Document:

Exhibit 10.10

 

	
 
    	
This is an English Translation
    
	
 
    	
 
    
	
 
    	
Contract   Number:
    

 

Equity Exchange Contract

 

Target Company: Beijing Beichen Auto Rental Company

 

Prepared by Beijing Equity Exchange

 

March 2011

 

 

Notes to Contract

 

I.              This Contract is the model contract prepared in accordance with the PRC Contract Law, Tentative Measures on Administration of Enterprise State-owned Equity Transfer and Practice Rules on Enterprise State-owned Equity Exchange. The terms of this Contract are model terms and used by the parties to equity exchange at their own discretion. The parties may make amendments, adjustments or supplementations based on the text of this Contract according to the actual situation.

 

II.            In order to better safeguard the rights and interests of the contractual parties, both parties should be prudent and detail-oriented when signing the contract. For matters irrelevant to the circumstances provided by the terms of this Contract, a description such as “these terms shall not be applicable to this Contract” may be added in, or the relevant terms can be deleted directly.

 

III.           Transferor shall refer to the legal person, natural person or other entity that owns the equities or shares of the target enterprise and is able to transfer such equities or shares according to laws. Transferee shall refer to the legal person, individual or other entity that accepts the transfer of the equities or shares by payment of certain consideration according to laws. If the relevant party is an natural person, his/her name and ID number should be provided in the general introduction of the party.

 

IV.           Transfer Target: the equity exchange contemplated by this Contract shall refer to the transfer with consideration of the equities or shares of the target enterprise owned by the capital contributors or the shareholders. Transfer target refers to the target of such equity exchange, including all or part of the investment interests of a non-corporate enterprise, all or part of shares of a limited liability company, non-listed stock company or a stock cooperative enterprise, and other capital interests that are transferable in accordance with laws.

 

V.            Target Enterprise shall refer to the enterprise in which the transferor owns the equities or shares by way of capital contribution, such as a non-corporate enterprise, a limited liability company, a non-listed stock company, stock cooperative enterprise, etc. separately invested by the transferor or jointly invested by the transferor with others.

 

VI.           Beijing Equity Exchange solemnly states that this model contract is only used by the parties who conduct equity exchange in this Exchange at their own discretion based on their actual situation. This Exchange shall not take any responsibilities for guarantee due to the preparation and/or provision of this Contract, including but not limited to guarantee for the completeness of the terms of this model contract, guarantee for the true intention of the contractual parties, guarantee for the signing competency of the contractual parties, guarantee for the truthfulness and accuracy of the statements and undertakings made and the documents and materials provided by the transactional parties for the execution of this Contract.

 

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The Parties

 

Transferor (“Party A”): Beijing North Star Industrial Group

Registered Address/Domicile: No. 8 Beichen East Road, North Si Huan Zhong Road, Chaoyang District, Beijing

Legal Representative: Sha Wanquan

Telephone: 010-84980325  Zip Code: 100101

Opening Bank:  Bank Account:

Brokerage Member of Transferor: Beijing Jin Yang Tai He Investment Consultancy Co., Ltd.

Telephone:

 

Transferee (“Party B”): Beijing China Auto Rental Co., Ltd.

Registered Address/Domicile: Room 2801, Block A, No. 2 Wang Jing Zhong Huan Nan Lu, Chaoyang District, Beijing

Legal Representative: Lu Zhengyao

Telephone: 010-58209988  Zip Code: 100102

Opening Bank:Bank of Communications, Beijing Dong Dan Bei Da Jie Branch

Bank Account: 

Brokerage Member of Transferee: Beijing Enterprise Liquidation Co., Ltd.

Telephone: 88498283

 

Whereas:

 

1              Party A is an enterprise legal person established on 8 August 1992 and legally existing in accordance with PRC laws and a state-owned enterprise under State-owned Assets Supervision and Administration Commission of People’s Government of Beijing Municipality (registration certificate number: 1100001500118 (4-1));

 

2              Beijing Beichen Auto Rental Company, the target enterprise referred to by this Contract (“Target Enterprise”), is a legally existing enterprise legal person with all the equities legally held by Party A and having an independent enterprise legal person status (registration certificate number: 110105002270732);

 

3              Party B is a limited liability company duly established and legally existing in accordance with PRC laws (registration certificate number: 110105010519225);

 

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4              Party A intents to transfer all the equities legally held in the Target Enterprise; and Party B intents to acquire such equities.

 

In accordance with the PRC Contract Law and the Tentative Measures on Administration of Enterprise State-owned Equities Transfer and other relevant laws, regulations and rules, based on the principle of free will, fairness and good faith and through friendly consultation, Party A and Party B have reached the following agreement and entered into this Equity Exchange Contract (“this Contract”) in relation to Party A transferring all the equities owned in Beijing Beichen Auto Rental Company to Party B.

 

ARTICLE 1  DEFINITION AND INTERPRETATION

 

Unless otherwise provided by this Contract, the relevant terms in this Contract shall have the following meanings:

 

1.1           Transferor shall refer to Beijing North Star Industrial Group, i.e. Party A;

 

1.2           Transferee shall refer to Beijing China Auto Rental Co., Ltd., i.e. Party B;

 

1.3           Beijing Equity Exchange shall refer to the venue where equity exchange is conducted and its owner Beijing Equity Exchange Co., Ltd.;

 

1.4           Equity Transfer shall refer to Party A’s transferring of all the equities held in the Target Enterprise to Party B;

 

1.5           Transfer Price shall refer to the consideration received by Party A from Party B in relation to the transfer of equities;

 

1.6           Intellectual Property shall refer to all the intellectual properties owned, licensed to and used by the Target Enterprise, no matter whether such intellectual properties are protected, created or generated under the laws of PRC or any other jurisdictions, including all the patents and applications therefor and all similar rights generated under the laws of any jurisdictions (“Patents”); all trademarks, service marks, trade names, service names, brand names, right of commercial arrangement, logos, internet domain names, company names and other similar intangible properties (“Logos”); registered and unregistered copyrights and the registrations and applications therefor (“Copyrights”); concepts, ideas, R&Ds, proprietary technologies, plans, inventions, creations, manufacturing and production processes and technologies, technological data, programs, designs, drawings, specifications, databases, client lists, supplier lists, price and cost information, business and marketing plans and proposals and other proprietary or confidential information of the Target Enterprise (“Trade Secrets”); all the software and technologies of the Target Enterprise; and the copies or tangible bearers of the foregoing matters;

