exv10w7





English
Translation





Exhibit 10.7




Exclusive Business Cooperation Agreement




     This Exclusive Business Cooperation Agreement (“Agreement”) is entered into as of
June 25, 2010 by and among the following parties in Beijing, the People’s Republic of China
(“PRC”), and amends and restates the Service Agreements executed on February 12, 2009, including
the supplemental agreement thereto, and the exclusive business cooperation framework agreement
executed on June 10, 2010:


Party A:



TAL Education Technology (Beijing) Co., Ltd.



Party B refers to each of:



(1) Beijing Xueersi Education Technology Co., Ltd.

(2) Beijing Xueersi Network Technology Co., Ltd.



Affiliated Entities of Party B: as listed in Appendix I, and other entities hereafter added to the
list in Appendix I pursuant to the Agreement, which are hereafter invested in or controlled by
Party B, including but not limited to any company or school of which Party B directly or indirectly
owns more than 50% of the investment interests and such company or school’s affiliated entities.



Party C refers to each of:



Bangxin Zhang, ID Card No. 321182198010012913;

Yundong Cao, ID Card No. 372831197910205618;

Yachao Liu, ID Card No. 211103198110152138;

Yunfeng Bai, ID Card No. 360521198109240073.



(Each of Party A, Party B, Affiliated Entities of Party B and Party C, a “Party”, and collectively
the “Parties”.)



WHEREAS,




     (1) Party A is a wholly foreign-owned enterprise duly registered and validly existing under
the PRC laws, owning resources to provide intellectual property licensing, system software
technical support, technology and business consulting services;



     (2) Party B is a corporation duly registered and validly existing under the PRC laws and
engages in education investments and related businesses directly or indirectly through Affiliated
Entities of Party B.



     (3) Party C are the shareholders of the two companies listed as Party B and collectively owns
100% of the equity interests of each of the two companies;



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     (4) Party A entered into a series of Service Agreements as of February 12, 2009 with the
Affiliated Entities of Party B, and agreed to provide exclusive licensing, technical and business
support to Party B and Affiliated Entities of Party B with Party A’s advantages in technology,
human resource and information. The Parties agree on such cooperation and wish to enter into this
Agreement to unify the principle terms and conditions for such cooperation.



     NOW THEREFORE, the Parties through amiable negotiations agree as follows:




	1.	 	Provision of Services






	 	1.1	 	In accordance with the terms and conditions herein, Party B and Party C appoint
Party A as Party B’s exclusive service provider to provide comprehensive intellectual
property licensing, technical and business support services as described in detail in
Appendix II hereto to Party B and Affiliated Entities of Party B.
	 
	 	 	 	Party B shall, and cause Affiliated Entities of Party B to, determine the specific terms
of services within the scope listed in Appendix II with Party A or any entity designated
by Party A in accordance with the actual business needs of Party B and Affiliated
Entities of Party B.
	 
	 	1.2	 	Party B, Affiliated Entities of Party B and Party C further agree that during the
term of this Agreement, Party B, Affiliated Entities of Party B and Party C shall not,
and shall ensure that their affiliates do not, directly or indirectly obtain the same or
similar services as those provided under this Agreement from any third party, or
establish any similar business cooperative relation with any third party with respect to
the matters stipulated herein without the prior written consent of Party A.
	 
	 	1.3	 	To ensure the normal operations of the ordinary business of Party B and Affiliated
Entities of Party B, Party A may, but is not obligated to, in its discretion and to the
extent permitted by laws and regulations of PRC, act as guarantor for the performance of
the agreements entered into by Party B or Affiliated Entities of Party B with any third
parties with respect to the business of Party B and Affiliated Entities of Party B. Party
B, Affiliated Entities of Party B and Party C hereby agree and affirm that if they need
to provide any guarantee for the performance of any agreements or the repayment of loans
by their affiliated entities in their affiliated entities’ course of business, they will
first seek Party A to act as guarantor.






