Exhibit 10.1
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PURCHASE AND SALE AGREEMENT
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By and Among
Xxxxxxx Xx, Xxx Xx, Xxxxxx Xxxx, Changgen Ma, Yongxia Tan,
Xxxxxx Xxxx, Xxxxxx Xxxxx,
(Individually collectively the "SELLERS")
And
Su Zhou Blue Tassel School
(BUYER)
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Covering the Acquisition of
CERTAIN SHARES OF YOUBANG HUMAN RESOURCE COMPANY
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March 6, 2009
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TABLE OF CONTENTS
1. PURCHASE AND SALE OF SHARES
2. THE CLOSING
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
4. REPRESENTATIONS AND WARRANTIES OF BUYER
5. PRE-CLOSING COVENANTS
5.1. Satisfaction of Conditions Precedent 13
5.2. Notices and Consents 13
5.3. Operation of Business 13
5.4. Access to Information 14
5.5. Contact with Customers and Vendors 14
5.6. Amendment of Schedules 14
5.7 Financial Statements 14
6. POST-CLOSING COVENANTS
6.1. General 15
6.2. Delivery and Retention of Records 15
6.3. Employee Matters 16
7. CONDITIONS PRECEDENT
7.1. Conditions to Obligation of the Buyer 16
7.2. Conditions to Obligation of the Sellers 17
8. REMEDIES FOR BREACHES OF AGREEMENT
8.1. Survival of Representations, Warranties and
Certain Covenants 18
8.2. Indemnification Provisions for Benefit of the Buyer 19
8.3. Indemnification Provisions for Benefit of the Sellers 20
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8.4. Matters Involving Third Parties 20
8.5. Determination of Amount of Adverse Consequences 21
8.6. Tax Treatment of Indemnity Payments 21
9. TAX MATTERS
9.1. Post-Closing Tax Returns 21
9.2. Pre-Closing Tax Returns 21
9.3. Intentionally Omitted 21
9.4. Claims for Refund 22
9.5. Cooperation on Tax Matters 22
9.6. Certain Taxes 22
9.7. Confidentiality 23
9.8. Audits 23
9.9. Control of Proceedings 23
9.10. Powers of Attorney 23
9.11. Remittance of Refunds 24
10. TERMINATION OF AGREEMENT
10.1. Termination of Agreement 24
10.2. Effect of Termination 25
11. MISCELLANEOUS
11.1. Intentionally Omitted 25
11.2. Press Releases and Public Announcements 25
11.3. No Third Party Beneficiaries 26
11.4. Succession and Assignment 26
11.5. Counterparts 26
11.6. Notices 26
11.7. Governing Law 27
11.8. Entire Agreement 27
11.9. Severability 27
11.10. Transaction Expenses 27
EXHIBITS
Exhibit A: Definitions and Interpretations
Exhibit B: Description of Assets
Exhibit C: Form of Lease Agreements
Exhibit D: Form of Legal Opinions
Exhibit F: Form of Letter Intention
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") dated as of March 6,
2009 is by and among SU ZHOU BLUE TASSEL SCHOOL ("Blue Tassel" or the "Buyer");
a 100% owned subsidiary company of CHINA IVY SCHOOL, INC. a Nevada corporation,
whose address is 0 Xxxxx Xxxx Xxxxxxx Xxxxxxxx, Xxxxx 000, Suzhou Industrial,
Jiangsu Province, PR China 215021, and Xxxxxxx Xx, Xxx Xx, Xxxxxx Xxxx, Changgen
Ma, Yongxia Tan, Xxxxxx Xxxx, Xxxxxx Xxxxx, whose address is No. 105-205 Labor
Service Market, Huashan Road Suzhou New District, Jiangsu Province, PR. China
215129 (individually a "Seller" and collectively the "Sellers").. The Sellers
and the Buyer are sometimes referred to collectively herein as the "Parties" and
individually as a "Party."
RECITALS
WHEREAS, Blue Tassel is a 100% owned subsidiary of China Ivy School, Inc.
who is a Nevada corporation with its principal place of business in PR. China
and is engaged in various business pursuits;
WHEREAS, Sellers own 90% of the outstanding shares of common stock (the
"Shares") of YOUBANG Human Resource Company ("YOUBANG'), a Chinese company
located in Suzhou, Jiangsu Province of the Peoples Republic of China;
WHEREAS, Sellers desire to sell to Buyer, and Buyer is willing to purchase
from the Sellers, the Shares for the consideration and on the other terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
On the terms and subject to the conditions set forth herein, each Seller agrees
to sell to Buyer, and Buyer agrees to purchase from each Seller, the percent of
YOUBANG Shares set forth opposite his name in consideration for the number of
shares of China Ivy common stock set opposite Seller's name at the closing
referred to below:
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Name of Percent of YOUBANG Shares Number of China Ivy
Seller Being Sold Shares
Xxxxxxx Xx 24.3% 5,400,000 shares
Xxx Xx 22.5% 5,000,000 shares
Surong Gong 19.8% 4,400,000 shares
Changgen Ma 9.0% 2,000,000 shares
Yongxia Tan 7.2% 1,600,000 shares
Xxxxxx Xxxx 3.6% 800,000 shares
Xxxxxx Xxxxx 3.6% 800,000 shares
Total 90.0% 20,000,000 shares
(This Agreement may refer to all Common Stock collectively as the "Stock" or the
"Common Stock.")