 

1.7           License of Intellectual Property shall refer to the right to use any intellectual property granted by the Target Enterprise to any other person, and any right to use the intellectual property of other person granted by such person to the Target Enterprise;

 

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1.8           Material Adverse Effect shall refer to such effect that occurred to the finance or business, assets, properties, revenues and prospects of the Target Enterprise which are reasonably expected to separately or jointly incur any changes or effect which may cause Material Adverse Effect on (i) the business, assets, properties, operational results, (financial or other) status of the Target Enterprise and prospects of any past, recent or long-term plans, (ii) the completion of the proposed transaction under this Contract by the parties, (iii) the value of the Target Enterprise, or (iv) the ability of the Transferor to complete the transaction under this Contract or perform its obligations under this Contract;

 

1.9           Appraisal Benchmark Date shall refer to the benchmark date on which the accounting firm entrusted by Party A with legal qualifications carries out the appraisal and issues the Assets Appraisal Report, i.e. 31 January 2010;

 

1.10         Security Deposit shall refer to transaction security deposit in RMB10 million advanced by Party B to the designated account of Beijing Equity Exchange according to the requests from Party A and Beijing Equity Exchange prior to the entering into of this Contract to provide security for the acquisition intention of Party B and show Party B’s credit standing and performance ability;

 

1.11         Approval Authority shall refer to the Ministry of Commerce of the People’s Republic of China, China Securities Regulatory Commission and other authority and its local authorized branch with approval authority pursuant to laws and regulations;

 

1.12         Registration Authority shall refer to the State Administration for Industry and Commerce of the People’s Republic of China or its local authorized branch;

 

1.13         Completion of Equities/Shares Transfer shall refer to recording the equities/shares transfer by Party A and Party B into the shareholders’ register and the completion of the formalities in relation to industrial and commercial registration alteration; or handling the transfer formalities with the equity escrow institution and the completion of the formalities in relation to industrial and commercial registration alteration.

 

1.14         Transitional Period shall refer to the period between the Appraisal Benchmark Date and the Completion Date.

 

1.15         Equity Transfer Costs shall refer to the costs and expenses incurred by the Transferor and/or the Transferee or the Target Enterprise in relation to the transfer of equities, or the negotiation, preparation and execution of this Contract and/or any documents under this Contract, or the implementation or completion of the transaction under this Contract, including any costs and expenses incurred to receive the necessary or appropriate waivers, consents or approvals of any governmental authorities or third parties; and the total cash costs and expenses such as equity exchange fees, brokerage fees or intermediary fees.

 

1.16         Equity Exchange Certificate shall refer to the certificate issued by Beijing Equity Exchange in relation to the transfer of equities/shares to show that the procedures of on-exchange trading have been completed in accordance with the rules of exchange.

 

Unless otherwise expressly provided, the following interpretation rules shall be applied in this Contract:

 

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1.17         Calculation of a certain period: if any actions or steps are proposed to be taken prior to, during or after a certain period in accordance with this Contract, when calculating this period, the date which is treated as the benchmark date for calculating such period shall be excluded. If the last date of such period is a non-business date, such period shall be extended to the end of following first business date.

 

1.18         Currency: all the references to RMB or Renminbi in this Contract shall refer to the legal currency of China, and all the references to $ or US dollars shall refer to the legal currency of the USA.

 

1.19         Including shall refer to including without limitation.

 

ARTICLE 2 TARGET OF EQUITY TRANSFER

 

2.1           The target of transfer under this Contract shall be all the equities held by Party A in the Target Enterprise (hereinafter referred to as Equities).

 

2.2           The capital subscribed by Party A for the Transfer Target held by it, i.e. RMB35 million, has been fully contributed.

 

2.3           There is no security in any form imposed on the Transfer Target, including but not limited to the pledge imposed on such equity, or any restrictions or obligations that may affect the Equity Transfer. The Transfer Target is not imposed with any mandatory measures, such as attachment, by any competent authorities.

 

ARTICLE 3 TARGET ENTERPRISE

 

3.1           Beijing Beichen Auto Rental Company, the Target Enterprise referred to by this Contract, is a legally existing state wholly-owned enterprise with all its contributors’ interests legally held by Party A and having an independent enterprise legal person status.

 

3.2           The Target Enterprise owns the legal approvals or permits to operate in the following scope of business:

 

(1)           Road Transportation Operation Permit [Lin Guan Zi Zhao No. (0019)];

 

(2)           Road Transportation Operation Permit [Xiu Zi (110105003139)];

 

(3)           Road Transportation Operation Permit [Xiu Zi (110105003139)].

 

3.3           The Target Enterprise owns the ownership right of the following fixed and non-fixed assets:

 

All the machineries, equipment, facilities, products, products in process (including equipment materials and all the records, spare parts, office wares of the Target Enterprise) located in the plant of the Target Enterprise.

 

3.4           All the assets of the Target Enterprise are subject to appraisal carried out by Beijing Tian Jian Xing Ye Assets Appraisal Co., Ltd. which has issued the Assets Appraisal Report with 31 January 2010 as the appraisal benchmark date.

 

3.5           The Target Enterprise has no circumstances that are not disclosed or have been omitted and may influence the appraisal result in the Assets Appraisal Report as referred to in clause 3.4 and the Final Audit Report as referred to in clause 7.6.

 

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3.6           The Target Enterprise has collated a Property and Material List which incorporates the relevant title certificates, approval letters, financial statements, assets lists, records, seals, engineering diagrams, technical assets and other documents and materials.

 

3.7           Party A and Party B enter into each terms of this Contract on the basis that the Target Enterprise owns the above assets and based on the appraisal result of the Assets Appraisal Report.

 

ARTICLE 4 CONDITIONS TO EQUITY TRANSFER

 

4.1           Party A has completed the legal approval or filing procedures pursuant to laws in relation to the Restructuring Plan of the Target Enterprise as referred to in this Contract.

