SUBSCRIPTION AGREEMENT
This
Subscription Agreement (the "Agreement") dated as
of December 21, 2009, has been executed by the undersigned (the "Subscriber") in
connection with the offer and sale (the "Offering") of 692,520
shares (the "Shares") of common
stock, $.0001 par value per share (the "Common Stock"), of
ChinaCast Education Corporation, a Delaware corporation (the "Company"), at a price
of US$7.22 per Share or a total of US$4,999,994.40
(RMB34,149,961.75). The offer and sale of the Common Stock are being
made in reliance upon the provisions of Regulation S ("Regulation S")
promulgated by the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities
Act"). Upon the terms and subject to the conditions set forth
herein, each Subscriber hereby agrees to purchase, and the Company hereby agrees
to issue and sell the Shares. In consideration of the mutual
promises, representations and warranties set forth herein, the Company and each
Subscriber hereby agree as follows:
1. Agreement to
Subscribe
1.1 Purchase and Issuance of the
Common Stock. The Subscriber is hereby subscribing for 692,520 Shares
(the “Subscriber’s
Common Stock”). The aggregate price payable for the
Subscriber's Common Stock is US$4,999,994.40 (RMB34,149,961.75) ("Share
Consideration"). The Company agrees that the Share
Consideration may be paid in the form of Chinese Renminbi. At the
Closing, Subscriber will deliver to the Company, or as otherwise instructed by
the Company, the Share Consideration by bank check, wire transfer or such other
form of payment as shall be acceptable to the Company, in its sole and absolute
discretion. The Company hereby assigns to Yupei Training Information
Technology Co. Ltd., a wholly-owned subsidiary of the Company, the right to
receive the Share Consideration and hereby instructs the Subscriber to pay the
Share Consideration directly to Yupei Training Information Technology Co. Ltd.
at the Closing.
1.2 Closing. The
closing for the sale of the Shares to the Subscriber shall take place at the
offices of the Company on January 4, 2010 (the "Closing"), or at such
other time and/or such other place as the Company may determine in its sole and
absolute discretion.
2. Representations and Warranties of
the Subscriber
The Subscriber represents and warrants
to the Company that:
2.1 No Government Recommendation
or Approval. The Subscriber understands that no United States
federal or state agency or similar agency of any other country, has passed upon
or made any recommendation or endorsement of the Company or the Offering of the
Shares.
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2.2 Not a "U.S.
Person". The Subscriber is not a "U.S. Person" as defined in
Rule 902 of Regulation S promulgated under the Securities Act, was not
organized under the laws of any United States jurisdiction, and was not formed
for the purpose of investing in securities not registered under the Securities
Act. At the time the purchase order for this transaction was
originated, the Subscriber was outside the United States.
2.3 Intent. The
Subscriber is purchasing the Shares solely for investment purposes, for the
Subscriber's own account and not for the account or benefit of any U.S. person,
and not with a view towards the distribution or dissemination thereof and the
Subscriber has no present arrangement to sell the Shares to or through any
person or entity. The Subscriber understands that the Shares must be
held indefinitely unless such Shares are resold in accordance with the
provisions of Regulation S, are subsequently registered under the Securities Act
or an exemption from registration is available.
2.4 Restrictions on
Transfer. The Subscriber understands that the Shares are being
offered in a transaction not involving a public offering in the United States
within the meaning of the Securities Act. The Shares have not been
and will not be registered under the Securities Act, and, if in the future the
Subscriber decides to offer, resell, pledge or otherwise transfer the Shares,
such Shares may be offered, resold, pledged or otherwise transferred only (A)
pursuant to an effective registration statement filed under the Securities Act,
(B) to a non-U.S. person in an offshore transaction in accordance with Rule 903
or Rule 904 of Regulation S of the Securities Act, (C) pursuant to the resale
limitations set forth in Rule 905 of Regulation S, (D) pursuant to an exemption
from registration under the Securities Act provided by Rule 144 thereunder (if
available) or (E) pursuant to any other exemption from the registration
requirements of the Securities Act, and in each case in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction. The Subscriber acknowledges, agrees and covenants that it will not
engage in hedging transactions with regard to the Subscriber's Common Stock
prior to the expiration of the distribution compliance period specified in Rule
903 of Regulation S promulgated under the Act, unless in compliance with the
Securities Act. The Subscriber agrees that if any transfer of its Shares or any
interest therein is proposed to be made, as a condition precedent to any such
transfer, the transferor may be required to deliver to the Company an opinion of
counsel satisfactory to the Company. Absent registration or another
exemption from registration, the Subscriber agrees that it will not resell the
securities constituting the Subscriber's Common Stock to U.S. Persons or within
the United States.
