Document:

Exhibit 4.35

 

EXECUTED VERSION

 

Bright Scholar Education Holdings Limited

 

US$300,000,000 7.45% Senior Notes due 2022

 

Purchase Agreement

 

July 24, 2019

 

J.P. Morgan Securities plc (“J.P. Morgan”)

25 Bank Street

Canary Wharf

London E14 5JP

United Kingdom

 

Ladies and Gentlemen:

 

Bright Scholar Education Holdings Limited, a company incorporated under the laws of the Cayman Islands with limited liability (the “Company”), proposes to issue and sell to J.P. Morgan (the “Initial Purchaser”), US$300,000,000 principal amount of its 7.45% Senior Notes due 2022 (the “Notes”). The Notes will be issued pursuant to an Indenture to be dated as of July 31, 2019 (the “Indenture”), among the Company, the subsidiary guarantors listed in Schedule 1 hereto (the “Guarantors”) and The Bank of New York Mellon, London Branch, as trustee (the “Trustee”), and will be guaranteed on a senior basis by each of the Subsidiary Guarantors (the “Subsidiary Guarantees”, together with the Notes, the “Securities”).

 

The Company and the Subsidiary Guarantors hereby confirm their agreement with the Initial Purchaser concerning the purchase and resale of the Securities, as follows:

 

1.              Offering Memorandum and Transaction Information.

 

The Securities will be sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the “Securities Act”), in offshore transactions in reliance on Regulation S under the Securities Act. The Company and the Subsidiary Guarantors have prepared a preliminary offering memorandum dated July 21, 2019 (the “Preliminary Offering Memorandum”) and will prepare an offering memorandum dated the date hereof (the “Offering Memorandum”) setting forth information concerning the Company, the Subsidiary Guarantors and the Securities. Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered by the Company to the Initial Purchaser pursuant to the terms of this purchase agreement (the “Agreement”). The Company hereby confirms that it has authorized the use of the Preliminary Offering Memorandum, the Pricing Disclosure Package (as defined below) and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchaser in the manner contemplated by this Agreement. References herein to “amend,” “amendment” or “supplement” with respect to the Preliminary Offering Memorandum or the Offering Memorandum shall be deemed to refer to and include any documents filed after such date.

 

“Pricing Disclosure Package” means the Preliminary Offering Memorandum, as supplemented and amended by the Pricing Term Sheet set forth in Annex A hereto that have been prepared and delivered by the Company to the Initial Purchaser in connection with the offering of the Securities. The “Applicable Time” means 9:45 pm Hong Kong time on the date hereof.

 

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2.              Purchase and Resale of the Securities.

 

(a)                                 The Company agrees to issue and sell the Securities to the Initial Purchaser as provided in this Agreement, and the Initial Purchaser, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees to purchase from the Company the principal amount of Securities at a price equal to 98.675% of the principal amount (being the issue price of 100% net of an aggregate combined underwriting, management, selling commission and incentive fee of 1.325%), plus accrued interest, if any, from July 31, 2019 to the Closing Date (the “Purchase Price”). The Company will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein. In addition, the Company agrees to pay a placement fee (the “Placement Fee”) of 0.25% of the aggregate principal amount of the Securities placed by private banks with private banking investors of such private banks. The Placement Fee shall be deducted by the Initial Purchaser from the proceeds of the issue of the Securities on the Closing Date.

 

(b)                                 The Company understands that the Initial Purchaser proposes to make an offering of the Securities on the terms and in the manner set forth herein, all or a portion of the Securities to purchasers at any time after this Agreement has been executed and delivered. The Securities are to be offered and sold through the Initial Purchaser, in reliance on Regulation S under the Securities Act. The Company acknowledges and agrees that the Initial Purchaser may offer and sell Securities to or through any affiliate of the Initial Purchaser and that any such affiliate may offer and sell Securities purchased by it to or through the Initial Purchaser.

 

(c)                                  Closing shall be on a delivery versus payment basis. On the Closing Date, the Company shall issue the Notes and procure the entry in the applicable register of the noteholders of the names of the persons designated by the Initial Purchaser to the holders of the Notes and will deliver to the Initial Purchaser or its order, in such place as the Initial Purchaser may require, the duly executed and authenticated global note representing the aggregate principal amount of the Notes (the “Global Note”). Delivery of the global note to which the Notes relates and completion of the applicable register of noteholders shall constitute the issue and delivery of the Notes. The “Closing Date” shall mean July 31, 2019 or such other date as shall be agreed between the Issuer and the Initial Purchaser. Against such delivery, the Initial Purchaser will pay or cause to be paid to the Issuer the Purchase Price for the Notes. The Initial Purchaser shall be entitled to deduct from the Purchase Price an amount representing the expenses payable by the Company pursuant to Section 11 (Expenses) of this Agreement and the Placement Fee. Such payment shall be made by a depositary (the “Common Depositary”) common to Euroclear Bank SA/NV, as operator of the Euroclear System (“Euroclear”) and Clearstream Banking S.A. (“Clearstream”) on behalf of the Initial Purchaser, in United States dollars in same day settlement funds for value on the Closing Date to such United States dollar account as shall have been notified by the Company to the Initial Purchaser not later than three days prior to the Closing Date, or such other time as shall be agreed between the Company and the Initial Purchaser, evidence of such payment taking the form of a confirmation from the Common Depositary that it has made such payment.

 

(d)                                 The Company and the Subsidiary Guarantors acknowledge and agree that the Initial Purchaser is acting solely in the capacity of an arm’s length contractual counterparty to the Company and the Subsidiary Guarantors with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company, the Subsidiary Guarantors or any other person. Additionally, the Initial Purchaser is not advising the Company, the Subsidiary Guarantors or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company and the Subsidiary Guarantors shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and the Initial Purchaser shall have no responsibility or liability to the Company or the Subsidiary Guarantors with respect thereto. Any review by the Initial Purchaser of the Company, the Subsidiary Guarantors, and the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Initial Purchaser and shall not be on behalf of the Company, the Subsidiary Guarantors or any other person.

 

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3.              Representations and Warranties of the Company and the Subsidiary Guarantors. The Company and the Subsidiary Guarantors jointly and severally represent and warrant to the Initial Purchaser that:

 

(a)                                 Pricing Disclosure Package and Offering Memorandum. The Pricing Disclosure Package at the Applicable Time, did not, and the Offering Memorandum, as of its date and as of the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Subsidiary Guarantors make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to the Initial Purchaser furnished to the Company in writing by the Initial Purchaser expressly for use in the Pricing Disclosure Package or the Offering Memorandum as described in Section 7(a) of this Agreement.

 

(b)                                 Additional Written Communications. The Company and the Subsidiary Guarantors (including their agents and representatives, other than the Initial Purchaser in its capacity as such) have not prepared, made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any “written communication” (with the meaning of the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Securities (each such communication by the Company and the Subsidiary Guarantors or their agents and representatives (other than a communication referred to in clauses (i) and (ii) below) an “Issuer Written Communication”) other than (i) the Preliminary Offering Memorandum, (ii) the Offering Memorandum, (iii) the Pricing Term Sheet set forth in Annex A hereto, which constitute part of the Pricing Disclosure Package, and (iv) any electronic road show materials or written communications, in each case constituting a “written communication” within the meaning of the Securities Act and used in accordance with Section 4(c). Each such Issuer Written Communication, when taken together with the Pricing Disclosure Package at the Applicable Time, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Subsidiary Guarantors make no representation or warranty with respect to any statements or omissions made in each such Issuer Written Communication in reliance upon and in conformity with the Initial Purchaser Information (as defined in Section 7 herein).

 

(c)                                  Financial Statements. The financial statements included in the Pricing Disclosure Package and the Offering Memorandum together with the related notes and schedules thereto, present fairly the combined financial position of the Company and the Subsidiaries (as defined below) and Affiliated Entities (as defined below) (together with the Company and the Subsidiaries, the “Group”) as of the dates indicated and the combined and consolidated results of operations, cash flows and changes in shareholders’ equity of the Group for the periods specified and have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved; the other financial data contained in the Pricing Disclosure Package and the Offering Memorandum are accurately and fairly presented and prepared on a basis consistent with the financial statements and books and records of the Group; there are no financial statements (historical or pro forma) that are required to be included in the Pricing Disclosure Package and the Offering Memorandum that are not included as required; and the Company and the Subsidiaries and Affiliated Entities do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Pricing Disclosure Package and the Offering Memorandum.

 

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(d)                                 No Material Adverse Change. Since the end of the period covered by the latest audited financial statements included in the Pricing Disclosure Package and the Offering Memorandum (i) there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company and its Subsidiaries and Affiliated Entities, taken as a whole; (ii) there has been no purchase of its own outstanding share capital by the Company, no dividend or distribution of any kind declared, paid or made by the Company on any class of its share capital; (iii) there has been no material adverse change in the share capital, short-term indebtedness, long-term indebtedness, net current assets or net assets of the Company and its Subsidiaries and Affiliated Entities; (iv) except as described in the Pricing Disclosure Package and the Offering Memorandum, neither the Company nor any of its Subsidiaries and Affiliated Entities has (A) entered into or assumed any material transaction or agreement, (B) incurred, assumed or acquired any material liability or obligation, direct or contingent, (C) acquired or disposed of or agreed to acquire or dispose of any business or any other material assets, or (D) agreed to take any of the foregoing actions, that would, in the case of any of clauses (i) through (iv) above, have a Material Adverse Effect (as defined below); and (v) neither the Company nor any of its Subsidiaries and Affiliated Entities has sustained any material loss or interference with its business from fire, explosion, flood, typhoon, or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree.

 

(e)                                  Organization and Good Standing. The Company has been duly incorporated, is validly existing as an exempted company with limited liability in good standing under the laws of the Cayman Islands, has the corporate power and authority to own its property and to conduct its business as described in the Pricing Disclosure Package and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification. The currently effective memorandum and articles of association or other constitutive or organizational documents of the Company comply with the requirements of applicable Cayman Islands law and are in full force and effect. Complete and correct copies of all constitutive documents of the Company and all amendments thereto have been delivered to the Initial Purchaser. No change will be made to any such constitutive documents on or after the date of this Agreement through and including the Closing Date.

 

All of the Company’s direct and indirect subsidiaries (each a “Subsidiary” and collectively, the “Subsidiaries”) have been identified on Schedule 2 hereto, and all of the entities through which the Company conducts its operations in the People’s Republic of China (“PRC”) by way of contractual arrangements (each an “Affiliated Entity” and collectively, the “Affiliated Entities”) have been identified on Schedule 3 hereto. Each of the Subsidiaries and Affiliated Entities has been duly incorporated, is validly existing as a corporation with limited liability or a school, as the case may be, and in good standing under the laws of the jurisdiction of its incorporation, has full corporate or other requisite power and authority to own its property and to conduct its business as described in the Pricing Disclosure Package and the Offering Memorandum, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except as described in the Pricing Disclosure Package and the Offering Memorandum for such qualification that would not have a Material Adverse Effect. All of the constitutive or organizational documents of each of the Subsidiaries and Affiliated Entities comply with the requirements of applicable laws of its jurisdiction of incorporation or organization and are in full force and effect. Apart from the Subsidiaries and Affiliated Entities, the Company has no direct or indirect subsidiaries. A “Material Adverse Effect” means a material adverse effect on the condition (financial or otherwise), earnings, results of operations, business, properties, assets, management or prospects of the Company and its Subsidiaries and Affiliated Entities, taken as a whole, or on the ability of the Company and its Subsidiaries and Affiliated Entities to carry out their obligations under the Transaction Documents (defined below).

 

(f)                                   Contractual Arrangement. The description of the corporate structure of the Company and each of the contracts among its Subsidiaries, the shareholders, the sponsors of the Affiliated Entities and the Affiliated Entities, as the case may be (each a “VIE Agreement” and collectively the “VIE Agreements”) as set forth in each of the Pricing Disclosure Package and the Offering Memorandum under the captions “Corporate History and Structure” and “Related Party Transaction” is true and accurate in all material respects and nothing has been omitted from such description which would make it misleading. There is no other material agreement, contract or other document relating to the corporate structure or the operation of the Company together with its Subsidiaries and Affiliated Entities taken as a whole, which has not been previously disclosed or made available to the Initial Purchaser and disclosed in the Pricing Disclosure Package and the Offering Memorandum.

 

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Each VIE Agreement has been duly authorized, executed and delivered by the parties thereto and constitutes a valid and legally binding obligation of the parties thereto, enforceable in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles. Each VIE Agreement is in full force and effect and none of the parties thereto is in breach or default in the performance of any of the terms or provisions of such VIE Agreement. No consent, approval, authorization, or order of, or filing or registration with, any person (including any governmental agency or body or any court) is required for the performance of the obligations under any VIE Agreement by the parties thereto other than those as described in the Pricing Disclosure Package and the Offering memorandum; and no consent, approval, authorization, order, filing or registration that has been obtained is being withdrawn or revoked or is subject to any condition precedent which has not been fulfilled or performed. Except as described in the Pricing Disclosure Package and the Offering Memorandum, the corporate structure of the Group complies with all applicable laws and regulations of the PRC, and neither the corporate structure nor the VIE Agreements violate, breach, contravene or otherwise conflict with any applicable laws of the PRC. There is no legal or governmental proceeding, inquiry or investigation pending against the Company, the Subsidiaries and the Affiliated Entities or shareholders or sponsors of the Affiliated Entities in any jurisdiction challenging the validity of any of the VIE Agreements, and to the knowledge of the Company and each of the Subsidiary Guarantors (to the extent the Subsidiary Guarantor is a party to such VIE Agreements), no such proceeding, inquiry or investigation is threatened in any jurisdiction.

 

The execution, delivery and performance of each VIE Agreement by the parties thereto do not and will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, or, except as described in the Pricing Disclosure Package and the Offering Memorandum, result in the imposition of any lien, encumbrance, equity or claim upon any property or assets of the Company or any of the Subsidiaries and Affiliated Entities pursuant to (A) the constitutive or organizational documents of the Company or any of the Subsidiaries and Affiliated Entities, (B) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any of the Subsidiaries and Affiliated Entities or any of their properties, or any arbitration award, or (C) any indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which the Company or any of the Subsidiaries and Affiliated Entities is a party or by which the Company or any of the Subsidiaries and Affiliated Entities is bound or to which any of the properties of the Company or any of the Subsidiaries and Affiliated Entities is subject. None of the parties to any of the VIE Agreement has sent or received any communication regarding termination of, or intention not to renew, any of the VIE Agreement, and no such termination or non-renewal has been threatened by any of the parties thereto.

 

The Company possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the Affiliated Entities, through its rights to authorize the shareholders or sponsors, as the case may be, of the Affiliated Entities to exercise their voting rights.

 

(g)                                  Termination of Contracts. Except as described in the Pricing Disclosure Package and the Offering Memorandum, neither the Company nor any of its Subsidiaries or Affiliated Entities has sent or received any communication regarding the termination of, or intent not to renew, any of the contracts or agreements referred to or described in each of the Pricing Disclosure Package and the Offering Memorandum, and no such termination or non-renewal has been threatened by the Company or any of its Subsidiaries or Affiliated Entities, or to the knowledge of the Company and each of the Subsidiary Guarantors (to the extent the Subsidiary Guarantor is a party to such contract or agreement), any other party to any such contract or agreement.

 

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(h)                                 Capitalization. The Company has the capitalization as set forth in each of the Pricing Disclosure Package and the Offering Memorandum under the heading “Capitalization”; and all the issued and outstanding shares of capital stock or other equity interests of each of the Company, the Subsidiaries and the Affiliated Entities have been duly and validly authorized and issued, are fully paid and non-assessable and, except as disclosed in the Pricing Disclosure Package and the Offering Memorandum, are free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party (collectively, “Liens”), and in the case of each Subsidiary, none of the outstanding share capital or equity interest in any Subsidiary was issued in violation of preemptive or similar rights of any security holder of such Subsidiary; all outstanding shares of capital stock or other equity interests of each Subsidiary are owned directly or indirectly by the Company.

 

(i)                                     Due Authorization. The Company and each of the Subsidiary Guarantors have full right, power and authority to execute and deliver this Agreement, the Securities, the Indenture (including each Subsidiary Guarantee set forth therein) (collectively, the “Transaction Documents”) and to perform their respective obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated thereby has been duly and validly taken.

 

(j)                                    The Indenture. The Indenture has been duly authorized by the Company and each of the Subsidiary Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Subsidiary Guarantors enforceable against the Company and each of the Subsidiary Guarantors in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability (collectively, the “Enforceability Exceptions”); and the Indenture will conform in all material respects to the applicable requirements of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).

 

(k)                                 The Notes and the Subsidiary Guarantees. The Notes have been duly and validly authorized by the Company and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture. The Notes, when issued, authenticated and delivered, will conform in all material respects to the description thereof in each of the Pricing Disclosure Package and the Offering Memorandum.

 

The Subsidiary Guarantees have been duly and validly authorized by each of the Subsidiary Guarantors and, when the Notes are issued, authenticated by the Trustee and delivered by the Company against payment by the Initial Purchaser in accordance with the terms of this Agreement and the Indenture will be legally binding and valid obligations of the Subsidiary Guarantors, enforceable against each of them in accordance with their terms, except that the enforcement thereof may be limited by the Enforceability Exceptions. The Subsidiary Guarantees, when issued, authenticated and delivered, will conform in all material respects to the descriptions thereof in each of the Pricing Disclosure Package and the Offering Memorandum.

 

(l)                                     Purchase Agreement. This Agreement has been duly authorized, executed and delivered by the Company and each of the Subsidiary Guarantors, and when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Subsidiary Guarantors enforceable against the Company and each Subsidiary Guarantor in accordance with its terms, subject to the Enforceability Exceptions, and except that rights to indemnity and contribution thereunder may be limited by applicable law and public policy.

 

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(m)                             Descriptions of the Transaction Documents. Each Transaction Document conforms in all material respects to the description thereof contained in each of the Pricing Disclosure Package and the Offering Memorandum.

 

(n)                                 Accurate Disclosure. The statements in each of the Pricing Disclosure Package and the Offering Memorandum (i) under the headings “Summary,” “Enforcement of Civil Liabilities,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Corporate History and Structure,” “Business,” “Regulations,” “Management,” “Principal Shareholders and Directors’ Interests,” “Related Party Transactions,” “Description of Other Material Indebtedness,” “Taxation,” “Plan of Distribution,” and “Ratings” insofar as such statements summarize legal matters, agreements and documents referred to therein, and (ii) under the heading “Description of the Notes” insofar as they purport to constitute a summary of the terms of the Securities and the Transaction Documents, fairly summarize the matters described therein in all material respects.

 

(o)                                 No Violation or Default. Neither the Company nor any of its Subsidiaries or Affiliated Entities is (i) in breach or violation of (A) its charter or by-laws or similar organizational documents or (B) any provision of applicable law (including, but not limited to, any applicable law concerning private education, intellectual property rights and foreign investment in the education sector in the PRC); (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries or Affiliated Entities is a party or by which the Company or any of its Subsidiaries or Affiliated Entities is bound or to which any property or assets of the Company or any of its Subsidiaries or Affiliated Entities is subject; or (iii) in breach or violation of any law or statute or any judgment, order or decree, rule or regulation of any domestic or foreign court or arbitrator or other governmental or regulatory authority, agency or other body or any arbitrator with jurisdiction over any of them or any of their assets or properties (each a “Governmental Authority”), except, in the case of (i)(A) above, the delay in payment of registered capital of Can-achieve (Beijing) Education Consulting Co., Ltd. and in the case of (i)(B), (ii) and (iii) above, for any such breach, default or violation that would not, individually or in the aggregate, result in a Material Adverse Effect.

 

(p)                                 No Conflicts. The execution, delivery and performance by the Company and each of the Subsidiary Guarantors of each of the Transaction Documents to which it is a party, the issuance and sale of the Securities and the issuance of the Subsidiary Guarantees and compliance by the Company and each of the Subsidiary Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, result in the termination, modification or acceleration of, or result in the creation or imposition of any lien, charge or encumbrance upon any property, right or assets of the Company or any of its Subsidiaries or Affiliated Entities pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries or Affiliated Entities is a party or by which the Company or any of its Subsidiaries or Affiliated Entities is bound or to which any property, right or assets of the Company or any of its Subsidiaries or Affiliated Entities is subject, (ii) result in any violation of any provision of applicable law or the provisions of the charter or by-laws or similar organizational documents of the Company or any of its Subsidiaries or Affiliated Entities or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any Governmental Authority.