 

4.2           Party A has completed the legal voting procedures pursuant to laws in relation to the Staff Relocation Plan involved in the restructuring of the Target Enterprise.

 

4.3           Party A has completed the public listing procedures at Beijing Equity Exchange in accordance with the relevant laws, regulations and policies in relation to the equity exchange under this Contract.

 

4.4           Party B has completed the necessary approval or authorization procedures in relation to accepting the transfer of Transfer Target owned by Party A in accordance with the provisions of this Contract.

 

ARTICLE 5  WAY OF EQUITY TRANSFER

 

The Equity Transfer under this Contract has been publicly listed at Beijing Equity Exchange on 21 January 2011, and during the listing period, there is only Party B expressing acquisition intention who will accept the transfer of Transfer Target under this Contract in accordance with laws.

 

ARTICLE 6  EQUITY TRANSFER PRICE AND PAYMENT

 

6.1           Transfer Price

 

Pursuant to the result of public listing, Party A will transfer the Transfer Target under this Contract to Party B at a price of Renminbi thirty five million five hundred and sixty one thousand and one hundred (i.e. RMB35,561,100). Party B shall pay the Security Deposit as required by Party A and Beijing Equity Exchange which will be converted into part of the Transfer Price.

 

6.2           Quote Currency

 

The forgoing Transfer Price shall be quoted in RMB.

 

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6.3           Way of Transfer Price Payment

 

Party B shall make a one lump payment by remitting the Transfer Price to the settlement account designated by Beijing Equity Exchange within thirty days after the this Contract takes effect.

 

ARTICLE 7 CLOSING MATTERS OF EQUITY TRANSFER

 

7.1           Party A and Party B shall perform or assist with the performance of obligations to report to the Approval Authority, and shall make their best endeavors to cooperate with the reasonable demands and inquiries raised by any Approval Authority in order to obtain the approvals from the Approval Authority in relation to this Contract and the equity exchange hereunder.

 

7.2           Within five working days after the certificate issued by Beijing Equity Exchange in relation to the equity exchange under this Contract is obtained, Party B shall handle the formalities in relation to share equity alteration registration with the Registration Authority, and Party A shall provide the necessary assistance and cooperation. The date on which the Registration Authority completes the share equity alteration registration formalities and issues the new enterprise business license shall be deemed as the completion date of Equity Transfer.

 

7.3           Within three days since the closing date of Equity Transfer, both parties shall discuss and confirm the detailed date and venue to handle the closing matters in relation to Equity Transfer. Party A shall hand over the assets and assets lists, title certificates, approval letters, financial statements, records, seals, engineering diagrams, technical assets of the Target Enterprise to Party B according to the Property and Material List of the Target Enterprise as referred to in clause 3.6 hereof for Party B’s inspection and acceptance.

 

7.4           Party A shall be responsible for the completeness and truthfulness of the above materials provided by it and the consistency of such materials with the real situations of the Target Enterprise, and shall take all legal liabilities arising from any concealments or misstatements.

 

7.5           Party B shall obtain the power of management and control to the Target Enterprise after the execution of Staff Relocation Compensation Agreement and shall start to manage and control the Target Enterprise.

 

7.6           Both parties agree to take March 2011 as the benchmark month and engage an intermediary institution to carry out final audit to the Target Enterprise so as to confirm the profits of the Target Enterprise generated from the Appraisal Benchmark Date to 31 March 2001. Within five days after the final audit report is delivered to Party B, Party B shall pay the profits of the Target Enterprise to Party A in one lump sum. In case of losses (i.e. the amount of net assets in the audit report is less than the Transfer Price as stated in clause 6.1), Party A shall return the balance between the net assets and the Transfer Price to Party B within five days after the final audit report is issued. The profits generated in March 2011 shall be allocated between Party A and Party B according to their respective actual number of days of controlling the Target Enterprise.

 

7.7           After Party B acquires the Target Enterprise, if Party B continues to use the premises and office site of the Target Enterprise, Party A agrees that the Target Enterprise may continue to lease all the existing office sites and premises belonging to Party A at such rental as provided in the original lease contract and the term of lease shall be no less than three years. After the expiry of such term, both parties shall renegotiate the lease contract and rental following the market principles.

 

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7.8           Party B shall cancel the registration of the original Target Enterprise and merge its assets to its own enterprise or other affiliates controlled by it. Where formalities, such as title transfer of the relevant certificates or approval letters or alteration of subject entity, are required to complete, Party A shall provide the necessary assistance.

 

ARTICLE 8 TRANSITIONAL PERIOD ARRANGEMENT

 

8.1           During the Transitional Period under this Contract, Party A shall be obliged to manage the Target Enterprise and its assets in good faith. Party A shall guarantee and procure the normal operations of the Target Enterprise. In event of any Material Adverse Effect occurring to the Target Enterprise during the Transitional Period, Party A shall promptly notify Party B of the same and take proper actions.

 

8.2           During the Transitional Period under this Contract, unless for normal operations of the Target Enterprise, Party A and the Target Enterprise shall guarantee not to execute, alter, amend or terminate all the contracts and transactions in relation to the Target Enterprise, not to make the Target Enterprise assume any liabilities or responsibilities outside of the Assets Appraisal Report, not to transfer or waive any rights, nor to dispose the assets of the Target Enterprise in any manner.

 

ARTICLE 9 ASSUMPTION OF EQUITY EXCHANGE FEES

 

The equity exchange fees incurred in the process of the equity exchange under this Contract shall be separately assumed by Party A and Party B in accordance with the relevant provisions.

 

ARTICLE 10 LIABILITY FOR FAILURE TO CAPITAL CONTRIBUTION (NOT APPLICABLE TO FULL CAPITAL CONTRIBUTION)

 

These terms shall not be applicable to this Contract.

 

ARTICLE 11 STAFF RELOCATION PLAN

 

11.1         Staffing of Target Enterprise:

 

Active staff: 139

 

Retired staff: 1

 

11.2         The staff of the Target Enterprise shall be properly relocated by Party B in accordance with the Staff Relocation Compensation Plan.