ARTICLE II
CLOSING
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of SUZHOU BLUE TASSEL SCHOOL ,
commencing at 10:00 a.m. local time on the second business day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated by this Agreement (other than
conditions with respect to actions each Party will take at the Closing itself),
or such other date as the Buyer and Seller may mutually determine (the "Closing
Date"). The Closing shall not be extended beyond April 15, 2009 unless extended
in writing by both parties. . At the Closing,
The Sellers will deliver to the Buyer the certificates evidencing the
shares of YOUBANG capital stock being transferred to Buyer, duly assigned and
executed in favor of Buyer, against delivery to each Seller (or his designee) of
certificates evidencing the number of shares of China Ivy to be delivered to
Seller hereunder duly executed by China Ivy.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers represent and warrant to the Buyer as follows:
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3.1 YOUBANG. YOUBANG is a corporation duly organized, validly existing, and in
good standing under the Laws of the People's Republic of China. YOUBANG is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of the business conducted by it or the ownership or leasing of its
properties makes such qualification necessary, except where the failure to
qualify would not have a material adverse effect on the Sellers or their ability
to consummate the transactions contemplated by this Agreement.
3.2 Authorization of Transaction. Each of the Sellers has full power and
authority to execute and deliver this Agreement and to perform his obligations
under this Agreement. This Agreement constitutes the valid and legally binding
obligation of each of the Sellers enforceable in accordance with its terms and
conditions, subject, however, to the effects of bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting creditors' rights, and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). None of the Sellers need give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Authority in order to consummate the transactions
contemplated by this Agreement.
3.3 Non contravention. Neither the execution nor delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will (i) violate any
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any Governmental Authority to which any of the Sellers
is subject or any provision of their Organizational Document or (ii) Conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any of the Sellers is a party or by
which it is bound or to which any of its assets is subject, except for (x)
required consents to transfer and related provisions, (y) any other third-party
approvals or consents contemplated in this Agreement; and (z) such violations,
defaults, breaches, or other occurrences that do not have a Material Adverse
Effect on the ability of any of the Sellers to consummate the transactions
contemplated by this Agreement.
3.4 Brokers' Fees. Neither the Sellers nor their Affiliates (as defined in Rule
405 under the Securities Act of 1933, as amended) have any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the Buyer
could become liable or obligated.
3.5 Solvency. As of the date of this Agreement, and after consummation of the
transactions contemplated by this Agreement, none of the Sellers are insolvent
or unable to pay its debts or have made a general assignment with or for the
benefit of its creditors, and no proceeding under any bankruptcy, insolvency or
reorganization law has been commenced by or with respect to any of the Sellers.
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3.6 Ownership of the Shares. Sellers own the Shares, free and clear of all
Encumbrances.
3.7 No Adverse Claims. To the Sellers' Knowledge, there are no adverse claims to
any of the assets of YOUBANG (the "Assets"), except for (i)Permitted
Encumbrances, and (ii) those claims which would not have a Material Adverse
Effect.
3.8 Contracts and Commitments. All contracts to which YOUBANG is a party are in
full force and effect, except where the failure to be in full force and effect
would not have a Material Adverse Effect. YOUBANG has performed all material
obligations required to be performed to date under all contracts to which
YOUBANG, is a party, and YOUBANG is not in default under any material obligation
of such contracts, except when such default would not have a Material Adverse
Effect.
3.9 Material Change. To the Sellers' Knowledge, since December 31, 2008 there
has been no Material Adverse Effect.
3.10 Real Property. The Sellers have delivered or made available to the Buyer
all material title reports, title insurance policies, title commitments, title
opinions and title abstracts relating to the real estate owned by YOUBANG and
any real property, leaseholds, easements, rights of way, caraways, and any
rights of ingress and egress (the "Title Information") which are in the
possession and control of the Sellers. To Sellers' Knowledge, all Title
Information is true and accurate except to the extent such inaccuracy would not
have a Material Adverse Effect.
3.11 Tax Matters. Except as would not have a Material Adverse Effect:
(i) There is no dispute or claim concerning any Tax liability with respect to
business operations of YOUBANG claimed or raised by any authority in writing.
(ii) There are no outstanding agreements or waivers extending the statutory
period of limitations applicable to any Tax Returns required to be filed by or
with respect to YOUBANG and for which the Buyer may be responsible.
(iii) All Tax Returns for YOUBANG that were required to be filed have been filed
and such Tax Returns are accurate in all respects. All Taxes shown as due on any
such Tax Returns have been paid.
(iv) To Sellers' Knowledge, no special assessments for improvements are
outstanding or have been completed as of the date of this Agreement.
3.11 Litigation. There are no matters of litigation affecting YOUBANG, which (i)
is subject to any outstanding injunction, judgment, order, decree, ruling, or
charge or (ii) is the subject of any action, suit, proceeding, hearing, or
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investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction, or is the subject
of any pending or, to the Sellers' Knowledge, threatened claim, demand, or
notice of violation or liability from any Person, except where any of the
foregoing would not have a Material Adverse Effect.