 

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(q)                                 No Consents Required. No consent, approval, authorization, order, registration or qualification of any Governmental Authority is required for the execution, delivery and performance by the Company and each of the Subsidiary Guarantors of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities and the issuance of the Subsidiary Guarantees and compliance by the Company and each of the Subsidiary Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents, except for (i) such consents, approvals, authorizations, orders and registrations or qualifications as may be required under applicable state securities or Blue Sky laws in connection with the purchase and resale of the Securities by the Initial Purchaser; (ii) the certificate of registration with respect to the Securities issued by the PRC National Development and Reform Commission (the “NDRC”) in accordance with the Notice on Promoting the Reform of the Filing and Registration System for Issuance of Foreign Debt by Corporates (国家发展改革委关于推进企业发行外债备案登记制管理改革的通知) (Fa Gai Wai Zi [2015] No 2044) (the “NDRC Notice”) which remains in full force and effect on the Closing Date; (iii) the post-issuance filing and reporting of the information relating to the issue of the Securities with the NDRC within the time period prescribed by the NDRC Notice and any implementation rules as issued by the NDRC from time to time; and (iv) approval of listing of the Securities on the Exchange.

 

(r)                                    Legal Proceedings. There are no legal or governmental proceedings pending or threatened (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) to which the Company, any of its Subsidiaries and Affiliated Entities or any of their respective executive officers, directors and key employees is a party or to which any of the properties of the Company or any of its Subsidiaries and Affiliated Entities is subject (i) other than proceedings that would not have a Material Adverse Effect, or proceedings that would not have any adverse effect on the power or ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated by the Pricing Disclosure Package or (ii) that are required to be described in the Pricing Disclosure Package or the Offering Memorandum and are not so described; and there are no statutes, regulations, contracts or other documents that are required to be described in the Pricing Disclosure Package or the Offering Memorandum that are not described.

 

(s)                                   Independent Accountants. Deloitte Touche Tohmatsu Certified Public Accountants LLP, who have certified certain financial statements of the Company and its Subsidiaries or Affiliated Entities as set forth in each of the Pricing Disclosure Package and the Offering Memorandum, are independent public accountants with respect to the Group within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.

 

(t)                                    Title to Real and Personal Property. Each of the Company and its Subsidiaries and Affiliated Entities has good and marketable title (valid land use rights and building ownership certificates in the case of real property located in the PRC) to all real property and good and marketable title to all personal property, in each case, owned by them which is material to the business of the Company and its Subsidiaries and Affiliated Entities, in each case free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries and Affiliated Entities; and any real property and buildings held under lease by the Company and its Subsidiaries and Affiliated Entities are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries and Affiliated Entities, in each case except as described in the Pricing Disclosure Package and the Offering Memorandum.

 

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(u)                                 Intellectual Property. Except as described in the Pricing Disclosure Package and the Offering Memorandum, the Company and its Subsidiaries and Affiliated Entities own, possess or can acquire on reasonable terms sufficient trademarks, trade names, patent rights, copyrights, domain names, licenses, approvals, trade secrets, inventions, technology, know-how and other intellectual property and similar rights, including registrations and applications for registration thereof (collectively, “Intellectual Property Rights”) necessary to the conduct of the business now conducted, and the expected expiration of any such Intellectual Property Rights would not, individually or in the aggregate, have a Material Adverse Effect. Except as disclosed in the Pricing Disclosure Package and the Offering Memorandum, (i) there are no rights of third parties to any of the Intellectual Property Rights owned by the Company or its Subsidiaries and Affiliated Entities; (ii) there is no material infringement, misappropriation, breach, default or other violation, or the occurrence of any event that with notice or the passage of time would constitute any of the foregoing, by the Company or its Subsidiaries and Affiliated Entities or third parties of any of the Intellectual Property Rights of the Company or its Subsidiaries and Affiliated Entities; (iii) there is no pending or threatened action, suit, proceeding or claim by others challenging the Company’s or the Subsidiaries’ and Affiliated Entities’ rights in or to, or the violation of any of the terms of, any of their Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (iv) there is no pending or threatened action, suit, proceeding or claim by others challenging the validity, enforceability or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (v) there is no pending or threatened action, suit, proceeding or claim by others that the Company, any Subsidiary or any Affiliated Entity infringes, misappropriates or otherwise violates or conflicts with any Intellectual Property Rights or other proprietary rights of others and the Company is unaware of any other fact which would form a reasonable basis for any such claim; and (vi) none of the Intellectual Property Rights used by the Company or its Subsidiaries and Affiliated Entities in their businesses has been obtained or is being used by the Company or its Subsidiaries and Affiliated Entities in violation of any contractual obligation binding on the Company or its Subsidiaries and Affiliated Entities in violation of the rights of any persons, except in each case covered by clauses (i) — (vi) such as would not, if determined adversely to the Company or its Subsidiaries and Affiliated Entities, individually or in the aggregate, have a Material Adverse Effect.

 

(v)                                 Related Party Transactions. No material relationships or material transactions, direct or indirect, exist between or among the Company or any of its Subsidiaries or Affiliated Entities, on the one hand, and their respective shareholders, sponsors, affiliates, directors, officers or any affiliates or family members of such persons on the other hand, except as described in each of the Pricing Disclosure Package and the Offering Memorandum.

 

(w)                               Taxes. (i) The Company and each of its Subsidiaries and the Affiliated Entities have filed all national, local and foreign tax returns required to be filed through the date of this Agreement or have requested extensions thereof and have paid all taxes required to be paid thereon (except for cases where failure to file or pay would not have a Material Adverse Effect, or except for taxes currently being contested in good faith and for which adequate reservations have been made in the financial statements of the Company), and no tax deficiency has been determined adversely to the Company or any of its Subsidiaries and the Affiliated Entities which has had (nor does the Company nor any of its Subsidiaries and the Affiliated Entities have any notice or knowledge of any tax deficiency which could reasonably be expected to be determined adversely to the Company or its Subsidiaries and the Affiliated Entities and which could reasonably be expected to have) a Material Adverse Effect. (ii) Any unpaid material income and corporation tax liability of the Company for any years not finally determined have been accrued on the Company’s financial statements in accordance with the GAAP. (iii) All local and national PRC governmental tax holidays, exemptions, waivers, financial subsidies, and other local and national PRC tax relief, concessions and preferential treatment enjoyed by the Company or any of the Subsidiaries and Affiliated Entities as described in the Pricing Disclosure Package and the Prospectus are valid, binding and enforceable and do not violate any laws, regulations, rules, orders, decrees, guidelines, judicial interpretations, notices or other legislation of the PRC.

 

(x)                                 No Stamp or Transaction Taxes. Except as described in each of the Pricing Disclosure Package and the Offering Memorandum, no transaction, stamp, capital, issuance, registration, documentary, value-added or duties are payable by or on behalf of the Company or the Initial Purchaser to the government of the PRC, the Cayman Islands, the British Virgin Islands, Hong Kong or any political subdivision or taxing authority thereof or therein in connection with (i) the issuance of the Securities, (ii) the sale and delivery by the Company of the Securities to or for the account of the Initial Purchaser, or (iii) the execution, delivery, performance or enforcement of this Agreement and other Transaction Documents.

 

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(y)                                 Licenses and Permits. Except as disclosed in the Pricing Disclosure Package and the Offering Memorandum, (i) each of the Company and its Subsidiaries and Affiliated Entities possesses all licenses, certificates, authorizations, declarations and permits issued by, and has made all reports to and filings with, the appropriate Governmental Authorities, for the Company and each of its Subsidiaries and Affiliated Entities that are necessary to conduct their respective businesses and for the lease of their respective properties; (ii) each of the Company and its Subsidiaries and Affiliated Entities is in compliance with the terms and conditions of all such licenses, certificates, authorizations and permits in all material respects; (iii) such licenses, certificates, authorizations and permits are valid and in full force and effect and contain no materially burdensome restrictions or conditions not described in the Pricing Disclosure Package and the Offering Memorandum; (iv) neither the Company nor any of its Subsidiaries and Affiliated Entities has received any notice of proceedings relating to the revocation or modification of any such license, certificate, authorization or permit; (v) neither the Company nor any of its Subsidiaries has any reason to believe that any such license, certificate, authorization or permit will not be renewed in the ordinary course; except in each of the case of (i) and (v) above, where such failure to possess, file or renew would not have a Material Adverse Effect.

 

(z)                                  No Labor Disputes. No material labor dispute with the employees or third-party contractors of the Company or any of its Subsidiaries and Affiliated Entities exists, or to the best knowledge of the Company and each of the Subsidiary Guarantors after due enquiry, is imminent; and neither the Company nor any of its Subsidiaries or Affiliated Entities is aware of any existing, threatened or imminent labor disturbance by the employees of any of the principal suppliers, service providers or business partners of the Company and its Subsidiaries and Affiliated Entities that could have a Material Adverse Effect. Except as described in the Pricing Disclosure Package and the Offering Memorandum, the Company and its Subsidiaries and Affiliated Entities are and have been at all times in compliance with all applicable labor laws and regulations in all material respects, and no governmental investigation or proceedings with respect to labor law compliance exists, or to the best knowledge of the Company or each of the Subsidiary Guarantors after due enquiry, is imminent.

 

(aa)                          Certain Environmental Matters. (i) The Company and its Subsidiaries and Affiliated Entities, (A) are in compliance with any and all applicable national, local and foreign laws and regulations (including, for the avoidance of doubt, all applicable laws and regulations of the PRC) relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval, except as described in the Pricing Disclosure Package and the Offering Memorandum or where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not have a Material Adverse Effect. (ii) There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties), except for those that would not have a Material Adverse Effect.

 

(bb)                          Disclosure Controls. The Company and its Subsidiaries and Affiliated Entities maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”) Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company and its Subsidiaries and Affiliated Entities have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

 

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(cc)                            Compliance with Accounting Controls and Sarbanes-Oxley Act. Except as disclosed in the Pricing Disclosure Package and the Offering Memorandum, the Company maintains a system of internal controls over accounting matters sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with the GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Pricing Disclosure Package and the Offering Memorandum, since the end of the Company’s most recent audited fiscal year, there has been (i) no material weakness or significant deficiencies in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(dd)                          Critical Accounting Policies. The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in each of the Pricing Disclosure Package and Offering Memorandum, accurately and fairly describes (i) accounting policies that the Company believes are the most important in the portrayal of the Company’s financial condition and results of operations and that require management’s most difficult, subjective and complex judgment (“critical accounting policies”); (ii) material judgments and uncertainties affecting the application of critical accounting policies and estimates; (iii) the likelihood that materially different amounts would be reported under different conditions or using different assumptions and an explanation thereof; (iv) all material trends, demands, commitments and events known to the Company, and uncertainties, and the potential effects thereof, that the Company believes would materially affect its liquidity and are reasonably likely to occur; and (v) all off-balance sheet commitments and arrangements of the Company and its Subsidiaries and Affiliated Entities, if any. The Company’s directors and management have reviewed and agreed with the selection, application and disclosure of the Company’s critical accounting policies as described in the Pricing Disclosure Package and the Offering memorandum and have consulted with its independent accountants with regard to such disclosure in each of the Pricing Disclosure Package and the Offering Memorandum..

 

(ee)                            Operating and Other Company Data. All operating and other Company data disclosed in the Pricing Disclosure Package and the Offering Memorandum, including the number of students, average student enrollment, the number of teachers, the number of foreign teachers, average number of teachers, average tuition and fees per student, the number of employees and school capacity, are true and accurate in all material respects.

 

(ff)                              Insurance. Each of the Company and its Subsidiaries and Affiliated Entities are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged, except where the absence thereof would not have a Material Adverse Effect; neither the Company nor any of its Subsidiaries and Affiliated Entities has been refused any insurance coverage sought or applied for; and neither the Company nor any of its Subsidiaries and Affiliated Entities has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at similar cost from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

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(gg)                            No Unlawful Payments. Neither the Company nor any of its Subsidiaries or Affiliated Entities, nor any director, officer or employee of the Company or any of its Subsidiaries or Affiliated Entities nor, to the best knowledge of the Company and each of the Subsidiary Guarantors after due inquiry, any agent, affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries or Affiliated Entities has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee , including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti-corruption law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Company and its Subsidiaries and Affiliated Entities have instituted, maintain and enforce, and will continue to maintain and enforce, policies and procedures designed to promote and provide assurance of compliance with all applicable anti-bribery and anti-corruption laws.

 

(hh)                          Compliance with Anti-Money Laundering and Anti-Terrorism Financing Laws. The operations of the Company and its Subsidiaries are Affiliated Entities are and have been conducted at all times in compliance with, to the extent applicable, financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and in compliance with all applicable anti-money laundering and anti-terrorism financing statutes of all jurisdictions where the Company or any of its Subsidiaries or Affiliated Entities conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering and Anti-Terrorism Financing Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries or Affiliated Entities with respect to the Anti-Money Laundering and Anti-Terrorism Financing Laws is pending or, to the best knowledge of the Company or each of the Subsidiary Guarantors after due inquiry, threatened.

 

(ii)                                  No Conflicts with Sanctions Laws. Neither the Company nor any of its Subsidiaries or Affiliated Entities, directors, officers or employees, nor, to the best knowledge of the Company or each of the Subsidiary Guarantors after due inquiry, any agent, affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries or Affiliated Entities is currently the subject or the target of any sanctions administered or enforced by the U.S. government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council (“UNSC”), the European Union, the United Kingdom (including, without limitation, Her Majesty’s Treasury (“HMT”)), the Monetary Authority of Singapore (“MAS”), the Hong Kong Monetary Authority (“HKMAS”) or other relevant sanctions authority or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company or any member of the Group located, organized or resident or listed, or owned, controlled (directly or indirectly) or acting on behalf of a person, located or organized in a country, region or territory that is the subject or target of Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan, Syria and Crimea (each, a “Sanctioned Country”). For the past five years, the Company and its Subsidiaries and Affiliated Entities have not knowingly engaged in, are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country and the Company and such Subsidiaries and Affiliated Entities have not received notice of, and are not aware of, any claim, action, proceeding, or investigation against it with respect to Sanctions. The Company and its Subsidiaries and Affiliated Entities will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, initial purchaser, advisor, investor or otherwise) of Sanctions, provided that. the foregoing sentence shall not apply if and to the extent that the expression of, or compliance with, or receipt or acceptance of, such undertaking would breach any provision of Council Regulation EC No. 2271/96, as amended from time to time, or breach any applicable implementing legislation.

 

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(jj)                                Solvency. On and immediately after the Closing Date, the Company, each Subsidiary and each Affiliated Entity (after giving effect to the issuance and sale of the Securities, the issuance of the Subsidiary Guarantees and the other transactions related thereto as described in each of the Pricing Disclosure Package and the Offering Memorandum) will be Solvent. As used in this paragraph, the term “Solvent” means, with respect to a particular date and entity, that on such date (i) the present fair value (and present fair saleable value) of the assets of such entity is not less than the total amount required to pay the probable liability of such entity on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured; (ii) such entity is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business; (iii) assuming consummation of the issuance and sale of the Securities and the issuance of the Subsidiary Guarantees as contemplated by this Agreement, the Pricing Disclosure Package and the Offering Memorandum, such entity does not have, intend to incur or believe that it will incur debts or liabilities beyond its ability to pay as such debts and liabilities mature; (iv) such entity is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would constitute unreasonably small capital; and (v) such entity is not a defendant in any civil action that would result in a judgment that such entity is or would become unable to satisfy.

 

(kk)                          No Restrictions on Subsidiaries; No Restrictions on Payments of Dividends in Foreign Currency. Except as disclosed in the Pricing Disclosure Package and the Offering Memorandum, (i) none of the Company nor any of its Subsidiaries and Affiliated Entities is prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from (A) paying any dividends or making any other distributions on its share capital, (B) making or repaying any loans or advances to the Company or any such other Subsidiary or Affiliated Entity; or (C) transferring any of its properties or assets to the Company or any other Subsidiary or Affiliated Entity; and (ii) all dividends and other distributions declared and payable upon the share capital of the Company or any of its Subsidiaries and Affiliated Entities (A) may be converted into foreign currency that may be freely transferred out of such Person’s jurisdiction of incorporation, without the consent, approval, authorization or order of, or qualification with, any court or governmental agency or body in such Person’s jurisdiction of incorporation or tax residence; and (B) are not and will not be required to obtain any consents, approvals, authorizations, orders, registrations, clearances or qualifications of or with any court or governmental agency or body having jurisdiction over such Person, provided however, that (1) such distribution has been duly approved by the shareholder and/or board meeting of the Company or any other Subsidiary or Affiliated Entity pursuant to their respective constitutional documents; (2) any enterprise income tax, if applicable, to the Company or any other Subsidiary or Affiliated Entity, has been fully paid; (3) any withholding tax has been duly withheld; (4) the Company or any other Subsidiary or Affiliated Entity has duly obtained, and maintain effective, their respective foreign exchange registration; (5) the allocations to statutory reserves by the Company or any other Subsidiary or Affiliated Entity have been duly made; and (6) the remittance of such dividends outside of the PRC complies with the procedures required under the PRC laws relating to foreign exchange. For the avoidance of doubt, solely for purposes of this paragraph, the transactions with respect to any Affiliated Entity described in this paragraph shall be limited to such transactions between a non-school Affiliated Entity and another non-school Affiliated Entity that is a direct or indirect subsidiary thereof.

 

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(ll)                                  Holders. No holder of the Securities after the consummation of the transactions contemplated by this Agreement or any other Transaction Documents is or will be subject to any personal liability in respect of any liability of the Company by virtue only of its holding of any Securities; and except as set forth in the Pricing Disclosure Package and the Offering Memorandum, there are no limitations on the rights of holders of the Securities to hold or transfer their Securities.

 

(mm)                  No Broker’s Fees. None of the Company, the Subsidiaries or the Affiliated Entities is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any of them or any Initial Purchaser for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities.

 

(nn)                          Foreign Issuer. The Company is a “foreign private issuer” within the meaning of Rule 405 under the Securities Act. There is no “substantial U.S. market interest” as defined in Rule 902(j) of Regulation S in either the Company’s or any of the Subsidiary Guarantors’ “debt securities” as such terms are defined in Rule 902(a) under the Securities Act.

 

(oo)                          No Integration. Neither the Company, the Subsidiary Guarantors nor any of their respective affiliates (as defined in Rule 501(b) of Regulation D) has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

 

(pp)                          No General Solicitation or Directed Selling Efforts. Neither the Company, the Subsidiary Guarantors nor any of their respective affiliates or any other person acting on its or their behalf (other than the Initial Purchaser, as to which no representation is made) has (i) solicited offers for, or offered or sold, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act or (ii) engaged in any directed selling efforts within the meaning of Regulation S under the Securities Act (“Regulation S”), and all such persons have complied with the offering restrictions requirement of Regulation S.

 

(qq)                          Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Initial Purchaser contained in Section 2(b) and their compliance with their agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Securities to the Initial Purchaser and the offer, resale and delivery of the Securities by the Initial Purchaser in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Offering Memorandum, to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act.

 

(rr)                                No Stabilization. None of the Company, the Subsidiaries, the Affiliated Entities or any of their Affiliates or persons acting on their behalf (other than the Initial Purchaser as to whom the Company makes no representation) has taken, nor will any of them take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities or to facilitate the sale or resale of the Securities.

 

(ss)                              Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) included in any of the Pricing Disclosure Package or the Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

(tt)                                Third-party Data. Any statistical, industry-related and market-related data included in the Pricing Disclosure Package and the Offering Memorandum are based on or derived from sources that the Company reasonably and in good faith believes to be reliable and accurate, and such data agree with the sources from which they are derived, and the Company has obtained the written consent for the use of such data from such sources to the extent required.

 

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(uu)                          Compliance with PRC Overseas Investment Regulations. Except as described in each of the Pricing Disclosure Package and the Offering Memorandum, each of the Company and its Subsidiaries has complied, and has taken all steps to ensure compliance by each of its shareholders, directors and officers that is, or is directly or indirectly owned or controlled by, a PRC resident or citizen with any applicable rules and regulations of the relevant PRC government agencies (including but not limited to the Ministry of Commerce, the National Development and Reform Commission, the China Securities Regulatory Commission (the “CSRC”) and the State Administration of Foreign Exchange (the “SAFE”)) relating to overseas investment by PRC residents and citizens (the “PRC Overseas Investment Regulations”), in all material respects, including, without limitation, requesting each such Person that is, or is directly or indirectly owned or controlled by, a PRC resident or citizen, to complete any registration and other procedures required under applicable PRC Overseas Investment Regulations (including any applicable rules and regulations of SAFE).

 

(vv)                          M&A Rules. The Company is aware of and has been advised as to the content of the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors and any official clarifications, guidance, interpretations or implementation rules in connection with or related thereto (the “PRC Mergers and Acquisitions Rules”) jointly promulgated by the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Tax Administration, the State Administration of Industry and Commerce, the CSRC and the SAFE on August 8, 2006 and amended by the Ministry of Commerce on June 22, 2009, including the provisions thereof which purport to require offshore special purpose entities formed for listing purposes and controlled directly or indirectly by PRC companies or individuals to obtain the approval of the CSRC prior to the listing and trading of their securities on an overseas stock exchange. The Company has received legal advice specifically with respect to the PRC Mergers and Acquisitions Rules from its PRC counsel, and the Company understands such legal advice. In addition, the Company has communicated such legal advice in full to each of its directors and each such director has confirmed that he or she understands such legal advice. The issuance and sale of the Securities and the consummation of the transactions contemplated by this Agreement (i) are not and will not be, as of the date hereof or at the Closing Date, adversely affected by the PRC Mergers and Acquisitions Rules and (ii) do not require the prior approval of the CSRC.

