DATED THE 27TH DAY OF APRIL 2011

INSCOM HK LIMITED

INSCOM GROUP LIMITED

INSCOM HOLDING LIMITED

APOLLO & MUSE HOLDING LIMITED

CLEVER STAR HOLDINGS LIMITED

CISG HOLDINGS LIMITED

INSCOM HK LIMITED, a company incorporated under the laws of the HKSAR (under company number 1457225) whose registered office is situate at ▇▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇. (“INSCOM HK”);

INSCOM GROUP LIMITED, a company incorporated under the laws of the British Virgin Islands (under company number 1584027) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (the “INSCOM BVI”);

INSCOM HOLDING LIMITED, a company incorporated under the laws of the British Virgin Islands (under company number 1584021) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (the “Company”);

APOLLO & MUSE HOLDING LIMITED, a company incorporated under the laws of the British Virgin Islands (under company number 1584020) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (“Apollo”);

CLEVER STAR HOLDINGS LIMITED, a company incorporated under the laws of the British Virgin Islands (under company number 1593866) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (“CSH”); and

CISG HOLDINGS LTD., a company incorporated under the laws of the British Virgin Islands (under company number 599853) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (“CISG” or “Subscriber”).

Pursuant to the Principal Agreement, the Subscriber has agreed to purchase and subscribe and the Company has agreed to issue and allot the Subscriber such number of Subscription Shares (as defined in the Principal Agreement) and Apollo has agreed to sell and transfer the Sale shares (as defined in the Principal Agreement) in accordance with the terms of the Principal Agreement.

Following further discussions between the parties to the Principal Agreement and having regard to the prevailing circumstances, the parties have agreed to vary the terms of the Principal Agreement on the terms and conditions as hereinafter provided.

Apollo and CSH, together with the Company, INSCOM BVI and INSCOM HK, have entered into a similar subscription and share purchase agreement (the “Further Share Purchase Agreement”) relating to the Company on 29 October 2010 with two other subscribers, namely Wang Strategic Capital Partners (II) Limited and Harbor Pacific Capital Partners I, LP (the “New Subscribers”). The New Subscribers had, pursuant to the execution of the Further Share Purchase Agreement, executed a Deed of Adherence to the effect that they shall perform, assume, comply with and be bound by all the terms, covenants, obligations and provision in the Principal Agreement.

Apollo, CSH and the Company confirm that (i) the relevant terms in the Principal Agreement to be amended by this Supplemental Agreement were not included in the Further Share Purchase Agreement; and (ii) the relevant terms in the Principal Agreement as amended by this Supplemental Agreement do not affect the rights and obligations of the New Subscribers under the Principal Agreement and/or Further Share Purchase Agreement.

Section 6.1 of the Principal Agreement shall be replaced by the following clause in its entirety:-

As an inducement to the Subscriber’s agreement to subscribe for the Subscription Shares, each of Apollo, CSH and the Company hereby agrees to undertake to use its/his/her best endeavors to achieve targets of Net Profit to be agreed for the financial years of 2011, 2012 and 2013 respectively.

The exact targets of Net Profit shall be further negotiated and agreed among the Subscriber, Apollo and CSH by 31 December 2011.

If no agreement on applicable targets of Net Profit is made among CISG, Apollo and CSH by 31 December 2011, each of Apollo, CSH and the Company shall be deemed to have undertaken the Subscriber to use its/his/her best endeavors to achieve the following targets:-

‘the Net Profit for the financial years of 2011, 2012 and 2013 shall not be less than ▇▇▇ ▇▇▇,▇▇▇,▇▇▇, ▇▇▇ 136,300,000 and RMB 170,200,000 respectively.’”

Save as expressly amended or altered by this Supplemental Agreement, the Principal Agreement shall continue in full force and effect and upon the same terms and conditions.

The headings of the clauses of this Supplemental Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Supplemental Agreement.

In the event of any conflict between the provisions of the Principal Agreement and this Supplemental Agreement, the provisions of this Supplemental Agreement shall prevail.

This Supplemental Agreement may be executed by the parties hereto in counterparts and by different parties on separate counterparts, each of which when so executed and delivered shall be an original but all of which shall together constitute one and the same instrument.

This Supplemental Agreement and the Principal Agreement constitute the entire and only agreement between the parties hereto with respect to the subject matter hereof.

Time shall be of the essence as regards any date or period mentioned in this Supplemental Agreement, or any date or period substituted for the same by the agreement of the parties otherwise.

Section 12 (Miscellaneous) of the Principal Agreement shall be incorporated herein by reference and shall apply mutatis mutandis to this Agreement.

 

SIGNED BY Tian Yuan

a director, for and on behalf of

INSCOM HK LIMITED

in the presence of

 

/s/ ▇▇▇ ▇▇▇▇▇▇▇▇

 

 

SIGNED BY Tian Yuan

a director, for and on behalf of

INSCOM GROUP LIMITED

in the presence of

 

/s/ ▇▇▇ ▇▇▇▇▇▇▇▇

 

 

SIGNED BY Tian Yuan

a director, for and on behalf of

INSCOM HOLDING LIMITED

in the presence of

 

/s/ ▇▇▇ ▇▇▇▇▇▇▇▇

 

 

SIGNED BY Tian Yuan

authorized signatory for and on behalf

of APOLLO & MUSE HOLDING

LIMITED, in the presence of

 

/s/ ▇▇▇ ▇▇▇▇▇▇▇▇

 

SIGNED BY ▇▇▇▇ ▇▇▇▇▇▇▇

a director, for and on behalf of

CLEVER STAR HOLDINGS LIMITED

in the presence of

 

/s/ Zhu Jiusheng

 

 

SIGNED BY Hu Yinan

a director, for and on behalf of

CISG HOLDING LIMITED

in the presence of

 

/s/ Zhu Jiusheng

INSCOM HK LIMITED, a company incorporated under the laws of the HKSAR (under company number 1457225) whose registered office is situate at ▇▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇. (“INSCOM HK”);

INSCOM GROUP LIMITED, a company incorporated under the laws of the British Virgin Islands (under company number 1584027) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (“INSCOM BVI”);

INSCOM HOLDING LIMITED, a company incorporated under the laws of the British Virgin Islands (under company number 1584021) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (the “Company”);

APOLLO & MUSE HOLDING LIMITED, a company incorporated under the laws of British Virgin Islands (under company number 1584020) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (“Apollo”);

CLEVER STAR HOLDINGS LIMITED, a company incorporated under the laws of British Virgin Islands (under company number 1593866) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (“CSH”);

CISG HOLDINGS LTD., a company incorporated under the laws of the British Virgin Islands (under company number 599853) whose registered office is situate at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (“CISG” or “Subscriber”).