	2.	 	Service Fee and Payment






	 	2.1	 	With respect to the specific services provided and the customers of the services,
relevant Parties shall determine a fair service fee and proper payment methods based on
the income and the total number of student enrollments during a set period of the Party
receiving the services. The formula for calculating service fees and determining 




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	 	 	 	payment
methods is set forth in Appendix II hereto.

	 
	 	2.2	 	If Party A determines the formula for calculating service fees specified herein
shall no longer apply due to any reason, Parties receiving the services shall negotiate
in good faith with Party A within 10 business days after Party A delivers a written
request for fee adjustment to set a new formula for service fees or new payment methods.
If any Party receiving the services does not respond within the aforementioned 10-day
period, it shall be deemed to have accepted the adjustments proposed by Party A. Party A
shall also negotiate in good faith with Parties receiving the services regarding any fee
adjustment request by such Parties. The Parties hereby reaffirm that Party A and
Affiliated Entities of Party B have orally agreed on and implemented the service
agreements in accordance with Article 2.2 of the Agreement, and retroactively affirm all
service fee adjustmenst since February 12, 2009.






	3.	 	Intellectual Properties






	 	3.1	 	Any intellectual properties created in connection with the performance of this
Agreement, including but not limited to copyrights, patents, and technological secrets,
belong to Party A, and Party B and its Affiliated entities enjoy no rights other than
those provided herein. The Parties agree that this clause shall remain effective
regardless of whether the Agreement is modified or terminated.
	 
	 	3.2	 	However, if any development by Party A is based on intellectual properties owned by
Party B or Affiliated Entities of Party B, Party B and Affiliated entities of Party shal
ensure that such intellectual properties are not defective. Party B and Affiliated
Entities of Party B shall bear all damages and losses of Party A as a result of defects
in such intellectual properties. If Party A is to bear any liabilities to any third party
because of defects in such intellectual properties, it has the right to recover all of
its losses from Party B or relevant Affiliated Entities of Party B.






	4.	 	Term






	 	4.1	 	The Agreement is executed and becomes effective as of the date first stated above.
	 
	 	4.2	 	The Agreement is effective within the operation term of Party A, Party B and
Affiliated Entities of Party B unless earlier terminated by mutual agreement of the
Parties.






	5.	 	Confidentiality






	 	5.1	 	This Agreement and all clauses hereof are confidential information and shall not be
disclosed to any third parties except for relevant senior officers, directors, employees,
agents or professional consultants. This clause shall not apply in the event any Party is
required by laws or regulations to disclose information relating to this Agreement to any
governmental authorities, the public or the shareholders, or file this Agreement with





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	 	 	 	relevant authorities for record.
	 
	 	5.2	 	This clause shall survive any modification or termination of this Agreement.






	6.	 	Liabilities for Breach of Agreement
	 
	 	 	In the event any Party shall fail to perform any of its obligations under this Agreement, or
make any untrue or inaccurate representation or warranty, such Party shall have breached the
Agreement and shall be liable for all the losses of the other Parties for breach of the
Agreement, or pay penalties according to any agreement otherwise reached by the relevant
Parties.
	 
	7.	 	Force Majeure
	 
	 	 	In the event the performance of the Agreement is effected by any Force Majeure event, the
Party affected by such an event shall notify the other Parties by telegram, facsimile or other
electronic means immediately after the occurrence of such event and shall provide written
documents evidencing the occurrence of such Force Majeure event within fifteen (15) business
days. The Parties shall determine through negotiation whether to terminate, partly terminate
or suspend the performance of this Agreement according to the extent the Agreement is effected
by such a Force Majeure event.
	 
	8.	 	Change of Parties






	 	8.1	 	If Party B shall add any affiliated entities at any time after the effectiveness of
this Agreement, Party B and Party C shall cause such newly added affiliated entity to
eexecute assumption agreement or other legal documents permitted or required by the PRC
laws to include such newly added affiliated entity in the Agreement such that it enjoys
all rights and undertakes all obligations as Affiliated Entities of Party B under this
Agreement. As of the date of execution of such assumption agreement or other legal
documents permitted or required by PRC laws, the newly added affiliated entity shall be
deemed as a party to this Agreement. Other Parties of the Agreement hereby agree to the
aforementioned arrangement.
	 
