**EXHIBIT 10.2**

**Dated        the 29**
**th**

**        day of December 2006**

**Zhou        Haisheng**

**Liu        Gang**

**and**

**AI-ASIA        INFORMATION TECHNOLOGY (SHANGHAI) CO., LTD. **

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**ON        CHINA PRINCELY EDUCATION TECHNOLOGY DEVELOPMENT (BEIJING) **
**COMPANY        LIMITED**

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** **

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**Table        of Contents**

| 1                            | Definitions                                                                                                                                                     | 3  |
|------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|----|
| 2                            | Preconditions                                                                                                                                                   | 6  |
| 3                            | Assets                  and Operation of China Princely                                                                                                         | 6  |
| 4                            | Sale                  and Purchase of the Sale Interests                                                                                                        | 6  |
| 5                            | Representations                  and Warranties                                                                                                                 | 7  |
| 6                            | Fees                  and Taxes                                                                                                                                 | 8  |
| 7                            | Registration                  of the Ownership Change of China Princely                                                                                         | 9  |
| 8                            | Business                  Term of Wholly owned foreign China Princely                                                                                           | 9  |
| 9                            | Confidentiality                                                                                                                                                 | 9  |
| 10                           | Breach                  of the Agreement                                                                                                                        | 9  |
| 11                           | Dispute                  Settlement                                                                                                                             | 9  |
| 12                           | Governing                  Law and Jurisdiction                                                                                                                 | 9  |
| 13                           | Effectiveness                                                                                                                                                   | 9  |
| 14                           | Miscellaneous                                                                                                                                                   | 10 |
| Schedule                  1: | Acknowledged                  Due Diligence Results & Financial Projections                                                                                 | 12 |
| Schedule                  2: | Assets                  and Liabilities List and Relevant Proofs of China Princely                                                                              | 13 |
| Schedule                  3: | Licenses                  and Permits for China Princely to be an Authorized Accrediting                  Organization in Vocational                  Education | 14 |
| Schedule                  4: | Primary                  Terms and Conditions of the Sale and Purchase Agreement                                                                                | 15 |
| Schedule                  5: | Primary                  Terms and Conditions of the Share Consideration                                                                                        | 16 |

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**THIS        AGREEMENT**

**BETWEEN:**

| (1) | **Zhou                  Haisheng**,                  (Holder of PRC ID Number 110227631007331) of Room 601, No.2, Building                  64,                  Hua Yan Bei Li, Chaoyang District, Beijing, People’s Republic of                  China; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Liu        Gang**

| (2) | **Ai-Asia                  Information Technology (Shanghai) Co., Ltd**.,                  a wholly-owned foreign company with limited liability and registered                  office at Room 628-14, Building 2, Guo Shou Jing Road, Zhangjiang                  Hi-Tech                  Park, Shanghai, People’s Republic of China and legal representative of                  Zhou Bizheng. Currently it is in the process of changing its name                  to                  **Hartcourt                  Education Investment Management & Consulting (Shanghai) Co.,                  Ltd.**                  (hereinafter “**Hartcourt                  Education**”). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**WHEREAS**
**:**

| 1. | China                  Princely Education Technology Development (Beijing) Co., Ltd                  (“**China                  Princely**”)                  is a company duly incorporated and validly existing with limited                  liability                  and has legally obtained Business License from Commercial and Industrial                  Administrative Bureau (License No.                  1101082787475); |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2. | Zhou                  Haisheng and Liu Gang are both Chinese natural persons, who are                  the                  shareholders of China Princely with each holding 50% equity                  interest; |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Hartcourt                  Education is a wholly-owned foreign company duly incorporated and                  validly                  existing with limited liability in                  China; |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | Zhou                  Haisheng and Liu Gang hereby jointly agree to sell all their 100%                  equity                  interests in China Princely to Hartcourt Education, and Hartcourt                  Education agrees to purchase it;  |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | Zhou                  Haisheng signed the Memorandum of Understanding with Hartcourt                  Companies,                  Inc, the parent company of Hartcourt Education, on October 12,                  2006. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**THEREFORE,        IT IS HEREBY AGREED BY ZHOU HAISHENG, LIU GANG AND HARTCOURT EDUCATION AS        FOLLOWS:**

