Continuing connected transactions - service framework agreement in respect of decoration and renovation engineering and construction and procurement framework agreement in respect of decoration and renovation materials and furnishings

Date:

6

August 2020

Parties:

The Company

RSM Holding

Term of Service:

6

August 2020 to 31 March 2021

Scope of Decoration and

Decoration and renovation engineering and construction services to

Renovation Engineering

be provided by the Group to RSM Holding and its subsidiaries are

and Construction

as follows:

Services:

(1)

Decoration and renovation engineering;

(2)

Building decoration engineering design;

(3)

Steel structure work;

(4)

Building mechanical and electrical installation work;

(5)

General contracting of construction engineering;

(6)

Professional contracting of building curtain wall engineering;

(7)

Professional contracting of firefighting facilities engineering;

and

(8)

General contracting of municipal public engineering.

Service Fee Cap:

The

fee cap of the abovementioned decoration and renovation

engineering and construction services during the term of service is

RMB570,000,000.

Payment Method of

When RSM Holding and its subsidiaries choose to accept the

Decoration and

relevant decoration and renovation engineering and construction

Renovation Engineering

services from the Company, they will enter into a separate

and Construction Service

construction contract with the Company per project after the

Fees:

Service Framework Agreement in respect of Decoration and

Renovation Engineering and Construction takes effect. The amount

Pricing Principles of

The prices of all decoration and renovation engineering and

Service Payments:

construction services under the Service Framework Agreement in

respect of Decoration and Renovation Engineering and Construction

shall be determined according to the following general principles

and order:

(1) The prices shall be determined through a bidding process in

principle, during which RSM Holding selects suppliers by

inviting tenders, and the suppliers provide quotations and

tenders independently based on each project. During the

bidding process, the Company shall strictly comply with the

Law of the People's Republic of China on Bid Invitation and

Bidding and the requirements set out in bidding document

prepared by RSM Holding, and

the

relevant

departments

of the Company will determine

the

tender

prices based

on recent quotations, relevant market information, etc., to

ensure the tender prices (as well as the tender terms) offered

by the Company are fair and reasonable, and are no more

favorable than the prices and terms offered by the Company to

independent third party;

(2) Where no bidding process is involved, the price shall be the

market price, reference can be made to the comparable prices

of independent third party suppliers in the market;

(3) Where comparable market price

is unavailable, the agreed

price shall be adopted, and it shall be determined after arm's

length negotiation between the parties to the contract. The

agreed price is the price determined according to "reasonable

costs of the project + reasonable market profit range". The

expected profit margin of the services provided by the

Company to RSM Holding shall be no less than the profit

margin the Company charges an independent third party;

(4) Strictly comply with the relevant laws and regulations if they

have specific requirements for the pricing of decoration and

renovation engineering and construction engineering services.

Liabilities in the Event

If the fault of one party results in losses to the other party, the

of Breaches:

defaulting party shall bear the corresponding economic liabilities.

Any employee of one party who violates the relevant regulations in

Date:

6 August 2020

Parties:

Betterhome Construction

RSM Holding

Term of Agreement:

6 August 2020 to 31 March 2021

Scope of Product

Types of Products to be provided by Betterhome Construction and

  Procurement:

its subsidiaries to RSM Holding and its subsidiaries mainly include:

(1)

Household items, furniture, kitchen equipment, home

appliances;

(2)

Bathroom sanitary ware, hardware and electrical appliances;

(3)

Building materials, construction materials, decorative

materials;

(4)

Daily necessities; and

(5)

Other products agreed by RSM Holding and

Betterhome

Construction.

Procurement Amount Cap:

The procurement amount cap of the abovementioned Products

during the term of service is RMB210,000,000.

Basis for Procurement

The annual cap is determined after arm's length negotiation between

  Amount Cap:

Betterhome Construction and RSM Holding, having considered

(1)

the aggregate contract transaction

amount

(unaudited)

of approximately RMB37,183,062.30 between Betterhome

Construction and RSM Holding in the past 12 months and the

estimated future transactions; and (2) the market price and the

normal gross margin range of product procurement in the market.