3.12 Non-contravention. Neither the execution nor delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will (i) violate
any statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any Governmental Authority to which YOUBANG or
the Sellers are subject or (ii) to the Sellers' Knowledge, conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice or trigger any rights to payment or other compensation under
any agreement, contract, lease, license, instrument, or other arrangement to
which YOUBANG or any Asset is subject, except for required consents to transfer
and related provisions and any other third party appraisals or consents
contemplated in this Agreement or where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation, failure to give
notice, right to payment or other compensation, or Encumbrance would not have a
Material Adverse Effect, or would not materially adversely affect the ability of
the Sellers to consummate the transactions contemplated by this Agreement. None
of the Sellers needs to give notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority in order for
the Parties to consummate the transactions contemplated by this Agreement,
except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a Material Adverse Effect or
would not materially adversely affect the ability of the Sellers to consummate
the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to the Sellers as follows:
4.1 Organization of the Buyer. The Buyer is a limited liability company duly
organized, validly existing, and in good standing under the Laws of the state of
Nevada. 4.2 Authorization of Transaction. The Buyer has full power and authority
(including full company power and authority) to execute and deliver this
Agreement and to perform its obligations under this Agreement. To the extent
that any approvals of shareholders or Boards of Directors is required,
consummation of closing shall constitute affirmative warranty that all such
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required approvals have been obtained. This Agreement constitutes the valid and
legally binding obligation of the Buyer, enforceable in accordance with its
terms and conditions, subject, however, to the effects of bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting creditors'
rights generally and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The Buyer
need not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any Governmental Authority in order to consummate the
transactions contemplated by this Agreement.
4.3 Buyer shall furnish to Seller such certificate or certificates as Seller may
direct in form suitable for recordation by the registrar or transfer agent of
the Company. Such certificates shall be duly authorized and deemed fully paid
and non-assessable immediately upon delivery. Buyer, at Buyer's expense, shall
provide for rights of registration, including piggyback rights, by which the
Seller's shares will be registered at Buyer's expense contemporaneously with any
other registration of securities by the Buyer.
4.4 Non-contravention. Neither the execution nor delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will (i) violate any
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any Governmental Authority to which the Buyer is subject
or any provision of its Organizational Documents or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any Party the right to accelerate, terminate, modify, or cancel, or
require any notice, approval or consent under any agreement, contract, lease,
license, instrument, or other arrangement to which the Buyer is a party or by
which it is bound or to which any of its assets is subject, except for such
violations, defaults, breaches, or other occurrences that do not, individually
or in the aggregate, have a material adverse effect on the ability of the Buyer
to consummate the transactions contemplated by this Agreement.
4.5 Brokers' Fees. The Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Sellers or its Affiliates could
become liable or obligated.
4.6 Sellers' Breach of Representation or Warranty. To the Buyer's Knowledge as
of the date of this Agreement, there is no fact or circumstance that would cause
the Sellers to be in breach of any representation or warranty set forth in this
Agreement.
ARTICLE V
PRE-CLOSING COVENANTS
5.1 Satisfaction of Conditions Precedent. From the date of this Agreement
until the earlier of the Closing Date or the termination of this Agreement, each
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party will use all commercially reasonable efforts to take all action and to do
all things necessary, proper, or advisable in order to consummate and make
effective the transactions contemplated by this Agreement, including without
limitation the satisfaction of the conditions precedent set forth in Article
VII. Without limiting the generality of the foregoing, the Buyer and the Sellers
agree to cooperate to take all commercially reasonable actions to satisfy the
conditions precedent and consummate the transactions contemplated under this
Agreement not later than April 15, 2009.
5.2 Notices and Consents. From the date of this Agreement until the
earlier of the Closing Date or the termination of this Agreement, the Sellers
will give any notices to third parties, and will use its commercially reasonable
efforts to obtain the third party consents. Each of the Parties will give any
notices to, make any filings with, and use all commercially reasonable efforts
to obtain any authorizations, consents, and approvals of Governmental
Authorities.
5.3 Operation of Business. From the date of this Agreement until the
earlier of the Closing Date or the termination of this Agreement, the Sellers
will not, without the consent of the Buyer (which consent shall not be
unreasonably withheld or delayed), engage in any practice, take any action, or
enter into any transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing, the Sellers will not, without the
consent of the Buyer (which consent shall not be unreasonably withheld, delayed
or conditioned), except as expressly contemplated by this Agreement or do any of
the following:
(a) Cause or allow any of the Shares or Assets to become subject to an
Encumbrance, except in the case of the Assets for Permitted Encumbrances and the
Encumbrances would not have a Material Adverse Effect.
(b) Except in the Ordinary Course of Business, amend in any material respect, or
terminate any production or royalty contract or any material agreement, lease,
license or other instrument affecting or to which YOUBANG is a party or the
before the expiration of the term thereof, other than to the extent that any of
them terminate or are terminable pursuant to their respective terms in the
Ordinary Course of Business.
(c) During the pendency of the Agreement, neither party shall negotiate or enter
into agreements with third parties to purchase any equity interests in YOUBANG
or the Shares at any time prior to the termination of this Agreement.
5.4 Access to Information. The Sellers will permit representatives of the
Buyer to have reasonable access at all reasonable times, and in a manner so as
not to interfere with the normal business operations and to all premises,
properties, personnel, books, records (including Tax records), contracts, and
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documents of or pertaining to YOUBANG.. Any information obtained by the Buyer,
its employees, representatives, consultants, attorneys, agents, lenders and
other advisors under this Section shall be subject to the confidentiality and
use restrictions contained in the Confidentiality Agreement. All "due diligence"
activities of the Buyer shall be conducted in accordance with applicable Laws
and the Buyer shall indemnify the Sellers and their Affiliates from and against
all damages, losses and liabilities incurred as a result of such activities.