| **1.** | **DEFINITIONS** |
|--------|-----------------|

| **“Zhou                  Haisheng”** | Chinese                  natural person and a shareholder of China Princely with 50% equity                  interest in it prior to the execution of the Agreement. |
|--------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **“Liu                  Gang”**                          | Chinese                  natural person and a shareholder of China Princely, holding 50%                  equity                  interest in it through capital increase to China Princely prior                  to the                  execution of the Agreement.                                                                                                                                                                         |
|----------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **“Hartcourt                  Education”**               | Ai-Asia                  Information Technology (Shanghai) Co., Ltd. It is now in the process                  of                  changing its name to Hartcourt Education Investment Management                  and                  Consulting (Shanghai) Co., Ltd. Hartcourt Education is the wholly                  owned                  subsidiary of Hartcourt.                                                                     |
| **“Hartcourt”**                                          | The                  Hartcourt Companies, Inc. is incorporated in State of Utah, United                  States,                  the shares of which are currently listed on the Over-the-Counter                  Bulletin                  Board (“**OTCBB**”)                  of the United States. Hartcourt conducts and focuses its business                  on the                  education investment and management. |
| **“China                  Princely”**                    | China                  Princely Education Technology Development (Beijing) Co., Ltd. Prior                  to the                  execution of the Agreement, Zhou Haisheng and Liu Gang are the                  investors                  of China Princely.                                                                                                                                                                              |
| **“CIVTE”**                                              | The                  Central Institute of Vocational and Technical Education of the                  Ministry of                  Education, a non-enterprise entity directly under the Ministry                  of                  Education. Founded in 1990, CIVTE is a vocational education research                  and                  development institution at the national level.                                                |
| **“Vocational                  Competency Certificate”** | The                  certificate that CIVTE authorized China Princely to grant according                  to the                  Letter issued by CIVTE on Sept 9, 2005, “The Letter on Consigning the Work                  of Developing Curriculum Program, Training and Certifying the Vocational                  Competency Based on Computer Internet (Jiao Zhi Suo [2005]                  No.4)                                |
| **“CASTIP”**                                             | China                  Association of Science And Technology Industry Parks. CASTIP has                  signed                  with China Princely a series of cooperation agreements, including                  without                  limitation to the joint issuance of the vocational competency                  certificates.                                                                                                      |

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| **“Financial                  Due Diligence”**                                                                                                                    | The                  Financial Due Diligence conducted by Hartcourt Education prior                  to December                  20, 2006 on China Princely’s financial standing as of November 30, 2006.                  Detailed Financial Due Diligence results are set out in the Schedule                  1.                                                                                                                                                                                                                                             |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **“Financial                  Projections”**                                                                                                                      | In                  relation to the year ending on December 31, 2007, 2008 and 2009,                  the                  Financial Projection on China Princely conducted by Hartcourt Education                  prior to December 20, 2006. Detailed Financial Projections is set                  out in                  the Schedule 1.                                                                                                                                                                                                                         |
| **“Sale                  Interests”**                                                                                                                             | The                  100% entire interest in the registered capital of China Princely                  to be                  sold by Zhou Haisheng and Liu Gang to Hartcourt Education.                                                                                                                                                                                                                                                                                                                                                                               |
| **“Agreement                  for Sale and Purchase of the****Entire                  Interest in the Registered Capital****of                  China Princely”** | The                  agreement executed by Zhou Haisheng, Liu Gang and Hartcourt Education                  on                  the sale and purchase of the 100% entire interest in the registered                  capital of China Princely.                                                                                                                                                                                                                                                                                                                        |
| **“Consideration”**                                                                                                                                               | The                  total consideration payable by Hartcourt Education of which includes                  RMB2,400,000 cash and 5,400,000 new Hartcourt Restricted Shares                  of Common                  Stock. The Consideration payment terms are set out in Clause 4.2                  and                  4.5.                                                                                                                                                                                                                                     |
| **“Restricted                  Shares of Hartcourt Common Stock”**                                                                                                | The                  ordinary restricted shares of common stock with par value of US$0.001                  each                  in the capital of Hartcourt to be allotted and issued. Trading                  symbol:                  U.S. HRCT.OB, Frankfurt 900009.                                                                                                                                                                                                                                                                                             |
| **“Delivery                  Date of the Sale Interests in****China                  Princely”**                                                                  | The                  delivery date of the 100% sale interests in China Princely, on                  which,                  pursuant to the PRC law, 100% control of China Princely has changed                  from                  Zhou Haisheng and Liu Gang to Hartcourt Education. Delivery Date                  of Sale                  Interests in China Princely shall be within 30 business days upon                  obtaining all necessary consents permits and approvals from relevant                  Governmental Agency on Foreign Investment. |
| **“Consideration                  Shares Trading Dates”**                                                                                                         | The                  dates on which the restricted shares of Hartcourt common stock                  as share                  consideration are permitted to be freely traded at the stock exchange.                  The                  date shall be the first trading date after one anniversary of the                  date                  when Hartcourt issues the consideration shares to Zhou Haisheng                  and Liu                  Gang.                                                                                                   |