	 	8.2	 	Rights and obligations under this Agreement shall be legally binding upon
assignees, successors of Partiesf, no matter such assignment of obligations and rights is
caused by takeover, restructuring, inheritance, assignment or any other reason.






	9.	 	Miscellaneous






	 	9.1	 	This Agreement shall be governed by and construed in accordance with the PRC laws.
All disputes arising out of or in connection with this Agreement shall be resolved
through good faith negotiations between the Parties. Unresolved disputes shall be settled
through arbitration by the Beijing Arbitration Committee according to such committee’s





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	 	 	 	rules of arbitration. The arbitration shall take place in Beijing. The arbitration ruling
shall be final.
	 
	 	9.2	 	The Agreement shall replace any and all promises, memorandums, agreements or other
documents among the Parties, including but not limited to:






	 	(1)	 	Technical Service Agreement for Management Information System of
Registration and Payment Collection;
	 
	 	(2)	 	Agreement for the Development and Use of Online Networks;
	 
	 	(3)	 	Exclusive Management and Consulting Agreement;
	 
	 	(4)	 	Technical Support and Service Agreement;
	 
	 	(5)	 	Teaching Materials Research and Development Agreement;
	 
	 	(6)	 	Technical Service Agreement for Internal Information Management System;
	 
	 	(7)	 	Technical Service Agreement for Human Resource Information Management
System (the above seven agreements were all executed on February 12, 2009 and are
collectively referred to herein as the “Service Agreements”);
	 
	 	(8)	 	Supplemental Agreement to the Service Agreements (dated as of April 9,
2009); and
	 
	 	(9)	 	Exclusive Business Cooperation Framework Agreement (dated as of June 10.
2010).






	 	 	 	In the event of any conflict between any of the above listed agreements and the
Agreement, the provisions of the Agreement including its appendixes shall prevail.
	 
	 	9.3	 	This Agreement is written in Chinese. The number of original copies of the
Agreement corresponds to the number of parties hereto. Each of Party A, Party B,
Affiliated Entities of Party B and shareholders listed under Party C shall have an
original copy.





[Signature pages to follow]









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[SIGNATURE PAGE OF THE EXCLUSIVE BUSINESS COOPERATION AGREEMENT]



Party A:




TAL Education Technology (Beijing) Co., Ltd.

/s/ Authorized Representative



Party B:




Beijing Xueersi Education Technology Co., Ltd.

/s/ Authorized Representative




Beijing Xueersi Network Technology Co., Ltd.

/s/ Authorized Representative




 









 





[SIGNATURE PAGE OF THE EXCLUSIVE BUSINESS COOPERATION AGREEMENT]



Affiliated Entities of Party B:




Beijing Dongcheng District Xueersi Training School

/s/ Authorized Representative




Beijing Haidian Lejiale Training School

/s/ Authorized Representative




Beijing Xicheng District Xueersi Training School

/s/ Authorized Representative




Beijing Haidian District Xueersi Training School

/s/ Authorized Representative




Beijing Zhikang Culture Distribution Co., Ltd.

/s/ Authorized Representative





 











 





[SIGNATURE PAGE OF THE EXCLUSIVE BUSINESS COOPERATION AGREEMENT]



Affiliated Entities of Party B:




Tianjin Xueersi Education Information Consulting Co., Ltd.

/s/ Authorized Representative




Shenzhen Xueersi Education Technology Co., Ltd.

/s/ Authorized Representative




Shanghai Lehai Science and Technology Information Co., Ltd.

/s/ Authorized Representative




Shanghai Xueersi Education Information Consulting Co., Ltd.

/s/ Authorized Representative




Shanghai Changning District Xueersi-Lejiale School

/s/ Authorized Representative




Shanghai Minhang District Lejiale School

/s/ Authorized Representative




Guangzhou Xueersi Education Technology Co., Ltd.