 

(ww)                      No Immunity. None of the Company, the Subsidiaries and Affiliated Entities nor any of their respective properties, assets or revenues has any right of immunity under the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom, PRC, New York state or United States federal law, from any legal action, suit or proceeding, the giving of any relief in any such legal action, suit or proceeding, set-off or counterclaim, the jurisdiction of any Cayman Islands, British Virgin Islands, Hong Kong, the United Kingdom, PRC, New York state or U.S. federal court, service of process, attachment upon or prior to judgment, or attachment in aid of execution of judgment, or execution of a judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Agreement and the Securities; and, to the extent that the Company, or any Subsidiary or Affiliated Entities or any of their respective properties, assets, or revenues may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings may at any time be commenced, each of the Company and its Subsidiaries and Affiliated Entities waives or will waive such right to the extent permitted by law and has consented to such relief and enforcement as provided in Section 16 hereof.

 

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(xx)                          Validity of Choice of Law. The choice of laws of the State of New York as the governing law of this Agreement, the Indenture and any other Transaction Documents, if applicable, is a valid choice of law under the laws of the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom and the PRC and will be honored by courts in the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom and the PRC. The Company has the power to submit, and pursuant to Section 16 hereof, has legally, validly, effectively and irrevocably submitted, to the personal jurisdiction of each United States federal court and New York state court located in the Borough of Manhattan, in The City of New York (each, a “New York Court”, and together, the “New York Courts”) and has validly and irrevocably waived any objection to the laying of venue of any suit, action or proceeding brought in such court, and the Company has the power to designate, appoint and empower, and pursuant to Section 16 hereof, has legally, validly, effectively and irrevocably designated, appointed and empowered, an authorized agent for service of process in any action arising out of or relating to this Agreement or the Securities in any New York Court, and service of process effected on such authorized agent will be effective to confer valid personal jurisdiction over the Company as provided in Section 16 hereof.

 

(yy)                          Enforceability of Judgment. Any final and conclusive judgment for a fixed or readily calculable sum of money (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) rendered by a New York Court having jurisdiction under its own domestic laws in respect of any suit, action or proceeding against the Company based upon this Agreement or the Securities would be recognized and enforced against the Company by the courts of the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom and the PRC and would give judgment based thereon in the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom and the PRC, provided that (i) with respect to the courts of the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom, (A) such courts had proper jurisdiction over the parties subject to such judgment, (B) such courts did not contravene the rules of natural justice of the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom, (C) such judgment was not obtained by fraud, (D) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom, (E) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom, and (F) there is due compliance with the correct procedures under the laws of the Cayman Islands, the laws of the British Virgin Islands, the laws of Hong Kong or the laws of the United Kingdom, and (ii) with respect to courts of the PRC, any application or request for recognition and execution of such judgement is subject to compliance with relevant civil procedural requirements in the PRC. The Company is not aware of any reason why the enforcement in the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom or the PRC of such a New York Court judgment would be, as of the date hereof, contrary to public policy of the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom or the PRC.

 

(zz)                            Representation of Officers. Any certificate signed by any officer of the Company and delivered to the Initial Purchaser or counsel to the Initial Purchaser in connection with the offering shall be deemed a representation and warranty by the Company, as to matters covered thereby, to the Initial Purchaser.

 

(aaa)                   Merger or Consolidation. Except as disclosed in each of the Time of Sale Information and the Offering Memorandum, neither the Company nor any of its Subsidiaries or Affiliated Entities is a party to any effective memorandum of understanding, letter of intent, definitive agreement or any similar agreements with respect to a merger or consolidation or an acquisition or disposition of assets, technologies, business units or businesses which is required to be described in each of the Pricing Disclosure Package or the Offering Memorandum and which is not so described, or which would have a Material Adverse Effect.

 

4.                                      Further Agreements of the Company and the Subsidiary Guarantors. The Company and the Subsidiary Guarantors jointly and severally covenant and agree with the Initial Purchaser that:

 

(a)                                 Delivery of Copies. The Company will deliver, without charge, to the Initial Purchaser as many copies of the Preliminary Offering Memorandum, any other Pricing Disclosure Package, any Issuer Written Communication and the Offering Memorandum (including all amendments and supplements thereto) as the Initial Purchaser may reasonably request.

 

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(b)                                 Offering Memorandum, Amendments or Supplements. Before finalizing the Offering Memorandum or making or distributing any amendment or supplement to any of the Pricing Disclosure Package or the Offering Memorandum or filing with the Commission at any time prior to the Closing Date, the Company will furnish to the Initial Purchaser and counsel for the Initial Purchaser a copy of the proposed Offering Memorandum or such amendment or supplement for review, and will not distribute any such proposed Offering Memorandum, amendment or supplement or file any such document with the Commission to which the Initial Purchaser reasonably objects (save as may be required by law, regulation or the rules of any securities exchange, in which case, the Company shall notify the Initial Purchaser and furnish to the Initial Purchaser and counsel for the Initial Purchaser a copy of the proposed Offering Memorandum or such amendment or supplement for review promptly).

 

(c)                                  Additional Written Communications. Before making, preparing, using, authorizing, approving or referring to any Issuer Written Communication, the Company and the Subsidiary Guarantors will furnish to the Initial Purchaser and counsel for the Initial Purchaser a copy of such written communication for review and will not make, prepare, use, authorize, approve or refer to any such written communication to which the Initial Purchaser reasonably objects.

 

(d)                                 Notice to the Initial Purchaser. The Company will advise the Initial Purchaser promptly, and confirm such advice in writing, (i) of the issuance by any Governmental Authority of any order preventing or suspending the use of any of the Pricing Disclosure Package, any Issuer Written Communication or the Offering Memorandum or the initiation or threatening of any proceeding for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the initial offering of the Securities as a result of which any of the Pricing Disclosure Package, any Issuer Written Communication or the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when such Pricing Disclosure Package, Issuer Written Communication or the Offering Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or the threatening of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order preventing or suspending the use of any of the Pricing Disclosure Package, any Issuer Written Communication or the Offering Memorandum or suspending any such qualification of the Securities and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.

 

(e)                                  Pricing Disclosure Package. If at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which any of the Pricing Disclosure Package as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it is necessary to amend or supplement the Pricing Disclosure Package to comply with law, the Company will immediately notify the Initial Purchaser thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the Initial Purchaser such amendments or supplements to the Pricing Disclosure Package (or any document to be filed with the Commission) as may be necessary so that the statements in any of the Pricing Disclosure Package as so amended or supplemented will not, in the light of the circumstances under which they were made, be misleading or so that any of the Pricing Disclosure Package will comply with law, and will expeditiously furnish to the Initial Purchaser and dealers a reasonable number of copies thereof.

 

(f)                                   Clear Market. During the period from the date hereof through and including the date that is 90 days after the date hereof, the Company and each of the Subsidiary Guarantors will not, without the prior written consent of the Initial Purchaser, offer, sell, contract to sell or otherwise dispose of any debt securities issued or guaranteed by the Company or any of the Subsidiary Guarantors and having a tenor of more than one year.

 

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(g)                                  Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities as described in each of the Pricing Disclosure Package and the Offering Memorandum under the heading “Use of proceeds.” The Company and its Subsidiaries and Affiliated Entities will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, initial purchaser, advisor, investor or otherwise) of Sanctions. The undertaking made in the second sentence of this Section 4(g) shall not apply if and to the extent that the expression of, or compliance with, or receipt or acceptance of, such undertaking would breach any provision of Council Regulation EC No. 2271/96, as amended from time to time, or breach any applicable implementing legislation.

 

(h)                                 No Integration. Neither the Company, the Subsidiary Guarantors nor any of their respective affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) that is or will be integrated with the sale of the Securities in a manner that would require the registration of the Securities under the Securities Act.

 

(i)                                     No General Solicitation or Directed Selling Efforts. Neither the Company, the Subsidiary Guarantors nor any of their respective affiliates or any other person acting on its or their behalf (other than the Initial Purchaser, as to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D without the prior written consent of the Initial Purchaser or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act or (ii) engage in any directed selling efforts within the meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of Regulation S.

 

(j)                                    No Stabilization. Neither the Company nor any of the Subsidiary Guarantors will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities to facilitate the sale or resale of the Securities.

 

(k)                                 Exchange Listing. The Company will use its reasonable best efforts to list, subject to notice of issuance, the Securities on The Stock Exchange of Hong Kong Limited (the “Exchange”); and if the Company is unable to maintain such listing having used its best efforts, to obtain and maintain a listing of the Securities on such other stock exchange or stock exchanges as the Company may agree with the Initial Purchaser.

 

(l)                                     Conditions Precedent. The Company and the Subsidiary Guarantors will do and perform all things required or necessary to be done and performed under this Agreement by it prior to the Closing Date, and to satisfy all conditions precedent to the Initial Purchaser’s obligations hereunder to purchase the Securities.

 

(m)                             Post-Closing NDRC Filing. The Company shall (i) file or cause to be filed with the NDRC or its local branch information of the offering of the Securities after the Closing Date in accordance with and within the time period prescribed by the NDRC Notice, and (ii) comply with all applicable PRC laws and regulations in relation to the NDRC registration pursuant to the NDRC Notice.

 

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5.              Certain Agreements of the Initial Purchaser. The Initial Purchaser hereby represents and agrees that it has not and will not use, authorize use of, refer to, or participate in the planning for use of, any written communication that constitutes an offer to sell or the solicitation of an offer to buy the Securities other than (i) the Preliminary Offering Memorandum and the Offering Memorandum, (ii) any written communication that contains either (a) no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) or (b) “issuer information” that was included (including through incorporation by reference) in the Pricing Disclosure Package or the Offering Memorandum, (iii) any written communication prepared pursuant to Section 4(c) (including any electronic road show) or 4(i) above, (iv) any written communication prepared by the Initial Purchaser and approved by the Company and the Initial Purchaser in advance in writing or (v) any written communication relating to or that contains the terms of the Securities and/or other information that was included (including through incorporation by reference) in the Pricing Disclosure Package or the Offering Memorandum.

 

The Initial Purchaser hereby further represents, warrants and agrees that (i) the Securities have not been and will not be offered or sold within the United States except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Act; and (ii) it and any of its Affiliates or any person acting on any of their behalf has offered the Securities and will offer and sell the Securities only in accordance with Rule 903 of Regulation S and, accordingly, neither it nor any persons acting on its behalf have engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Securities, and any such persons have complied and will comply with the offering restrictions requirement of Regulation S.

 

6.              Conditions of Initial Purchaser’s Obligations. The obligation of the Initial Purchaser to purchase Securities on the Closing Date as provided herein is subject to the performance by the Company and each of the Subsidiary Guarantors of their respective covenants and other obligations hereunder and to the following additional conditions:

 

(a)                                 Representations and Warranties. The representations and warranties of the Company and the Subsidiary Guarantors contained herein shall be true and correct on the date hereof and on and as of the Closing Date; and the statements of the Company, the Subsidiary Guarantors and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date.

 

(b)                                 No Material Adverse Change. No event or condition of a type described in Section 3(d) hereof shall have occurred or shall exist, the effect of which in the judgment of the Initial Purchaser makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Offering Memorandum.

 

(c)                                  Officer’s Certificate. The Initial Purchaser shall have received on and as of the Closing Date a certificate of an executive officer of the Company and of each Subsidiary Guarantor who has specific knowledge of the Company’s or such Subsidiary Guarantor’s financial matters and is reasonably satisfactory to the Initial Purchaser, in form and substance reasonably satisfactory to the Initial Purchaser, (i) confirming that such officer has carefully reviewed the Pricing Disclosure Package and the Offering Memorandum and, to the best knowledge of such officer after due inquiry, the representations set forth in Sections 3(a) and 3(b) hereof are true and correct, (ii) confirming that the other representations and warranties of the Company and the Subsidiary Guarantors in this Agreement are true and correct and that the Company and the Subsidiary Guarantors have complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date and (iii) to the effect set forth in paragraphs (b) and (c) above.

 

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(d)                                 Comfort Letters. (i) On the date of this Agreement and on the Closing Date, Deloitte Touche Tohmatsu Certified Public Accountants LLP shall have furnished to the Initial Purchaser, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Initial Purchaser, in form and substance reasonably satisfactory to the Initial Purchaser, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in each of the Pricing Disclosure Package and the Offering Memorandum; provided that the letter delivered on the Closing Date shall use a “cut-off” date no more than three business days prior to the Closing Date; and (ii) the Company shall have furnished to the Initial Purchaser a certificate, dated the Closing Date and addressed to the Initial Purchaser, of its chief financial officer with respect to certain financial data contained in the Pricing Disclosure Package and the Offering Memorandum, providing “management comfort” with respect to such information substantially in the form of Annex G hereto.

 

(e)                                  Opinion of Counsel for the Company. Allen & Overy, U.S. counsel for the Company, shall have furnished to the Initial Purchaser, at the request of the Company, their written opinions, dated the Closing Date and addressed to the Initial Purchaser, in form and substance reasonably satisfactory to the Initial Purchaser, to the effect set forth in Annex B.

 

(f)                                   Opinions of PRC Counsel. (i) Junhe LLP, PRC counsel for the Company, shall have furnished to the Initial Purchaser, at the request of the Company, their written opinions, dated the Closing Date and addressed to the Initial Purchaser, in form and substance reasonably satisfactory to the Initial Purchaser, to the effect set forth in Annex C hereto, and (ii) the Initial Purchaser shall have received on and as of the Closing Date an opinion, addressed to the Initial Purchaser, of King & Wood Mallesons, PRC counsel for the Initial Purchaser, with respect to such matters as the Initial Purchaser may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

 

(g)                                  Opinions of Hong Kong Counsel for the Company. Allen & Overy, Hong Kong counsel for the Company, shall have furnished to the Initial Purchaser, at the request of the Company, their written opinions, dated the Closing Date and addressed to the Initial Purchaser, in form and substance reasonably satisfactory to the Initial Purchaser, to the effect set forth in Annex D hereto.

 

(h)                                 Opinions of English Counsel for the Company. Allen & Overy, English counsel for the Company, shall have furnished to the Initial Purchaser, at the request of the Company, their written opinions, dated the Closing Date and addressed to the Initial Purchaser, in form and substance reasonably satisfactory to the Initial Purchaser, to the effect set forth in Annex E hereto.

 

(i)                                     Opinions of Cayman Islands Counsel for the Company. Conyers Dill & Pearman, Cayman Islands counsel for the Company, shall have furnished to the Initial Purchaser, at the request of the Company, their written opinions, dated the Closing Date and addressed to the Initial Purchaser, in form and substance reasonably satisfactory to the Initial Purchaser, to the effect set forth in Annex F hereto.

 

(j)                                    Opinion of Counsel for the Initial Purchaser. The Initial Purchaser shall have received on and as of the Closing Date an opinion, addressed to the Initial Purchaser, of Davis Polk & Wardwell, U.S. counsel for the Initial Purchaser, with respect to such matters as the Initial Purchaser may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

 

(k)                                 No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any Governmental Authority that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Subsidiary Guarantees; and no injunction or order of any Governmental Authority shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Subsidiary Guarantees.

 

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(l)                                     Ratings. The Initial Purchaser shall have received a written confirmation from each of Moody’s Investors Service (“Moody’s”) and Fitch Ratings Inc. (“Fitch”), or other evidence reasonably satisfactory to the Initial Purchaser, to the effect that on the Closing Date the Securities are rated or expected to be rated at least “Ba3” by Moody’s and “BB-” by Fitch.

 

(m)                             Indenture and Securities. The Indenture shall have been duly executed and delivered by a duly authorized officer of the Company, each of the Subsidiary Guarantors and the Trustee, and the Securities shall have been duly executed and delivered by a duly authorized officer of the Company and duly authenticated by the Trustee.

 

(n)                                 Additional Documents. On or prior to the Closing Date, the Company and the Subsidiary Guarantors shall have furnished to the Initial Purchaser such further certificates and documents as the Initial Purchaser may reasonably request.

 

(o)                                 Exchange Listing. Approval for the listing of, and the permission to deal in, the Securities on the Exchange, shall have been received.

 

7.              Indemnification and Contribution.

 

(a)                                 Indemnification of the Initial Purchaser. The Company and each of the Subsidiary Guarantors jointly and severally agree to indemnify and hold harmless the Initial Purchaser, its affiliates, directors and officers and each person, if any, who controls the Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, or any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, any of the other Pricing Disclosure Package, any Issuer Written Communication, any road show as defined in Rule 433(h) under the Securities Act or the Offering Memorandum (or any amendment or supplement thereto) or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to the Initial Purchaser furnished to the Company in writing by the Initial Purchaser expressly for use therein (the “Initial Purchaser Information”). Each of the Company and the Subsidiary Guarantors hereby acknowledges that the Initial Purchaser Information only includes (i) the name of the Initial Purchaser on the cover page, in the “Important Notice” section and under the caption “Plan of Distribution” in the Preliminary Offering Memorandum and the Offering Memorandum and (ii) the sixth full paragraph of the “Plan of Distribution” section in the Preliminary Offering Memorandum and the Offering Memorandum.

 

(b)                                 Indemnification of the Company and the Subsidiary Guarantors. The Initial Purchaser agrees to indemnify and hold harmless the Company, each of the Subsidiary Guarantors, each of their respective directors and officers and each person, if any, who controls the Company or any of the Subsidiary Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to the Initial Purchaser Information.

 

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(c)                                  Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under paragraph (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under paragraph (a) or (b) above. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for the Initial Purchaser, its affiliates, directors and officers and any control persons of the Initial Purchaser shall be designated in writing by the Initial Purchaser and any such separate firm for the Company, the Subsidiary Guarantors, their respective directors and officers and any control persons of the Company and the Subsidiary Guarantors shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

 

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(d)                                 Contribution. If the indemnification provided for in paragraph (a) or (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Subsidiary Guarantors on the one hand and the Initial Purchaser on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Subsidiary Guarantors on the one hand and the Initial Purchaser on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Subsidiary Guarantors on the one hand and the Initial Purchaser on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company from the sale of the Securities and the total discounts and commissions received by the Initial Purchaser in connection therewith, as provided in this Agreement, bear to the aggregate offering price of the Securities. The relative fault of the Company and the Subsidiary Guarantors on the one hand and the Initial Purchaser on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any Subsidiary Guarantor or by the Initial Purchaser and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

(e)                                  Limitation on Liability. The Company, the Subsidiary Guarantors and the Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall the Initial Purchaser be required to contribute any amount in excess of the amount by which the total discounts and commissions received by the Initial Purchaser with respect to the offering of the Securities exceeds the amount of any damages that the Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

(f)                                   Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

 

8.              Taxes

 

(a)                                 The Company and each of the Subsidiary Guarantors jointly and severally agree to indemnify and hold harmless the Initial Purchaser against any transaction, stamp, capital, issuance, registration, documentary, value-added, transfer or similar tax or duty (excluding any profit tax) payable by or on behalf of the Initial Purchaser in connection with (i) the issuance or the Securities, (ii) the sale and delivery by the Company of the Securities to or for the account of the Initial Purchaser, (iii) the initial sale and delivery by the Initial Purchaser of the Securities to purchasers thereof, and (iv) the execution, delivery, performance and enforcement of this Agreement and the other Transaction Documents.

 

(b)                                 All payments made under this Agreement by or on behalf of the Company or any Subsidiary Guarantor, as the case may be, to or for the account of the Initial Purchaser shall be made without withholding or deduction for or on account of any taxes, duties or governmental charges of whatever nature, unless such withholding or deduction is required by law. In such case, the Company or the relevant Subsidiary Guarantor, as the case may be, shall pay such additional amounts as are required so that the amounts received by the Initial Purchaser shall be the amounts that would have been received but for such withholding or deduction.

 

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9.              Effectiveness of Agreement. This Agreement shall become effective as of the date first written above.

 

10.       Termination. This Agreement may be terminated in the absolute discretion of the Initial Purchaser, by notice to the Company, if after the execution and delivery of this Agreement and on or prior to the Closing Date (i) trading generally shall have been suspended or materially limited on the New York Stock Exchange or the over-the-counter market; (ii) trading of any securities issued or guaranteed by the Company or any of the Subsidiary Guarantors shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the judgment of the Initial Purchaser, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Offering Memorandum.

 

11.       Payment of Expenses.

 

(a)                                 Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company and each of the Subsidiary Guarantors jointly and severally agree to pay or cause to be paid all costs and expenses incident to the performance of their respective obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, transfer, preparation and delivery of the Securities and any taxes payable in that connection; (ii) the costs incident to the preparation and printing of the Preliminary Offering Memorandum, any other Pricing Disclosure Package, any Issuer Written Communication and the Offering Memorandum (including any amendment or supplement thereto) and the distribution thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the Company’s and the Subsidiary Guarantors’ counsel and independent accountants; (v) any fees charged by rating agencies for rating the Securities; (vi) the fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties); (vii) all expenses incurred by the Company in connection with any “road show” presentation to potential investors; and (viii) all expenses and application fees related to the listing of the Securities on the Exchange.