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| **“Governmental                  Agency on Foreign Investment”** | Relevant                  PRC Administrative authority on Foreign Economic &                  Trade.                                                                                                                                         |
|------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **“Consideration                  Payment Date”**                | The                  date on which Hartcourt Education pays cash consideration and issues                  Restricted Shares of Hartcourt Common Stock to Zhou Haisheng and                  Liu Gang                  as set out in Clause 4.5. |
| **“Net                  Profit”**                                | Net                  Profit = total realized profit - income tax (all based on U.S.                  GAAP and                  audited by independent auditor)                                                                                   |

| **2.** | **PRECONDITIONS** |
|--------|-------------------|

| 2.1 | Hartcourt                  Education has entrusted independent professionals to perform financial                  due                  diligence and financial projections on China Princely. Hartcourt                  Education, Zhou Haisheng and Liu Gang hereby acknowledge the results                  of                  the due diligence in writing. Acknowledged results of financial                  due                  diligence and financial projections are set out in Schedule 1. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.2 | The                  authorization granted by CIVTE to China Princely to issue the Vocational                  Competency Certificates and the cooperation agreements that China                  Princely                  and CIVTE had executed prior to the Agreement, shall remain valid                  after                  the Sale and Purchase of the Sale Interests. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **3.** | **ASSETS                  AND OPERATIONS OF CHINA                  PRINCELY** |
|--------|-------------------------------------------------------------------------------|

| 3.1 | Prior                  to the Sale and Purchase of the Sale Interests, total amount of                  assets of                  China Princely, including but not limit to fixed assets, intellectual                  property right, etc. Assets and Liabilities list and Relevant Proofs                  of                  China Princely are set out in Schedule 2. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 |   | China                  Princely has obtained all the licenses and permits for granting                  Vocational                  Competency Certificates, including but not limit to the documents                  and                  agreements from or with CIVTE and CASTIP, details of which are                  set out in                  Schedule 3. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **4** | **SALE                  AND PURCHASE OF THE SALE                  INTERESTS** |
|-------|-------------------------------------------------------------------------------|

| 4.1 | Within                  30 business days upon the Preconditions are satisfied and the                  prerequisites are met in respect of the Assets and Operations of                  China                  Princely referred to in Clause 3, Zhou Haisheng, Liu Gang and Hartcourt                  Education shall sign and execute an Agreement for Sale and Purchase                  of the                  Entire Interest in the Registered Capital of China Princely. Subject                  to                  the terms and conditions of the agreement, Zhou Haisheng and Liu                  Gang                  shall sell their 100% equity interest in China Princely to Hartcourt                  Education. The primary terms and conditions of the Agreement for                  Sale and                  Purchase of the Entire Interest in the Registered Capital of China                  Princely are set out in Schedule 4. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 4.2 | The                  Consideration for the sale and purchase of the Sale Interests shall                  be an                  aggregate of RMB2,400,000 cash and 5,400,000 Restricted Shares                  of                  Hartcourt Common Stock, based on the assets of China Princely,                  the capital                  injected to China Princely from Zhou Haisheng and Liu Gang as well                  as the                  financial projections each year in the future years. Among the                  total                  Consideration, RMB300,000 cash and the Consideration Shares shall                  be paid                  and issue to Zhou Haisheng and Liu Gang proportionally to their                  percentage                  of equity interest in China Princely, while the rest RMB2,100,000                  cash                  shall be invested in China Princely as capital                  injection. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.3 | Hartcourt                  Education shall credit the Consideration to the accounts designated                  by                  Zhou Haisheng and Liu Gang. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.4. | Since                  the Delivery Date of the Sale Interests in China Princely, Hartcourt                  Education shall take over the 100% control of China Princely from                  Zhou                  Haisheng and Liu Gang as shareholder pursuant to the                  Agreement. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.5. | Hartcourt                  Education shall credit the Consideration, satisfied as details                  hereunder:- |
|------|------------------------------------------------------------------------------------------------------------------------|