During the period prior to Closing, in no event shall Buyer or its Affiliates or
their respective officers, directors, employees, counsel, financial advisors or
other representatives be permitted to conduct any sampling or testing of any
real property owned by YOUBANG without the prior written consent of the Sellers,
which consent shall not be unreasonably withheld or delayed.
5.5 Contacts with Lessees, Customers and Vendors. The Buyer shall not,
prior to the Closing Date, contact any lessee, customer, vendor, supplier or
employee of, or any other Person having business dealings with, YOUBANG, Sellers
or their respective Affiliates with respect to the transactions contemplated
hereby, without the prior consent of the Sellers, which consent shall not be
unreasonably withheld or delayed.
5.6 Amendment of Schedules. Each Party agrees that, with respect to the
representations and warranties of such Party contained in this Agreement, such
Party shall have the continuing obligation until the Closing to supplement or
discovered which, if existing or known at the date of this Agreement, would have
been required to be set forth or described in the Agreement. If the Closing
shall occur, then all matters disclosed pursuant to any such supplement or
amendment at or prior to the Closing shall be deemed included in the Agreement
and no Party shall be entitled to make a claim for indemnification under this
Agreement with regard to such supplemental information based on the absence of
any such supplemental information in this Agreement and pursuant to the terms of
this Agreement.
5.7 Financial Statements. As soon as practicable following the date of
this Agreement, the Sellers will provide to Buyer the audited financial
statements and unaudited interim financial statements in a form suitable for
filing with the Securities and Exchange Commission ("SEC") on Form 8-K, together
with any related amendment thereto regarding the purchase of the Shares. As soon
as practicable following the date of this Agreement, (i) the Sellers shall
provide financial statements and footnotes to the Buyer and its auditors and
(ii) upon receipt of such financial statements and footnotes from the Seller,
the Buyer will cause its auditors to commence an audit of the applicable
financial statements. Upon receiving comments or other response from the SEC,
the Seller shall provide financial statements and footnotes that conform to the
SEC responses to the Buyer and its auditors. The Sellers shall cooperate fully
with the Buyer and its auditors in completing the required audit(s) of annual
periods and review(s) of interim periods in a timely manner, allowing the Buyer
to file the required Form 8-K and 8-K amendment(s) in accordance with Regulation
S-K and S-X. The audit(s) and interim period review(s) shall be completed prior
to the Closing Date. The fees and costs of audit(s) and interim period review(s)
shall be borne by the Buyer.
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ARTICLE VI
POST-CLOSING COVENANTS
6.1 General. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as the other Parties reasonably may request, all at
the sole cost and expense of the requesting Party (unless the requesting Party
is entitled to indemnification therefore under Article VIII).
6.2 Delivery and Retention of Records. On or before sixty (60) days after
the Closing Date, at the Buyer's request, the Sellers will deliver or cause to
be delivered to the Buyer at its office in 0 Xxxxx Xxxx Xxxxxxx Xxxxxxxx, Xxxxx
000, Suzhou Industrial park, Jiangsu Province, PR China 215021, or such other
mutually agreeable location, all files, records, information and data relating
to the YOUBANG's Shares records (collectively, the "Records"). Each of the
Sellers (and their successors and assigns) may retain a copy of the Records to
the extent that they relate to the operation of their businesses. The Buyer
agrees to (a) hold the Records and not to destroy or dispose of any portion
thereof for a period of ten years from the Closing Date or such longer time as
may be required by Law, provided that, if it desires to destroy or dispose of
such Records during such period, it will first offer in writing at least sixty
(60) days before such destruction or disposition to surrender them to the
Sellers and if the Sellers do not accept such offer within twenty (20) days
after receipt of such offer, the Buyer may take such action and (b) following
the Closing Date to afford (i) the Sellers, (ii) the Sellers' successors and
assigns and (iii) any of their accountants, and counsel, during normal business
hours, upon reasonable request, at any time, full access to the Records and to
the Buyer's employees at no cost to the Sellers (other than for reasonable
out-of-pocket expenses); provided that such access will not be construed to
require the disclosure of Records that would cause the waiver of any
attorney-client, work product or like privilege; provided, further, that in the
event of any litigation nothing herein shall limit any Party's rights of
discovery under applicable Law. Nothing herein shall impose any liability upon
Buyer in the event of destruction or loss of any Records as a result of
casualty. The Buyer agrees to provide the Sellers and their successors and
assigns and their Affiliates involved in the human resource service business
reasonable access to the Records after the Closing Date in order for Sellers to
comply with their obligations under this Agreement (including without
limitation, the preparation of the Closing Date Statement, the preparation of
any required tax returns in accordance with this Agreement and to comply with
any indemnity obligations), to conduct any historical audit of the financial
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statements in accordance with generally accepted accounting principles and in
accordance with Regulation S-X of the Securities and Exchange Commission. The
Sellers agree (and shall bind its successors and assigns) to keep the terms and
conditions of the material agreements confidential; provided that the Sellers
shall not be obligated to keep such terms and conditions confidential to the
extent that they are already in possession of the public or becomes available to
the public other than through the act or omission of the Sellers in breach
hereof.
