seek preliminary injunctive relief, if possible, from any
court of competent jurisdiction pending the constitution of the arbitral
tribunal.

       

      Section
12.10 Waiver of
Immunity.  To the extent that each of the Parties (including
its assignees of any such rights or obligations hereunder) may be entitled, in
any jurisdiction, to claim for itself (or himself or herself) or its revenues or
Assets and Properties, immunity from service of process, suit, the jurisdiction
of any court, an interlocutory order or injunction or the enforcement of the
same against its property in such court, attachment prior to judgment,
attachment in aid of execution of an arbitral award or judgment (interlocutory
or final) or any other legal process, and to the extent that, in any such
jurisdiction there may be attributed such immunity (whether claimed or not),
such Party hereby irrevocably waive such immunity. 

       

      
        
          
          

        

        
          58

          
            

          

        

        
          
          

        

      

       

      Section
12.11 Governing
Law.  This Agreement shall be governed by, and construed in
accordance with, the law of the state of New York. 

       

      Section
12.12 Counterparts.  This
Agreement may be executed in one or more counterparts, and by the different
Parties in separate counterparts, each of which when executed shall be deemed to
be an original but all of which when taken together shall constitute one and the
same agreement.

       

      Section
12.13 Trust
Account.  Reference herein is made to SCAC’s final prospectus,
dated February 27, 2008 (the “Prospectus”).  Each
of the Parties hereto other than SCAC has read the Prospectus and understands
that SCAC has established the trust account described in the Prospectus,
initially in an amount of US$35,460,000 for the benefit of the public
shareholders and the underwriters of SCAC’s initial public offering (the “Underwriters”) and
that, except for certain exceptions described in the Prospectus, SCAC may
disburse monies from the trust account only: (i) to the public shareholders in
the event of the conversion of their shares or the liquidation of SCAC; or (ii)
to SCAC and the Underwriters after consummation of a business combination, as
described in the Prospectus.  Each of the Parties hereto other than
SCAC hereby agrees that it does not have any right, title, interest or claim of
any kind in or to any monies in the trust account (the “Claim”) and hereby
waives any Claim it may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with SCAC and will not seek recourse
against the trust account for any reason whatsoever.

       

      
        
          
          

        

        
          59

          
            

          

        

        
          
          

        

      

       

       

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      SCHEDULE
C

      

      TARGETED
EBITDA GROWTH

      

      Earn-Out
Consideration Percentage (%) is equivalent to the percentage (%) set forth below
each of the respective thresholds for each of the applicable fiscal years ended
December 31.  Notwithstanding the foregoing, such Earn-Out
Consideration Percentage (%) is only applicable in the event that SCAC achieves
EBITDA of at least the amount set forth in parenthesis immediately following
each of the applicable fiscal years ended December 31 set forth
below.  For purposes of this Schedule C “G”
shall mean Targeted EBITDA Growth.

      

      
        
          	
                  FY ending 12/31

                	 	 	
                  G > 30%

                	 	 	
                  G > 40%

                	 	 	
                  G > 50%

                	 	 	
                  G > 60%

                	 	 	
                  G > 70%

                	 	 	
                  G > 80%

                	 	 	
                  G > 90%

                	 
	2009
      (US$22.50MM)	 	 	 	5.0	%	 	 	7.5	%	 	 	10.0	%	 	 	12.5	%	 	 	15.0	%	 	 	17.5	%	 	 	20.0	%
	2010
      (US$29.25MM)	 	 	 	5.0	%	 	 	7.5	%	 	 	10.0	%	 	 	12.5	%	 	 	15.0	%	 	 	17.5	%	 	 	20.0	%
	2011
      (US$38.03MM)	 	 	 	5.0	%	 	 	7.5	%	 	 	10.0	%	 	 	12.5	%	 	 	15.0	%	 	 	17.5	%	 	 	20.0	%
	2012
      (US$49.44MM)	 	 	 	5.0	%	 	 	7.5	%	 	 	10.0	%	 	 	12.5	%	 	 	15.0	%	 	 	17.5	%	 	 	20.0	%
	2013
      (US$64.27MM)	 	 	 	5.0	%	 	 	7.5	%	 	 	10.0	%	 	 	12.5	%	 	 	15.0	%	 	 	17.5	%	 	 	20.0	%EXHIBIT
10.1

     

    FIRST AMENDMENT TO EXECUTIVE
EMPLOYMENT AGREEMENT

    

    THIS
FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this “Amendment”) is made and
entered into effective as of the 31st day of December, 2008, by and between
MULTIMEDIA GAMES, INC., a Delaware corporation (the “Company”), and ANTHONY
SANFILIPPO (the “Executive”).