 

(b)                                 If (i) this Agreement is terminated pursuant to Section 10, (ii) the Company for any reason fails to tender the Securities for delivery to the Initial Purchaser (iii) the Initial Purchaser declines to purchase the Securities for any reason permitted under this Agreement or (iv) if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company and each of the Subsidiary Guarantors jointly and severally agree to reimburse the Initial Purchaser for all out-of-pocket costs and expenses (including the fees and expenses of its counsel) reasonably incurred by the Initial Purchaser in connection with this Agreement and the offering contemplated hereby.

 

12.       Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and any controlling persons referred to herein, and the affiliates of the Initial Purchaser referred to in Section 7 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Securities from the Initial Purchaser shall be deemed to be a successor merely by reason of such purchase.

 

13.       Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company, the Subsidiary Guarantors and the Initial Purchaser contained in this Agreement or made by or on behalf of the Company, the Subsidiary Guarantors or the Initial Purchaser pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company, the Subsidiary Guarantors or the Initial Purchaser.

 

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14.       Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City, the Cayman Islands, the British Virgin Islands, Hong Kong, the United Kingdom or the PRC; (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act; (d) the term “Exchange Act” collectively means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder; and (e) the term “written communication” has the meaning set forth in Rule 405 under the Securities Act.

 

15.       Compliance with USA Patriot Act. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchaser is required to obtain, verify and record information that identifies its clients, including the Company, which information may include the name and address of its clients, as well as other information that will allow the Initial Purchaser to properly identify its clients.

 

16.       Miscellaneous.

 

(a)                                 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Initial Purchaser shall be given to J.P. Morgan Securities plc, 25 Bank Street, Canary Wharf, London E14 5JP, United Kingdom (fax: +44 20 3493 1413); Attention: EMEA Debt Capital Markets Desk. Notices to the Company and the Subsidiary Guarantors shall be given to them at Bright Scholar Education Holdings Limited, No. 1, Country Garden Road, Beijiao Town, Shunde District, Foshan, Guangdong 528300, People’s Republic of China; Attention: Chief Executive Officer.

 

(b)                                 Governing Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

(c)                                  Submission to Jurisdiction. The Company and each of the Subsidiary Guarantors hereby submit to the exclusive jurisdiction of the New York Courts in any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The Company and each of the Subsidiary Guarantors waive any objection which it may now or hereafter have to the laying of venue of any such suit or proceeding in such courts. Each of the Company and each of the Subsidiary Guarantors agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon the Company and each Subsidiary Guarantor, as applicable, and may be enforced in any court to the jurisdiction of which Company and each Subsidiary Guarantor, as applicable, is subject by a suit upon such judgment. The Company and each of the Subsidiary Guarantors irrevocably appoint Law Debenture Corporate Services Inc. located at 801 2nd Avenue, Suite 403, New York, New York 10017, as its authorized agent in the Borough of Manhattan in The City of New York (the “Authorized Agent”) upon whom process may be served in any such suit, action or proceeding, and agrees that service of process upon the Authorized Agent, and written notice of such service to the Company or any such Subsidiary Guarantor, as the case may be, by the person serving the same to the address provided in this Section 16, shall be deemed in every respect effective service of process upon the Company and such Subsidiary Guarantor in any such suit, action or proceeding. The Company and each of the Subsidiary Guarantors hereby represent and warrant that such authorized agent has accepted such appointment and has agreed to act as such authorized agent for service of process. The Company and each of the Subsidiary Guarantors further agree to take any and all action as may be necessary to maintain such designation and appointment of such authorized agent in full force and effect for a period of seven years from the date of this Agreement.

 

25

 

(d)                                 Waiver of Jury Trial. Each of the parties hereto hereby waives, to the fullest extent permitted by applicable law, any and all rights to trial by jury in any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

(e)                                  Judgment Currency. In respect of any judgment or order given or made for any amount due hereunder that is expressed and paid in a currency (the “judgment currency”) other than United States dollars, the Company will indemnify the Initial Purchaser against any loss incurred by the Initial Purchaser as a result of any variation as between (i) the rate of exchange at which the United States dollar amount is converted into the judgment currency for the purpose of such judgment or order and (ii) the rate of exchange at which the Initial Purchaser is able to purchase United States dollars with the amount of the judgment currency actually received by the Initial Purchaser. The foregoing indemnity shall constitute a separate and independent obligation of the Company and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of or conversion into United States dollars.

 

(f)                                   Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.

 

(g)                                  Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.

 

(h)                                 Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

 

17.       Recognition of Bail-in Powers.

 

Notwithstanding any other term of this Agreement or any other agreements, arrangements, or understanding among the Company and the Initial Purchaser, the Company acknowledges and accepts that a BRRD Liability arising under this Agreement may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts, and agrees to be bound by:

 

(a)         the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of the Initial Purchaser to the Company under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:

 

(i)                               the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon;

 

(ii)                             the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the Initial Purchaser or another person (and the issue to or conferral on the Company of such shares, securities or obligations);

 

(iii)                               the cancellation of the BRRD Liability;

 

(iv)                              the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period;

 

(b)         the variation of the terms of this Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by them Relevant Resolution Authority.

 

26

 

For the purposes of this Section 17:

 

“Bail-in Legislation” means Part I of the UK Banking Act 2009 and any other law or regulation applicable in the UK relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings);

 

“Bail-in Powers” means the powers under the Bail-in Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or affiliate of a bank or investment firm, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability;

 

“BRRD Liability” means a liability in respect of which the relevant Bail-in Powers may be exercised; and

 

“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Bail-in Powers in relation to the Initial Purchaser.

 

18.       Recognition of the U.S. Special Resolution Regimes

 

(a)                                 In the event that the Initial Purchaser that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from the Initial Purchaser of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

 

(b)                                 In the event that the Initial Purchaser that is a Covered Entity or a BHC Act Affiliate of the Initial Purchaser becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Initial Purchaser are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

 

For the purposes of this Section 18:

 

“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k);

 

“Covered Entity” means any of the following:

 

(a)         a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

 

(b)         a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

(c)          a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

 

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and

 

“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

 

27

 

If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Issuer the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
Bright   Scholar Education Holdings Limited
    
	
 
    	

    
	
 
    	
(as Issuer)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Junli He
    
	
 
    	
 
    	
Name:
    	
Junli He
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Purchase Agreement]

 

 

 

	
 
    	
Impetus   Investment Ltd.
    
	
 
    	
(as Subsidiary   Guarantor)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Junli He
    
	
 
    	
 
    	
Name:
    	
Junli He
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Purchase Agreement]

 

 

	
 
    	
Time   Education China Holdings Limited
    
	
 
    	

    
	
 
    	
(as Subsidiary   Guarantor)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Junli He
    
	
 
    	
 
    	
Name:
    	
Junli He
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Purchase Agreement]

 

 

	
 
    	
BRIGHT   SCHOLAR (UK) HOLDINGS LIMITED
    
	
 
    	
(as Subsidiary   Guarantor)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Junli He
    
	
 
    	
 
    	
Name:
    	
Junli He
    
	
 
    	
 
    	
Title:
    	
Director
    

 

[Signature Page to the Purchase Agreement]

 

 

	
Accepted   as of the date first written above:
    	
 
    
	
 
    	
 
    
	
J.P.   MORGAN SECURITIES PLC
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Amy Tan
    	
 
    
	
By
    	
Managing Director
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    

 

[Signature Page to the Purchase Agreement]

 

 

Schedule 1

 

List of Subsidiary Guarantors

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
% Held by
    	
 
    
	
Subsidiary Guarantor
    	
 
    	
Place of incorporation
    	
 
    	
the Company
    	
 
    
	
1.
    	
 
    	
Impetus Investment Ltd.
    	
 
    	
Cayman Islands
    	
 
    	
100
    	
%
    
	
2.
    	
 
    	
Time Education China Holdings Limited
    	
 
    	
Hong Kong
    	
 
    	
100
    	
%
    
	
3.
    	
 
    	
Bright Scholar (UK) Holdings Limited
    	
 
    	
United Kingdom
    	
 
    	
100
    	
%
    

 

31

 

Schedule 2

 

List of Subsidiaries

 

32

 

Schedule 3

 

List of Affiliated Entities

 

33

 

ANNEX A

 

Pricing Term Sheet, dated July 24, 2019

to Preliminary Offering Memorandum dated July 21, 2019

Strictly Confidential

 

Bright Scholar Education Holdings Limited

US$300,000,000 7.45% Senior Notes due 2022

 

This pricing term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum (the “Preliminary Offering Memorandum”). The information in this pricing term sheet supplements the Preliminary Offering Memorandum and updates and supersedes the information in the Preliminary Offering Memorandum to the extent it is inconsistent with the information in the Preliminary Offering Memorandum. Terms used and not defined herein have the meanings assigned in the Preliminary Offering Memorandum.

 

The securities have not been registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction. The securities may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S) except in transactions exempt from, or not subject to, the registration requirements of the Securities Act. Accordingly, the securities are being offered only outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act.

 

	
Issuer:
    	
 
    	
Bright Scholar Education Holdings Limited
    
	
 
    	
 
    	
 
    
	
Subsidiary Guarantors:
    	
 
    	
The securities will initially be fully and   unconditionally guaranteed on a senior basis by certain subsidiaries of the   Issuer as listed in “Description of the Notes — Subsidiary Guarantees.”
    
	
 
    	
 
    	
 
    
	
Security description:
    	
 
    	
US$300,000,000 aggregate principal amount of 7.45%   Senior Notes due 2022
    
	
 
    	
 
    	
 
    
	
Distribution:
    	
 
    	
Reg S
    
	
 
    	
 
    	
 
    
	
Gross proceeds:
    	
 
    	
US$300,000,000
    
	
 
    	
 
    	
 
    
	
Maturity:
    	
 
    	
July 31, 2022
    
	
 
    	
 
    	
 
    
	
Coupon:
    	
 
    	
7.45%
    
	
 
    	
 
    	
 
    
	
Issue price:
    	
 
    	
100% of principal amount
    
	
 
    	
 
    	
 
    
	
Interest Payment Dates:
    	
 
    	
January 31 and July 31, commencing   January 31, 2020
    
	
 
    	
 
    	
 
    
	
Equity clawback:
    	
 
    	
Up to 35% at 107.45% prior to July 31, 2022
    

 

34

 

	
Optional redemption:
    	
 
    	
At any time prior to July 31, 2022, the Issuer   may at its option redeem the Notes, in whole but not in part, at a redemption   price equal to 100% of the principal amount of the Notes plus the Applicable   Premium as of, and accrued and unpaid interest, if any, to (but not including)   the redemption date.
    
	
 
    	
 
    	
 
    
	
Change of control:
    	
 
    	
Putable at 101% of principal plus accrued and unpaid   interest
    
	
 
    	
 
    	
 
    
	
Settlement date:
    	
 
    	
T+5; July 31, 2022
    
	
 
    	
 
    	
 
    
	
ISIN and Common Code:
    	
 
    	
ISIN: XS2032582244
    
	
 
    	
 
    	
Common Code: 203258224
    
	
 
    	
 
    	
 
    
	
Denominations/Multiple:
    	
 
    	
US$200,000 and integral multiples of US$1,000 in   excess thereof
    
	
 
    	
 
    	
 
    
	
Ratings*:
    	
 
    	
Moody’s – Ba3; Fitch – BB-
    
	
 
    	
 
    	
 
    
	
Sole Bookrunner:
    	
 
    	
J.P. Morgan Securities plc
    
	
 
    	
 
    	
 
    
	
Listing:
    	
 
    	
Approval-in-principle has been received for the   listing of the securities on The Stock Exchange of Hong Kong Limited.
    
	
 
    	
 
    	
 
    
	
Selling Restriction:
    	
 
    	
No PRIIPs key information document (KID) has been   prepared as EEA retail investors are not targeted.
    

 

Use of Proceeds

 

Estimated net proceeds to the Issuer from the offering of the securities will be approximately US$295,809,750, after deducting the Initial Purchaser’s discounts and commissions and estimated offering expenses.

 

This material is confidential and is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of these securities or the offering. Please refer to the Preliminary Offering Memorandum for a complete description.

 

This communication is being distributed outside the United States solely to Non-U.S. persons as defined under Regulation S under the Securities Act of 1933, as amended (the “Securities Act”).

 

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. The securities described herein have not been, and will not be, registered under the Securities Act, or with any securities regulatory authority of any state of other jurisdiction in the United States and may not be offered or sold, directly or indirectly, into the United States unless the securities are so registered or an exemption from the registration requirements is available.

 

35

 

In connection with Section 309B of the Securities and Futures Act (Chapter 289) of Singapore (the “SFA”) and the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the “CMP Regulations 2018”), the Issuer has determined the classification of the securities as Prescribed Capital Markets Products (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

 

The securities are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); (ii) a customer within the meaning of Directive 2002/92/EC (as amended, the “Insurance Mediation Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Directive 2003/71/EC (as amended, the “Prospectus Directive”). Consequently no key information document required by Regulation (EU) No 1286/2014 (the “PRIIPs Regulation”) for offering or selling the Securities or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Securities or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

 

*A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

 

Any disclaimer or other notice that may appear below is not applicable to this communication and should be disregarded. Such disclaimer or notice was automatically generated as a result of this communication being sent by Bloomberg or another email system.

 

36

 

	
 
    	
ANNEX B
    

 

Form of Opinion of U.S. Counsel for the Company and the Subsidiary Guarantors

 

[Based on the foregoing and subject to the qualifications below, we are of the opinion that:

 

(a)                                 The Purchase Agreement has been duly executed and delivered by each of the Company and the Subsidiary Guarantors.

 

(b)                                 The Indenture has been duly executed and delivered by each of the Company and the Subsidiary Guarantors and constitutes a valid and binding obligation of each of the Company and the Subsidiary Guarantors, enforceable against each of the Company and the Subsidiary Guarantors in accordance with its terms.

 

(c)                                  The Notes constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, and the Notes are entitled to the benefits of the Indenture.

 

(d)                                 Each of the Guarantees constitutes valid and binding obligations of the respective Subsidiary Guarantors, as applicable, enforceable against such Subsidiary Guarantor in accordance with their terms, and the Guarantees are entitled to the benefits of the Indenture.

 

(e)                                  Neither the execution and delivery of the Agreements nor the performance by the Company or the Subsidiary Guarantors of their obligations thereunder will result in a violation of any Applicable Law; provided, however, that for purposes of the opinion expressed in this paragraph 4(e), we express no opinion with respect to U.S. federal or New York State securities laws, rules or regulations or any other state or U.S. federal anti-fraud laws, rules and regulations.

 

(f)                                   No authorization, approval or consent of, and no filing or registration with, or qualification of or with any governmental or regulatory authority or agency of the United States or of the State of New York is required on the part of the Company or the Subsidiary Guarantors for the execution, delivery or performance of the Agreements to which it is a party, except such as may be required under the U.S. federal securities laws or any state securities or “blue sky” laws.

 

(g)                                  No registration of the Securities under the Securities Act, and no qualification of an indenture under the U.S. Trust Indenture Act of 1939, as amended, is required for the offer and sale of the Securities by the Company and the initial reoffer and resale of the Securities by the Manager in the manner contemplated by the Agreements and the Offering Document, provided that we express no opinion as to when or under what circumstances any of the Securities may be subsequently reoffered or resold.

 

(h)                                 The statements set forth under the heading “Description of the Notes” in the Offering Document as of its date and as of the date hereof, insofar as such statements purport to summarize certain provisions of the Securities and the Indenture, are accurate in all material respects.

 

(i)                                     The statements set forth under the heading “Plan of Distribution” in the Offering Document as of its date and as of the date hereof, insofar as such statements purport to summarize certain provisions of the Purchase Agreement, are accurate in all material respects.

 

37

 

(j)                                    Assuming the validity of such actions under the laws of the Cayman Islands and Hong Kong, under Section [  ] of the Purchase Agreement and Section [  ] of the Indenture, each of the Company and the Subsidiary Guarantors (i) has validly submitted to the non-exclusive jurisdiction of any New York State or United States Federal court sitting in the Borough of Manhattan, the City of New York for the purposes specified therein, (ii) has validly and irrevocably waived any objection to the venue of a proceeding in any such court, and (iii) has validly appointed [Law Debenture Corporate Services Inc. in the City of New York as its authorized agent for such purposes. Service of process on Law Debenture Corporate Services Inc.] in the manner set forth in the Purchase Agreement and the Indenture will be effective under the laws of the State of New York to confer valid personal jurisdiction over the Company and the Subsidiary Guarantors for such purposes.]

 

38

 

	
 
    	
ANNEX C
    

 

Form of Opinion of PRC Counsel for the Company and the Subsidiary Guarantors

 

[Based on the foregoing, and subject to any further assumptions and qualifications set forth below, we are of the opinion that on the date hereof:

 

(a)                                 Each of the PRC Companies is duly incorporated and validly existing as a wholly foreign owned enterprise with limited liability or a company with limited liability, as the case may be, under PRC Laws and is a separate and independent legal entity capable of suing and being sued, and the business conducted by the PRC Companies as disclosed in the Offering Memoranda is within the scope of its articles of association and business license; the articles of association and the business licence of each PRC Companies comply with the applicable requirements of the PRC Laws and are in full force and effect.

 

(b)                                 Each of the Schools is duly incorporated and validly existing as an entity with limited liability under PRC Laws and is a separate and independent legal entity capable of suing and being sued, and the business conducted by the Schools as disclosed in the Offering Memoranda is within the scope of its articles of association, permit for operating a private school, registration certificate of a privately run non-enterprise institution; except as disclosed in the Offering Memoranda, the articles of association, permit for operating a private school, registration certificate of a privately run non-enterprise institution of each Schools comply with the applicable requirements of the PRC Laws and are in full force and effect.

 

(c)                                  [Based on the Confirmation] and to the best of our knowledge, except as disclosed in the Offering Memoranda, each of the PRC Entities has full legal right, power and authority to own, use, lease and operate its properties and other assets and to conduct its business and operations as described in its business licence and the Offering Memoranda and such businesses conducted by the PRC Entities as disclosed in the Offering Memoranda have not infringed or breached any PRC Laws. [Based on the Confirmation], each of the PRC Entities is not in violation or default of its articles of association.

 

(d)                                 The registered capital of each of the PRC Companies has been fully and legally paid in accordance with its articles of association and PRC Laws. The registered capital of each of the PRC Companies is legally held by its shareholders and in compliance with the PRC Laws. The liability of each of the shareholders in respect of the equity interest held by it in the PRC Companies is limited to its investment therein. [Based on the Confirmation], the equity interests in the PRC Companies held by their respective shareholders are free and clear of any liens, charges, encumbrances, or any security interests.

 

(e)                                  The operation fund of each of the Schools which are required to be issued and paid according to PRC Laws has been fully and legally paid for, except which would not have a Material Adverse Effect, in accordance with its articles of association and PRC Laws. [Based on the Confirmation], the investment interests in each of the Schools held by its sponsor are free and clear of any liens, charges, encumbrances, or any security interests.

 

39

 

(f)                                   [Based on the Confirmation] and to the best of our knowledge after due inquiry, the PRC Entities do not own any land use rights or building ownership of any real property, and each of the school operation agreements and the lease agreements as set out in Schedule II is duly executed, binding and enforceable in accordance with the PRC Laws.

 

(g)                                  To the best of our knowledge after due inquiry, except as disclosed in the Offering Memoranda, each of the PRC Entities has obtained all necessary Governmental Authorizations to conduct its business in the manner presently conducted as disclosed in the Offering Memoranda, except for the lack of which would not, have a Material Adverse Effect. To the best of our knowledge after due inquiry, the necessary Governmental Authorizations described above do not contain any materially burdensome restrictions or conditions and are valid and in full force and effect. [Based on the Confirmation], each of the PRC Entities is in compliance with all such Governmental Authorizations, except for such violations which would not, have a Material Adverse Effect. To the best of our knowledge and [based on the Confirmation], none of the PRC Entities has received any notification of proceedings relating to the modification, suspension or revocation of any of such necessary Governmental Authorizations.

 

(h)                                 [Based on the Confirmation] and to the best of our knowledge after due inquiry, (i) no steps have been taken or are being taken to wind up or dissolve the PRC Entities, appoint a bankruptcy administrator or similar officer in respect of the PRC Entities or any of their assets, (ii) there is no action or legal, administrative, arbitral or other proceedings, pending or threatened in the PRC to which any of the PRC Entities is a party, which might result in the winding-up of the PRC Entities, or the appointment of an administrator or similar officer in respect of any of their properties or assets; and (iii) no notice of appointment in respect of any of the PRC Entities, receiver of their assets or trustee in bankruptcy or other similar officer has been served.

 

(i)                                     We have reviewed the [Material Financing Agreements and Material Contracts] and are of the opinion that all of such Material Financing Agreements and Material Contracts have been executed and delivered by the PRC Entities and such agreements are legal, valid and binding on the parties and are enforceable under the PRC Laws. [Based on the Confirmation], the PRC Entities are in compliance with all material provisions thereof, and the PRC Entities are not in default in the performance of any obligations of the Material Financing Agreements and Material Contracts as set out in Schedule III, except for such default or non-compliance which would not, individually or in the aggregate, have a Material Adverse Effect.