/s/ Authorized Representative




Wuhan Jianghanqu Xiaoxinxing English Training School

/s/ Authorized Representative




Hubei Qianjiang Xiaohafu English Training School

/s/ Authorized Representative




Hubei Jianli Hafu English Training School

/s/ Authorized Representative




 









 





[SIGNATURE PAGE OF THE EXCLUSIVE BUSINESS COOPERATION AGREEMENT]



Party C:




/s/ Bangxin Zhang

Bangxin Zhang




/s/ Yundong Cao

Yundong Cao




/s/ Yachao Liu

Yachao Liu




/s/ Yunfeng Bai

Yunfeng Bai




 









 





Appendix I: Affiliated Entities of Party B





	1.	 	Beijing Dongcheng District Xueersi Training School
	 
	2.	 	Beijing Haidian Lejiale Training School
	 
	3.	 	Tianjin Xueersi Education Information Consulting Co., Ltd.
	 
	4.	 	Shenzhen Xueersi Education Technology Co., Ltd.
	 
	5.	 	Beijing Xicheng District Xueersi Training School
	 
	6.	 	Beijing Haidian District Xueersi Training School
	 
	7.	 	Beijing Zhikang Culture Distribution Co., Ltd.
	 
	8.	 	Shanghai Lehai Science and TechnologyInformation Co., Ltd.
	 
	9.	 	Shanghai Changning District Xueersi-Lejiale School
	 
	10.	 	Shanghai Minhang District Lejiale School
	 
	11.	 	Shanghai Xueersi Education Information Consulting Co., Ltd.
	 
	12.	 	Guangzhou Xueersi Education Technology Co., Ltd.
	 
	13.	 	Wuhan Jianghanqu Xiaoxinxing English Training School
	 
	14.	 	Hubei Qianjiang Xiaohafu English Training School
	 
	15.	 	Hubei Jianli Hafu English Training School




 









 











Appendix II: Services, Calculation and Payment of the Service Fees





	1.	 	List of Services






	(1)	 	Providing educational software and course materials research and development services;
	 
	(2)	 	Providing employee training services;
	 
	(3)	 	Providing technology development, transfer and consulting services;
	 
	(4)	 	Providing public relation services;
	 
	(5)	 	Providing market survey, research and consulting services;
	 
	(6)	 	Providing near-to-mid-term market development and market planning services;
	 
	(7)	 	Providing human resource management and internal information management;
	 
	(8)	 	Providing network development, upgrade and ordinary maintenance services;
	 
	(9)	 	Providing sales services of proprietary products;
	 
	  (10)	 	Licensing of software and trademarks; and/or
	 
	  (11)	 	Other services agreed upon from time to time by Party A and the Parties receiving services
according to the business needs and the capacity to provide services.
	 
	2.	 	Calculation and Payment of Service Fee
	 
	 	 	The Fee for the services provided under this Agreement is calculated based on a percentage of
the total revenues of the Party receiving the services or according to the total number of
student enrollments of Affiliated Entities of Party B. The specific percentage or amount shall
be agreed upon by both Party A and the Party receiving the services taking into account the
actual services provided as evidenced by service bills or other written documents delivered by
Party A to the Party receiving the services.
	 
	3.	 	The amount of service fees shall be determined by the Parties taking into account the
following factors:






	 	(1)	 	The technical difficulty and complexity of the services;
	 
	 	(2)	 	The amount of time spent by employees of Party A to render the services;
	 
	 	(3)	 	The content and commercial value of the services;
	 
	 	(4)	 	The market prices for similar services.






	4.	 	Party A shall calculate the total amount fees payable on a fixed schedule and send Parties
receiving the services a bill of service fees to notify such party, who shall pay the stated
fees to the bank account designated by Party A within 10 business days after receipt of the
bill and send a copy of the remittance certificate by facsimile or mail to Party A within 10
business days after payment.