 

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11.3        The foregoing Staff Relocation Compensation Agreement has been discussed and passed in the general staff meeting convened by the Target Enterprise on 26 February 2011.

 

ARTICLE 12 PARTY A’S REPRESENTATIONS AND WARRANTIES

 

12.1        Party A has the legal, valid and complete disposition right to the Transfer Target under this Contract.

 

12.2        All the certificates and materials submitted to Party B and Beijing Equity Exchange for the purposes of entering into this Contract are true, accurate and complete.

 

12.3        All the formalities required for entering into this Agreement, including but not limited to obtaining authorizations, approvals, company internal decisions, etc., are legally and validly handled. All the preconditions on which this Contract is established and the equities are transferred are satisfied.

 

12.4        There are no securities or restrictions imposed upon the Transfer Target that may affect the Equity Transfer.

 

ARTICLE 13 PARTY B’S REPRESENTATIONS AND WARRANTIES

 

13.1        Party B’s acceptance to acquire the Transfer Target under this Contract is in accordance with laws and regulations and not in violation of any industrial policies within China.

 

13.2        All the certificates and materials submitted to Party A and Beijing Equity Exchange for the purposes of entering into this Contract are true, accurate and complete.

 

13.3        All the formalities required for entering into this Agreement, including but not limited to obtaining authorizations, approvals, company internal decisions, etc., are legally and validly handled. All the preconditions on which this Contract is established and the equities are acquired are satisfied.

 

ARTICLE 14 LIABILITY FOR BREACH OF CONTRACT

 

14.1        After this Contract takes effect, any party requesting to terminate this Contract without due cause shall pay to the other party a liquidated damage in an amount equal to 20% of the Transfer Price under this Contract. In case of any damages caused to the other party, such party shall also take the liability for compensation.

 

14.2        If Party B fails to pay the Transfer Price and the one lump compensation for liabilities of the Target Enterprise against Party A and for the staff within the period provided by the contract, Party B shall pay liquidated damages for payment delay.  Such liquidated damages shall be calculated at 0.01% of payable amounts for each day of delay during the payment delay period. Where payment is delayed in excess of fifteen days, Party A shall be entitled to terminate this Contract and require Party B to assume liability for breach of contract which equals 20% of the Transfer Price of this Contract and to assume the losses thereby incurred to Party A and the Target Enterprise.

 

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14.3        If Party A fails to complete the transfer of target as agreed by this Contract, Party B shall be entitled to terminate this Contract and request Party A to pay an amount of liquidated damages equal to 20% of the Transfer Price in accordance with this Contract.

 

14.4        If there are any material event that are not disclosed or have been omitted in relation to the assets and liabilities of the Target Enterprise, which may cause Material Adverse Effect on the Target Enterprise or may affect the Transfer Price, Party B shall be entitled to terminate this Contract and request Party A to assume liability for breach of contract equaling 20% of the Transfer Price in accordance with this Contract.

 

If Party B chooses not to terminate the contract, it shall be entitled to request Party A to make compensations in relation to the relevant matters. The amount of compensation shall be equal to the amount of losses that the foregoing undisclosed or omitted assets and liabilities may cause to the Target Enterprise.

 

ARTICLE 15 AMENDMENT AND TERMINATION OF CONTRACT

 

15.1        Both parties may amend or terminate this Contract through mutual agreement.

 

15.2        Either party may terminate this Contract in any of the following situations:

 

(1)           The purpose of this Contract may not be achieved due to force majeure or any other reasons that are not attributable to both parties;

 

(2)           The other party loses the actual performance ability;

 

(3)           The other party materially breaches the contract which makes the purpose of this Contract may not be achieved;

 

(4)           The other party has committed breach of contract as referred to by clause 14 hereof.

 

15.3        Amendment and Termination of this Contract shall be made in writing and submitted to Beijing Equity Exchange for filing.

 

ARTICLE 16 APPLICABLE LAW AND DISPUTE RESOLUTION

 

16.1        This Contract and the behaviors during the equity exchange shall be governed by the laws of the People’s Republic of China.

 

16.2        If the parties have any disputes over the interpretation and performance of this Contract, both parties shall try to resolve the disputes through consultation. If no resolution can be reached through consultation, the disputes shall be referred to the people’s court in the locality of Party A for litigation.

 

ARTICLE 17 EFFECTIVENESS

 

This Contract shall take effect after being signed or sealed by the authorized representatives of both parties and filed to the Approval Authority for approval in accordance with laws and administrative regulations.

 

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ARTICLE 18  MISCELLANEOUS

 

18.1        Any amendments or supplementations to this Contract shall be made by both parties in writing and be treated as the schedules to this Contract. The schedules to this Contract shall have the same legal effect as this Contract.

 

18.2        This Contract shall include the original contract and Debt Settlement Agreement and Staff Relocation Compensation Agreement as the two schedules thereto.

 

18.3        The undertaking letter and other documents submitted by Party B during the acquisition of Transfer Target in accordance with the listing conditions shall be an integral part of this Contract and shall have the same legal effect as this Contract.

 

18.4        This Contract shall have eight copies, among which, Party A and Party B shall each hold two copies, the brokerage members of Party A and Party B shall each hold one copy, Beijing Equity Exchange shall retain one copy for filing purpose and the rest will be used for applying for approval and registration of the equity exchange.

 

 

	
Transferor   (Party A):
    	
 
    	
Transferee   (Party B):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Beijing   North Star Industrial Group
    	
 
    	
Beijing   China Auto Rental Co., Ltd.
    
	
 
    	
 
    	
 
    
	
(Seal)   [Company seal is affixed]
    	
 
    	
(Seal)   [Company seal is affixed]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Legal   Representative or
    	
 
    	
Legal   Representative or
    
	
 
    	
 
    	
 
    
	
Authorized   Representative (Signature):
    	
 
    	
Authorized   Representative (Signature):
    
	
 
    	
 
    	
 
    
	
/s/
    	
 
    	
/s/
    
	
 
    	
 
    	
 
    
	
Place   of Signing: Beijing
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date   of Signing: 8 March 2011
    	
 
    	
 
    

 

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Staff Relocation Compensation Agreement

 

This Agreement is entered into by the following parties:

 

Party A: Beijing North Star Industrial Group

 

Party B: Beijing China Auto Rental Co., Ltd.