 

(j)                                    [As the search results of the website: http://zxgk.court.gov.cn dated [ ], 2019] indicated, no judgments or orders are being executed against the PRC Entities in compulsory enforcement cases.] The website only provides information on persons/entities against whom a judgment or order is being executed in compulsory enforcement cases which were brought before courts across the PRC (excluding military courts) after January 1, 2007 or in compulsory enforcement cases which were not settled before January 1, 2007.

 

(k)                                 [Based on the Confirmation and to the best of our knowledge after due inquiry], except as set out in Schedule IV which would not individually or in the aggregate have a Material Adverse Effect, there are no actions, suits or proceedings (legal, administrative, governmental, arbitral or otherwise) current, pending, threatened or contemplated in the PRC, which are against or affecting the PRC Entities or their properties or assets, whether or not arising in the ordinary course of business, which would individually or in the aggregate have a Material Adverse Effect.

 

40

 

(l)                                     To the best of our knowledge after due inquiry, each of the PRC Entities has legal and valid title to the material intellectual properties as set out in Schedule V hereto (“Intellectual Properties”). [Based on the Confirmation], (i) each of the Intellectual Properties is free and clear of any encumbrances, (ii) none of the PRC Entities has received any notice of infringement of or conflict with asserted rights of others with respect to such Intellectual Properties, (iii) there is no pending or threatened action, suit, proceeding or claim by others challenging any of the PRC Entities’ rights in or to, or the violation of any of the terms of, any of their Intellectual Properties.

 

(m)                             [Based on the Confirmation], no labour dispute or disturbance involving the employees of any of the PRC Entities exists or is imminent or threatened to any of the PRC Entities, which would individually or in the aggregate, have a Material Adverse Effect.

 

(n)                                 Save for (1) the filing with National Development and Reform Commission (“NDRC”) to obtain the Enterprise Foreign Debt Pre-issuance Registration Certificate in respect of the issue of the Notes prior to the offering pursuant to the Notice on Promoting the Reform of the Filing and Registration System for Issuance of Foreign Debt by Corporates (Fa Gai Wai Zi [2015] No 2044) (《国家发展改革委员会关于推进企业发行外债备案登记制管理改革的通知》) (发改外资 [2015] 2044 号) ) issued by the NDRC (the “NDRC Notice”), which the Company obtained on December 12, 2018 and extended on March 13, 2019 and remains valid and in effect as of the date hereof; (2) the reporting of the relevant information and documents in respect of the issuance of the Notes with the NDRC within 10 working days in the PRC after the issuance of the Notes according to the NDRC Notice, no other consent, approval, authorisation or order of any PRC Authority, is required, for (i) the execution, delivery and performance of the Transaction Documents, (ii) the issue and offer of the Notes, the execution, delivery, performance or the consummation of the other transactions contemplated by the Transaction Documents, or (iii) the listing of the Notes on The Stock Exchange of Hong Kong Limited. From a PRC Law perspective, any failure to complete the Post-issuance NDRC Reporting shall not have a negative effect on the validity of the Notes, but for the avoidance of doubt, the Company is still required to do such Post-issuance NDRC Reporting.

 

(o)                                 The [entering into, execution and delivery of the Transaction Documents, and the performance of the Transaction Documents, by the PRC Entities or the] consummation of the transactions hereby or thereby contemplated, or the fulfillment of the terms hereof or thereof do not conflict with, or result in a breach of or default under (i) PRC Laws; or (ii) Material Contracts and Material Financing Agreements as set out in Schedule III.

 

(p)                                 There has been no material adverse change from the date of the Offering Memoranda in the PRC Laws published, including the official interpretation of any such PRC Laws, affecting the PRC Entities.

 

(q)                                 It is not necessary or desirable in order to ensure the legality, validity, enforceability or admissibility in evidence in legal proceedings in the PRC of the Transaction Documents or the Notes that any documents be filed, registered, notarised or otherwise recorded with any PRC Authority, except that the Chinese translation of the relevant Transaction Documents or the Notes is required to be presented to a court in the PRC in respect of any legal action or proceeding relating to such Transaction Documents or the Notes in the PRC.

 

41

 

(r)                                    The statements set forth in the Offering Memoranda, as applicable, under [“Risk Factors”, “Business”, “Selling Restrictions”, “Taxation” and “Regulations”] in each case to the extent, and only to the extent, governed by the PRC Laws (other than the financial statements and related schedules and other financial data contained therein to which we express no opinion), insofar as such statements describe or summarize PRC legal matters, fairly present the information and summarize in all material the matters referred to therein; and such statements are true and accurate in all material aspects, and correctly set forth therein, and nothing has been omitted from such statements which would make the same misleading in any material respect.

 

(s)                                   The application of the proceeds as set forth in the Offering Memoranda under the section “Use of Proceeds” from the issuance of the Notes will not contravene any provision of applicable PRC Laws.

 

(t)                                    Pursuant to the EIT Law and its Implementation Regulations, enterprises that are established under laws of foreign countries and regions (including Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan) but of which places of effective management organ are within the territory of the PRC shall be resident enterprises for the purpose of the EIT Law and such enterprises shall pay enterprise income tax under the EIT Law at the rate of 25% in respect of their income sourced from both within and outside of the PRC. If relevant PRC tax authorities decide, in accordance with applicable tax rules and regulations, that the places of effective management organ of the Company is within the territory of the PRC, the Company may be held to be a resident enterprise for the purpose of the EIT Law and be subject to enterprise income tax under the EIT Law at the rate of 25% for its income sourced from both within and outside of the PRC. [Based on the Confirmation], up to the date of this Opinion, the Company has not been notified or informed by the PRC tax authorities that the Company is considered a resident enterprise for the purpose of the EIT Law.

 

(u)                                 Except as disclosed in the Offering Memoranda, the foreign holder of a Note who is neither resident in, nor engaged in trade or business through a permanent establishment in the PRC will not be deemed to be resident, domiciled, carrying on business in the PRC by reason only of the execution, performance and/or enforcement of the Transaction Documents or holding of such Note.

 

(v)                                 The choice of laws of the State of New York as the governing law of the Transaction Documents and the Notes is a valid choice of law, do not contravene any applicable PRC Laws and will be recognised and given effect to by the PRC courts subject to the satisfaction of the PRC Enforcement Rules.

 

(w)                               According to the Civil Procedure Law of the PRC, any noteholder or each party to the Transaction Documents can apply to the PRC courts with jurisdiction over the case for recognition and enforcement of any final and conclusive judgement obtained in a U.S. federal or New York state court arising out of or in relation to the payment obligations of the Company under the Transaction Documents. Such judgment will be recognised or enforced by the PRC courts if, after being reviewed by the PRC courts in accordance with the PRC Enforcement Rules. However, as at the date hereof, there is no bilateral or multilateral treaty concluded or acceded to by the PRC and the United States as to the mutual recognition and enforcement of judgments.

 

42

 

(x)                                 Under the PRC Laws, none of the PRC Entities is entitled to any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding, set-off or counterclaim, the jurisdiction of any court in the PRC, service of process, attachment prior to or in aid of execution of judgment, or other legal process or proceeding for the granting of any relief or the enforcement of in respect of its obligations under the Transaction Documents or the Notes.

 

(y)                                 Except for otherwise provided under the Contractual Arrangements, each of the PRC Companies has full power and authority, under PRC Laws and its articles of association, to declare and effect dividend payments, and all dividends and other distributions declared and payable upon the interests in such PRC Companies, as applicable, subject to compliance with the requirements under PRC Laws.

 

(z)                                  insofar as the PRC Laws are concerned, none of the PRC Entities or any of their respective properties, assets or revenues are entitled to any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceedings, from set-off or counterclaim, from the jurisdiction of any court, from services of process, from attachment prior to or in aid of execution of judgment, or from other legal processor proceedings for the giving of any relief or for the enforcement of any judgment in respect of its obligations under the Transaction Documents or the Notes.]

 

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ANNEX D
    

 

Form of Opinion of Hong Kong Counsel for the Company and the Subsidiary Guarantors

 

[On the basis of the foregoing, and having regard to such legal considerations as we deem relevant and subject as set out below, we are of the opinion that:

 

1.                                      The HK Subsidiary Guarantor is duly incorporated and validly existing as a company with limited liability under the laws of Hong Kong.

 

2.                                      The HK Subsidiary Guarantor has the corporate power to enter into and perform its obligations under the Transaction Documents and the Notes, and has taken all necessary corporate action to authorise its execution, delivery and performance of the Transaction Documents and the Notes.

 

3.                                      The Offering Memorandum will not constitute a prospectus to which the requirements under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong (the COWUMPO) apply, provided that the Notes are offered and sold by means of any document only (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the SFO) and any rules made thereunder; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the COWUMPO or which do not constitute an offer to the public within the meaning of the COWUMPO.

 

4.                                      Subject to paragraph 3 above, there is no required authorisation, approval or consent of, or registration or filing with, any government department or regulatory authority of or within Hong Kong in relation to the issue of the Notes or the offering and sale of the Notes by the Initial Purchasers in Hong Kong except for the approval of the Listing Division of the HKSE with respect to the listing of the Notes.

 

5.                                      There will have been no contravention of the provisions of Section 103 of the SFO by the issue, or possession for the purposes of issue, whether in Hong Kong or elsewhere, of an advertisement, invitation or document relating to the Notes provided that: (i) such advertisement, invitation or document is not, or does not contain, an invitation to the public or (ii) such issue, or possession for the purposes of issue, is made by or on behalf of an intermediary licensed or registered for Type 1, Type 4 or Type 6 regulated activity (as such terms are defined in the SFO) (whether acting as principal or as agent) or (iii) the Notes are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the SFO and any rules made thereunder or (iv) such issue, or possession for the purposes of issue, is otherwise permitted under the securities laws of Hong Kong.

 

6.                                      No Hong Kong stamp duty is payable in Hong Kong in connection with the execution or, where appropriate, delivery of the Transaction Documents or in connection with the issue and offering of the Notes. No Hong Kong stamp duty is payable in Hong Kong upon the transfer of a Note.

 

7.                                      All payments by the HK Subsidiary Guarantor under the Transaction Documents or in respect of the Notes may be made without withholding or deduction for any taxes, duties, assessments or governmental charges in Hong Kong.

 

44

 

8.                                      A judgment obtained against the HK Subsidiary Guarantor by a New York court could not be enforced by registration in the Hong Kong courts but the judgment would be treated as constituting a cause of action against the HK Subsidiary Guarantor and could be sued upon summarily in the Hong Kong courts. The Hong Kong courts should enter judgment against the HK Subsidiary Guarantor in such proceedings, without re-examination of the merits of the original judgment, provided that:

 

(a)                                 the original court was of competent jurisdiction;

 

(b)                                 the original judgment is final and conclusive;

 

(c)                                  the original judgment was between the same parties (or their privies) as those before the Hong Kong court;

 

(d)                                 the original judgment is not for multiple damages (as defined by the Protection of Trading Interests Ordinance (Cap.471) of Hong Kong (the Protection of Trading Interests Ordinance));

 

(e)                                  the original judgment is for a fixed sum of money and not for a tax, fine or penalty;

 

(f)                                   the original judgment was not obtained by fraud, or in proceedings contrary to substantial justice and its enforcement is not contrary to Hong Kong public policy;

 

(g)                                  the writ in Hong Kong was issued within 6 years after the date on which the original judgment became enforceable;

 

(h)                                 the original judgment is not inconsistent with a Hong Kong judgment in respect of the same points at issue between the same parties; and

 

(i)                                     the original judgment is not a judgment to which either of section 7 of the Protection of Trading Interests Ordinance or section 3 of the Foreign Judgments (Restriction on Recognition and Enforcement) Ordinance (Cap.46) of Hong Kong applies.

 

9.                                      The choice of New York law as the governing law of the Transaction Documents and the Notes would be upheld as a valid choice by the courts of Hong Kong, provided that the chosen law is a bona fide choice of the parties to the Transaction Documents and the Notes and is sufficiently certain to be enforceable.]

 

45

 

	
 
    	
ANNEX E
    

 

Form of Opinion of English Counsel for the Company and the Subsidiary Guarantors

 

[On the basis of the foregoing, and having regard to such legal considerations as we deem relevant and subject as set out below, we are of the opinion that:

 

1.                                      The UK Subsidiary Guarantor is duly incorporated and validly existing as a private company with limited liability under the laws of England.

 

2.                                      The Purchase Agreement and the Indenture are expressed to be governed by the laws of the State of New York, United States. There is no reason, so far as English law is concerned, why the Purchase Agreement and the Indenture should not constitute legal, valid and binding obligations of the UK Subsidiary Guarantor.

 

Nothing in this opinion shall be taken as implying that an English court would exercise jurisdiction in any proceedings relating to the Purchase Agreement and the Indenture or accordingly that any remedy would be available in England for the enforcement of obligations arising under the Purchase Agreement and the Indenture or that an English court would respect the submission by the UK Subsidiary Guarantor to the jurisdiction of the New York courts in the Purchase Agreement and the Indenture

 

3.                                      An English court would uphold as a valid choice the choice of the laws of the state of New York, United States as the governing law of (i) the Purchase Agreement and the Indenture, subject to and in accordance with Rome I and, in the case of the Indenture, subject to and in accordance with the Recognition of Trusts Acts 1987 and provided that the relevant obligation is within the scope of, and the choice is permitted by, Rome I and, in the case of the Indenture, the Recognition of Trusts Acts 1987; [and (ii) any non-contractual obligations arising out of or in connection with the Purchase Agreement and the Indenture, subject to and in accordance with Rome II and provided that the relevant non-contractual obligation is within the scope of, and the choice is permitted by, Rome II.] ]

 

46

 

	
 
    	
ANNEX F
    

 

Form of Opinion of Cayman Islands Counsel for the Company and the Subsidiary Guarantors

 

The Company:

 

[On the basis of and subject to the foregoing, we are of the opinion that:

 

1.                                      The Company is duly incorporated and existing under the laws of the Cayman Islands and, based on the Certificate of Good Standing, is in good standing as at the Certificate Date. Pursuant to the Companies Law (the “Law”), a company is deemed to be in good standing if all fees and penalties under the Law have been paid and the Registrar of Companies has no knowledge that the Company is in default under the Law. The Company has the corporate capacity to own, use or lease its assets and conduct its business in accordance with its Memorandum and Articles of Association.

 

2.                                      The Company has the necessary corporate power and authority to enter into and perform its obligations under the Transaction Documents, to issue, circulate and distribute the Offering Memorandum, to create, offer, issue, and perform its obligations under the Notes and to have the Notes listed on The Stock Exchange of Hong Kong Limited (the “HKSE”).. The execution and delivery of the Transaction Documents and the Notes by the Company and the performance by the Company of its obligations thereunder do not and will not violate the Memorandum or Articles of Association of the Company nor any applicable law, regulation, order or decree in the Cayman Islands.

 

3.                                      The Company has taken all corporate action required to authorise its execution, delivery and performance of the Transaction Documents and the Notes, its creation, offering, delivery and issue of the Notes and the issue, circulation and distribution of the Offering Memorandum. The Transaction Documents (other than the Global Note) have been duly executed and delivered by or on behalf of the Company, and constitute legal, valid and binding obligations of the Company enforceable in accordance with the terms thereof. The Global Note has been duly executed and delivered by or on behalf of the Company and the Subsidiary Guarantors and, when duly authenticated in accordance with the terms of the Transaction Documents, will constitute legal, valid and binding obligations of the Company and the Subsidiary Guarantors and enforceable against the Company and the Subsidiary Guarantors in accordance with the terms thereof.

 

4.                                      No order, consent, approval, licence, authorisation, registration, filing or validation of or exemption or any other similar requirement by any government or public body or authority of the Cayman Islands or any sub-division thereof is required to authorise or is required in connection with the circulation and distribution of the Offering Memorandum, the creation, offering, issue and delivery of the Notes to the Initial Purchaser or the resale by the Initial Purchaser in accordance with the terms of Purchase Agreement, the issue, the listing of the Notes on the HKSE, the payment of the principal, interest and any other amounts under the Notes and the execution, delivery, performance and enforcement of the Transaction Documents or the Notes.

 

5.                                      [It is not necessary or desirable to ensure the enforceability in the Cayman Islands of the Transaction Documents or the Notes that they be registered in any register kept by, or filed with, any governmental authority or regulatory body in the Cayman Islands. However, to the extent that any of the Transaction Documents or the Notes creates a charge over assets of the Company, the Company and its Directors are under an obligation to enter such charge in the Register of Mortgages and Charges of the Company in accordance with section 54 of the Companies Law. While there is no exhaustive definition of a charge under Cayman Islands law, a charge normally has the following characteristics:

 

(i)                                     it is a proprietary interest granted by way of security which entitles the chargee to resort to the charged property only for the purposes of satisfying some liability due to the chargee (whether from the chargor or a third party); and

 

(ii)                                  the chargor retains an equity of redemption to have the property restored to him when the liability has been discharged.

 

47

 

However, as the Transaction Documents and the Notes are governed by the Foreign Laws, the question of whether they would possess these particular characteristics would be determined under the Foreign Laws.]

 

6.                                      There is no income or other tax of the Cayman Islands imposed by withholding or otherwise on any payment to be made to or by the Company pursuant to the Transaction Documents or the Notes. The Cayman Islands currently levy no taxes on individuals or corporations not resident in the Cayman Islands based upon profit, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty.

 

7.                                      There is no stamp, documentary, recording, transfer, registration or similar tax or duty to be paid on or in relation to any of the Transaction Documents or the Notes provided that they are executed and remain outside the Cayman Islands. If it becomes necessary to bring the Transaction Documents or the Notes into the Cayman Islands for enforcement or otherwise, nominal stamp duty will be payable on all Transaction Documents and the Notes. [In the case of any Transaction Document or the Notes creating security over movable property situated in the Cayman Islands granted by an exempted company, an ordinary non-resident company or a foreign company, or over shares in an exempted company or an ordinary non-resident company, stamp duty will be payable on an ad valorem basis to a maximum of CI$500.00 (US$600.00).] Apart from the payment of stamp duty, there are no acts, conditions or things required by the laws and regulations of the Cayman Islands to be done, fulfilled or performed in order to make any of the Transaction Documents or the Notes admissible in evidence in the Cayman Islands.

 

8.                                      The Initial Purchaser and the Trustee will not be deemed to be resident, domiciled or carrying on business or subject to any liability or taxation in the Cayman Islands by reason only of the execution, performance and/or enforcement of the Transaction Documents or the Notes.

 

9.                                      A holder of the Notes (a “Note Holder”) will not be deemed to be resident or domiciled in the Cayman Islands and will not be required to be licensed, qualified or otherwise entitled to carry on business in the Cayman Islands by reason only of holding or transfer of a Note. A Note Holder will not be subject to taxation under the laws of the Cayman Islands by reason only of the acquisition, ownership or disposal of a Note.

 

10.                               The Company has the legal capacity to sue and be sued in its own name under the laws of the Cayman Islands.

 

11.                               The Initial Purchaser and the Trustee have standing to bring an action or proceedings before the appropriate courts in the Cayman Islands for the enforcement of the Transaction Documents or the Notes. It is not necessary or advisable in order for the Initial Purchaser or the Trustee to enforce its rights under the Transaction Documents or the Notes, including the exercise of remedies thereunder that it be licensed, qualified or otherwise entitled to carry on business in the Cayman Islands.

 

12.                               The Company is not entitled to any immunity under the laws of the Cayman Islands, whether characterised as sovereign immunity or otherwise, from any legal proceedings to enforce the Transaction Documents or the Notes in respect of itself or its property.

 

13.                               The obligations of the Company under the Transaction Documents and the Notes will rank at least pari passu in priority of payment with all other unsecured unsubordinated indebtedness of the Company, other than indebtedness which is preferred by virtue of any provision of the laws of the Cayman Islands of general application.

 

14.                               Based solely upon a search of the Register of Writs and other Originating Process of the Grand Court of the Cayman Islands conducted at [    ] a.m. on [    ] July 2019 (which would not reveal details of (i) proceedings which have been filed but not actually entered in the Register of Writs and other Originating Process of the Grand Court of the Cayman Islands at the time of our search or (ii) counterclaims, third party notices or amendments to pleadings filed prior to 8 December 2008) there are no actions pending against the Company nor any petitions to wind up the Company pending in the Grand Court of the Cayman Islands to which the Company is subject.

 

48

 

15.                               The Transaction Documents and the Notes are in an acceptable legal form under the laws of the Cayman Islands for enforcement thereof in the Cayman Islands.

 

16.                               There is no applicable usury or interest limitation law in the Cayman Islands which may restrict the recovery of payments or the performance by the Company of its obligations under the Transaction Documents or the Notes.