Payment Method of Product

When RSM Holding and its subsidiaries choose to procure

  Procurement Fee:

prescribed Products from Betterhome Construction, they will enter

into a separate procurement contract with Betterhome Construction

per order after the Procurement Framework Agreement in respect of

Decoration and Renovation Materials and Furnishings takes effect.

The procurement amount, settlement method and relevant rights and

obligations are determined as agreed in the specific contract.

Pricing Principle of

The transaction price of the procured Products under the

  Procurement Amount:

Procurement Framework Agreement in

respect of

Decoration

and Renovation Materials and Furnishings shall be determined

according to the following general principles and order:

independent third party suppliers in the market; and

(3) Where comparable market price rate is unavailable, the agreed

price shall be adopted, and it shall be determined after arm's

length negotiation between the parties to the contract. The

agreed price is the price determined according to "reasonable

costs of the products + reasonable market profit range". The

expected profit margin of the Products provided by Betterhome

Construction to RSM Holding shall be no less than the profit

margin the Company charges an independent third party.

Liability in the Event of

If the fault of one party results in losses to the other party, the

  Breaches:

defaulting party shall bear the corresponding economic liabilities.

Any employee of one party who violates the relevant regulations in

the PRC shall be dealt with by the relevant authorities in accordance

with laws.

If Betterhome Construction and RSM Holding are unable to perform

the Procurement Framework Agreement in respect of Decoration

and Renovation Materials and Furnishings due to force majeure,

they shall be exempted from liability in part or in whole depending

on the impact of the force majeure, except as otherwise provided

by the PRC laws. If force majeure occurs after the delay of

performance of the Procurement Framework Agreement in respect

of Decoration and Renovation Materials and Furnishings by one

party, the party shall not be exempted from liability.

"Associate(s)"

has the meaning ascribed thereto under the Listing Rules

"Betterhome Construction"

Betterhome Construction Technology Co., Ltd. ( 家倍得建築科技有

限公司 ), a limited liability company established in the PRC and a

subsidiary of the Company

"Board"

the board of directors of the Company

"Company"

Red Star Macalline Group Corporation Ltd., a sino-foreign joint

stock company incorporated in the PRC with limited liability, whose

H shares are listed on the main board of the Stock Exchange and A

shares are listed on the Shanghai Stock Exchange

"connected person"

has the meaning ascribed thereto under the Listing Rules

"controlling shareholder"

has the meaning ascribed thereto under the Listing Rules

"Director(s)"

the directors of the Company

"Group"

the Company and its subsidiaries

"Listing Rules"

the Rules Governing the Listing of Securities on The Stock

Exchange of Hong Kong Limited

"PRC"

the People's Republic of China

"Procurement Framework

the procurement framework agreement in respect of decoration

  Agreement in respect of

and renovation materials and furnishings entered into between

  Decoration and

Betterhome Construction and RSM Holding on 6 August 2020

"Product(s)"

decoration and renovation materials and furnishings

"RMB"

Renminbi, the lawful currency of the PRC

"RSM Holding"

Red Star Macalline Holding Group Company Limited* ( 紅星美

凱龍控股集團有限公司, formerly known as "Shanghai Red Star

Macalline Investments Company Limited" ( 上海紅星美凱龍投資

有限公司 )), a limited liability company established in the PRC and

a controlling shareholder of the Company

"Service Framework

the service framework agreement in respect of decoration and

Agreement in respect

renovation engineering and construction entered into between the

of Decoration and

Company and RSM Holding on 6 August 2020

"Stock Exchange"

The Stock Exchange of Hong Kong Limited

"subsidiary(ies)"

has the meaning ascribed thereto under the Listing Rules

"Transactions"

the continuing connected transactions contemplated as set out in

the "Service Framework Agreement in respect of Decoration and

Renovation Engineering and Construction" and "Procurement

Framework Agreement in respect of Decoration and Renovation

Materials and Furnishings" in this announcement