The Company is a private limited company incorporated and subsisting under the laws of the British Virgin Islands and as at the date hereof has an authorized capital of US$50,000 divided into 50,000 shares of US$1.00 each, of which 10,000 Ordinary Shares have been issued and fully paid. Corporate information of the Company is set out in Schedule 1 of this Agreement.

As at the date hereof, the Company is the legal and beneficial owner of the entire issued share capital of INSCOM BVI, which in turn owns the entire issued share capital of INSCOM HK. Corporate information of INSCOM BVI and INSCOM HK is set out in Schedules 3A and 3B of this Agreement respectively. INSCOM HK owns the entire equity interests in (“Ying Si Kang”) as at the date hereof, which is a wholly foreign owned enterprise incorporated in PRC. Corporate information of Ying Si Kang is set out in Schedule 3C of this Agreement. Through the structure of variable interests entities (“VIE”), Ying Si Kang has exercised effective control and management over the following two PRC companies: -

(SZ Xinbao Investment); and

(SZ InsCom E-Commerce).

CISG, a private limited company incorporated and subsisting under the laws of the British Virgin Islands, is a wholly owned subsidiary of CNinsure Inc., a company incorporated in the Cayman Islands and whose shares are listed on NASDAQ under symbol CISG.

As at the date hereof, Apollo is legal and beneficial owner of 7,788 Ordinary Shares of the Company constituting 77.88% of the entire issued share capital of the Company. Apollo has agreed to sell and CISG has agreed to purchase the Sale Shares (as defined below) in accordance with the terms of this Agreement.

The Subscriber has agreed to subscribe and the Company has agreed to issue and allot to the Subscriber such number of Subscription Shares (as defined below) in accordance with the terms of this Agreement.

Immediately upon Closing of the Subscription and Shares Purchase, CISG shall procure its beneficial equity interests in the following PRC companies be transferred to Ying Si Kang or its associated companies in the PRC: -

(“HN Fanhua Anlian Insurance”);

(“HZ Fanhua Zhixin Insurance”);

(“TJ Fanhua Xianghe Insurance”);

(“FZ Fanhua Guoxin Insurance”);

(“CS Lianyi Insurance”); and

(“NB Baolian Insurance”).

The Parties are desirous of entering into this Agreement to set out the terms and conditions of the Subscription and Shares Purchase and to establish certain matters pertaining to the operation and management of the Group and to regulate certain rights and obligations among themselves with respect thereto.

Representations and Warranties. The representations and warranties of each of the Parties contained in Section 7.1 and Schedule 4 of this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same effect as though made again on and as of such date.

Performance of Obligations. Each of the other Parties shall have performed and complied in all material respects with all obligations and covenants required to be performed or complied with by it on or prior to the Closing Date.

No Government Injunction/Consents from Governmental Authority. There is not pending or threatened any action, proceeding or investigation that seeks any governmental injunction or restraining order issued by a court of competent jurisdiction against the Company and/or any member of the Group. All consents, permits from relevant Governmental Authority as well as all third party consents which are legally required for completion of the Subscription and Shares Purchase having been duly obtained.

No Material Adverse Change. There shall not have occurred any material adverse change in the financial markets, governmental regulations and business environment in China. The Subscriber being satisfied that consummation of any of the transactions contemplated by this Agreement would not produce a material adverse effect on the Group or the business of the Group.

Due Diligence Reports. In addition to Section 5.1(a)-(d), the Subscriber’s obligation to effect Closing is further subject to the Subscriber being satisfied with the results of the Due Diligence Reports in which:-

the Legal Due Diligence Report has confirmed such legal issues including but not limited to:-

legality of the First PRC Subsidiaries’ operation of the Business in China in accordance with the details of the Business Plan;

legality of such other issues incidental to matters, transactions contemplated under the Business Plan; and

legality of the entities of the Group outside China.

the Financial Due Diligence Report has confirmed satisfaction of such accounting issues incidental to matters, transactions contemplated under the Business Plan including but not limited to: -

satisfaction of such accounting issues incidental to matters, transactions contemplated under the Business Plan;

accuracy of the financial statements which have been submitted by the Company and/ or Apollo to CISG. In particular, the Financial Due Diligence Report shall confirm that the Group has no liabilities other than those which have been disclosed;

Business Plan. The business plan shall have been finalized to the satisfaction of the Subscriber setting out relevant information as the Subscriber may require including but not limited to description of the organizational structure, business strategy and production expansion plan, analysis of market conditions and regulatory environment, utilization of Subscription Consideration by the Company, investment plan and financial projection of the business for the next 3 years following Closing.

Closing Accounts. The Company shall have produced the Closing Accounts to the Subscriber and the Subscriber being satisfied (i) with the financial position and other issues and matters as reflected in the Closing Accounts; (ii) that there shall be no material deviations or changes between the Closing Accounts and the Accounts; and (iii) that the Company shall have a book value of net cash asset of not less than RMB10,000,000 or equivalent sum in USD. For the avoidance of doubt, “net cash asset” shall mean net asset in cash as shown in the Closing Accounts.

satisfaction of financial review of the Company whereby it is substantiated that the net cash asset of the Company shall not be less than RMB 10,000,000 or equivalent sum in USD; and

Other Conditions to Closing. Such other conditions as CISG may require and considers to be necessary in the course of conducting the due diligence of the Group.