 

17.                               The choice of the Foreign Laws as the governing law of the Transaction Documents and the Notes is a valid choice of law and would be recognised and given effect to in any action brought before a court of competent jurisdiction in the Cayman Islands, except for those laws (i) which such court considers to be procedural in nature, (ii) which are revenue or penal laws or (iii) the application of which would be inconsistent with public policy, as such term is interpreted under the laws of the Cayman Islands. The submission in the Transaction Documents and the Notes to the jurisdiction of the Foreign Courts is valid and binding upon the Company.

 

18.                               There are no exchange control restrictions in the Cayman Islands and accordingly there is no exchange control regulations imposed under Cayman Islands law.

 

19.                               The Company is free to acquire, hold and sell foreign currency and securities without restriction.

 

20.                               All payments of principal, interests and premiums, if applicable, in accordance with the terms of the Notes may under the current laws and regulations of the Cayman Islands be paid to the Note Holders and where they are to be paid from the Cayman Islands may be freely transferred out of the Cayman Islands.

 

21.                               The appointment by the Company under the Documents of an agent to accept service of process in any Foreign Court is legal, valid and binding on the Company if such appointment is legal, valid and binding under the Foreign Laws and no other procedural requirements are necessary in order to validate such appointment. The indemnification and contribution provisions set forth in the Purchase Agreement do not in our view contravene public policy or applicable laws of the Cayman Islands so long as those provisions do not amount to fraud or dishonesty

 

22.                               The courts of the Cayman Islands would recognise as a valid judgment, a final and conclusive judgment in personam obtained in the Foreign Courts against the Company based upon the Transaction Documents or the Notes under which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) or, in certain circumstances, an in personam judgment for non-monetary relief, and would give a judgment based thereon provided that (a) such courts had proper jurisdiction over the parties subject to such judgment; (b) such courts did not contravene the rules of natural justice of the Cayman Islands; (c) such judgment was not obtained by fraud; (d) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands; (e) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of the Cayman Islands; and (f) there is due compliance with the correct procedures under the laws of the Cayman Islands.

 

23.                               Any monetary judgment in the courts of the Cayman Islands in respect of a claim brought in connection with the Documents may be expressed in the currency in which such claim is made, since such courts have power to grant a monetary judgment expressed otherwise than the currency of the Cayman Islands, but they may not necessarily do so.

 

24.                               The statements in the Offering Memorandum under the headings [“Enforceability of Civil Liabilities”, “Risk Factors”, “Business”, “Regulations”, “Plan of Distribution”, “Selling Restrictions”, “Legal Matters”, and “Taxation — Cayman Islands” insofar and to the extent that they constitute a summary or description of the law and regulations of the Cayman Islands, fairly and accurately present and summarise the matters referred to therein.

 

49

 

Subsidiary Guarantor:

 

On the basis of and subject to the foregoing, we are of the opinion that:

 

1.                                      The Company is duly incorporated and existing under the laws of the Cayman Islands and, based on the Certificate of Good Standing, is in good standing as at the Certificate Date. Pursuant to the Companies Law (the “Law”), a company is deemed to be in good standing if all fees and penalties under the Law have been paid and the Registrar of Companies has no knowledge that the Company is in default under the Law. The Company has the corporate capacity to own assets and conduct business in accordance with its Memorandum and Articles of Association.

 

2.                                      The Company has the necessary corporate power and authority to enter into and perform its obligations under the Transaction Documents and the Notes. The execution and delivery of the Transaction Documents and the Notes by the Company and the performance by the Company of its obligations thereunder will not violate the Memorandum or Articles of Association of the Company nor any applicable law, regulation, order or decree in the Cayman Islands.

 

3.                                      The Company has taken all corporate action required to authorise its execution, delivery and performance of the Transaction Documents and the Notes. The Transaction Documents (other than the Global Note) have been duly executed and delivered by or on behalf of the Company, and constitute legal, valid and binding obligations of the Company enforceable in accordance with the terms thereof. The Global Note has been duly executed and delivered by or on behalf of the Company and, when duly authenticated in accordance with the terms of the Transaction Documents, will constitute the legal, valid and binding obligations of the Company enforceable in accordance with the terms thereof.

 

4.                                      No order, consent, approval, licence, authorisation or validation of or exemption by any government or public body or authority of the Cayman Islands or any sub-division thereof is required to authorise or is required in connection with the execution, delivery, performance and enforcement of the Transaction Documents or the Notes.

 

5.                                      It is not necessary or desirable to ensure the enforceability in the Cayman Islands of the Transaction Documents or the Notes that they be registered in any register kept by, or filed with, any governmental authority or regulatory body in the Cayman Islands. However, to the extent that any of the Transaction Documents or the Notes creates a charge over assets of the Company, the Company and its Directors are under an obligation to enter such charge in the Register of Mortgages and Charges of the Company in accordance with section 54 of the Companies Law. While there is no exhaustive definition of a charge under Cayman Islands law, a charge normally has the following characteristics:

 

(i)                                     it is a proprietary interest granted by way of security which entitles the chargee to resort to the charged property only for the purposes of satisfying some liability due to the chargee (whether from the chargor or a third party); and

 

(ii)                                  the chargor retains an equity of redemption to have the property restored to him when the liability has been discharged.

 

However, as the Transaction Documents and the Notes are governed by the Foreign Laws, the question of whether they would possess these particular characteristics would be determined under the Foreign Laws.

 

6.                                      There is no income or other tax of the Cayman Islands imposed by withholding or otherwise on any payment to be made to or by the Company pursuant to the Transaction Documents or the Notes.

 

50

 

7.                                      There is no stamp, registration or similar tax or duty to be paid on or in relation to any of the Transaction Documents or the Notes provided that they are executed and remain outside the Cayman Islands. If it becomes necessary to bring the Transaction Documents or the Notes into the Cayman Islands for enforcement or otherwise, nominal stamp duty will be payable on all Transaction Documents and the Notes. In the case of any Transaction Document or the Notes creating security over movable property situated in the Cayman Islands granted by an exempted company, an ordinary non-resident company or a foreign company, or over shares in an exempted company or an ordinary non-resident company, stamp duty will be payable on an ad valorem basis to a maximum of CI$500.00 (US$600.00). Apart from the payment of stamp duty, there are no acts, conditions or things required by the laws and regulations of the Cayman Islands to be done, fulfilled or performed in order to make any of the Transaction Documents or the Notes admissible in evidence in the Cayman Islands.

 

8.                                      The Company has the legal capacity to sue and be sued in its own name under the laws of the Cayman Islands.

 

9.                                      Based solely upon a search of the Register of Writs and other Originating Process of the Grand Court of the Cayman Islands conducted at [     ] a.m. on [     ] July, 2019 (which would not reveal details of (i) proceedings which have been filed but not actually entered in the Register of Writs and other Originating Process of the Grand Court of the Cayman Islands at the time of our search or (ii) counterclaims, third party notices or amendments to pleadings filed prior to 8 December 2008) there are no actions pending against the Company nor any petitions to wind up the Company pending in the Grand Court of the Cayman Islands to which the Company is subject.

 

10.                               The courts of the Cayman Islands would recognise as a valid judgment, a final and conclusive judgment in personam obtained in the Foreign Courts against the Company based upon the Transaction Documents or the Notes under which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) or, in certain circumstances, an in personam judgment for non-monetary relief, and would give a judgment based thereon provided that (a) such courts had proper jurisdiction over the parties subject to such judgment; (b) such courts did not contravene the rules of natural justice of the Cayman Islands; (c) such judgment was not obtained by fraud; (d) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands; (e) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of the Cayman Islands; and (f) there is due compliance with the correct procedures under the laws of the Cayman Islands.

 

11.                               The Company is free to acquire, hold and sell foreign currency and securities without restriction.

 

12.                               The Company is not entitled to any immunity under the laws of the Cayman Islands, whether characterised as sovereign immunity or otherwise, from any legal proceedings to enforce the Transaction Documents or the Notes in respect of itself or its property.

 

13.                               The obligations of the Company under the Transaction Documents and the Notes will rank at least pari passu in priority of payment with all other unsecured unsubordinated indebtedness of the Company, other than indebtedness which is preferred by virtue of any provision of the laws of the Cayman Islands of general application.

 

14.                               There are no exchange control restrictions in the Cayman Islands and accordingly there is no exchange control regulations imposed under Cayman Islands law.]

 

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ANNEX G
    

 

FORM OF CHIEF FINANCIAL OFFICER’S CERTIFICATE

 

BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED

CHIEF FINANCIAL OFFICER’S CERTIFICATE

 

[date]

 

The undersigned, Chief Financial Officer of Bright Scholar Education Holdings Limited, (collectively with its consolidated subsidiaries and affiliated entities, the “Company”), pursuant to Section 6(d)(ii) of the Purchase Agreement, dated July 24, 2019 (the “Purchase Agreement”), among the Company and J.P. Morgan Securities plc, as the initial purchaser (the “Initial Purchaser”), in my capacity as Chief Financial Officer of the Company but not in any personal capacity, hereby certifies that:

 

1.                                      I am providing this certificate to the Initial Purchaser in connection with the Company’s offer and sale of US$300,000,000 7.45% Senior Notes due 2022 (the “Offering”) as described in the Pricing Disclosure Package and the Offering Memorandum.

 

2.                                      I am familiar with the accounting, operations, records systems and internal controls of the Company. I have participated in the preparation of the Pricing Disclosure Package and the Offering Memorandum.

 

3.                                      I have reviewed the amounts, percentages, ratios and other information identified on the pages of the Pricing Disclosure Package and the Offering Memorandum relating to the Offering attached hereto as Exhibit A, and I compared each of such items to the Company’s accounting records and schedules prepared from the Company’s accounting records and found them to be in agreement and have no reason to believe that such items are not true and correct in all material respects.

 

Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement. This certificate is to assist the Initial Purchaser in conducting and documenting their investigation of the affairs of the Company in connection with the Offering and shall not be used for other purposes.

 

(Signature Page Follows)

 

52

 

IN WITNESS WHEREOF, I have signed this Chief Financial Officer’s Certificate as of the date first written above.

 

	
 
    	
Bright   Scholar Education Holdings Limited
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    	
Dongmei Li
    
	
 
    	
Title:
    	
Chief Financial Officer
    

 

53

 

	
 
    	
Exhibit A
    

 

54Exhibit 4.36

 

DATED 5 July 2019

 

(1)    THE SELLER (AS DEFINED HEREIN)

 

(2)    THE BUYER (AS DEFINED HEREIN)

 

(3)    THE WARRANTORS (AS DEFINED HEREIN)

 

(4)    THE GUARANTOR (AS DEFINED HEREIN)

 

SALE AND PURCHASE AGREEMENT

 

RELATING TO

 

CATS COLLEGES HOLDINGS LIMITED

 

CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

[***] indicates the redacted confidential portions of this exhibit.

 

 

CONTENTS

 

	
Clause
    	
 
    	
 
    	
 
    	
Page
    
	
1.
    	
 
    	
Definitions and Interpretation
    	
 
    	
1
    
	
2.
    	
 
    	
Sale of the Shares
    	
 
    	
24
    
	
3.
    	
 
    	
Consideration
    	
 
    	
24
    
	
4.
    	
 
    	
Exchange
    	
 
    	
24
    
	
5.
    	
 
    	
Completion
    	
 
    	
25
    
	
6.
    	
 
    	
Position pending Completion
    	
 
    	
25
    
	
7.
    	
 
    	
Leakage
    	
 
    	
26
    
	
8.
    	
 
    	
Seller’s Warranties and Indemnities
    	
 
    	
27
    
	
9.
    	
 
    	
Buyer’s warranties and Guarantee
    	
 
    	
31
    
	
10.
    	
 
    	
Warranties
    	
 
    	
34
    
	
11.
    	
 
    	
Insurance
    	
 
    	
35
    
	
12.
    	
 
    	
Protection of Goodwill
    	
 
    	
36
    
	
13.
    	
 
    	
Confidentiality
    	
 
    	
39
    
	
14.
    	
 
    	
Taxation
    	
 
    	
39
    
	
15.
    	
 
    	
Costs
    	
 
    	
41
    
	
16.
    	
 
    	
Post-Completion Arrangements
    	
 
    	
42
    
	
17.
    	
 
    	
Warrantors’ Representative
    	
 
    	
46
    
	
18.
    	
 
    	
Transitional Services Agreement, Reverse   Transitional Services Agreement, APA, and Reverse APA
    	
 
    	
46
    
	
19.
    	
 
    	
General
    	
 
    	
47
    
	
20.
    	
 
    	
Applicable Law and Jurisdiction
    	
 
    	
50
    
	
21.
    	
 
    	
Notices
    	
 
    	
50
    
	
Schedule 1   Ultimate Shareholders, Warrantors and Retained Group Companies
    	
 
    	
53
    
	
Schedule 2   Exchange Deliverables
    	
 
    	
54
    
	
Schedule 3   Completion Obligations
    	
 
    	
56
    
	
Schedule 4   Conduct of Business
    	
 
    	
58
    
	
Schedule 5   Warranties
    	
 
    	
60
    
	
Schedule 6   Limitations on Claims
    	
 
    	
83
    
	
Schedule 7 Tax   Covenant
    	
 
    	
91
    
	
Schedule 8   Specific Tax Indemnities
    	
 
    	
98
    
	
 
    	
 
    	
 
    
	
Agreed   Form Documents
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Voting Power of Attorney
    	
 
    	
 
    
	
(b)
    	
 
    	
Resignation Letters
    	
 
    	
 
    

 

 

	
(c)
    	
 
    	
Board resolution of the Seller
    	
 
    	
 
    
	
(d)
    	
 
    	
Board resolutions of the Company
    	
 
    	
 
    
	
(e)
    	
 
    	
Board resolutions of the Buyer
    	
 
    	
 
    
	
(f)
    	
 
    	
Board resolutions of the Guarantor
    	
 
    	
 
    
	
(g)
    	
 
    	
Announcement
    	
 
    	
 
    
	
(h)
    	
 
    	
Security Releases
    	
 
    	
 
    
	
(i)
    	
 
    	
Legal Opinion
    	
 
    	
 
    
	
(j)
    	
 
    	
Bonus Side Letter
    	
 
    	
 
    
	
(k)
    	
 
    	
Standard Contractual clauses
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Annexures
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
1.
    	
 
    	
Accounts
    	
 
    	
 
    
	
2.
    	
 
    	
Management Accounts
    	
 
    	
 
    
	
3.
    	
 
    	
Locked Box Accounts
    	
 
    	
 
    
	
4.
    	
 
    	
Permitted Leakage Schedule
    	
 
    	
 
    
	
5.
    	
 
    	
Target Group Information Pack
    	
 
    	
 
    
	
6.
    	
 
    	
Separation Paper
    	
 
    	
 
    
	
7.
    	
 
    	
Reorganisation Documents List
    	
 
    	
 
    
	
8.
    	
 
    	
Draft FY18 Tax Computations
    	
 
    	
 
    

 

 

THIS AGREEMENT is made on 5 July 2019

 

BETWEEN:

 

(1)                                 CAMBRIDGE EDUCATION GROUP LIMITED incorporated in England and Wales with registered number [***] and having its registered office at Kett House, Station Road, Cambridge CB1 2JH (the “Seller”);

 

(2)                                 BRIGHT SCHOLAR (UK) HOLDINGS LIMITED, incorporated in England and Wales with registered number [***] and whose registered office is at Bournemouth Collegiate School College Road, Southbourne, Bournemouth, United Kingdom, BH5 2DY (the “Buyer”);

 

(3)                                 BRIGHT SCHOLAR EDUCATION HOLDINGS LIMITED incorporated in the Cayman Islands with registered number [***] and having its registered office at Conyers Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Guarantor”); and

 

(4)                                 THE SEVERAL PERSONS whose names and addresses are set out in Part III of Schedule 1 (together the “Warrantors” and each a “Warrantor”).

 

INTRODUCTION

 

(A)                               CATS Colleges Holdings Limited (the “Company”) is a private company limited by shares incorporated in England and Wales with registered number [***] and having its registered office at Kett House, Station Road, Cambridge, United Kingdom, CB1 2JH, further details of which are set out in the Target Group Information Pack (as defined in clause 1.1 below).

 

(B)                               Details of the subsidiary undertakings of the Company are set out in Part 2 of the Target Group Information Pack.

 

(C)                               The Seller has agreed to sell the Shares (as defined in clause 1.1 below) and the Buyer has agreed to buy the Shares, in each case on the terms and subject to the conditions set out in this Agreement.

 

(D)                               The Guarantor has agreed to guarantee the obligations of the Buyer under this Agreement.

 

IT IS AGREED as follows:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                               The following words and expressions where used in this Agreement have the meanings given to them below:

 

Accounting Period means any period by reference to which income, profits, gains or other amounts relevant for the purposes of Taxation are determined.

 

1

 

Accounts means:

 

(a)                                 in respect of the UK Subsidiaries (other than any dormant UK Subsidiaries), audited financial statements of each of those UK Subsidiaries, prepared in accordance with the Act and generally accepted accounting principles in the United Kingdom (the “UK Accounts”);

 

(b)                                 in respect of each of the dormant UK Subsidiaries, financial statements of each of those UK Subsidiaries, prepared in accordance with the Act and generally accepted accounting principles in the United Kingdom (the “Dormant Subsidiaries Accounts”);

 

(c)                                  in respect of the US Subsidiaries, a profit and loss statement and balance sheet prepared in accordance with generally accepted accounting principles in the United States of America for each of the US Subsidiaries (the “US Accounts”);

 

(d)                                 in respect of Canadian Subsidiaries, a profit and loss statement and balance sheet prepared in accordance with generally accepted accounting principles in Canada for each of the Canadian Subsidiaries (the “Canada Accounts”);

 

(e)                                  in respect Cambridge Education Technology (Shanghai) Co Limited, a profit and loss statement and balance sheet of Cambridge Education Technology (Shanghai) Co Limited prepared in accordance with generally accepted accounting principles in the PRC (the “PRC Accounts”); and

 

(f)                                   in respect of CEG Hong Kong JV Limited, a balance sheet of CEG Hong Kong JV Limited prepared in accordance with generally accepted accounting principles in Hong Kong (the “HK Accounts”),

 

in each case in relation to the accounting reference period ended on the Accounts Date, true copies of which comprise Annexure 1.

 

Accounts Date means 31 August 2018.

 

Act means the Companies Act 2006.

 

Aggregate Transaction Bonus Amount means the aggregate amount of any Transaction Bonuses (including all Tax arising on the payment of such Transaction Bonuses) as set out in column (6) of the schedule to the Bonus Side Letter.

 

Announcement means the announcement in the agreed form relating to the transactions contemplated by this Agreement and to be released by the parties on or following Exchange.

 

Anti-bribery Law means the United Kingdom Bribery Act 2010 or the regulations promulgated thereunder as amended from time to time, or any anti-bribery and corruption law of similar effect that is legally binding on the Target Group.

 

2

 

APA means the asset purchase agreement dated 31 March 2019 between (1) the Seller and other parties; and (2) the Company and which relates to the transfer of assets of the Seller to the Target Group.

 

Bonus Side Letter means the bonus side letter in the agreed form dated on or about the date hereof between the Buyer and the Seller relating to the Transaction Bonuses.

 

Bridgepoint Group means Bridgepoint Advisers Limited and its affiliates.

 

Business means together the business operations and activities of the Target Group Companies as carried out as at Completion.

 

Business Day means a day (excluding Saturdays and Sundays) on which commercial banks are generally open in London, Beijing and Hong Kong for the transaction of normal banking business.

 

Business IPR means all Intellectual Property Rights used by a Target Group Company for any purpose in connection with the Business including, without limitation, the Registered Marks, the Licensed IPR and the Business Names (but excluding any TSA IPR).

 

Business Names means CATS, CATS Colleges, CATS Cambridge, CATS Canterbury, CATS London, CATS Boston, CATS Academy Boston, Cambridge Schools of Visual & Performing Arts, CSVPA, Stafford House International, Stafford House Study Holidays, Stafford House School of English, Stafford House Summer and any other name by which the Business (or part thereof) is known as or trades under and any part or abbreviation thereof and any logo, device, format or style in or with which any such name or part or abbreviation of it is or has been used by any Target Group Company.

 

Buyer Group means the Buyer, any parent undertaking of the Buyer and any subsidiary undertaking of the Buyer or such parent undertaking (including, for these purposes with effect from Completion, the Company and every Target Group Company) from time to time and references to “Buyer Group Company” and “any member of the Buyer Group” shall be construed accordingly.

 

Canadian Subsidiaries means together, CEG Holdings Canada, Inc., 976821 Ontario, Inc. and 744648 Alberta, Inc.

 

CATS China means Cambridge Education Technology (Shanghai) Co Limited.

 

CATS China Investment Agreement means the investment agreement between the Seller and Sam Huang, Wei, Joe Chan, Zhangming dated 4 July 2018.

 

Completion means completion of the sale and purchase of the Shares under this Agreement.

 

Completion Date means the date on which Completion occurs.

 

3

 

Confidential Information means the Target Confidential Information, the Retained Group Confidential Information and the Transaction Confidential Information.

 

Confidentiality Agreement means the confidentiality agreement entered into in relation to the sale of the Company dated 5 December 2018.

 

Consideration shall have the meaning given to it in clause 3.1.