    

    WHEREAS, the Company and the
Executive entered into that certain Executive Employment Agreement dated June
15, 2008 (as amended, modified and supplemented from time to time, the “Employment Agreement”);
and

    

    WHEREAS, the parties desire to
amend the Employment Agreement pursuant to the terms conditions and conditions
contained herein;

    

    NOW, THEREFORE, in
consideration of the premises, the mutual covenants herein contained and for
other good and valuable consideration, the receipt, adequacy and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as
follows:

    

    
      	
              1.

            	
              Terms.  Capitalized
      terms used herein and not otherwise defined herein (including, without
      limitation, in the language amendatory to the Employment Agreement) shall
      have the respective meanings given such terms in the Employment
      Agreement.

            

    

    

    
      	
              2.

            	
              Schedule
      1.8.2 entitled “Termination Without Cause;
      Resignation for Good Reason” shall be deleted in its entirety and
      replaced with the following
paragraph:

            

    

    

    1.8.2 Termination Without Cause;
Resignation for Good Reason.  Subject to the provisions set
forth in Section
1.8.3, in the case of a termination of Executive’s employment
hereunder  Without Cause in accordance with Section 1.7.4 above,
or Executive’s resignation with Good Reason, the Company (i) shall pay Executive
(A) in the event that the Termination takes place on or before June 15, 2009,
one year of Base Salary continuation (to be paid in accordance with the
Company’s normal payroll practices) and Target Bonus (Target Bonus to be paid at
the end of the year), subject to the tax withholding specified in Section 1.4.1 above
or (B) in the event that the Termination takes place after June 15, 2009, two
years of Base Salary continuation (to be paid in accordance with the Company’s
normal payroll practices) and two years of Target Bonus (Target Bonuses to be
paid at the end of each year); such payments must not however extend beyond the
second taxable year of the Executive following the taxable year in which the
termination of employment occurred; and (ii) if Executive elects to continue
health coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), for a period up to
one year after the termination, the Company will pay Executive’s premiums, in an
amount sufficient to maintain the level of health benefits in effect on
Executive’s last day of employment.  Further, subject to the
provisions set forth in Section 1.8.3, in the
event that there is a Change of Control and within one year after the closing of
the Change of Control, Executive is terminated Without Cause or resigns for Good
Reason, (i) the Company shall pay Executive a lump sum equal to two years of
Base Salary continuation and two years of Target Bonus, such lump sum payment
must be made within 60 days of such termination of employment; (ii) if Executive
elects to continue health coverage under the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”), for a period up to
one year after the termination, the Company will pay Executive’s premiums, in an
amount sufficient to maintain the level of health benefits in effect on
Executive’s last day of employment; and (iii) the Option will immediately vest
as set forth in Section
1.5.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    For purposes of this Agreement, “Good Reason” means the
occurrence of any of the following:  (i) the assignment to Executive
of duties materially inconsistent with his status as President and Chief
Executive Officer of the Company or a material adverse alternation in the nature
or status of his responsibilities, duties or authority; (ii) the requirement
that Executive report to anyone other than the Board of Directors or a committee
thereof; (iii) the failure of Executive to be nominated for election as a member
of the Board of Directors; (iv) a material reduction by the Company in
Executive’s then Base Salary or Target Bonus, a material reduction in other
benefits, or the failure by the Company to pay Executive any material portion of
his current compensation when due; (v) a requirement that Executive report to a
primary work location that is more than 50 miles from the Company’s current
location in Austin, Texas; (vi) the Company requiring Executive either (a) to be
based anywhere other than the location of the Company’s principal offices in
Austin (except for required travel in the Company’s business to an extent
substantially consistent with Executive’s present business obligations) or (b)
to remove recognition of home offices in Germantown, Tennessee and Salt Lake
City, Utah; or (viii) the failure of the Executive and a successor company to
reach a mutually agreeable employment agreement, so long as Executive is willing
and able to execute a new contract that substantially provides similar terms and
conditions to this Agreement.  Notwithstanding the foregoing,
Executive’s resignation shall not be treated as a resignation for Good Reason
unless (a) Executive notifies the Company in writing of a condition constituting
Good Reason within 60 days following Executive’s knowledge of its initial
occurrence; (b) the Company fails to remedy such condition within 30 days
following such written notice (the “Remedy Period”); and (c)
Executive resigns within 30 days following the expiration of the Remedy
Period.  In addition the termination must occur within two years of
the occurrence of one of the above enumerated events.

     

    
      	
              3.