Company’s Obligations. Subject to satisfaction of all the conditions set out in Section 5.1, Closing shall take place on the Closing Date. At Closing and in so far as the Subscription is concerned, the Company shall and the Existing Shareholders shall procure the Company to deliver to the Subscriber:-

duly executed sealed share certificate(s) issued in the name of CISG or its nominee(s) in respect of the Subscription Shares in favor of the Subscriber and/ or its nominee(s);

certified true copies of the board resolutions as referred to in Section 5.2(c);

shareholders resolution approving the amendments to the Articles of Association; and

such other documents (including any power of attorney under which any document required to be delivered under this Section shall have been executed and any waivers or consents) as the Subscriber may require to enable the Subscriber and/or its nominee(s) to be registered as holders of the Subscription Shares.

Apollo’s Obligations. Subject to satisfaction of all the conditions set out in Section 5.1, Closing shall take place on the Closing Date. At Closing and in so far as the Shares Purchase is concerned, Apollo shall cause to deliver to CISG:

original share certificate(s) in respect of the Sale Shares;

the duly completed and executed instrument(s) of transfer and sold notes by Apollo in favor of CISG or its nominee(s) in respect of the Sale Shares;

a copy of the Company’s register of members, certified by a director of the Company as true and complete as of the Closing Date, updated to show CISG or its nominee(s) as the holder of the Sale Shares of the Company; and

a certified copy of the written resolutions of the directors of Apollo authorizing the Share Purchase.

Board Resolutions of the Company. On or prior to Closing, the Company shall pass and the Existing Shareholders shall cause the Company to pass board resolutions to the effect that:

the Subscription Shares be allotted and issued to the Subscriber on the Closing Date, for cash at the Subscription Consideration;

the transfer of the Sale Shares shall be approved for registration and the relative share certificates issued to CISG or its nominee(s);

the Subscriber or CISG or its nominee(s) be entered into the register of members of the Company as holder of the Subscription Shares and the Sale Shares;

the appointment of ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇. ▇▇▇▇ Ge or such other person as nominated by the Subscriber or CISG as directors of the Company;

the appointment of ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ as chairman of the Board of Directors; and

such other matters to be dealt with and resolved upon as the Subscriber or CISG shall require for the purpose of giving effect to the provisions of this Agreement.

In the event that Performance Benchmark is not fulfilled in any single year of 2011, 2012 and 2013, CISG shall have the right to demand Apollo to pay to CISG an amount equivalent to such portion of net profit that falls short of the Performance Benchmark for that particular year (“Cash Compensation”) within 15 days upon the delivery of the Approved Accounts of that particular year. For the avoidance of doubt, the aggregate Cash Compensation for 2011, 2012 and 2013 shall not in any event exceed the total amount of RMB84,000,000.

In the event that the Performance Benchmark in any single year of 2011, 2012 and 2013 is less than 70% of the target mentioned in Section 6.1, CISG shall, in addition and without prejudice to Cash Compensation, have the right to demand CSH in any of such year to transfer such number of shares (“Compensation Shares”) constituting 3% of the entire issued share capital of the Company at a nominal consideration of USD1.00 to CISG or its nominee(s) within 15 days upon the delivery of the Approved Accounts of that particular year. For the avoidance of doubt, CISG shall have the right to demand CSH to transfer a total number of the Compensation Shares representing 9% of the entire issued share capital of the Company at a total nominal consideration of USD3.00 if the Net Profit for all the years of 2011, 2012 and 2013 is less than 70% of the target mentioned in Section 6.1.

Corporate Status, Power and Authority. Such Party has full power and authority (corporate or otherwise) to enter into and perform its/his obligations under this Agreement.

Authorization and Enforceability. The execution and delivery of this Agreement and the performance of the obligations hereunder has been duly authorised (corporate or otherwise) by such Party and this Agreement constitutes valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.

Regulatory Approvals. No consent, waiver, approval or authorization of any Governmental Authority or any filing, registration or qualification with or notice to, any Governmental Authority is required on the part of such Party in connection with such Party’s execution or delivery of this Agreement or the performance of any of its obligations hereunder.

Litigation. To the best knowledge of such Party after having made due inquiry, there are no judicial or administrative actions, proceedings or investigations pending or threatened against such Party that questions the validity, binding nature and enforceability of this Agreement or the ability of such Party to perform the obligations under this Agreement. In the event that the Company has came to the knowledge of the aforesaid, Apollo and CSH shall forthwith notify CISG.

Encumbrances. Unless with the unanimous consent of the board of directors, all the shareholders of the Company warrants and undertakes that they shall not mortgage, charge, pledge, lien or have other form of security or encumbrance on, over or affecting any of their equity interest in the Company.

In consideration of CISG entering into this Agreement, each of the Company, Apollo and CSH hereby:-

warrants, represents and undertake to CISG that on the date hereof and as of the Closing Date, each statement set out in Schedule 4 of this Agreement and this Article is true, accurate and not misleading;

warrants, represents and undertakes to CISG that the entry into and performance of this Agreement by the Parties (other than CISG) will not be contrary to any applicable law;

undertakes to CISG that prior to the Closing Date, if any of the Warranties is discovered by the Company and/or Apollo and/or CSH to be untrue, inaccurate or misleading or any of the Warranties has not been fully and/or punctually carried out in any respect, or in the event of the Company and/or Apollo and/or CSH becoming unable or failing to do anything required under this Agreement to be done by any one of them on or before the Closing Date and if any of the aforesaid comes to the knowledge of the Company and/or Apollo and/or CSH, the Company and/or Apollo and/or CSH shall forthwith notify CISG, and in all these events, CISG shall have the absolute discretion to postpone completion of the Subscription and/or Share Purchase for three (3) months and require the Company and/or Apollo and/or CSH to rectify the aforesaid events. In the event that such event(s) shall not have been rectified to the satisfaction of CISG within three (3) months from the Closing Date, CISG shall have the right not to complete the Subscription and/or Share Purchase and may by notice in writing rescind this Agreement, in which event the Parties shall be discharged from their respective further obligations hereunder on a no recourse basis except for their obligations under Section 10.3 and Articles XI and XII.