|  | (1) | Within                  10 business days upon the Delivery Date of the Sale Interests in                  China                  Princely, Hartcourt Education shall credit RMB150,000 cash to Zhou                  Haisheng, and RMB150,000 cash to Liu Gang. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | With                  30 business days upon the Delivery Date of the Sale Interests in                  China                  Princely, Hartcourt Education shall injected RMB2,100,000 cash                  to China                  Princely to increase its registered capital. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | With                  30 business days upon the Delivery Date of the Sale Interests in                  China                  Princely, Hartcourt Education shall issue and allot the Consideration                  of                  total 5,400,000 Restricted Shares of Hartcourt Common Stock to                  Zhou                  Haisheng and Liu Gang with 2,700,000 shares each. Hartcourt and                  Hartcourt                  Education shall jointly guarantee the average closing price of                  the 3 days                  immediately prior to the Consideration Shares Trading Date at not                  less                  than US$0.50 per share, otherwise, Hartcourt shall credit additional                  cash                  or issue and allot additional new Restricted Shares of Hartcourt                  Common                  Stock to make it up. The primary terms and conditions of issuance                  of                  Restricted Shares of Hartcourt Common Stock and Consideration Shares                  Trading Date are set out in Schedule 5. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **5** | **REPRESENTATIONS                  AND WARRANTS** |
|-------|---------------------------------------------------|

| 5.1 | Zhou                  Haisheng hereby represents and warrants as                  follows:- |
|-----|---------------------------------------------------------------------------------------------|

|   | (1) | Zhou                  Haisheng shall be the actual beneficial owner of the 50% Sale Interests                  in                  the registered capital of China Princely and has full rights, interests,                  and control in this 50% interest. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Zhou                  Haisheng assures that no third-party interest has been put against                  the                  Sale Interests such as pledge, lien, etc. from its incorporation                  till the                  Delivery Date of the Sale Interests in China Princely, and no conflicts                  or                  disputes in respect of any interest stand                  thereon. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | (3) | The                  Net Profit of China Princely in 2007 shall be not less than RMB2,000,000. |
|--------|-----|------------------------------------------------------------------------------------------------|

|   | (4) | No                  false investment or capital withdrawal happens to China Princely,                  otherwise, Zhou Haisheng shall take full responsibility and liabilities                  and indemnify China Princely and Hartcourt Education for all the                  losses                  incurred; all the risks and losses before Hartcourt Education obtaining                  the 100% equity interests in China Princely, except otherwise expressly                  acceptable by Hartcourt Education, shall be borne by Zhou Haisheng,                  and                  provided any losses caused herewith to China Princely or Hartcourt                  Education, Zhou Haisheng shall assume the liabilities to indemnify. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | As                  of the date of the Agreement, Zhou Haisheng shall not, directly                  or                  indirectly, sponsor or participate in sponsoring any education                  institutions that might potentially be competitive to China Princely                  in                  China. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.2 | Liu                  Gang hereby represents and warrants as                  follows:- |
|-----|----------------------------------------------------------------------------------------|

|   | (1) | Liu                  Gang shall be the actual beneficial owner of the 50% Sale Interests                  in the                  registered capital of China Princely and has full rights, interests,                  and                  control in this 50% interest. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Liu                  Gang assures that no third-party interest has been put against                  the Sale                  Interests such as pledge, lien, etc. from its incorporation till                  the                  Delivery Date of the Sale Interests in China Princley, and no conflicts                  or                  disputes in respect of any interest stand                  thereon. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Liu                  Gang guarantees that his capital injection in China Princely is                  all real                  and no withdrawal any of the capital from China Princely will happen,                  otherwise, Liu Gang shall take full responsibility and liabilities                  and                  indemnify China Princely and Hartcourt Education for all the losses                  incurred; |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | As                  of the date of the Agreement, Liu Gang shall not, directly or indirectly,                  sponsor or participate in sponsoring any education institutions                  that might                  potentially be competitive to China Princely in                  China. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.3 | Hartcourt                  Education hereby represents and warrants as                  follows:- |
|-----|---------------------------------------------------------------------------------------------------|