            	
              Section
      4.2, entitled Section 409A shall be
      deleted in its entirety and replaced by the
  following:

            

    

    4.2.           Section
409A.  Notwithstanding any inconsistent provision of this
Agreement, to the extent the Company determines in good faith that (a) one or
more of the payments or benefits received or to be received by Executive
pursuant to this Agreement in connection with Executive’s termination of
employment would constitute deferred compensation subject to the rules of
Section 409A of the Code (“Section 409A”) and (b)
Executive is a “specified employee” under Section 409A, then only to the extent
required to avoid Executive’s incurrence of any additional tax or interest under
Section 409A, such payment or benefit will be delayed until the earliest date
following Executive’s “separation from service” within the meaning of Section
409A which will permit Executive to avoid such additional tax or
interest.  The Company and Executive agree to negotiate in good faith
to reform any provisions of this Agreement to maintain to the maximum extent
practicable the original intent of the applicable provisions without violating
the provisions of Section 409A, if the Company deems such reformation necessary
or advisable pursuant to guidance under Section 409A to avoid the incurrence of
any such interest and penalties.  Such reformation shall not result in
a reduction of the aggregate amount of payments or benefits under this
Agreement.  Any payments under this Agreement that are deemed subject
to Section 409A shall be subject to the following terms and
provisions:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              4.2.1

            	
              Nonassignability.  The
      Executive, nor any other person shall have the right to commute, sell,
      assign, transfer, pledge, anticipate, mortgage, or otherwise encumber,
      transfer, hypothecate, alienate, or convey in advance of actual receipt,
      the amounts, if any, payable under this Agreement that are deemed under
      Section 409A to be “deferred compensation” (“Deferred Compensation”),
      or any part thereof, and all rights to such payments are expressly
      declared to be, unassignable and non-transferable.  Subject to
      Section 4.2.3 below, no part of the amounts payable shall, prior to actual
      payment, be subject to seizure, attachment, garnishment, or sequestration
      for the payments of debts, judgments, alimony or separate maintenance owed
      by Executive or any other person, be transferable by operation of law in
      the event of a Executive’s or any other person’s bankruptcy or insolvency,
      or be transferable to a spouse as a result of a property settlement or
      otherwise.  Any purported assignment, encumbrance or transfer of
      any nature before actual receipt shall be null and
  void.

            

    

     

    
      	
               
      

            	
              4.2.2

            	
              No Suspension of
      Severance.  Once the deferred compensation payments
      commence, such payments shall continue to be made, except as otherwise
      permitted under Section 409A.

            

    

     

    
      	
               
      

            	
              4.2.3

            	
              Set-Off.  Notwithstanding
      any provision herein or any agreement to the contrary, the Company shall
      not have
      any right to offset against any Deferred Compensation benefits payable
      under this Agreement until such benefit is distributable to Executive or
      his/her beneficiary or as otherwise allowed under
      Section 409A.

            

    

     

    
      	
               
      

            	
              4.2.4

            	
              Acceleration of
      Benefits.  The Company may not accelerate any Deferred
      Compensation benefits.  Notwithstanding the previous sentence,
      the Company may permit any acceleration that is allowed under Section
      409A.

            

    

     

    
      	
               
      

            	
              4.2.5

            	
              Compliance with
      Section 409A.  The provisions of  this
      Agreement shall be interpreted and administered consistent with
      Section 409A, Treasury Regulations and other applicable guidance
      issued under Section 409A and shall incorporate the terms and provisions
      required by Section 409A.  If any provision herein would cause
      noncompliance with Section 409A, such provision shall be disregarded
      and this Employment Agreement shall be construed and administered as if
      such provision were not a part of this Employment
    Agreement.

            

    

     

    

    
      	
              4.

            	
              Ratification.  The
      Employment Agreement, as herein amended, remains in full force and effect
      in accordance with its terms, and the Company and the Executive hereby
      ratify and confirm the same.  The Company and the Executive
      agree that no event of default or default has occurred and is continuing
      under the Employment Agreement, as herein
  amended.

            

    

    

    
      	
              5.

            	
              Law
      Governing.  This Amendment shall be governed by and
      interpreted in accordance with the laws of the State of
    Texas.

            

    

    

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    This First Amendment to Executive
Employment Agreement is executed on the 31st day of December, 2008.

    

    
       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	 
      	
                                            “COMPANY”

                                          	 
	 
      	 
      	 
      	 
	 
      	
                                            MULTIMEDIA
      GAMES, INC.

                                          	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	By:	
                                            /s/
      Neil E. Jenkins

                                          	 
	 
      	
                                             

                                          	
                                            NEIL
      E. JENKINS

                                          	 
	 
      	
                                             

                                          	
                                            Chairman
      Compensation Committee

                                          	 
	 
      	 
      	 
      	 
	 
      	
                                            “EXECUTIVE”

                                          	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	      
                                            /s/
      Anthony M. Sanfilippo

                                          	 
	 
      	
                                             

                                          	
                                            ANTHONY
      M. SANFILIPPO

                                          	 

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

           

           

           

           

           

          
            
              
              

            

            
              4

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