The Warranties shall be separate and independent and save as expressly provided shall not be limited by reference to any other section or anything in this Agreement or the Schedules.

The Warranties shall be deemed to be repeated as at the Closing Date as if all references therein to the date of this Agreement were references to the Closing Date.

the settlement of any claim that any of the Warranties are untrue or misleading or have been breached;

any arbitration proceedings in which CISG claims that any of the Warranties are untrue or misleading or have been breached and in which the arbitral order is given for CISG; or

In consideration of CISG’s entering into this Agreement, each of Apollo and CSH as primary obligor hereby, jointly and severally, unconditionally and irrevocably guarantees by way of continuing guarantee to CISG the due and punctual performance and observance by the Company and the Existing Shareholders of their respective obligations, commitments, undertakings, agreements, Warranties, indemnities and covenants under or pursuant to this Agreement and, agrees to indemnify and keep indemnified CISG in full from and against all liabilities, losses, damages, claims, costs and expenses (including properly

The guarantee and indemnity set out in this Section 7.4(a) shall be a continuing security to CISG for all obligations, commitments, undertaking, Warranties, indemnities and covenants on the part of the Company and Existing Shareholders under or pursuant to this Agreement notwithstanding any settlement of account or other matter or thing whatsoever and is in addition and without prejudice to and not in substitution for any rights or security which CISG may now or hereafter have or hold for the performance and observance of the obligations, commitments, undertakings, agreements, Warranties, indemnities and covenants of the Company and/or Existing Shareholders under or in connection with this Agreement.

The obligations of Apollo and CSH under this Section shall not be affected by any matter or thing which but for this provision might operate to affect or prejudice those obligations, including without limitation:-

any time or indulgence granted to, or composition with, the Company and/or the Existing Shareholders or any other person;

the taking, variation, renewal or release of, or neglect to perfect or enforce this Agreement or any right, guarantee, remedy or security from or against the Company and/or the Existing Shareholders or any other person;

any unenforceability or invalidity of any obligation of the Company and/or the Existing Shareholders, so that this Section shall be construed as if there were no such unenforceability or invalidity;

the liquidation, bankruptcy, winding-up, receivership of the Company and/or the Existing Shareholders or other member of the Group; and

any other act, matter, event or omission which but for this provision would or might operate to discharge, impair or otherwise affect the liabilities of Apollo and CSH hereunder.

The Board shall meet as required provided that any Director may call a Board meeting by not less than seven (7) days’ notice in writing to the Company specifying the business to be transacted thereat. Directors may participate in a meeting of the Board by means of telephone conference or similar communications equipment whereby all persons participating in the meeting can hear each other and such participation shall constitute presence in person. Resolutions of the Board may be passed by resolution signed by all the Directors.

A shareholder of the Company or any member of the Group may call a general meeting of the relevant company by not less than seven (7) days’ notice in writing to the Company. The quorum for shareholders’ meetings shall be two (2) and must consist of at least one (1) person being the authorized representative or proxy for CISG.

Each Company Shareholder will exercise or refrain from exercising any voting rights or other powers of control so as to ensure the passing of any and every resolution necessary or desirable to procure that the affairs of the Group are conducted in accordance with the provisions of this Agreement and otherwise to give full effect to the provisions of this Agreement and likewise to ensure that no resolution is passed which does not accord with such provisions.

issuing or agreeing to issue any shares of any class in any member of the Group or any loan capital, securities or other rights, having attached thereto a right of conversion into or exchange for any shares or any equity interest in any member of the Group.

acquiring, merging or consolidating with or into any other company, or reconstructing or amalgamating its business or, promoting or taking any steps to effect its winding up or passing of any resolution to liquidate it or applying to any court of competent jurisdiction for an order to convene a meeting of creditors or any class of creditors or members or any class of members or to sanction any such compromise or arrangement.

incorporating any subsidiary or acquiring further interest or permit the disposal or dilution of its interest, directly or indirectly, in any subsidiary or acquire shares or interests in any company, joint venture, partnership or such other business entities or dispose of any shares or interests in any company or acquire or dispose of any loans or loan capital.

commencing, acquiring or expanding any new line of business which does not fall within the business or engaging in any other business activities other than those contemplated under the Business Plan.

engaging in any material investments or disposals of assets of the Company outside the ordinary course of business. For this purpose, a “material investment” or a “material disposal” means an investment or a disposal which has a book value of more than RMB5,000,000.00.

borrowing any money or obtaining any credit advance in any form from any parties which incurs an accumulated indebtedness in excess of RMB5,000,000.00 over any 12 months period.

creating or allowing to subsist any security interest and/or Encumbrances over any of the Group’s assets in excess of an accumulated sum of RMB5,000,000.00 over any 12 months period.

entering into any contract or arrangement other than in the ordinary course of business and involving an one-off transaction sum of more than RMB5,000,000.00 or series of transactions of the same or similar nature involving an accumulated sum of more than RMB5,000,000.00 over any 12 months period.

issuing or agreeing to issue any shares, options or convertible bonds to any Person at a price lower than the Effective Subscription Price.

repurchasing or redemption of stocks/shares/securities or debt instruments (except to the extent such debt is due in accordance with its terms and conditions issued by any Group Company.

committing to any capital expenditure not previously approved by annual budget of the Group and in excess of RMB5,000,000.00 over any 12 months period.

declaring or paying any dividends.

entering into any connected transaction(s) (as defined in the Listing Rules) between any member of the Group of the one part and connected persons (as defined in the Listing Rules) of the other part.

changing or amending the Memorandum and Articles of Association of any member of the Group other than those amendments which are necessary to accord with the provisions of this Agreement.

altering its accounting year end or changing its secretary, or accounting policies, practices and procedures.

changing the size of the Board of Directors.

the appointment of senior managerial staff, including the chief executive officer, chief financial officer and such other key staff members receiving an annual remuneration of more than RMB1,000,000.00.

approval of the annual budget and business plan of the Group.