|   | (1) | Hartcourt                  Education is a duly incorporated and validly existing                  company. |
|--------|-----|------------------------------------------------------------------------------------------------------------|

|   | (2) | Hartcourt                  Education has the corporate powers and authority to sign and execute                  this                  Agreement. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Hartcourt                  Education guarantees to pay the Consideration of the Sale Interests                  in                  full when due. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Hartcourt                  Education guarantees that all the documents presented to Zhou Haisheng                  and                  Liu Gang are true, and in the event of any losses caused by the                  untrue                  documents, Hartcourt Education shall assume the liabilities and                  indemnify                  China Princely, Zhou Haisheng and Liu Gang for the losses incurred                  hereof. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **6** | **FEES                  AND TAXES** |
|-------|-------------------------------------|

| 6.1 | Zhou                  Haisheng, Liu Gang and Hartcourt Education shall assume the respective                  share of the expenses incurred for the Sale Interests in China                  Princely                  and be obliged to pay taxes due and payable. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **7** | **THE                  REGISTRATION OF THE OWNERSHIP CHANGE OF CHINA                  PRINCELY** |
|-------|--------------------------------------------------------------------------------------------------|

| 7.1 | In                  respect of registration of the ownership change with Commercial&                  Industrial Bureau related to the Sale Interests, Zhou Haisheng                  and Liu                  Gang shall cooperate with the China Princely to complete it before                  the                  Delivery Date of the Sale Interests in China Princely, Hartcourt                  Education                  shall provide necessary assistance                  thereto. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **8** |   | **BUSINESS                  TERM OF THE WHOLLY OWNED FOREIGN CHINA PRINCELY**  |
|-------|--------|-------------------------------------------------------------------------------------|

| 8.1 | After                  Hartcourt Education controls the 100% equity interest in China                  Princely,                  the business term of the wholly owned foreign China Princely shall                  be 50                  years. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **9** | **CONFIDENTIALITY** |
|-------|---------------------|

| 9.1 | Zhou                  Haisheng, Liu Gang and Hartcourt Education undertakes the responsibilities                  to keep all the known information and documents in connection with                  this                  Agreement strictly confidential; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.2 | Except                  legally required by relevant governmental authority or securities                  supervisory administration in respect hereof, without the consent                  of all                  its counterparties, no party shall divulge anything to any third                  party                  other than the parties in this Agreement. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **10** | **BREACH                  OF THE AGREEMENT** |
|--------|----------------------------------------------|

| 10.1 | Any                  party of Zhou Haisheng, Liu Gang and Hartcourt Education, when                  fails to                  fulfill its obligations specified in this Agreement without legal                  reasons,                  shall assume the liabilities of breach to non-breaching                  party. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **11** | **DISPUTE                  SETTLEMENT** |
|--------|-----------------------------------------|

| 11.1 | Any                  dispute, controversy or claim arising out of or relating to this                  Agreement, shall be settled by negotiation and discussion between                  Zhou                  Haisheng, Liu Gang and Hartcourt Education in good faith. This                  negotiation                  and discussion shall start immediately after one party sending                  out the                  written notice to the other parties in this                  regards. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11.2 | In                  the event that the dispute, controversy or claim cannot be solved                  within                  90 days of the aforesaid written notice, this dispute, controversy                  or                  claim, as any parties requires, and after informing the other parties,                  shall be submitted and settled by China International Economic                  and Trade                  Arbitration Commission, Shanghai Branch. Arbitration Rules will                  be final,                  and will be binding on Zhou Haisheng, Liu Gang and Hartcourt Education. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **12** | **GOVERNING                  LAW AND JURISDICATION** |
|--------|------------------------------------------------------|

| 12.1 | This                  Agreement shall be governed, construed and interpreted in accordance                  with                  the laws of the People’s Republic of                  China. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **13** | **EFFECTIVENESS** |
|--------|-------------------|

| 13.1 | This                  Agreement will be effective immediately upon duly signed by Zhou                  Haisheng,                  Liu Gang and Hartcourt Education or their authorized                  representative. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **14** | **MISCELLANEOUS**  |
|--------|-------------------------|

| 14.1 | The                  headings of the Clause in this Agreement are for reference only                  and shall                  not be construed as the interpretation of this Agreement. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.2 | This                  Agreement will supersede all previous agreements, arrangements,                  memorandum                  of understandings between the parties hereto upon signed and executed                  by                  all parties. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14.3 | This                  Agreement will be in three original copies, one copy with each                  party, and                  each copy shall be deemed as equally authentic. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**IN        WITNESS**