 

Whereas:

 

1              Party A is the contribution shareholder of Beijing Beichen Auto Rental Company (“Target Enterprise”) and Party A has publicly listed all the shareholders’ interests owned in the Target Enterprise and all the relevant rights and obligations at Beijing Equity Exchange Co., Ltd. in accordance with the relevant laws, regulations and policies;

 

2              Party B becomes the acquirer of equities of the Target Enterprise through public bidding at Beijing Equity Exchange Co., Ltd. (or other way of bidding, such as tendering and internet bidding, etc.);

 

3              Party A has clearly stated in the exchange conditions upon public listing that the acquirer of the Target Enterprise is required to properly relocate the staff of the Target Enterprise and be liable for all the staff relocation compensation fees; Party B has fully understood the foregoing exchange conditions when delisting the equity exchange at Beijing Equity Exchange Co., Ltd. and promised to abide by such conditions.

 

In witness thereof, Party A and Party B hereby enter into this Agreement through mutual agreement.

 

Clause 1.               Party B undertakes to accept and properly relocate all the active staff of Target Enterprise when acquiring the equities of Target Enterprise.

 

Clause 2.               As a result of Party A’s transferring all the share equities of Target Enterprise, the active staff of Target Enterprise shall be given with economic compensation in one lump sum for their years of service in the enterprise in accordance with the relevant national provisions. Such compensation shall be borne by Party B. The compensation standard and amount shall be based on the average monthly salary of each staff within twelve months prior to the completion of industrial and commercial alteration registration of the Target Enterprise. The determination of such base amount shall comply with the relevant laws and regulations. Such payment standard and amount shall also be subject to determination of the staff in accordance with the applicable PRC labor laws. The Target Enterprise shall provide Party B with the list of staff to receive compensation and the amount of compensation in advance.

 

Party B shall pay the above compensation to the staff in one lump sum when the Target Enterprise re-enters into an employment contract or service agreement with the staff (i.e. within three days since the date of industrial and commercial registration alteration). If the staff of Target Enterprise is relocated on an earlier date due to the Equity Transfer of Target Enterprise, the Target Enterprise may pay compensation to such staff first, and within the time limit provided by the Staff Relocation Compensation Agreement, Party B shall pay such amount of compensation to the Target Enterprise, provided that Party A shall provide necessary document to prove such payment for Party B.

 

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Clause 3.               Party B undertakes that after acquiring the equities of Target Enterprise, the Target Enterprise shall re-enter into employment contracts with active staff, re-enter into service agreements or rework agreements with other staff such as drivers or in accordance with the applicable PRC labor regulations; the term of employment contract and service agreement re-entered into shall not be shorter than the term entered into with the original Target Enterprise. The Target Enterprise shall complete re-entering into employment contracts and service agreements within three working days sine the date on which the Target Enterprise completes the industrial and commercial registration alteration. Party B must make full contribution of various social securities and housing funds for the staff in accordance with the relevant national provisions.

 

Clause 4.               Party B undertakes that in principle it will not reduce the salary of the staff and remain the original post, position and remunerations of current senior and middle level management and key staff unchanged.

 

Clause 5.               Party B shall provide Party A with detailed staff relocation plan, which shall include employment contract, service agreement, post arrangements, remunerations, job descriptions, etc.

 

Clause 6.               This Agreement shall be an effective and integral part of Equity Exchange Contract with the same legal effect.

 

Clause 7.               If Party B fails to properly relocate the staff and assume the staff relocation compensations in accordance with this Agreement, Party A shall be entitled to terminate the Equity Exchange Contract and require Party B to assume liability for breach of contract in accordance with Equity Exchange Contract.

 

Clause 8.               This Agreement shall have eight copies, among which, Party A and Party B shall each hold four copies.

 

 

	
Party   A:
    	
 
    	
Party   B:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Beijing   North Star Industrial Group
    	
 
    	
Beijing   China Auto Rental Co., Ltd.
    
	
 
    	
 
    	
 
    
	
(Seal)  [Company seal is affixed]
    	
 
    	
(Seal)   [Company seal is affixed]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Legal   Representative or 
    	
 
    	
Legal   Representative or 
    
	
 
    	
 
    	
 
    
	
Authorized   Representative (Signature):
    	
 
    	
Authorized   Representative (Signature):
    
	
 
    	
 
    	
 
    
	
/s/
    	
 
    	
/s/
    
	
 
    	
 
    	
 
    
	
Date   of Signing: 8 March 2011
    	
 
    	
 
    

 

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Debt Payment Agreement

 

This Agreement is entered into by the following parties:

 

Party A: Beijing North Star Industrial Group

 

Party B: Beijing China Auto Rental Co., Ltd.

 

Whereas:

 

1              Party A is the contribution shareholder of Beijing Beichen Auto Rental Company (“Target Enterprise”) and Party A has publicly listed all the shareholders’ interests owned in the Target Enterprise and all the relevant rights and obligations at Beijing Equity Exchange Co., Ltd. in accordance with the relevant laws, regulations and policies;

 

2              Party B becomes the acquirer of equities of the Target Enterprise through public bidding at Beijing Equity Exchange Co., Ltd. (or other way of bidding, such as tendering and internet bidding, etc.);

 

3              Party A has clearly stated in the exchange conditions upon public listing that as of Assessment Benchmark Date, the total debt amount owed by the Target Enterprise to Party A is RMB17,669,721.67; Party B has fully understood the foregoing situations when delisting the equity exchange at Beijing Equity Exchange Co., Ltd. and promised to pay off al the debt amount owed by the Target Enterprise to Party A in one lump sum.

 

In witness thereof, Party A and Party B hereby enter into this Agreement through mutual agreement.

 

Clause 1.               As of Assessment Benchmark Date, the total amount of debt owed by the Target Enterprise to Party A is Renminbi seventeen million six hundred and sixty nine thousand seven hundred and twenty one dollars and sixty seven cents (i.e. RMB17,669,721.67); Party B undertakes that such debt amount shall be assumed by Party B and paid off to Party A in such a manner and within such a time limit as provided by this Agreement.