entering into or modifying, varying any employment contract, remuneration package or benefit scheme in respect of senior managerial staff members;.

acquiring, hiring or leasing of any automobile, apartment for any staff member of the management team of the Group.

altering the arrangement regarding appointment of authorized signatories of bank accounts of the Group.

lending any money to any person (otherwise than by way of deposit with a bank or other financial institution the normal business of which includes the acceptance of deposits) or granting any credit to any person (except to its customers in the normal course of business.

direct or indirect provision of any guarantees to any parties.

pledging of the stocks or shares of any member of the Group to any parties/persons.

varying, modifying or abrogating any of the rights attaching to any of the stocks or shares of any member of the Group.

increasing its nominal share capital, reducing its share capital or share premium account or capital redemption reserve fund, or sub-dividing or consolidating any of the stocks of any member of the Group.

granting or agreeing to grant any option over or right to acquire or purchase or redeem any shares or stocks of any member of the Group.

consolidate, subdivide or convert any of its share capital of any member in the Group.

passing any resolution the result of which would be its winding up, liquidation or receivership save as otherwise expressly provided in this Agreement, or make any composition or arrangement with creditors.

issuing any debentures or other securities convertible into shares or debentures or interests.

offering the Ordinary Shares or other securities of the Company or any member of the Group for subscription by the general public by initial public offering either on The Stock Exchange of Hong Kong Limited or other stock exchange or securities exchange of other parts of the world.

determining the relevant stock exchange or securities exchange for the IPO as well as the appropriate timing for the IPO application and IPO valuation.

approval of the terms and conditions regarding the Share Incentive Scheme upon which the Management Incentive Shares or any part thereof will be granted.

entering into any contract or arrangement not at arm’s length (including but not limited to the terms pursuant to which any Ordinary Shares or other securities in the Company will be issued and allotted to any potential subscribers or investors.

doing or failing to do anything which has the effect of breaching, varying or modifying the terms of this Agreement.

For the purposes of this Clause, “Confidential Information” means all information of a confidential nature disclosed (whether in writing, verbally or by any other means and whether directly or indirectly) by one party (the “Disclosing Party”) to any other party (the “Receiving Party”) whether before or after the date of this Agreement.

During the term of this Agreement and within one year after the termination or expiration of this Agreement for any reason whatsoever the Receiving Party shall:

keep the Confidential Information confidential;

not disclose the Confidential Information to any other person other than with the prior written consent of the Disclosing Party or being compelled by law or in accordance with Section 10.3 hereof; and

not use the Confidential Information for any purpose other than the performance of its obligations under this Agreement.

During the term of this Agreement the Receiving Party may disclose the Confidential Information to its employees (the “Recipient”) to the extent that it is necessary for the purposes of this Agreement.

The Receiving Party shall procure that each Recipient is made aware of and complies with all the Receiving Party’s obligations of confidentiality under this Agreement as if the Recipient was a party to this Agreement.

The obligations contained in Section 10.3 hereof shall not apply to any Confidential Information which:-

is at the date of this Agreement or at any time after the date of this Agreement comes into the public domain other than through breach of this Agreement by the Receiving Party or any Recipient; or

can be shown by the Receiving Party to the reasonable satisfaction of the Disclosing Party to have been known to the Receiving Party prior to it being disclosed by the Disclosing Party to the Receiving Party; or

subsequently comes lawfully into the possession of the Receiving Party from a third party; or

is required to be disclosed to the relevant Governmental Authority in compliance with relevant laws and regulations applicable to that Party or the relevant Listing Rules or any applicable rules in relation to any applicable stock exchange.

Quarterly Financial Statements. Within 35 days after the close of each fiscal quarterly accounting period ending after the date hereof, the consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarterly period and the related statements of income, shareholders’ equity and cash flow for such quarterly period and (if different) for that portion of the fiscal year that has elapsed with the last day of such quarterly period, and in each such case setting forth comparative figures for the corresponding periods in the prior fiscal year, all of which shall be prepared in accordance with US GAAP applied on a consistent basis.

Annual Financial Statements. Within 120 days after the close of each fiscal year of the Company, the consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and the related statements of income, shareholders’ equity and cash flow for such fiscal year, in each case setting forth comparative figures for the preceding fiscal year, all of which shall be prepared in accordance with US GAAP applied on a consistent basis.

Monthly Management Reports. Within 15 days after the close of each fiscal monthly accounting period ending after the date hereof, the Company shall prepare and submit to the Company Shareholders management reports setting out operational, management and financial conditions of the Group in order to enable the Subscriber ascertaining the latest position of business activities undertaken by the Group and the Group’s financial position.

Annual Budget. Within 30 days before the end of each year, the Company shall prepare and submit to the Company Shareholders its estimated detailed financial budget for the following financial year.

Any other information in relation to the business activities, operation and financial condition of the Group that the Directors may reasonably request from time to time.

If the Company wishes to issue (“Further Issuance”) any further Ordinary Shares or any other shares in the capital of the Company or any loan capital, securities or other rights which having attached thereto a right of conversion into or exchange for any Ordinary Shares or any equity interest in the Company, the Company shall give and the Existing Shareholders shall procure the Company to give notice (the “Company’s Notice”) to CISG stating the total number of additional Ordinary Shares or any shares to be issued or which could be issued upon exercise of a right of conversion or exchange pursuant to the Further Issuance and the price for such Further Issuance to be subscribed for CISG shall have the option but not the obligation to subscribe at the price set forth in the Company’s Notice for that proportion of Further Issuance equivalent to the percentage (%) which the number of Ordinary Shares held by CISG bears to the total number of issued Ordinary Shares of the Company at the time when the Company’s Notice is issued. Such option may be exercised by CISG by serving a notice to the Company at any time within 20 Business Days following CISG’s receipt of the Company’s Notice and accompanied by payment in full for that proportion of the Further Issuance to be subscribed for. The Company hereby agrees that any Further Issuance will be at a price that is not less than CISG’s price pursuant to this Subscription. The Parties hereby expressly acknowledge, confirm and agree the purpose of this Section 10.5 is to offer an anti- dilution protection in favor of CISG so that if CISG shall have elected to exercise the option hereunder, its shareholdings in the Company will not be diluted notwithstanding the Further Issuance.