**SIGNED        **

**SIGNED        **

**SIGNED        **

**AI-ASIA        INFORMATION TECHNOLGOY (SHANGHAI) CO., LTD**

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**Schedule        1:**
**Acknowledged        Due Diligence Results & Financial Projections**

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**Schedule        2: **
**Assets        and Liabilities List and Relevant Proofs of China Princely**

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**Schedule        3: **
**Licenses        and Permits for China Princely to be an Authorized Accrediting Organization        in        respect of Vocational Education **

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**Schedule        4: Primary Terms and Conditions of the Sale and Purchase        Agreement**

| 1 | Zhou                  Haisheng will sell his 50% equity interest in China Princely to                  Hartcourt                  Education. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------|

| 2 | Liu                  Gang will sell his 50% equity interest in China Princely to Hartcourt                  Education. |
|---|------------------------------------------------------------------------------------------------------------------------|

| 3 | The                  Consideration for the sale and purchase of the Sale Interests Shall                  be an                  aggregate of RMB2,400,000 cash and 5,400,000 Restricted Shares                  of                  Hartcourt Common Stock, based on the assets of China Princely,                  the capital                  injected to China Princley from Zhou Haisheng and Liu Gang and                  the                  financial projections each year in the future years. Among                  the total Consideration, RMB300,000 cash and the Consideration                  Shares                  shall be paid and issued to Zhou Haisheng and Liu Gang proportionally                  to                  their percentage of equity interest in China Princely, while the                  rest                  RMB2,100,000 cash shall be invested in China Princely as capital                  injection. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4 | Hartcourt                  Education shall credit the Consideration to the accounts designated                  by                  Zhou Haisheng and Liu Gang. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5 | The                  Delivery Date of the Sale Interests in China Princely shall be                  within 30                  business days upon obtaining the offcial approval from Governmental                  Agency                  on Foreign Investment; and Since the Delivery Date of the Sale                  Interests                  in China Princely, Hartcourt Education shalll take over the 100%                  control                  of China Princely from Zhou Haisheng and Liu Gang as shareholder                  pursuant                  to the Agreement. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6 | Hartcourt                  Education shall credit the Consideration, satisfied as details                  hereunder:- |
|---|------------------------------------------------------------------------------------------------------------------------|

|   | (1) | Within                  10 business days upon the Delivery Date of the Sale Interests in                  China                  Princely, Hartcourt Education shall credit RMB150,000 cash to Zhou                  Haisheng, and RMB150,000 cash to Liu Gang. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | With                  30 business days upon the Delivery Date of the Sale Interests in                  China                  Princely, Hartcourt Education shall injected RMB2,100,000 cash                  to China                  Princely to increase its registered capital. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | With                  30 business days upon the Delivery Date of the Sale Interests in                  China                  Princely, Hartcourt Education shall issue and allot the Consideration                  of                  total 5,400,000 Restricted Shares of Hartcourt Common Stock to                  Zhou                  Haisheng and Liu Gang with 2,700,000 shares each. Hartcourt and                  Hartcourt                  Education shall jointly guarantee the average closing price of                  the 3 days                  immediately prior to the Consideration Shares Trading Date at not                  less                  than US$0.50 per share, otherwise, Hartcourt shall credit additional                  cash                  or issue and allot additional new Restricted Shares of Hartcourt                  Common                  Stock to make it up. The primary terms and conditions of issuance                  of                  Restricted Shares of Hartcourt Common Stock and Consideration Shares                  Trading Date are set out in Schedule 5. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7 | After                      Hartcourt Education controls the 100% equity interest in China                      Princely,                      China Princely will become a wholly owned foreign                      company. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8 | The                  business term of the wholly owned foreign China Princely shall                  be 50                  years. |
|---|------------------------------------------------------------------------------------------------------------------------------------|

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**Schedule        5: **
**Primary        Terms and Conditions of the Share Consideration**