6.3 Employee Matters. As of the Closing Date, the employees listed on the
YOUBANG's document as of the Closing (the "Current Employees") shall be offered
employment with the Buyer or its Affiliates in the same positions, at the same
level of wages and/or salary, and at a work location which is within 50 miles of
their work location immediately prior to the Closing Date; provided, however,
except as may be specifically required by applicable Law or any contract,
neither the Buyer nor its Affiliates, on the one hand, nor any employee, on the
other hand, shall be obligated to continue any employment relationship or any
specific terms of employment for any specific period of time. As of the Closing
Date, all Current Employees shall cease active participation in all employee
benefit plans and arrangements of the Sellers and their Affiliates. As of the
first day following the Closing Date, all Current Employees shall be permitted
to participate in the employee benefits plans and arrangements of the Buyer and
its Affiliates on the same terms as similarly situated employees of the Buyer or
any of its Affiliates. To the extent any employee benefit plan, program or
policy of the Buyer or their Affiliates is made available to the Current
Employees immediately prior to the Closing Date with respect to any welfare
benefit plans to which such employees may become eligible, the Buyer or its
Affiliates shall cause such plans to provide credit for any co-payments or
deductibles by such employees and waive all pre-existing condition exclusions
and waiting periods, other than limitations or waiting periods that have not
been satisfied under any welfare plans maintained by the Seller and its
Affiliates for their employees prior the Closing Date.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) The representations and warranties of the Sellers contained in Section 3.1
and Article IV shall be true and correct when made and as of the Closing Date
(other than representations and warranties that are made as of a specific date
which shall have been true and correct as of such date), except to the extent
that any failures of such representations and warranties to be so true and
correct would not have a Material Adverse Effect; provided, however, that if any
representation and warranty of the Sellers is determined to be untrue or
incorrect prior to the Closing Date and such failure of such representation and
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warranty to be so true and correct would have a Material Adverse Effect, then
the Buyer shall notify the Sellers upon such determination, and the Sellers
shall have the right, but not the obligation, to cure such failure on or before
the Closing Date, in which case, if cured, such failure shall be deemed to have
been waived;
(b) The Sellers shall have performed and complied with all of its covenants
hereunder through the Closing except to the extent that any failure to perform
or comply would not have a Material Adverse Effect;
(c) There shall not be any injunction, judgment, order, decree, ruling, or
charge in effect preventing consummation of any of the transactions contemplated
by this Agreement;
(d) The Sellers shall have delivered to the Buyer an officer's certificate to
the effect that each of the conditions specified in subsections 7.1(a)-(c) is
satisfied in all respects;
(e) Any governmental approvals required to consummate the transactions
contemplated by this Agreement shall have been received;
(f) The Buyer shall have either (i) completed the audit requirements with
respect to the Assets in accordance with the SEC Requirements as set forth in
Section 5.7(b) or (ii) shall have reasonably determined that, based upon its
review of the Sellers' accounting records, the SEC Requirements will be capable
of being completed in a reasonable period of time; and
(g) The Sellers shall have delivered to the Buyer a Fairness opinion or audit or
other financial information to the Sellers that is reasonably acceptable to the
Buyer's counsel, to the effect that the assets of YOUBANG are worth a
substantially equivalent amount as the market price of the common voting shares
issued in payment thereof as of a date reasonably close to the closing date. The
Buyer may waive any condition specified in this Section 7.1 if it executes a
writing so stating at or before the Closing.
7.2 Conditions to Obligation of the Sellers. The obligation of the Sellers
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(a) The representations and warranties of the Buyer contained in Section 3.2
shall be true and correct when made and as of the Closing Date (other than
representations and warranties that are made as of a specific date which shall
have been true and correct as of such date), except to the extent that any
failures of such representations and warranties to be so true and correct would
not have a material adverse effect on the Sellers; provided, however, that if
any representation and warranty of the Buyer is determined to be untrue or
incorrect prior to the Closing Date and such failure of such representation and
warranty to be so true and correct would have a material adverse effect, then
Sellers shall notify Buyer upon such determination, and Buyer shall have the
right, but not the obligation, to cure such failure on or before the Closing
Date, in which case, if cured, such failure shall be deemed to have been waived;
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(b) The Buyer shall have performed and complied with all of its covenants
hereunder through the Closing except to the extent any failure to perform or
comply would not have a material adverse effect on the Sellers;
(c) There shall not be any injunction, judgment, order, decree, ruling, or
charge in effect preventing consummation of any of the transactions contemplated
by this Agreement;
(d) The Buyer shall have delivered to the Sellers a certificate to the effect
that each of the conditions specified in subsections 7.2(a)-(c) is satisfied in
all respects;
(e) Any governmental approvals required to consummate the transactions
contemplated by this Agreement shall have been received;
(f) All third party consents required to effectuate the transaction under this
Agreement have been received by the Sellers on terms acceptable to it, in its
sole discretion; and
(g) The Buyer shall have delivered to the Sellers an opinion of counsel (relying
to the extent deemed necessary by such counsel on the opinion of Chinese
counsel), or other counsel to the Buyer that is reasonably acceptable to the
Seller.
The Sellers may waive any condition specified in this Section 7.2 if it executes
a writing so stating at or before the Closing.
ARTICLE VIII
REMEDIES FOR BREACHES OF AGREEMENT
8.1 Survival of Representations, Warranties and Certain Covenants. (i) All
of the representations and warranties of the Sellers contained in Articles III
and IV and in any documentation or certificates delivered pursuant to Section
7.1(d) or as described in Section 2.1 shall survive the Closing under this
Agreement for a period of two years after the Closing Date; (ii) the
representations and warranties in Section 4.1(e) shall survive the Closing with
respect to any given claim that would constitute a breach of such representation
or warranty until the earlier of four (4) years from the Closing Date or the
expiration of the statute of limitations applicable to the underlying Tax matter
giving rise to that claim; and (iii) the representations and warranties in
Section 4.1(g) shall survive the Closing under this Agreement for a period of
three years after the Closing Date. The representations and warranties of the
Buyer contained in Section 3.2 shall survive the Closing for a period of two
years after the Closing Date. The covenants contained in this Agreement to be
performed after the Closing shall survive the Closing indefinitely.