 

Clause 2.               Party B shall pay off the entire debt amount set out in Clause 1 hereof to Party A in one lump sum at the same time when paying the transfer price.

 

Clause 3.               In accordance with the provisions of Equity Exchange Contract, both parties agree to engage an intermediary institution to conduct final audits to the Target Enterprise with March 2011 as the benchmark month in order to determine all the debts owed by the Target Enterprise to Party A from the Assessment Benchmark Date to 31 March 2011. If there are any discrepancies between the final audit results and the original audit report and asset assessment report, both parties agree to determine the debt amount owed by the Target Enterprise to Party A based on the final audit results. The portion of amount thereby determined in excess of the amount set out in Clause 1 hereof shall be paid within five days after the final audit report is delivered to Party B, while as to the difference by which the debt amount determined by the final audit report is less than the debt amount as agreed in Clause 1 hereof, the excessive amount of debt payment shall be returned to Party B by Party A within five days after the final audit report is issued.

 

Clause 4.               This Agreement shall be an effective and integral part of Equity Exchange Contract with the same legal effect.

 

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Clause 5.               If Party B fails to pay off debt amount to Party A in accordance with this Agreement, Party A shall be entitled to terminate the Equity Exchange Contract and require Party B to assume liability for breach of contract in accordance with Equity Exchange Contract.

 

Clause 6.               This Agreement shall have eight copies, among which, Party A and Party B shall each hold four copies.

 

 

	
Party   A:
    	
 
    	
Party   B:
    
	
 
    	
 
    	
 
    
	
Beijing   North Star Industrial Group
    	
 
    	
Beijing   China Auto Rental Co., Ltd.
    
	
 
    	
 
    	
 
    
	
(Seal)  [Company seal is affixed]
    	
 
    	
(Seal)   [Company seal is affixed]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Legal   Representative or 
    	
 
    	
Legal   Representative or 
    
	
 
    	
 
    	
 
    
	
Authorized   Representative (Signature):
    	
 
    	
Authorized   Representative (Signature):
    
	
 
    	
 
    	
 
    
	
/s/
    	
 
    	
/s/
    
	
 
    	
 
    	
 
    
	
Date   of Signing: 8 March 2011
    	
 
    	
 
    

 

2Exhibit 10.11

 

	
 
    	
This is an English Translation
    
	
 
    	
 
    
	
 
    	
Listing   Number: G310SH1004725
    
	
 
    	
 
    
	
 
    	
Contract   Number:
    

 

Contract for Equity Exchange in Shanghai

 

Prepared by

 

Shanghai Administration for Industry and Commerce

 

Shanghai Municipal Equity Exchange Administration Office

 

 

Notes to Contract

 

I.                                         The document is a model contract formulated in accordance with the PRC Contract Law, Tentative Measures on Administration of Enterprise State-owned Equity Transfer and Measures on Administration of Equity Exchange of Shanghai. The terms that constitute the essence of this model Contract are for guidance and should be used as applicable. The terms set out herein, including those in the brackets, shall be chosen by the contractual parties at their own discretion when entering into the Contract.

 

II.                                     In order to better safeguard the rights and interests of the contractual parties, both parties shall exercise due diligence and strive to be as elaborate and accurate as possible. When it comes to detailed terms and conditions, relevant matters should be clearly stated, and irrelevant articles shall be marked as “these terms shall not be applicable to this Contract” or “these articles are irrelevant to this Contract”.

 

III.                                 Transferor refers to the owner, contributor or disposer of the equities of Transfer Target.

 

IV.                                 Transferee refers to the legal person or natural person or other entity that acquires the equities with consideration by way of agreement transfer, auction or tendering and bidding at Shanghai United Assets and Equity Exchange.

 

V.                                     The basic information of contractual parties should be completed as required by the Contract. The type of business should be completed as what is stated in the business license of Transferor and Transferee. If the relevant party is a natural person, information to be provided shall include his/her name, nationality, ID number (passport number), residence address, zip code, telephone number and bank account number, etc. If there are several parties as to the Transferor and Transferee under this Contract, such information of each party shall be set out in the Contract respectively.

 

VI.                                 Transfer Target refers to the equities (all or part of) legally owned  by a legal person, natural person or other entity, including land use rights, real estate and buildings, equipment, vehicles, technology projects, trademark rights, patents, etc.

 

VII.                             Transfer Price: Prior to the equity transfer, state-owned equities should be subject to asset appraisal, the value of which should serve as  reference for  transfer price. Determination of transfer price directly through bidding or agreement  without asset appraisal generally only applies to non-state-owned equities.

 

VIII.                         Employee relocation involved in equity transfer refers to the relevant matters in connection with the proper relocation of employees of the target enterprise in accordance with the relevant provisions. Where the Tentative Measures on Administration of Enterprise State-owned Equity Transfer applies, the resolution of employees’ congress on the employee relocation program should be attached as a schedule to this Contract.

 

IX.                                Succession of creditor’s rights and settlement of debts involved in the equity transfer refers to the disposal of creditor’s rights and debts (including overdue debts to the employees) of the target enterprise. Where the Tentative Measures on Administration of Enterprise State-owned Equity Transfer applies, the agreement on creditor’s rights and debts which is approved by the relevant financial institution should be attached as a schedule to this Contract.

 

X.                                    Disposal of assets refers to the disposal of actual items of the target, such as land use rights, real estate and buildings, equipment, vehicles, technology projects, trademark rights, patents, etc., pursuant to the specific agreements of the target.

 

XI.                                Equity Exchange Benchmark Date refers to the specific point of time when the value of Transfer Target  is reflected.

 

XII.                            Default liabilities: if the parties have agreed on both liquidated damages and security deposits, one party may choose to apply either the clauses applicable to the liquidated damages or the clauses applicable to the security deposits when the other party breaches the Contract.

 

XIII.                        Dispute resolution: apart from consultation and mediation, the parties hereto may choose to apply for arbitration or resort to litigation in case of disputes. However, once the approach of arbitration is chosen, other approaches are no longer applicable.

 

2

 

Parties and Entrusted  Parties Involved in this Contract

 

Transferor (“Party A”): Shanghai Huadong Industrial Co., Ltd.