If and whenever the Ordinary Shares by reason of any consolidation or sub-division shall become of a lesser nominal amount, CISG will proportionally be issued with additional Ordinary Shares at a nominal consideration so that CISG’s shareholdings in the Company immediately upon such consolidation or sub-division will remain the same as its shareholdings in the Company immediately before such consolidation or sub-division.

The number of arbitrators shall be three, one of whom shall be appointed by the Party asserting a claim against the other Party or Parties, one of whom shall be appointed by the Party or Parties (acting together), as the case may be, against whom a claim has been asserted, and the third of whom shall be selected by mutual agreement, if possible, within thirty days of the selection of the second arbitrator and thereafter by the administering authority. In the event the Party against whom a claim has been asserted fails to appoint the second arbitrator within 15 days after the first arbitrator is appointed by the Party asserting a claim, then the administering authority shall select the second and third arbitrators after expiration of the said 15 days.

The language of arbitration shall be conducted in the English language and any foreign language documents presented at such arbitration shall be accompanied by an English translation thereof. The arbitration shall be held in HKSAR.

Any award of the arbitrators (i) shall be in writing, (ii) shall state the reasons upon which such award is based and (iii) may include an award of costs, including reasonable attorney’s fees and disbursements.

Any Party may make an application to the arbitrators seeking injunctive relief to maintain the status quo until such time as the arbitration award is rendered or the dispute, controversy or claim is otherwise resolved. Any Party may apply to any court having jurisdiction hereof and seek injunctive relief in order to maintain the status quo until such time as the arbitration award is rendered or the dispute, controversy or claim is otherwise resolved.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNED BY: Tian Yuan

Power of attorney of a director, for and on behalf of

INSCOM HK LIMITED

in the presence of

SIGNED BY: Tian Yuan

a director, for and on behalf of

INSCOM GROUP LIMITED

in the presence of

SIGNED BY: Tian Yuan

a director, for and on behalf of

INSCOM HOLDING LIMITED

in the presence of

SIGNED BY: Tian Yuan

Power of attorney of a director, for and on behalf of

APOLLO & MUSE HOLDING Limited

in the presence of

SIGNED BY:▇▇▇▇ ▇▇▇▇▇▇▇

a director, for and on behalf of

CLEVER STAR HOLDINGS LIMITED

in the presence of

SIGNED BY:Hu Yinan

a director, for and on behalf of

CISG HOLDINGS LTD.

in the presence of

 

 

 

 

 

 

 

 

 

Apollo & Muse Holding Limited

Clever Star Holdings Limited

 

 

 

 

 

 

 

 

 

InsCom Holding Limited

 

 

 

 

 

 

 

 

InsCom Group Limited

 

 

 

 

 

 

 

 

InsCom HK Limited

 

 

 

 

 

 

 

 

▇▇▇▇ ▇▇▇▇

 

Fei Xiao

 

 

 

 

 

 

 

 

▇▇▇▇ ▇▇▇▇

 

Fei Xiao

HN Fanhua Anlian Insurance Agency Co.,Ltd

HZ Fanhua Zhixin Insurance Agency Co.,Ltd

TJ Fanhua Xianghe Insurance Agency Co.,Ltd

FZ Fanhua Guoxin Insurance Agency Co.,Ltd

CS Lianyi Insurance Agency Co.,Ltd

NB Baolian Insurance Agency Co.,Ltd

The information and particulars relating to the Group as set out in the recitals and Schedules to this Agreement are true and accurate in all respects.

Copies of articles of association of each member of Group which have been given to the Subscriber are accurate and complete in all respects and have annexed or incorporated copies of all resolutions or agreements required to be so annexed or incorporated by the rules and regulations governing companies in the PRC.

The statutory books and registers of the Group have been properly kept and no notice or allegation that any of them is incorrect or should be rectified has been received.

All returns and particulars, resolutions and other documents which any member of the Group is required by law to file with or deliver to the relevant authorities have been correctly made up and duly filed or delivered.

The PRC Subsidiaries have been duly incorporated and are validly existing under the laws of the PRC and have full power, authority and legal right to own their assets and carry on the business.

Save and except already disclosed to the Subscriber in writing by the Existing Shareholders, no person is entitled or has claimed to be entitled to require any member of Group to issue any share equity or loan capital either now or at any future date whether contingently or not.

Save and except already disclosed to the Subscriber in writing by the Existing Shareholders, there is no option, right of pre-emption, right to acquire, mortgage, charge, pledge, lien or other form of security or encumbrance on, over or affecting any of the equity interest of the Group nor is there any commitment to give or create any of the foregoing, and no person has claimed to be entitled to any of the foregoing.

The Group is the legal and beneficial owner of its assets as set out in the Accounts.

The Group has taken no steps to be a party to a transaction and has not entered into any disposition of property pursuant to or as a result of which an asset owned, purportedly owned or otherwise held by any member of the Group is liable to be transferred or re-transferred to another person or which gives or may give rise to a right of compensation or other payment in favor of another person.

Each member of the Group has conducted its business in accordance with all applicable laws, regulations and rules issued by the relevant PRC government authorities and has not committed any criminal, illegal or unlawful act.

To the best belief and knowledge of the Existing Shareholders, neither the Group, nor any of its officers, agents or employees (during the course of their duties), has done or omitted to do anything which is a contravention of any statute, order, regulation or the like giving rise to any fine, penalty or other liability or sanction on the part of the Group which could have produced adverse effect on the normal operation of the Group.

The Group has not committed any breach of contract or statutory duty or other unlawful act which could lead to a claim for damages being made against it and no event has occurred which would entitle any third party to terminate any contract or any benefit enjoyed by the Group.

All necessary licenses, approvals and/or permits for undertaking the business by the Group have been validly issued to the Group Companies by the Governmental Authorities and that the Existing Shareholders are not aware of anything that might result in the revocation, suspension or modification of any of such licenses, approvals and permits or any circumstances that might prejudice their renewal.