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8.2 Indemnification Provisions for Benefit of the Buyer.
(a) Sellers shall indemnify and hold Buyer harmless from and against any and all
Adverse Consequences whatsoever arising out of or resulting from:
(i) Any breach of warranty or misrepresentation by the Sellers or the
nonperformance of any covenant or obligation to be performed by the Sellers to
the extent that and only to the extent that (A) there is an applicable survival
period pursuant to Section 8.1; and that (B) the Buyer makes a written claim for
indemnification against the Sellers pursuant to Section 11.6 within such
survival period;
(ii) Any liability arising out of the ownership of the Shares, prior to the
Closing Date) to the extent that the Buyer makes a written claim for
indemnification against the Sellers pursuant to Section 11.6 within five years
of the Closing Date;
(iii)Any claim which may be asserted against YOUBANG or any of the Shares, by
any of the Sellers' employees, independent contractors, their employees, or
agents with respect to liabilities incurred by or on the Sellers' behalf prior
to the Closing Date, whether covered by a collective bargaining agreement or
not, including labor costs, severance pay, pension benefits, employee benefits,
workers' compensation, vacation and holiday benefits, sick pay, multiemployer
withdrawal liability, any and all employee benefits, and any other costs
associated therewith;
(iv) Any attempt (whether or not successful) by any person to cause or require
Buyer to pay or discharge any debt, obligation or liability relating to the
Sellers not associated with the Shares.
(b) Limitations of Indemnification. The following limitations shall apply with
regard to the Sellers' obligations to indemnify the Buyer Indemnities pursuant
to this Section 8.2:
(i) The Sellers' liability under this Agreement shall not exceed 25% of the
Purchase Price paid in accordance with Section 2.2. The limitations on Sellers'
indemnification obligations set forth in the prior sentence shall not apply to
losses resulting from fraud or willful misconduct by the Sellers.
(ii) The Sellers and their Affiliates will have no liability for any Adverse
Consequences, unless and until the aggregate Adverse Consequences for which the
Buyer Indemnities are entitled to recover under this Agreement exceeds 1% of the
Purchase Price paid in accordance with Section 2.2 (the "Threshold Amount");
provided, however, once such amount exceeds the Threshold Amount, the Buyer
Indemnitees will be entitled to recover all amounts to which they are entitled
in excess of the Threshold Amount, subject to the limitations set forth in (i)
above.
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(iii)The Sellers and their Affiliates shall not be liable to the Buyer
Indemnities for any Adverse Consequences associated with a claim that is based
upon any fact, matter or circumstance within the actual knowledge of the Buyer,
the Buyer Indemnities and their Affiliates as of the date hereof, as well as
such facts, matters or circumstances which before the Closing Date had been
communicated to the Buyer, the Buyer Indemnities or their Affiliates in writing.
(iv) The Buyer acknowledges and agrees that the indemnification provisions in
this Article VIII and the termination rights in Section 10.1 shall be the
exclusive remedies of the Buyer, the Buyer Indemnities and their Affiliates with
respect to the transactions contemplated by this Agreement.
8.3 Indemnification Provisions for Benefit of the Sellers. The Buyer shall
indemnify and hold the Sellers forever harmless from and against all Adverse
Consequences whatsoever arising out of or resulting from:
(a) Any breach of warranty or misrepresentation by the Buyer contained herein,
or the non-performance of any covenant or obligation to be performed by the
Buyer to the extent that and only to the extent that (A) there is an applicable
survival period pursuant to Section 8.1; and that (B) the Sellers make a written
claim for indemnification against the Buyer pursuant to Section 11.6 within such
survival period; or
(b) The ownership, conduct or operation of the business of YOUBANG from and
after the Closing Date.
8.4 Matters Involving Third Parties.
(a) If any third party shall notify any Party (the "Indemnified Party") with
respect to any matter (a "Third Party Claim") that may give rise to a right to
claim for indemnification against any other Party (the "Indemnifying Party")
under Section 8.2 or Section 8.3, then the Indemnified Party shall promptly (and
in any event within five business days after receiving notice of the Third Party
Claim) notify the Indemnifying Party thereof in writing.
(b) The Indemnifying Party will have the right to assume and thereafter conduct
the defense of the Third Party Claim with counsel of its choice reasonably
satisfactory to the Indemnified Party; provided, however, that the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably) unless the judgment or
proposed settlement involves only the payment of money damages and does not
impose an injunction or other equitable relief upon the Indemnified Party.
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(c) Unless and until the Indemnifying Party assumes the defense of the Third
Party Claim as provided in subsection 8.4(b), the Indemnified Party may defend
against the Third Party Claim in any manner it reasonably may deem appropriate.
(d) In no event will the Indemnified Party consent to the entry of any judgment
or enter into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party which consent shall not be
withheld unreasonably.