 

Address: No. 572 Madang Road, Shanghai

 

	
Legal   Representative: Zhuang Zheng
    	
 
    	
Type   of Business: Limited Liability Company
    

 

Registered Capital: RMB Two Hundred Million

 

	
Entrusted  Broker Entity: Shanghai Chang Feng Equities Brokerage Co., Ltd.
    	
Tel:   021-55807512
    

 

Transferee (“Party B”): Beijing China Auto Rental Co., Ltd.

 

Address: Room 2801, 2A Wang Zhonghuan South Road, Chaoyang District, Beijing

 

	
Legal   Representative: Lu Zhengyao
    	
 
    	
Type   of Business: Limited Liability Company
    

 

Registered Capital: RMB Ninety-Seven Million Eight Hundred and Thirty-Seven Thousand Eight Hundred and Twenty-Seven

 

	
Entrusted Broker Entity: Shanghai   Zhi Ang Investment   Consulting Co., Ltd.
    	
Tel:   021-63507720
    

 

3

 

Based on the principles of free will, fairness and good faith, Party A and Party B hereby enter into this Contract for mutual compliance in accordance with PRC laws and regulations and the Measures on Administration of Equity Exchange of Shanghai.

 

WHEREAS:

 

1                                          Shanghai Huadong Auto Rental Co., Ltd. (hereinafter referred to as the “Target Company”) was established on 30 July 2003 with a registered capital of RMB9 million. Shanghai Huadong Industrial Co., Ltd. holds 100% share equities of Target Company.

 

2                                          According to the evaluation, the net assets of Shanghai Huadong Auto Rental Co., Ltd. amounts to RMB22.5739 million, with its total assets of RMB27.8711 million and total liabilities of RMB5.2971 million.

 

3                                          Both parties have been authorized in connection with the transfer of 100% share equities of Shanghai Huadong Car Rental Co., Ltd. and the creditor’s rights of RMB2.5 million.

 

ARTICLE ONE                                                             TRANSFER TARGET

 

Party A agrees to transfer 100% share equities and related interests of Shanghai Huadong Auto Rental Co., Ltd. as well as its creditor’s rights of RMB2.5 million  to Party B with consideration. The target of equity transfer shall include all the current or future rights affiliated to such share equities upon the signing of this Contract.

 

ARTICLE TWO                                                        TRANSFER PRICE

 

Party A agrees to transfer the aforementioned share equities and creditor’s rights to Party B at a price of RMB25.50 million (Twenty-Five Million Five Hundred Thousand), among which the price for equity transfer is RMB23 million (Twenty-Three Million).

 

ARTICLE THREE                                               WAY OF EQUITY TRANSFER

 

Subject to evaluation and filing, after being listed on Shanghai United Assets and Equity Exchange (listing number: G310SH004725) and determining the transferee and Transfer Price, the equity exchange contract shall be entered into and the equity transfer shall be proceeded by way of agreement.

 

ARTICLE FOUR                                                     EMPLOYEE RELOCATION INVOLVED IN EQUITY TRANSFER

 

The Transferee agrees that the Target Company shall continue to perform the labor contracts with the active employees of Target Company.

 

4

 

ARTICLE FIVE                                                            SUCCESSION AND SETTLEMENT OF CREDITOR’S RIGHTS AND DEBTS INVOLVED IN EQUITY TRANSFER

 

After the equity transfer, the creditor’s rights and debts of Target Company will be succeeded and assumed by the new company after the equity change.

 

ARTICLE SIX                                                                  ASSET DISPOSAL INVOLVED IN EQUITY TRANSFER

 

This article is not applicable to this Contract.

 

ARTICLE SEVEN                                               PAYMENT METHOD, PERIOD AND TERMS FOR THE TOTAL EQUITY TRANSFER CONSIDERATION AND THE METHOD FOR PAYMENT IN ONE LUMP-SUM OR BY INSTALLMENT AS AGREED BY PARTY A AND PARTY B

 

Party A and Party B agree that:

 

(1)                                        The security deposits in RMB3 million paid by Party B to Shanghai United Assets and Equity Exchange at early stage shall be converted into the equity Transfer Price and be remitted through the Equity Exchange to the account designated by Party A;

 

(2)                                        Within five  working days after this Contract becomes effective, Party B shall pay the balance of RMB22.50 million (Twenty-Two Million Five Hundred Thousand) to the bank account designated by Shanghai United Assets and Equity Exchange in one lump sum, and within three working days since the issuance of equity exchange certificate, Shanghai United Assets and Equity Exchange shall transfer such amount of payment to the bank account designated by Party A in one lump sum.

 

ARTICLE EIGHT                                                  CLOSING MATTERS TO THE EQUITY TRANSFER

 

1                                          Party A and Party B agree that the Equity Exchange Benchmark Date  of this equity transfer shall be  31 December 2009. All the profits or losses and risks arising out of the Target Company during the period starting from the Equity Exchange Benchmark Date to the closing date of this equity transfer shall be succeeded by the Transferee pro rata with the transferred  share equities. However, the Transferor shall make a truthful and detailed disclosure of the profits or losses and risks during such period, and such disclosure shall be attached as a schedule to this Contract for signing. If the Transferee discovers that disclosure is untruthful or incomplete after completion, the Transferor shall be obliged to undertake all the liabilities and compensate for the losses.

 

2                                          Party A agrees that when handling the equity change procedures for this equity transfer, any of its directors designated or nominated by Party A shall resign from such position.

 

3                                          If,  after the handover between Party A and Party B, Party B discovers that the equities  acquired from Party A are inconsistent with the information and facts provided by Party A for Shanghai United Equities, Party B shall have the right to claim damages against Party A and reserve such right in accordance with the relevant PRC laws.

 

4                                          Party A and Party B may conduct the handover procedures in relation to Shanghai Huadong Auto Rental Co., Ltd. after Shanghai United Assets and Equity Exchange issues the equity exchange certificate and Party A receives the Transfer Price for this equity transfer. Once Party B signs and seals on the handover list issued by Party A, the handover procedures of Target Company shall be deemed as completed.