The Existing Shareholders do not have actual knowledge and have not received any written notice that:-

the Group is engaged in any litigation or arbitration proceedings.

the Group has done or omitted to do anything which will give rise to any litigation or arbitration proceedings by or against the Group, and

the Group is the subject of any investigation, inquiry or enforcement proceedings or process by any governmental, administrative or regulatory body.

Save as disclosed prior to signing of this Agreement, the Existing Shareholders have not received any written notice or verbal indication from any party in which:-

any receiver, liquidator, provisional administrator or other person carrying on similar function has been appointed in respect of any Group or in respect of the whole or any part of the assets or undertaking of any Group; and

any winding up or administrative order has been made and no petition has been presented for such an order in respect of any Group.

Save as disclosed prior to signing of this Agreement, the Existing Shareholders have not received any notice in which:-

any meeting has been convened at which a resolution shall be proposed, any resolution has been passed, any petition has been presented and any order has been made for the winding up or dissolution of any Group Company or for an administrative order in respect of any Group Company; or

any Group Company has stopped or suspended payment of its debts, become unable to pay its debts (within the meaning of Section 178 of the Companies Ordinance or any similar provisions under the applicable laws in PRC) or otherwise become insolvent.

Save as disclosed prior to signing of this Agreement, the Existing Shareholders have not received any written notice in which any circumstances have arisen which entitle any person to take any action, appoint any person, commence proceedings or obtain any order.

Save as disclosed prior to signing of this Agreement, the Company, INSCOM HK and INSCOM BVI have not carried on any actual business operation in any part of the world and have not entered into any contract, agreement (whether verbal or in writing) with any Person.

to the best knowledge and belief of the Existing Shareholders, the Accounts have been prepared in accordance with US GAAP and laws and regulations of PRC.

are complete and accurate in all material respects and give, a true and fair view of the state of affairs and financial position of the Group Companies as at the Account Date.

are true, accurate and complete, in all material respects with regard to capital commitments, assets and liabilities (actual and contingent), profits and loss and the financial position of the Group Companies as at the Account Date.

are not materially and adversely affected by any unusual or non-recurring items.

fully disclose all the assets of the Group Companies as at the Account Date.

fully disclose and make full provision or reserve for all actual liabilities, and

fully disclose and make provision or reserve for or note all contingent liabilities, capital or burdensome commitments and deferred taxation.

All accounts, books, ledgers, and other financial records of the Group Companies:-

to the best knowledge and belief of the Existing Shareholders, all accounts, books, ledgers, and other financial records of the Group Companies have been properly maintained and contain accurate records of all matters required to be entered in them in accordance with US GAAP, and applicable statutes and regulations of PRC; and

give a true and fair view of the matters which ought to appear in them.

No dividend or other distribution of profits or assets has been or agreed to be declared, made or paid by the Group Companies since the Account Date.

All dividends or other distributions of profits or assets declared, made or paid since the respective dates of incorporation of the Group Companies have been declared, made and paid in accordance with the applicable PRC statutes and regulations and the respective articles of association (or equivalent documents) of each member of the Group Companies.

The Group Companies have made no bank borrowings other than those as shown in the Accounts.

The Group Companies has no outstanding mortgages, charges, debentures or other loan capital or bank overdrafts, bank or other borrowings, loans or other indebtedness, financial facilities, finance leases or hire purchase commitments or any guarantees or other contingent liabilities other than those as shown in the Accounts.

No material outstanding indebtedness of any member of the Group Companies has become payable by reason of default by any member of the Group Companies and no event of default has occurred or is pending which with the lapse of time or the fulfillment of any condition or the giving of notice may result in any such indebtedness becoming so payable prior to maturity.

Save as disclosed in the Accounts, the Group Companies have no and has not incurred any loan capital or any liability.

The Group Companies have not lent any money to any parties which has not been repaid to it or owns the benefit of any debt (whether present or future) other than debts accrued to it in the ordinary course of its business.

The Group Companies have sufficient working capital for the purposes of operating their existing businesses.

Save as disclosed in writing prior to signing of this Agreement or transactions contemplated under this Agreement, the Group Companies have no material outstanding capital commitment and is not engaged in any scheme or project requiring expenditure of capital of a significant sum.

Save as disclosed in the Accounts, there are no liabilities (including contingent liabilities) which are outstanding on the part of the Group Companies other than those incurred in the ordinary and proper course of business since the Account Date.

The Company, INSCOM HK and INSCOM BVI have not incurred any liabilities (including contingent liabilities) since incorporation.

In relation to all financing arrangements (including all mortgages, overdrafts and other loan or financial facilities) to which any Group Companies is a party:-

there has been no contravention of or non-compliance with any provision of any such document.

no steps for the enforcement of any encumbrances or the early repayment of the indebtedness have been taken or threatened;

there has not been any alteration in the terms and conditions of any of the said arrangements or facilities all of which are in full force and effect.

nothing has been done or omitted to be done whereby the continuance of the said arrangements and facilities in full force and effect might be affected or prejudiced.

none of the arrangements is dependent on the guarantee of or on any security provided by a third party.

no consent is required from the lenders of such financing arrangements for the entering into and completion of the transactions contemplated under this Agreement, and

none of the facilities may be terminated, or mature prior to its stated maturity as a result of completion of the Subscription or any matter contemplated by this Agreement.

Since the Account Date:-

the Group Companies have conducted the business of the Group Companies in a normal and proper manner.

the Group Companies have not entered into any unusual contract or commitment or otherwise departs from its normal course of trading.

there has been no material adverse change to the Accounts since Account Date.

there has not been any sale or transfer by the Group Companies of any material tangible or intangible assets other than in the ordinary course of business, any mortgage or pledge or the creation of any security interest, lien, or encumbrance on any such asset, or any lease of property, including equipment, other than tax liens with respect to taxes not yet due and statutory rights of customers in inventory and other assets.

there has not been any damage, destruction, or loss, whether covered by insurance or not, materially adversely affecting the business of the Group Companies (taken as a whole.

there has not been making of any material loan, advance, indemnity or guaranty by the Group Companies to or for the benefit of any person except the creation of accounts receivables in the ordinary course of business.

there has not been any material adverse change in the business, financial condition, operations, or assets of the Group Companies (taken as a whole. And

there has not been an agreement to do any of the foregoing.