8.5 Determination of Amount of Adverse Consequences. The Adverse
Consequences giving rise to any indemnification obligation hereunder shall be
limited to the actual loss suffered by the Indemnified Party (i.e., reduced by
any insurance proceeds or other payment or recoupment received, realized or
retained by the Indemnified Party as a result of the events giving rise to the
claim for indemnification), net of any reduction in Taxes of the Indemnified
Party (or the affiliated group of which it is a member) occasioned by such loss
or damage. The amount of the actual loss and the amount of the indemnity payment
shall be computed by taking into account the timing of the loss or payment, as
applicable, using a 10% interest or discount rate, as appropriate. Upon the
request of the Indemnifying Party, the Indemnified Party shall provide the
Indemnifying Party with information sufficient to allow the Indemnifying Party
to calculate the amount of the indemnity payment in accordance with this Section
8.5. An Indemnified Party shall take all reasonable steps to mitigate damages in
respect of any claim for which it is seeking indemnification and shall use
reasonable efforts to avoid any costs or expenses associated with such claim
and, if such costs and expenses cannot be avoided, to minimize the amount
thereof.
8.6 Tax Treatment of Indemnity Payments. All indemnification payments made
under this Agreement, including any payment made under Article VIII, shall be
treated as purchase price adjustments for Tax purposes.
ARTICLE IX
TAX MATTERS
9.1 Post-Closing Tax Returns. The Buyer shall prepare or cause to be
prepared and file or cause to be filed any Post-Closing Tax Returns with respect
to the Shares. The Buyer shall pay (or shall cause to be paid) any Taxes due
with respect to such Tax Returns.
9.2 Pre-Closing Tax Returns. The Sellers shall prepare or cause to be
prepared and file or cause to be filed all Pre-Closing Tax Returns with respect
to the Shares. The Sellers shall pay (or cause to be paid) any Taxes due with
respect to such Tax Returns.
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9.3 [Intentionally omitted]
9.4 Claims for Refund. The Buyer shall not file any claim for refund of
taxes with respect to the Shares. for whole or partial taxable periods on or
before the Closing Date.
9.5 Cooperation on Tax Matters.
(a) The Buyer and the Sellers shall cooperate fully, as and to the extent
reasonably requested by the other parties, in connection with the filing of Tax
Returns pursuant to this Section and any audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The
Buyer and the Sellers shall (i) retain all books and records with respect to Tax
matters relating to any whole or partial taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by the Buyer or any Sellers, any extensions thereof) of the
respective taxable periods, and to abide by all record retention agreements
entered into with any taxing authority, and (ii) give the other party reasonable
written notice prior to transferring, destroying or discarding any such books
and records and, if the other party so requests, the Buyer or any Sellers, as
the case may be, shall allow the other party to take possession of such books
and records.
(b) The Buyer and the Sellers further agree, upon request, to use their best
efforts to obtain any certificate or other document from any Governmental
Authority or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).
9.6 Certain Taxes. The Sellers will file all necessary Tax Returns and
other documentation with respect to all transfer (including without limitation,
stock transfer), recording, documentary, sales, use, stamp, registration and
other Taxes and fees, and, if required by applicable Law, the Buyer will, and
will cause its Affiliates to, join in the execution of any such Tax Returns and
other documentation. Notwithstanding anything set forth in this Agreement to the
contrary, the Buyer will be obligated to bear and shall pay at Closing, any
transfer, documentary, sales, recording, use, stamp, registration and other
Taxes and fees incurred in connection with this Agreement and the transactions
contemplated under this Agreement. The Buyer agrees to indemnify, defend and
hold the Sellers harmless for all such taxes and fees.
9.7 Confidentiality. Any information shared in connection with Taxes shall
be kept confidential, except as may otherwise be necessary in connection with
the filing of Tax Returns or reports, refund claims, tax audits, tax claims and
tax litigation, or as required by Law.
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9.8 Audits. The Sellers and the Buyer shall provide prompt written notice
to the others of any pending or threatened tax audit, assessment or proceeding
that it becomes aware of related to the Assets for whole or partial periods for
which it may be indemnified by the other party hereunder. Such notice shall
contain factual information (to the extent known) describing the asserted tax
liability in reasonable detail and shall be accompanied by copies of any notice
or other document received from or with any tax authority in respect of any such
matters. If an indemnified party has knowledge of an asserted tax liability with
respect to a matter for which it may be indemnified hereunder and such party
fails to give the indemnifying party prompt notice of such asserted tax
liability, then (a) if the indemnifying party is precluded by the failure to
give prompt notice from contesting the asserted tax liability in any forum, the
indemnifying party shall have no obligation to indemnify the indemnified party
for any Taxes arising out of such asserted tax liability, and (b) if the
indemnifying party is not so precluded from contesting, but such failure to give
prompt notice results in a detriment to the indemnifying party, then any amount
which the indemnifying party is otherwise required to pay the indemnified party
pursuant to this Section shall be reduced by the amount of such detriment,
provided, the indemnified party shall nevertheless be entitled to full
indemnification hereunder to the extent, and only to the extent, that such party
can establish that the indemnifying party was not prejudiced by such failure.
Section 9.10 shall control the procedure for Tax indemnification matters to the
extent it is inconsistent with any other provision of this Agreement.
9.9 Control of Proceedings. The party responsible for the Tax under this
Agreement shall control audits and disputes related to such Taxes (including
action taken to pay compromise or settle such Taxes). Reasonable out of pocket
expenses with respect to such contests shall be borne by the Sellers and the
Buyer in proportion to their responsibility for such Taxes as set forth in this
Agreement, except as otherwise provided by this Agreement, the no controlling
party shall be afforded a reasonable opportunity to participate in such
proceedings at its own expense.