2.5. Accredited and Sophisticated
Investor.
(i) The
Subscriber is familiar with the term "accredited investor" as defined in
Regulation D promulgated under the Securities Act and is an "accredited
investor" within the meaning of such term in Regulation D.
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(ii) The
Subscriber is sophisticated in financial matters and is able to evaluate the
risks and benefits of the investment in the Shares.
(iii) The
Subscriber is able to bear the economic risk of his investment in the Shares for
an indefinite period of time because none of the Shares have been registered
under the Securities Act and therefore cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.
2.6 Independent
Investigation. The Subscriber, in making the decision to
purchase the Shares, has relied upon an independent investigation of the Company
and has not relied upon any information or representations made by any third
parties or upon any oral or written representations or assurances from the
Company, its officers, directors or employees or any other representatives or
agents of the Company, other than as set forth in this Agreement. The Subscriber
is familiar with the business, operations and financial condition of the Company
and has had an opportunity to ask questions of, and receive answers from, the
Company’s officers and directors concerning the Company and the terms and
conditions of the offering of the Shares and has had full access to such other
information concerning the Company as the Subscriber has requested.
2.7 Authority. This
Agreement has been validly authorized, executed and delivered by the Subscriber
and is a valid and binding agreement enforceable in accordance with its terms,
subject to the general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally. The
execution, delivery and performance of this Agreement by the Subscriber does not
and will not conflict with, violate or cause a breach of any agreement, contract
or instrument to which the Subscriber is a party.
2.8 No Legal Advice from
Company. The Subscriber acknowledges that he, she or it has
had the opportunity to review this Agreement and the transactions contemplated
by this Agreement and the other agreements entered into between the parties
hereto with the Subscriber's own legal counsel and investment and tax
advisors. Except for any statements or representations of the Company
made in this Agreement and the other agreements entered into between the parties
hereto, the Subscriber is relying solely on such counsel and advisors and not on
any statements or representations of the Company or any of its representatives
or agents for legal, tax or investment advice with respect to this investment,
the transactions contemplated by this Agreement or the securities laws of any
jurisdiction.
2.9 Reliance on Representations
and Warranties. The Subscriber understands that the Shares are
being offered and sold to the Subscriber in reliance on specific provisions of
United States federal and state securities laws and that the Company is relying
upon the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Subscriber set forth in this Agreement
in order to determine the applicability of such provisions.
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2.10 No
Advertisements. The undersigned is not subscribing for Shares
as a result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or
meeting.
3. Representations and Warranties of
the Company
The
Company represents and warrants to each Subscriber that:
3.1 Valid Issuance of Capital
Stock. The shares of Common Stock comprising the Subscriber’s Common
Stock will, when issued in accordance with the terms of this Subscription
Agreement, be duly authorized, validly issued, fully paid and
non-aseseeable.
3.2 Organization and
Qualification. The Company is a corporation duly incorporated
and existing in good standing under the laws of the state of Delaware and has the requisite
corporate power to own its properties and assets and to carry on its business as
now being conducted.
3.3 Authorization;
Enforcement. (i) The Company has the requisite corporate power
and authority to enter into and perform its obligations under this Subacription
Agreement and to issue the Subscriber’s Common Stock in accordance with the
terms hereof, (ii) the execution, delivery and performance of this Subscription
Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action,
and no further consent or authorization of the Company or its Board of Directors
or stockholders is required, and (iii) this Subscription Agreement constitutes
valid and binding obligations of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization, or similar laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies or by equitable principles of
general application and except as enforcement of rights to indemnity and
contribution may be limited by federal and state securities laws or principles
of public policy.