 

5

 

ARTICLE NINE                                                          ALTERATION OF EQUITY CERTIFICATE

 

Through consultation and cooperation between Party A and Party B,  the Target Company shall complete the registration alteration formalities in relation to the transferred equities within sixty working days from the effective date of this Contract.

 

ARTICLE TEN                                                               TAXES AND FEES OF EQUITY TRANSFER

 

Taxes arising out of the equity transfer shall be paid by each party respectively in accordance with applicable PRC laws and regulations.

 

Fees arising out of the equity transfer shall be paid by each party respectively according to the negotiation and agreement between Party A and Party B.

 

ARTICLE ELEVEN                                        DEFAULT LIABILITIES

 

1                                          Each party shall undertake default liabilities for its breach of Contract. If the default of Party A leads to the failure of performance of this Contract, Party A shall return the security deposits to Party B at a double amount. If the default of Party B leads to the failure of performance of this Contract, Party B shall be deprived of its right to claim the security deposits.

 

If both parties agree to terminate this Contract, Party A shall return the security deposits to Party B.

 

2                                          If Party A fails to complete the equity transfer as scheduled or Party B fails to pay the total equity Transfer Price as scheduled, an amount of liquidated damages equal to 0.3% of the total price shall be paid  to the other party for each day of delay.

 

ARTICLE TWELVE                                   DISPUTE RESOLUTION

 

Any disputes between both parties arising out of the performance of this Contract may be resolved through consultation; referred to Shanghai United Assets and Equity Exchange for mediation; or referred to Shanghai Arbitration Commission for arbitration.

 

ARTICLE THIRTEEN                          AMENDMENTS AND TERMINATION OF THE CONTRACT

 

This Contract may be amended or terminated in occurrence of the following incidents:

 

1                                          There is a change of circumstances  and such amendments or termination has been agreed upon by both parties and  will not harm the national and social public interests.

 

2                                          There is an event of force majeure which  renders all the obligations under this Contract unable to be performed.

 

3                                          As acknowledged by the other party, one party fails to perform  this Contract within the period specified by the Contract for a certain cause.

 

6

 

4                                          The situations for amendment or termination of contract as provided in this Contract  have occurred.

 

If Party A and Party B agree to terminate this Contract, Party A shall return all the amounts that have been paid to Party B.

 

In case of amendment and termination of this Contract, Party A, Party B and their entrusted brokers must enter into an agreement on amendment or termination of contract and submit the same to Shanghai United Assets and Equity Exchange for filing.

 

ARTICLE FOURTEEN                      UNDERTAKINGS OF BOTH PARTIES

 

1                                          Party A undertakes that the equity  title  transferred from Party A is true and complete, without concealing any of the following issues:

 

(1)                                  Seizure of assets by enforcement authority;

 

(2)                                  Security over the interests and equities;

 

(3)                                  Concealment of assets;

 

(4)                                  Pending litigation;

 

(5)                                  Any other facts that may have impact on the truthfulness and completeness of the equity title.

 

2                                          Party A undertakes and warrants that the normal business of Target Company will be maintained during the period from the Equity Exchange Benchmark Date of this equity transfer to the closing date of this equity transfer and there will be no guaranty, loan and litigation that may have material impact on the business of Target Company, nor will there any significant change of personnel.

 

3                                          Party B undertakes to Party A that it has the entire rights and capacities  to acquire the equities, has met the basic requirements to become a shareholder of the auto rental company, and has no frauds.

 

4                                          Without the prior written consent of the other party,  neither parties may reveal any contents of this Contract.

 

ARTICLE FIFTEEN                                      MISCELLANEOUS

 

This Contract shall take effect after being signed and sealed by Party A, Party B, the professional equity brokers and the equity broker entities.

 

Where the effectiveness of this Contract is otherwise provided by the national laws and regulations, such provisions shall prevail.

 

The Notes to Contract and the indispensable attachments to this Contract shall be of the same legal effect as this Contract.

 

7

 

This Contract shall have  seven original copies, with Party A, Party B, Target Company, two equity  broker entities, Shanghai United Assets and Equity Exchange and the relevant Administration for Industry and Commerce each holding one copy.

 

(No text below)

 

Attachments:

 

1. Party A:

 

Business license, organization code certificate, tax registration certificate, registration certificate of state-owned equities, articles of association, board resolutions, approval letter from higher authority and legal opinion.

 

2. Party B:

 

Business license, organization code certificate, tax registration certificate, articles of association, shareholder resolutions and balance sheet.

 

3. Target Company:

 

Business license, organization code certificate, tax registration certificate, registration certificate of state-owned equities, capital verification report, articles of association, shareholder resolutions, audit report, evaluation report, filing form. Disclosure of profits or losses and risks of Target Company (from the Equity Exchange Benchmark Date to the closing date of this equity transfer).

 

8

 

(No text in this page)

 

	
Transferor   (Party A):
    	
 
    	
Transferee   (Party B):
    
	
 
    	
 
    	
 
    
	
Shanghai   Huadong Industrial Co, Ltd.
    	
 
    	
Beijing   China Auto Rental Co., Ltd.
    
	
 
    	
 
    	
 
    
	
(Seal)   (Company seal is affixed)
    	
 
    	
(Seal)   (Company seal is affixed)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Legal   Representative or
    	
 
    	
Legal   Representative or
    
	
 
    	
 
    	
 
    
	
Authorized   Representative (Signature):
    	
 
    	
Authorized   Representative (Signature):
    
	
/s/
    	
 
    	
/s/
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Equity Broker Entity:
    	
 
    	
Equity Broker Entity:
    
	
 
    	
 
    	
 
    
	
(Seal)  (Company seal is affixed)
    	
 
    	
(Seal)  (Company seal is affixed)
    
	
 
    	
 
    	
 
    
	
Shanghai   Chang Feng Equities   Brokerage Co., Ltd.
    	
 
    	
Shanghai   Zhi Ang Investment   Consulting Co., Ltd.
    
	
/s/
    	
 
    	
/s/
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Place   of Signing: Shanghai
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date   of Signing: 20 August 2010
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Shanghai   United Assets and Equity   Exchange (Transaction Contract Approval Chop)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Seal   is affixed
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
24   August 2010
    

 

9

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