 

Contracts means all contracts, agreements, licences and other contractual arrangements whether or not currently in force (in each case under which rights, obligations and/or liabilities remain to be performed or survive) which may have been entered into or undertaken by any Target Group Company (and “Contract” shall mean any one of them).

 

CRC Costs means any fees, charges, levies, payments or costs of any nature whatsoever to be paid or incurred (as can be reasonably evidenced by written records) pursuant to the provisions of the CRC Scheme from time to time including, but not limited to, any costs of registration for the CRC Scheme and any costs associated with the acquisition of allowances required to be surrendered pursuant to the CRC Scheme.

 

CRC Scheme means the emissions trading scheme applicable to the Target Group and/or Investor Ultimate Shareholders and/or their Related Persons established and regulated by the CRC Energy Efficiency Scheme Order 2010 (SI 2010/768) as amended, supplemented, varied and/or replaced from time to time.

 

Data Incident means any matter which results in, or could result in, the accidental, unauthorised or unlawful destruction, loss, alteration, disclosure of, or access to, personal data transmitted, stored or otherwise processed and/or Target Confidential Information, or any claim for compensation for loss or accidental or unauthorised destruction or disclosure of personal data and/or Target Confidential Information.

 

Data Protection Legislation means any law applicable from time to time relating to the processing of personal data and/or privacy, including without limitation, the UK Data Protection Act 2018, the GDPR, and the Privacy and Electronic Communications (EC Directive) Regulations 2003, in each case including any legally binding regulations, direction and orders issued from time to time under or in connection with any such law.

 

Data Protection Regulator means any regulatory body with authority for supervising the application of and compliance with Data Protection Legislation.

 

Data Room means the Project Alumni online data room hosted by Intralinks Inc., and references to “Data Room Document” or “Data Room Folder” shall be to the relevant document or folder of documents within the Data Room.

 

Disclosed means, for all purposes under this Agreement and the Disclosure Letter, fairly disclosed (in the absence of any fraud on the part of the Seller or any Warrantor), in such a manner and with such accuracy and details so as to enable the Buyer to make a reasonably informed assessment of the nature of the fact, matter or circumstance concerned.

 

4

 

Disclosed Matters means any fact, matter, event or circumstance which is Disclosed in this Agreement or the Disclosure Letter (or which is deemed to be Disclosed under the terms of the Disclosure Letter).

 

Disclosure Letter means the letter dated on Exchange from the Warrantors to the Buyer in which certain matters are Disclosed against the Warranties.

 

Documented Loans shall be as defined in the Global Instrument Framework Agreement.

 

Draft FY18 Tax Computations means the draft corporation tax computations of the Target Group Companies for the Accounting Period ended on the Accounts Date a true copy of which comprises Annexure 8.

 

EHS Law means all statutes and regulations applicable in the United Kingdom or any other jurisdiction in which the Business is carried on concerning as their principal function the protection of the Environment or human life and health and safety at work (excluding any statutes or regulations which relate to town and country planning) which are in force as at Exchange and which are applicable to and legally binding upon any Target Group Company.

 

Employee means any person who has entered into a contract of employment with any Target Group Company and remains employed by that Target Group Company as at Exchange.

 

Employment Related Claims means the five (5) employment related disputes set out in section 6.8 of Part E of the Travers Smith LLP Project Alumni Vendor Legal Due Diligence Report dated 29 March 2019 and each of the employment related disputes Disclosed in Part 5.1 of the Disclosure Letter.

 

Environment means any or all of the following media (alone or in combination): air, water, soil and/or ecosystem.

 

Exchange shall immediately and automatically occur when this Agreement has been entered into by each of the parties hereto and dated.

 

Exchange Rate means in relation to any currency to be converted into or from £ for the purposes of this Agreement, the spot rate of exchange (closing mid-point) for that currency into or, as the case maybe, from £ as published in the London edition of The Financial Times first published on or after the relevant date, or where no such rate of exchange is published in respect of that date, at the rate quoted by www.oanda.com as at 5.00 p.m. on that date.

 

5

 

Existing Facilities Agreement means the senior facilities agreement dated 17 December 2013, as amended by an amendment and restatement agreement dated 1 April 2016 and by a second amendment and restatement agreement dated 26 April 2017 and by a third amendment and restatement agreement dated 30 May 2019 between: (i) Camelot Holdco Limited (as Parent); (ii) the companies listed therein as Original Guarantors; (iii) HSBC Bank plc, The Governor and Company of the Bank of Ireland, Sumitomo Mitsui Banking Corporation Europe Limited, Alcentra European DLF S.AR.L and Alcentra UK DLF S.AR.L (as Arrangers); (iv) the financial institutions listed in Part II of Schedule 1 thereof as Original Lenders; and (v) Sumitomo Mitsui Banking Corporation Europe Limited as both Agent (the “Existing Agent”) and Security Agent (the “Existing Security Agent”).

 

Existing Security Documents means each of the security documents entered into by a member of the Target Group in favour of the Existing Security Agent pursuant to the Existing Facilities Agreement.

 

Existing Use means the actual use to which each TG Property is presently put as indicated in paragraph 2.3 (Title and Use) of XII of Schedule 5 (Warranties).

 

Fixed Costs shall be as defined in the Transitional Services Agreement.

 

Foreign Public Official means an individual who (a) holds a legislative, administrative or judicial position of any kind, whether appointed or elected, of a country or territory (or any subdivision of such a country or territory), (b) exercises a public function (i) for or on behalf of a country or territory (or any subdivision of such a country or territory) or (ii) for any public agency or public enterprise of that country or territory (or subdivision), or (c) is an official or agent of a Public International Organisation.

 

Fund means any fund, bank, company, unit trust, investment trust, investment company, limited, general or other partnership, industrial provident or friendly society, collective investment scheme, investment professional, pension fund, insurance company, authorised person under the Financial Services and Markets Act 2000 or body corporate or other entity, in each case the assets of which are managed professionally for investment purposes.

 

Fundamental Warranty Claim means any claim under the warranties given by the Seller pursuant to clause 8.1.

 

GDPR means the General Data Protection Regulation (Regulation (EU) 2016/679) (including any legally binding regulations, direction, and orders issued from time to time under or in connection with the Regulation) as applied and amended from time to time.

 

Global Instrument Framework Agreement means the global instrument framework agreement entered into on 29 March 2019 between each of the parties listed in schedule 2 therein (including each member of the Target Group and the Seller).

 

Global Instruments shall be as defined in the Global Instrument Framework Agreement.

 

6

 

Governmental Authority shall mean any government, any government entity, department, commission, board or agency, and any court, tribunal, judicial or arbitral body or self-regulatory authority whether federal, state, provincial, supranational, county, local or foreign.

 

Group Funding Amount means an amount equal to £4,143,183 (being an amount equal to all intercompany loans, trading balances or other amounts owed by the Retained Group to the Target Group as at the Completion Date (but excluding (i) any such amounts incurred pursuant to the Reverse Transitional Services Agreement; and (ii) any amounts transferred from the Target Group to the Retained Group pursuant to the Transitional Services Agreement to settle Recharge Costs owed by the Target Group to the Retained Group).

 

Group Relief has the meaning attributed to that term by Part 5 CTA 2010 or Part 5A CTA 2010.

 

Hardware means the computer and data processing systems used by any Target Group Company, excluding the Software, but including all plant and equipment which may include embedded software or similar processing systems.

 

Indemnity Claim means any Relevant Indemnity Claim and/or any Relevant Tax Claim.

 

Individual Ultimate Shareholder means each of the persons set out in Part II of Schedule 1.

 

Intellectual Property Rights means patents, trademarks, trade names, service marks, domain names, design rights, copyright, and neighbouring rights (including rights in software), rights in databases, know-how, utility models, rights in inventions, discoveries and improvements, trade secrets, confidential information, and other intellectual property rights, in each case whether registered or unregistered and including applications for the grant of any such rights, the right to apply for any such rights and all rights or forms of protection having equivalent or similar effect anywhere in the world.

 

Investor Ultimate Shareholder means each of the persons set out in Part I of Schedule 1.

 

IPR Agreement means any material agreement or arrangement pursuant to which any Target Group Company grants rights to use the Business IPR or pursuant to which any Target Group Company is granted rights to use Licensed IPR (other than the TSA IPR), including but not limited to, the Asset Purchase Agreement.

 

IT Agreements means the agreements or arrangements (other than the Transitional Services Agreement) under which any element of the IT Systems are provided to the Business (or any part thereof), including any agreement or commitment entered into in respect of any material planned upgrade or new acquisition in respect of the IT Systems.

 

IT Systems means the Hardware and the Software including any devices or services used in relation thereto, used in the operation of the Business, but excluding any hardware, software, devices or services which are used in relation to (or made available to) the Business pursuant to the Transitional Services Agreement.

 

7

 

Leakage means:

 

(a)                                 any actual or deemed dividend or distribution (in cash or in specie) or payments in lieu of any dividend or distribution declared, paid or made by any Target Group Company to the Seller and/or any Seller’s Affiliates;

 

(b)                                 any: (i) payments or deemed payments made to; (ii) future benefits granted to; (iii) assets or rights transferred at an undervalue or surrendered to; (iv) liabilities assumed or incurred for the benefit (whether direct or indirect) of; or (v) any guarantee, indemnity or Security Interest granted to or for the benefit (whether direct or indirect) of, or in respect of the obligations or liabilities of, the Seller and/or any Seller’s Affiliates and/or any Warrantor and/or any Related Person of any Warrantor by any Target Group Company;

 

(c)                                  any payments made or agreed or deemed to be made by any Target Group Company to the Seller and/or any Seller’s Affiliates in connection with any issue, redemption, purchase, repayment or other return of capital event in respect of the share capital, loan capital and/or other securities (whether by reduction of capital or otherwise and whether in cash or kind) of any Target Group Company;

 

(d)                                 the waiver, deferral, release or discount (whether conditional or not) by any Target Group Company of any amount or obligation, or any claim in respect thereof, owed to that Target Group Company by the Seller and/or any Seller’s Affiliates and/or any Warrantor and/or any Related Person of any Warrantor;

 

(e)                                  the purchase by any Target Group Company from a the Seller and/or any Seller’s Affiliates and/or any Warrantor and/or any Related Person of any Warrantor of any assets or services not on arm’s length terms or otherwise at an overvalue;

 

(f)                                   the payment of, or agreement to pay (whether conditional or not), any fees, costs or expenses (including any professional advisers’ fees) to or on behalf or for the benefit of the Seller, any Seller’s Affiliate, any Warrantor or any Related Person of any Warrantor by a Target Group Company: (i) in relation to the Transaction (including the sale of Shares under this Agreement); or (ii) in connection with the Reorganisation;

 

(g)                                  the payment of any transaction or sale bonuses payable as a result of or in connection with the Transaction by any Target Group Company to or for the benefit of the Seller, any Seller’s Affiliate, any Warrantor or any Warrantor’s Related Persons;

 

(h)                                 any agreement or arrangement made or entered into to do or give effect to any matter referred to in paragraphs (a) to (g) above; and/or

 

8

 

(i)                                     any Tax (excluding any recoverable VAT) incurred or becoming directly or indirectly payable by any member of the Target Group in respect of any of the matters referred to in (a) to (h) above, but excludes any Permitted Leakage.

 

Legal Opinion means the legal opinion in the agreed form relating to the Guarantor and addressed to the Seller evidencing the validity of the intended execution of this Agreement by the Guarantor (and any other documents required to be entered into by the Guarantor in connection with this Agreement) and provided by Conyers, Dill & Pearman.

 

Lender means any bank and/or financial institution lending money or making other financing facilities available to the Buyer (or any other member of the Buyer Group) and any trustee(s) or agent(s) appointed on behalf thereof in connection with such facilities.

 

Licensed IPR means Intellectual Property Rights owned by a third party which any Target Group Company is permitted to use (including the TSA IPR), including but not limited to, Intellectual Property Rights which are licensed to the Target Group by the Retained Group pursuant to the Asset Purchase Agreement.

 

Locked Box Accounts means the unaudited consolidated balance sheet prepared in accordance with generally accepted accounting principles in the United Kingdom for the Target Group as at the Locked Box Date, a true copy of which comprises Annexure 3.

 

Locked Box Date means 31 March 2019.

 

Loss means, in relation to any matter, all liabilities, losses, claims, reasonably incurred costs (including reasonably incurred costs of enforcement and reasonably and properly incurred legal costs and expenses), damages, awards, charges, demands, penalties, fines, expenses, Tax and/or any other liabilities incurred or sustained as a direct result of that matter (and “Losses” shall be construed accordingly).

 

L/C Indemnified Matters has the meaning given in Clause 16.11.

 

Management Accounts means the unaudited monthly management accounts of the Target Group for the period from the Accounts Date to the Management Accounts Date, a true copy of which comprises Annexure 2 (and which, for the avoidance of doubt, are contained at folder 2.1.3.1 in the Data Room).

 

Management Accounts Date means 30 April 2019.

 

Material Contracts means:

 

(a)                                 the validation agreement between [***] and [***] dated 5 February 2019;

 

(b)                                 the university foundation programme letter from [***] to [***] dated 13 March 2019;

 

(c)                                  the progression agreement between [***] and [***] dated 11 March 2019;

 

9

 

(d)                                 the agreement between [***] and [***] dated 30 January 2018;

 

(e)                                  the [***] Food Services Management Agreement between [***] and [***] effective 1 April 2016 and amended 1 April 2018;

 

(f)                                   the [***] Maintenance Services Agreement between [***] and [***] dated 27 March 2019;

 

(g)                                  the validation agreement between [***] and [***] dated on or around 21 December 2016;

 

(h)                                 the memorandum of understanding between [***] and [***] dated on or around 20 February 2019;

 

(i)                                     the memorandum of understanding between [***] and [***] dated 10 November 2016;

 

(j)                                    the agreement between [***] and [***] dated 23 February 2019;

 

(k)                                 the agreement between [***] and [***] dated 13 April 2018;

 

(l)                                     the CATS China Investment Agreement;

 

(m)                             the four agreements listed in the disclosure information provided by the Warrantors in the Disclosure Letter against the Warranty set out in paragraph 2.3 of Part VII of Schedule 5; and

 

(n)                                 each service agreement in effect as of the date of this Agreement between each Senior Employee and any Target Group Company but excluding, for the avoidance of doubt, all other contracts entered into by the Target Group whether written or unwritten.

 

Net Group Funding Amount means an amount equal to [***] being the Group Funding Amount minus the Reverse Group Funding Amount.

 

No Claims Declaration shall have the meaning given to it in the W&l Policy.

 

Outgoing Directors means [***].

 

10

 

Permitted Leakage means:

 

(a)                                 payments (and/or accruals in respect of payments to be made) to the Seller and/or any of the Seller’s Affiliates and/or any Warrantor and/or any Warrantor’s Related Persons in their capacities as employees, directors (whether executive or non-executive) or consultants of any member of the Target Group in respect of:

 

(i)                                     employee remuneration, bonus entitlements or benefits;

 

(ii)                                  consultancy fees; and/or

 

(iii)                               expenses,

 

(including all associated income tax and national insurance contributions or as the case may be VAT, or in each case the equivalent in any jurisdiction outside the UK), provided that (x) such payments are in accordance with the terms of the relevant person’s employment or appointment, or otherwise in the ordinary course of its Business, and (y) the aggregate if such payments shall not exceed the maximum aggregate amount in respect thereof set out in the Permitted Leakage Schedule;

 

(b)                                 payments (or accruals in respect of payments to be made) to the Seller and/or the Seller’s Affiliates and/or any Warrantor and/or any Warrantor’s Related Persons in respect of directors’ or consultancy fees or benefits, monitoring fees and expenses in connection with the operation of the Target Group up to a maximum aggregate amount as set out in the Permitted Leakage Schedule (including all associated income tax and national insurance contributions, or as the case may be VAT, or in each case the equivalent in any jurisdiction outside the UK);

 

(c)                                  payments (or accruals in respect of payments to be made) of advisers’ fees and expenses in connection with the Reorganisation and the Transaction (including, without limitation fees and expenses relating to legal and/or financial due diligence and negotiation of the Reorganisation Documents and the Transaction Documents) (together with any VAT or the equivalent in any jurisdiction outside the UK arising as a result of or in connection with such payments) up to the maximum aggregate amount set out in the Permitted Leakage Schedule;

 

(d)                                 payments (or accruals in respect of payments to be made) by any Target Group Company in connection with any action(s) undertaken at the written request of the Buyer or any Buyer Group Company;

 

(e)                                  payments (or accruals in respect of payments to be made) by any Target Group Company pursuant to, or in accordance with, any term of this Agreement;

 

(f)                                   repayment of the Reorganisation Intercompany Debt Amount;

 

(g)                                  any: (i) payments made by (or accruals in respect of payments to be made by), (ii) liabilities assumed or incurred by; or (iii) any guarantee, or indemnity granted by, a member of the Target Group pursuant to the Transitional Services Agreement including, but not limited to:

 

11

 

(i)                                     any Fixed Costs up to a maximum aggregate amount as set out in the Permitted Leakage Schedule; and

 

(ii)                                  any Recharge Costs provided such costs are incurred in accordance with the terms of the Transitional Services Agreement;

 

(h)                                 any services provided and liabilities assumed or incurred by a member of the Target Group pursuant to and in accordance with the Reverse Transitional Services Agreement;

 

(i)                                     any intercompany loans or other amounts owed by the Retained Group to the Target Group pursuant to the Group Funding Amount;

 

(j)                                    the payment of, or agreement to pay, any costs or incurring any obligation to pay any costs in respect of services provided by the Target Group to the Retained Group under the Reverse Transitional Services Agreement;

 

(k)                                 the payment of any amount constituting Leakage that has, following payment of such amount, since been reimbursed in full (on an after tax basis) by the Seller, a Warrantor (or any of the Seller’s Affiliates or any of the Warrantors’ Related Persons) to the Target Group;

 

(l)                                     any: (i) payments made by (or accruals in respect of payments to be made by); (ii) liabilities assumed or incurred by; or (iii) any guarantee, or indemnity granted by a member of the Target Group pursuant to, and as detailed in, the Reorganisation Documents or the Transaction Documents;

 

(m)                             any allowance, provision or reserve specifically accrued and separately identifiable in the Locked Box Accounts;

 

(n)                                 any payments of, or in respect of, VAT made by a Target Group Company to the representative member of the Seller’s VAT Group, including pursuant to clause 14.3;

 

(o)                                 any payments (not exceeding the saving of Tax as a result of that surrender) made by a Target Group Company to any member of the Retained Group in respect of any surrender by way of Group Relief from a member of the Retained Group to the Target Group Companies, including pursuant to clause 14.8;

 

(p)                                 any payments made by any Target Group Company to the nominated company of the Seller’s GPA in respect of Taxation which is required to be discharged by such nominated company on behalf of the Target Group Companies, including pursuant to clause 14.13;

 

(q)                                 any payments made by any Target Group Company to the Seller in respect of amounts on account of Tax payable by any member of the Retained Group under a PSA in relation to Employees, including pursuant to clause 14.14;

 

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(r)                                    any payments of CRC Costs to or for the benefit of the Seller and/or any Investor Ultimate Shareholder or their Related Persons which relate to the period prior to Completion up to a maximum aggregate amount as set out in the Permitted Leakage Schedule;

 

(s)                                   any payment by any Target Group Company of the Aggregate Transaction Bonus Amounts, up to the maximum aggregate amount set out in column (6) of the schedule to the Bonus Side Letter; and

 

(t)                                    the payment of, or agreement to pay, any Taxation or incurring any obligation to pay any Taxation which is or was incurred by any Target Group Company in connection with or otherwise attributable to the matters set out in sub-paragraphs (a) to (s) above (to the extent not already included in those sub-paragraphs),

 

provided that no amount and/or item of Permitted Leakage shall be counted more than once.

 

Permitted Leakage Schedule means the schedule setting out the Permitted Leakage, a true copy of which comprises Annexure 4.