3.4 No
Conflicts. To the knowledge of the Company, the execution,
delivery and performance of this Agreement and the consummation by the Company
of the transactions contemplated
hereby do not materially (i) result in a violation of the Company's Certificate
of Incorporation or By-Laws or (ii) conflict with, or constitute a default under
any agreement, indenture or instrument to which the Company is a
party. Other than any SEC or state securities filings which may be
required to be made by the Company subsequent to the Closing, and any
registration statement which may be filed pursuant thereto, the Company is not
required under federal, state or local law, rule or regulation to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency or self-regulatory entity in order for it to
perform any of its obligations under this Subscription Agreement or issue the
Subscriber’s Common Stock in accordance with the terms hereof.
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4. Legends;
Denominations
4.1 Legend. The
Company will issue the Shares purchased by the Subscriber in the name of the
Subscriber and in such denominations to be specified by the Subscriber prior to
the Closing. The Shares will bear the following legend (the
"Legend"), and appropriate "stop transfer" instructions:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND THESE SECURITIES MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT, (B) TO A
NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO THE RESALE
LIMITATIONS SET FORTH IN RULE 905 OF REGULATIONS S UNDER THE SECURITIES ACT, (D)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO ANY OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
4.2 Subscriber's
Compliance. Nothing in this Section 4 shall affect in any way
the Subscriber's obligations and agreement to comply with all applicable
securities laws upon resale of the Shares.
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4.3 Company’s Refusal to
Register Transfer of Shares. The Company shall refuse to
register any transfer of the Shares not made in accordance with the provisions
of Regulation S, pursuant to an effective registration statement filed under the
Securities Act, or pursuant to an available exemption from the registration
requirements of the Securities Act.
5. Governing Law; Jurisdiction;
Waiver of Jury
Trial
This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York. The parties hereto hereby waive any right to a
jury trial in connection with any litigation pursuant to this Agreement and the
transactions contemplated hereby.
6. Assignment; Entire Agreement;
Amendment
6.1 Assignment. Neither
this Agreement nor any rights hereunder may be assigned by any party to any
other person other than by Subscriber to a person agreeing to be bound by the
terms hereof.
6.2 Entire Agreement;
Amendment. This Agreement and any other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subject matter hereof, and no party shall
be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth in this
Agreement. Except as expressly provided in this Agreement, neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge, or termination is
sought.
7. Notices;
Indemnity
7.1 Notices. Unless
otherwise provided herein, any notice or other communication to a party
hereunder shall be sufficiently given if in writing and personally delivered or
sent by facsimile with copy sent in another manner herein provided or sent by
courier (which for all purposes of this Agreement shall include Federal Express,
UPS or other recognized overnight courier) or mailed to said party by certified
mail, return receipt requested, at its address provided for herein or such other
address as either may designate for itself in such notice to the other and
communications shall be deemed to have been received when delivered personally
on the scheduled arrival date when sent by next day or 2-day courier service or
if sent by facsimile upon receipt of confirmation of transmittal or, if sent by
mail, then three days after deposit in the mail.
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7.2 Indemnification. Each
party shall indemnify the other against any loss, cost or damages (including
reasonable attorney's fees and expenses) incurred as a result of such party's
breach of any representation, warranty, covenant or agreement in this
Agreement.
8. Counterparts
This
Agreement may be executed in any number of counterparts, each of which shall be
enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument.
9. Survival;
Severability
The
representations, warranties, covenants and agreements of the parties hereto
shall survive the Closing. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
10. Titles and
Subtitles
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
[REMAINDER
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Name of
the Subscriber: Thriving Blue Limited
Date of
Subscription: December 21, 2009
Place of Residency and/or Principal
Place of Business: British Virgin Islands
Address of Subscriber:
Xxxx 0000, 00xx Xxxxx
Xxxx Xxxx 000 Xxxxxxxxxx
Xxxxxx
Xxxxx Xxxxx, Xxxx Xxxx
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Signature
of Subscriber:
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THRIVING BLUE LIMITED | |
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By:
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/s/
Xxx Xxxx Xxx Xxxx
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Name: Xxx
Xxxx Xxx Xxxx
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Title: Director
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This
subscription is accepted by the Company on the 21st day of December,
0000
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XXXXXXXXX
EDUCATION CORPORATION
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By:
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/s/ Xxx Xxxx Xxx Xxxx
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Name: Xxx
Xxxx Xxx Xxxx
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Title: Chairman
and Chief Executive
Officer
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