Neither the execution of this Agreement nor the compliance with the terms of this Agreement does and will:-

conflict with, or result in the breach of, or constitute a default under, any of the terms, conditions or provisions of any agreement or instrument to which the Group Companies is a party, or any provision of the memorandum or articles of association or other corresponding constitutional documents of the Group Companies or any encumbrances, lease, contract, order, judgement, award, injunction, regulation or other restriction or obligation of any kind or character by which or to which any asset of the Group Companies is bound or subject.

relieve any person from any obligation to the Group Companies or cause any person to determine any such obligation or any right or benefit enjoyed by the Group Companies, or to exercise any right, whether under an agreement with or otherwise in respect of the Group Companies.

result in the creation, imposition, crystallization or enforcement of any encumbrance whatsoever on any of the assets of the Group Companies, and

result in any present or future indebtedness of the Group Companies becoming due and payable or capable of being declared due and payable prior to its stated maturity.

Each member of the Group Companies is not a party to any agency, distributorship, marketing, purchasing, manufacturing or licensing agreement or arrangement, or any restrictive trading or other agreement or arrangement which in any way restricts its freedom to carry on business.

The Group Companies are not a party to any undertaking or assurances given to any court or governmental agency which is still in force.

On or prior to the Closing Date, the Group Companies are not and will not with the lapse of time become:-

in default under any agreement or covenant to which it is a party or in respect of any other obligations or restrictions binding upon it; and

to the best information and belief of the Existing Shareholders, liable in respect of any breach of representation or warranty given under any agreement to which it is a party.

On or prior to the Closing Date, no threat or claim of default under any agreement, instrument or arrangement to which any member of the Group Companies is a party has been made and is outstanding against it and there is nothing whereby any such agreement, instrument or arrangement may be prematurely terminated or rescinded by any other party or whereby the terms thereof may be materially worsened as against the relevant member of Group Companies.

No party to any agreement with or under an obligation to the Company is (1) in default under it, being a default which would be material in the context of its financial or trading position and there are no circumstances likely to give rise to such a default; or (2) incapable of performing its obligations or granting any rights thereunder.

The Group Companies have not granted any power of attorney or similar authority which remains in force as at the date of this Agreement.

Each Group Company has complied with all other relevant legal requirements relating to registration or notification for Taxation purposes.

Each member of Group Company has:-

duly and punctually paid all Taxation which it has become liable to pay and is under no liability to pay any penalty or interest in connection with any claim for Taxation and has not paid any tax which it was and is not properly due to pay.

taken all necessary steps to obtain any repayment of or relief from Taxation available to it.

The returns which ought to have been made by or in respect of any member of Group Companies for any Taxation purposes have been made and all such returns are up-to-date correct and on a proper basis and are not the subject of any dispute with any Taxation or other relevant authority and there are no present circumstances known to the Existing Shareholders which are likely to give rise to any such dispute and provision has been made in the Accounts for all amounts which were or would have been shown by any such return to be payable by the Company.

The provisions (if any) included in the Accounts are sufficient to cover all Taxation in respect of all periods ending on or before the Account Date for which the Group Companies was then or might at any time thereafter become or have become liable.

No member of the Group has entered into any agreements, arrangement or understanding (whether legally enforceable or not) for the licensing or otherwise permitting the use or exploitation of the IP Rights.

None of the IP Works is currently being infringed, misused or used without authorization by any third party and none of it has been so infringed, misused or used without authorization during the last three years nor will it be so infringed, misused or used and no third party has threatened any such infringement, misuse or unauthorized use.

To the best belief and knowledge of the Existing Shareholders, there are no circumstances under which the Group’s right to use IP Works may be prohibited or terminated.

The activities of the Group Companies do not infringe or otherwise involve the misuse or unauthorized use of any industrial or intellectual property rights of third parties. None of the IP Rights has been wrongfully or unlawfully acquired by the Group Companies. No claim under any warranty contained in such documentation has been made or intimated nor are there any reasonable grounds on which any such claim could be made.

The Group has taken all steps open to it to preserve its IP Works including, but not limited to take all reasonable steps to preserve the confidentiality of all know-how, confidential information and trade secrets used in the Business, including ensuring that all such know-how, information and secrets are fully documented and held in a secure location in the possession or control of the Group, are only disclosed to such employees and other persons to whom disclosure is necessary in the normal conduct of the business of the Group and who are aware of, and accept in writing an obligation to maintain, the confidentiality thereof.

The Group has not in the past been carrying on the business in such a way as to infringe any intellectual property right of any person, does not do so as at the date of this Agreement, and it will not do so prior to Closing.

None of the Group has owned any real property in the PRC or elsewhere.

The relevant Selling Shareholder shall first give a notice in writing within 7 days after receipt of the offer (the “Transfer Notice”) from any third party (“Prospective Purchaser”) to CISG informing that he/she/it has received such an offer. The Transfer Notice shall specify:-

the number of stocks which the Prospective Purchaser wishes to acquire (the “Offered Shares”);

the name of the Prospective Purchaser;

the price which the Prospective Purchaser has offered for the Offered Shares (if any); and

details of any other material terms of the offer made by the Prospective Purchaser (if any) and any other material terms or circumstances known to the relevant Selling Shareholder which affect or may affect the offer.

CISG (“Purchasing Shareholder”) may within a period of 15 Business Days after receipt of the Transfer Notice require the relevant Selling Shareholder to sell the Relevant Shares to CISG under the same terms and conditions.

None of the Existing Shareholders shall Transfer or agree to transfer or enter into any arrangement for the transfer of the Offered Shares or any part thereof to the Prospective Purchaser or its nominees unless the provisions set out herein have been duly complied with.

 

 

(c) Liquidation Preference