9.10 Powers of Attorney. The Buyer shall provide the Sellers and their
Affiliates with such powers of attorney or other authorizing documentation as
are reasonably necessary to empower them to execute and file returns they are
responsible for hereunder, file refund and equivalent claims for Taxes they are
responsible for, and contest, settle, and resolve any audits and disputes that
they have control over under Section 9.8 (including any refund claims which turn
into audits or disputes).
9.11 Remittance of Refunds. If the Buyer or any Affiliate of the Buyer
receives a refund of any Taxes attributable to a Pre-Closing Tax Period that the
Sellers is responsible for hereunder, or if the Sellers or any Affiliate of the
Sellers receives a refund of any Taxes attributable to a Post-Closing Tax Period
that the Buyer is responsible for hereunder, the party receiving such refund
shall, within thirty days after receipt of such refund, remit it to the party
who has responsibility for such Taxes hereunder. For the purpose of this Section
9.11, the term "refund" shall include a reduction in Tax and the use of an
overpayment as a credit or other tax offset, and receipt of a refund shall occur
upon the filing of a return or an adjustment thereto using such reduction,
overpayment or offset or upon the receipt of cash.
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ARTICLE X
TERMINATION OF AGREEMENT
10.1 Termination of Agreement. The Parties may terminate this Agreement,
as provided below:
(a) The Buyer and the Sellers may terminate this Agreement by mutual written
consent at any time before the Closing;
(b) The Buyer may terminate this Agreement by giving written notice to the
Sellers at any time before Closing if the Closing shall not have occurred on or
before May 12, 2009 (unless the failure results primarily from the Buyer itself
breaching any representation, warranty or covenant contained in this Agreement);
(c) The Sellers may terminate this Agreement by giving written notice to the
Buyer at any time before the Closing if the Closing shall not have occurred on
or before May 12, 2009 (unless the failure results primarily from the Sellers
breaching any representation, warranty or covenant contained in this Agreement);
(d) The Buyer or the Sellers may terminate this Agreement if any court of
competent jurisdiction or any governmental, administrative or regulatory
authority, agency or body shall have issued an order, decree or ruling or shall
have taken any other action permanently enjoining, restraining or otherwise
prohibiting the transactions contemplated hereby and such order, decree, ruling
or other action shall have become final and no appealable; and
(e) The Sellers may terminate this Agreement by giving written notice to the
Buyer at any time before the Closing to the extent that the Buyer does not
provide its consent to the assignment of the Lease Agreements to a third party
(whether pursuant to a direct assignment or pursuant to a transfer of control)
designated by the Sellers.
10.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 10.1, all rights and obligations of the Parties hereunder
shall terminate without any liability of any Party to any other Party (except
for any liability of any Party then in breach); provided that the
confidentiality provisions contained in the Confidentiality Agreement and
Sections 11.2 and 11.3 of this Agreement shall survive termination.
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ARTICLE XI
MISCELLANEOUS
11.1 [Intentionally omitted]
11.2 Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Parties; provided
that any Party may make any public disclosure it believes in good faith is
required by applicable Law or any listing or trading agreement concerning its
publicly traded securities (in which case the disclosing Party will advise the
other Parties before making the disclosure).
11.3 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
11.4 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of
the other Party.
11.5 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but which together will constitute one and the
same instrument.
11.6 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given two business days
after it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:
If to the Buyer: SU ZHOU BLUE TASSEL SCHOOL
0 Xxxxx Xxxx Xxxxxxx Xxxxxxxx, Xxxxx 000,
Suzhou Industrial park, Jiangsu Province,
PR China 215021
---------------
With copy to: Xxxxxx Xxx
22
If to the Sellers: Xxxxxxx Xx, Xxx Xx, Xxxxxx Xxxx, Changgen Ma, Yongxia Tan,
Xxxxxx Xxxx, Xxxxxx Xxxxx
No. 105-205 Labor Service Market,
Huashan Road Suzhou New District,
Jiangsu Province,
PR. China 215129
With a copy to: Xxxxxxx Xx
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the addresses set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
11.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic Laws of the state of Nevada without giving effect
to any choice or conflict of law provision or rule (whether of the state of
Nevada or any other jurisdiction) that would cause the application of the Laws
of any jurisdiction other than the state of Nevada.
11.8 Entire Agreement. This Agreement (including the documents referred to
in this Agreement) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they have related in any way to the
subject matter of this Agreement. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers.
11.9 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
11.10 Transaction Expenses. Each of the Buyer and the Sellers will bear
its own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
*****
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
SELLERS:
Xxxxxxx Xx, Xxx Xx, Xxxxxx Xxxx, Changgen Ma, Yongxia Tan, Xxxxxx Xxxx, Xxxxxx
Xxxxx
By:
/s/ Xxxxxxx Xx
------------------------
/s/ Xxx Xx
------------------------
/s/ Surong Gong
------------------------
/s/ Changgen Ma
------------------------
/s/ Yongxia Tan
------------------------
/s/ Xxxxxx Xxxx
------------------------
/s/ Xxxxxx Xxxxx
------------------------
ATTEST:
/s/
------------------------
BUYER:
SU ZHOU BLUE TASSEL SCHOOL.
By: /s/ Xxxxxx Xxx
----------------
Chairman of the Board & CEO
ATTEST:
/s/
------------------------
Corporate Secretary
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