 

Permitted Use means:

 

(a)                                 the disclosure or use of any Confidential Information by or on behalf of a party to this Agreement if and to the extent that:

 

(i)                                     such information becomes generally known (other than as a result of a breach of clause 13 (Confidentiality) by any party and/or its Related Persons);

 

(ii)                                  it is required by law or any competent judicial or regulatory authority or by any Recognised Stock Exchange;

 

(iii)                               it is reasonably required for the purposes of any legal proceedings arising out of a breach of any Transaction Document;

 

(iv)                              it is required for the purposes of the preparation of, or to be included within, accounts, financial statements and/or tax returns or other submissions to or communications with any Taxation Authority in connection with the tax affairs of the disclosing party;

 

(v)                                 it is required to be disclosed by the liquidator of the Seller or any Retained Group Company in connection with the liquidation of the Seller or any Retained Group Company following Completion, including but not limited to, any statutory notices required to be made in connection with such liquidation;

 

(vi)                              it is made to that party’s professional advisers or insurers subject to professional duties of confidentiality; and/or

 

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(vii)                           the Seller and the Buyer have given their prior written consent to such disclosure or use (such consent not to be unreasonably withheld or delayed);

 

(b)                                 the release by or on behalf of any of the parties of the Announcement following Exchange and the subsequent use or disclosure by any party of the information contained therein;

 

(c)                                  the disclosure of Confidential Information to: (i) any of the Seller’s Affiliates (in the case of a disclosure by the Seller); and (ii) any member of the Buyer Group (in the case of a disclosure by the Buyer) and on the basis that the Confidential Information is disclosed to them on a confidential basis on the same terms, mutatis mutandis, as those contained in clause 13;

 

(d)                                 the disclosure of Transaction Confidential Information by or on behalf of any Investor Ultimate Shareholder to: (i) its Related Persons and each of their respective officers, employees, and professional advisers, and/or (ii) any investor or potential investor in Funds which are managed or advised by an Investor Ultimate Shareholder and/or any of their respective Related Persons, on the basis that each such recipient keeps any Transaction Confidential Information disclosed to them confidential;

 

(e)                                  the disclosure by the Seller or any of the Seller’s Affiliates of the Retained Group Confidential Information; or

 

(f)                                   the disclosure by or on behalf of the Buyer of Transaction Confidential Information or Target Group Confidential Information to any proposed purchaser of, investor in and/or current or potential provider of debt finance to (including any security trustee, agent or professional adviser acting on behalf of such debt finance provider(s)) the Buyer Group or any part of it together with the professional advisers and representatives of each of the foregoing, if and to the extent that such disclosure is reasonably required in order to facilitate the proposed purchase, investment and/or provision of debt finance and on the basis that the recipients keep any Transactional Confidential Information disclosed to them confidential on the same terms, mutatis mutandis, as those contained in clause 13.

 

PSA means any PAYE Settlement Agreement entered into between HMRC and any Retained Group Company and which relates to or affects any Target Group Company pursuant to Regulation 105 of the Income Tax (PAYE) Regulation 2003 in respect of any tax year ending on or before Completion, or which is current at Completion.

 

Public International Organisation means an organisation whose members are any of (a) countries or territories, (b) governments of countries or territories, (c) other public international organizations or (d) a mixture of any of the above.

 

Recharge Cost shall be as defined in the Transitional Services Agreement.

 

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Recognised Stock Exchange means a recognised investment exchange, recognised overseas investment exchange, designated investment exchange or designated overseas investment exchange, in each case for the purposes of the Financial Services and Markets Act 2000.

 

Registered Marks those trade marks listed in Part 5 of the Target Group Information Pack.

 

Regulatory Authority means any governmental authority, agency or department having authority under, or jurisdiction in respect of, any EHS Law.

 

Related Person means:

 

(a)                                    in relation to any party to this Agreement, any person that, directly or indirectly, controls or is controlled by, or is under common control with, that party (and for these purposes “control” shall mean the possession, directly or indirectly, or the power to direct the management and policies of such person, whether through the ownership of a majority of voting securities or by contract or otherwise), or is a group undertaking of that party;

 

(b)                                    in relation to any Investor Ultimate Shareholder: (i) any general partner, limited partner or other partner in, or trustee, nominee, custodian, operator or manager of, or investment adviser to, that Investor Ultimate Shareholder or a group undertaking of that Investor Ultimate Shareholder; (ii) any group undertaking of any general partner, trustee, nominee, custodian, operator or manager of, or investment adviser to, such person or a group undertaking of that Investor Ultimate Shareholder; (iii) any Fund which has the same general partner, trustee, nominee, operator, manager or investment adviser as that Investor Ultimate Shareholder or any group undertaking of that Investor Ultimate Shareholder; (iv) any Fund which is advised, or the assets of which (or some material part thereof) are managed (whether solely or jointly with others), by that Investor Ultimate Shareholder or a group undertaking of that Investor Ultimate Shareholder; (v) any Fund in respect of which that Investor Ultimate Shareholder or its general partner, investment adviser, manager, operator, nominee or any group undertaking of that Investor Ultimate Shareholder is a general partner, manager or investment adviser; and (vi) any co-investment scheme of that Investor Ultimate Shareholder or any group undertaking of that Investor Ultimate Shareholder or any person holding shares or other securities under such scheme or entitled to the benefit of shares or other securities under such scheme;

 

(c)                                     in relation to any Individual Ultimate Shareholder who is a natural person: (i) any spouse, civil partner, co-habitee, lineal descendant by blood or adoption and/or step child of that party; or (ii) any person or persons acting in its and/or their capacity as trustee or trustees of a trust of which such party is the settlor; and

 

15

 

(d)                                    any employee, officer, director or partner of: (i) any party to this Agreement; or (ii) any of the Related Persons of such relevant party to this Agreement, provided that for the purposes of this Agreement:

 

(i)                                     no member of the Buyer Group and/or the Target Group shall be a Related Person of the Seller; and

 

(ii)                                  no party to this Agreement shall be deemed to be a Related Person of any other party,

 

and “Related Persons” shall be construed accordingly.

 

Relevant Benefits means any benefits that are provided under a pension scheme (as defined in section 150(1) Finance Act 2004).

 

Relevant Indemnity Claim means any claim(s) made by the Buyer under this Agreement in relation to or arising out of the matters set out at clause 8.7.

 

Relevant Person means any past or present employee, officer or director of any Target Group Company.

 

Relevant Post-LBD Accounting Period means the part of the Accounting Period of the Target Group Companies commencing on the day after the Locked Box Date which is an overlapping period with the surrender period of any member of the Retained Group for the purposes of Part 5 of the Corporation Tax Act 2010.

 

Relevant Pre-LBD Accounting Periods means the Accounting Period of the Target Group Companies ended on the Accounts Date and the part ending on the Locked Box Date of the Accounting Period of the Target Group Companies commencing on 1 September 2018.

 

Relevant Tax Claim means any claim under, or in respect of, any obligations contained Schedule 8.

 

Reorganisation means the separation of the Business from the pathways and digital businesses of the Seller and comprising the steps set out in, and all matters and transactions contemplated by, the Separation Paper.

 

Reorganisation Documents means the documents entered into to implement the Reorganisation and as set out in the Reorganisation Documents List.

 

Reorganisation Documents List means the document listing the Reorganisation Documents, a true copy of which comprises Annexure 7.

 

Reorganisation Intercompany Debt Amount means an amount equal to £110,252,026 (being an amount equal to the debt owed by the Target Group to Camelot Bidco Limited pursuant to the terms of the Global Instruments and the Documented Loans immediately following the Reorganisation).

 

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Resignation Letters means the resignation letters in the agreed form to be entered into by the Outgoing Directors on Completion and references to “Resignation Letter” shall be construed accordingly.

 

Restricted Party means:

 

(a)                                 any person designated on any Sanctions List;

 

(b)                                 any person owned or controlled by a person or persons described in (a); or

 

(c)                                  any person acting on behalf or at the direction of a person or persons described in (a) or (b).

 

Restricted Period shall be as defined in clause 12.8.2.

 

Restricted Territories shall be as defined in clause 12.8.3.

 

Retained Group Company means those companies listed in Part IV of Schedule 1 and together referred to as the “Retained Group Companies”.

 

Retained Group Confidential Information means all information (whether oral or recorded in any medium) relating to the business, financial or other affairs (including future plans) of the Seller and/or any Retained Group Company, which is treated by the Seller, any Ultimate Shareholder or any Retained Group Company (as the case may be) as confidential, or is marked or is by its nature confidential, but excluding Target Confidential Information and Transaction Confidential Information.

 

Retained Group Senior Employee means any employee of a Retained Group Company whose base salary exceeds [***] per annum.

 

Reverse APA means the asset purchase agreement dated 31 March 2019 between (1) the Company and other parties; and (2) CEG Oncampus and Digital Holdings Limited, and which relates to the transfer of assets of the Target Group to OEG Oncampus and Digital Holdings Limited and other members of the Retained Group.

 

Reverse Group Funding Amount means [***], being an amount equal to the intercompany loan owed by the Target Group to the Retained Group as at the Closing Date (but excluding amounts owed pursuant to the Reorganisation Intercompany Debt Amount and any amounts incurred pursuant to the Transitional Services Agreement).

 

Reverse Transitional Services Agreement means the transitional services agreement between the Company and [***] and dated 22 May 2019.

 

Sales Employees has the meaning given to it in the Transitional Services Agreement.

 

Sanctioned Country means, at any time, a country or territory which is subject to country-wide or territory-wide Sanctions (including, without limitation, at Exchange, Crimea, Cuba, Iran, North Korea, and Syria).

 

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Sanctions means the economic or financial sanctions laws, regulations, embargoes or restrictive trade measures administered, enacted or enforced by any Sanctions Authority.

 

Sanctions Authority means each of:

 

(a)                                 the United Nations Security Council;

 

(b)                                 the United States;

 

(c)                                  the United Kingdom;

 

(d)                                 the European Union; and

 

(e)                                  the Governmental Authorities of any of paragraphs (a) to (d) above, including without limitation the US Office of Foreign Assets Control (“OFAC”), the US Department of State, and Her Majesty’s Treasury (“HMT”) in the UK.

 

Sanctions List means the Specially Designated Nationals and Blocked Persons list maintained by OFAC, the Consolidated List of Financial Sanctions Targets maintained by HMT, or any similar list maintained by a Sanctions Authority and as amended from time to time.

 

Schemes means each of the (i) National Employment Savings Trust; and (ii) the 401(k) Retirement Plan.

 

Security Interest means any mortgage, charge (whether fixed or floating), lien, hypothecation, option, pledge, assignment, trust arrangement, right of set off or other security interest, third-party right or interest (legal or equitable) of any kind including any right of pre-emption, first refusal or first offer, assignment by way of security, reservation of title or any other security interest of any kind however created or arising or any other agreement or arrangement (including a sale and repurchase arrangement), whether conditional or otherwise, having similar effect.

 

Security Releases means the deeds of release in the agreed form to be delivered by the Seller on Completion in relation to the Existing Security Documents.

 

Seller’s Affiliates means each Retained Group Company, each Ultimate Shareholder and each of the Ultimate Shareholders’ Related Persons.

 

Seller’s GPA has the meaning give to it in clause 14.12.

 

Seller’s Solicitors means Travers Smith LLP of 10 Snow Hill, London EC1A 2AL.

 

Seller’s Solicitors Account means the client account of the Seller’s Solicitors with such details as are notified to the parties in writing by the Seller’s Solicitors.

 

Seller’s VAT Group has the meaning given to it in clause 14.2.

 

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Senior Employee means [***] and any Employee whose base salary exceeds [***] per annum.

 

Separation Paper means the Project Alumni — Pre-Sale Reorganisation Steps Report prepared by PricewaterhouseCoopers LLP and dated 28 March 2019, a true copy of which comprises Annexure 6.

 

Shared Properties means those properties owned or leased by Retained Group Companies but which are occupied or used by a Target Group Company, details of which are set out in Part IV of the Target Group Information Pack and “Shared Property” shall be construed accordingly.

 

Shares means the entire issued share capital of the Company, comprising 101 ordinary shares of £1 each.

 

Software means all computer software used in the Business.

 

Subsidiaries means each of the UK Subsidiaries, the US Subsidiaries, the Canadian Subsidiaries, Cambridge Education Technology (Shanghai) Co Limited and CEG Hong Kong JV Limited.

 

Target Confidential Information means all information (whether oral or recorded in any medium) relating to the Business (including future plans of the Business), which is treated by any Target Group Company or the Seller (as the case may be) as confidential, or is marked or is by its nature confidential, but excluding the Retained Group Confidential Information and the Transaction Confidential Information.

 

Target Group means the Company and the Subsidiaries and references to “Target Group Company”  and to “member of the Target Group”  shall be construed accordingly.

 

Target Group Information Pack means the document setting out certain factual information relating to the Target Group, a true copy of which comprises Annexure 5.

 

Tax or Taxation means all taxes, duties (including stamp duties), charges, levies, imposts, contributions (including national insurance and social security contributions), withholdings or amounts in the nature thereof (but, for the avoidance of doubt, excluding water rates, business rates and other utility or local authority charges), whenever and by whatever authority imposed, assessed or collected and whether of the United Kingdom or elsewhere, irrespective of the person to which any such taxes, duties, charges, levies, imposts, contributions, withholdings or amounts are directly or primarily chargeable, together with all interest, fines, penalties, surcharges and charges incidental or relating to any of the foregoing.

 

Tax Assessment means any notice, demand, assessment (including self-assessment letter), letter, return, accounts, computations or other document or action taken indicating that any Target Group Company is or may be placed under a liability to make a payment of or in respect of Taxation.

 

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Taxation Authority means any taxation or other authority (whether within or outside the United Kingdom) which seeks to determine liability for and/or administers Taxation.

 

Tax Covenant Claim shall be as defined in Schedule 6.

 

Tax Leakage means leakage falling within paragraph (i) of the definition of Leakage.

 

Tax Warranty Claim shall be as defined in Schedule 6.

 

Tenant means the Target Group Company which is the tenant of the relevant TG Property as identified in Part 4 of the Target Group Information Pack.

 

TG Leases means leases of the TG Properties the details of which are set out in Part 4 of the Target Group Information Pack and “TG Lease” shall be construed accordingly.

 

TG Letters of Credit means each of:

 

(a)                                 the irrevocable standby letter of credit originally issued on 24 June 2014 by HSBC Bank USA (Credit Number [***]) in favour of 2001 Washington Street LLC in respect of the obligations of CATS Academy Boston Inc. in the amount of [***]; and

 

(b)                                 the irrevocable standby letter of credit originally issued on 6 February 2017 by HSBC Bank USA (Credit Number [***]) in favour of DWF IV 38 Chauncy, LLC in respect of the obligations of Boston Academy of English, Inc. in the amount of [***].

 

TG L/C Bank means HSBC Bank USA or one of its affiliates.

 

TG L/C Release has the meaning given in Clause 16.10.

 

TG Properties means those properties owned, leased or otherwise occupied or used by a Target Group Company, details of which are set out in Part 4 of the Target Group Information Pack and “TG Property”  shall be construed accordingly.

 

TIOPA means the Taxation (International and Other Provisions) Act 2010.

 

Total Aggregate Cap means an aggregate amount equal to the Consideration plus the Reorganisation Intercompany Debt Amount.

 

Transaction means every transaction contemplated by this Agreement.

 

Transaction Bonuses means the bonuses paid, or payable, to any Warrantor as a result of the Transaction as set out in the Bonus Side Letter.

 

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Transaction Confidential Information means all information received or obtained by the relevant party as a result of it negotiating, entering into or performing its obligations under the Transaction Documents including, the provisions of or subject matter of the Transaction Documents, but excluding the Target Confidential Information and the Retained Group Confidential Information.

 

Transaction Documents means this Agreement, the Transitional Services Agreement, the Reverse Transitional Services Agreement and any other document required to be entered into pursuant to this Agreement (each such document being a “Transaction Document”).

 

Transfer has the meaning given to it in clause 16.3.1.

 

Transitional Services Agreement means the transitional services agreement between Camelot Bidco Limited and the Company and dated 22 May 2019 as amended by a variation deed dated on or around the date of this Agreement.

 

TSA IPR means all Intellectual Property Rights in the Software made available to the Target Group under the Transitional Services Agreement.

 

UK Subsidiaries means together, CEG Properties UK Limited, Stafford House Companies Limited, Stafford House School of English Limited, Stafford House Study Holidays Limited, Study Holidays Limited, CEG Colleges Limited, Cambridge Arts and Sciences Limited, CATS Canterbury Limited, CATS College London Limited, CATS Retail Limited, Cambridge School of Art and Design Limited and Cambridge School of Visual and Performing Arts Limited.

 

Ultimate Shareholder means the Investor Ultimate Shareholders and the Individual Ultimate Shareholders, together referred to as the “Ultimate Shareholders”.

 

US Subsidiaries means together, Cambridge Education Group Holdings, Inc., CATS Academy Boston, Inc., Intrax English Academies LLC and Boston Academy of English, Inc.

 

Voting Power of Attorney means the power of attorney in the agreed form to be entered into by the Seller on Completion in respect of the Shares.

 

W&I Policy means the buy-side warranty and indemnity insurance policy (with policy number HG19WI5067) entered into on or around the date hereof between the W&I Provider and the Buyer.

 

W&I Provider means Hunter George & Partners Limited.

 

Warranties means the warranties set out in Schedule 5.

 

Warrantors’ Representative means, subject to clause 17.3, David Newton.

 

Warranty Claim shall be as defined in Schedule 6.

 

Warranty Limitations means the limitations set out in Schedule 6.

 

Worker means the Employees, directors, officers, workers, and self-employed contractors of the Target Group.

 

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1.2                               Unless the context requires otherwise, words and expressions defined in or having a meaning provided by the Act at Exchange shall have the same meaning in this Agreement. The use of the term “connected” and any question as to whether a person is “connected” with another shall be determined in accordance with the provisions, as at Exchange, of sections 1122 and 1123 of the Corporation Tax Act 2010, save that for these purposes, the term “company” (as defined in section 1123 of the Corporation Tax Act 2010) shall include a limited liability partnership and provided that (save in relation to the use of the term “connected” in paragraph 7.5 of Schedule 6) two or more persons shall not be treated as connected solely by reason of acting together to secure or exercise control of the Company (within the meaning of section 1122(4) of the Corporation Tax Act 2010).

 

1.3                               Unless the context requires otherwise, references in this Agreement to:

 

1.3.1                                             any of the masculine, feminine and neuter genders shall include other genders;

 

1.3.2                                             the singular shall include the plural and vice versa;

 

1.3.3                                             a “person”  shall include a reference to any natural person, body corporate, unincorporated association, partnership and trust;

 

1.3.4                                             any statute or statutory provision shall be deemed to include any instrument, order, regulation or direction made or issued under it and shall be construed so as to include a reference to the same as it may have been, or may from time to time be, amended, modified, consolidated, re-enacted or replaced except and to the extent that any amendment or modification made after Exchange would increase any liability or impose any additional obligation upon any party to this Agreement;

 

1.3.5                                             any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official, Tax or any legal concept or thing shall, in respect of any jurisdiction other than that of England (including for the purposes of applying any Warranty to any Target Group Company which is incorporated, or any Property which is located, outside England and Wales), be deemed to include what most nearly approximates in that jurisdiction to the English legal term;

 

1.3.6                                             any time or date shall be construed as a reference to the time or date prevailing in England;

 

1.3.7                                             a “month”  means a calendar month;

 

1.3.8                                             “material”  or “materially”  shall be construed as a reference to materiality in the context of the operations, business or financial condition of the Target Group as a whole; and

 

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1.3.9                                             a particular government or statutory authority shall include any entity which is a successor to that authority.

 

1.4                               The headings in this Agreement are for convenience only and shall not affect its meaning. References to a “clause”, “Schedule”  or “paragraph”  are (unless otherwise stated) to a clause of and Schedule to this Agreement and to a paragraph of the relevant Schedule. The Schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement.

 

1.5                               A document expressed to be in the “agreed form”  means a document, the terms of which have been approved by the Seller and the Buyer and a copy of which has been identified as such and initialled (or otherwise approved by email) by or on behalf of the Seller and the Buyer.

 

1.6                               A document expressed to be an “Annexure”  means a document, a copy of which has been identified as such and initialled by or on behalf of the Seller and the Buyer.

 

1.7                               The ejusdem generis principle of construction shall not apply to this Agreement. Accordingly, in construing this Agreement, general words introduced by the word “other”  shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things and general words followed by the word “including”  shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

 

1.8                               References to “£” shall be references to pounds sterling.

 

1.9                               For the purposes of this Agreement:

 

1.9.1                                             where it is necessary to determine whether a monetary limit or threshold set out in Schedule 6 has been reached or exceeded (as the case may be) and the value of the relevant Warranty Claim and/or Fundamental Warranty Claim and/or Tax Covenant Claim is expressed in a currency other than pounds sterling, the value of each such Warranty Claim and/or Fundamental Warranty Claim and/or Tax Covenant Claim shall be translated into pounds sterling by reference to the Exchange Rate on the date that written notification of the relevant Warranty Claim and/or Fundamental Warranty Claim and/or Tax Covenant Claim is sent to the Warrantors or the Seller (as applicable) by the Buyer in accordance with paragraph 2.1 of Schedule 6 or, if such day is not a Business Day, on the Business Day immediately preceding such day; and

 

1.9.2                                             in all other circumstances references to any monetary sum expressed in £ shall, where such sum is referable in whole or in part to a particular jurisdiction outside the United Kingdom, be deemed to be a reference to an equivalent amount in the local currency of that jurisdiction translated at the Exchange Rate on the date of this Agreement.

 

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2.                                      SALE OF THE SHARES

 

2.1                               On Completion, the Seller shall sell with full title guarantee free from all Security Interests the legal and beneficial interest in the Shares and the Buyer shall buy the legal and beneficial interest in the Shares on the terms and conditions of this Agreement.

 

2.2                               All rights and advantages accruing to the Shares (including any dividends or distributions declared, made or paid thereon) on or after the Completion Date shall belong to the Buyer.

 

2.3                               With effect from Completion, the Seller waives (or agrees to procure the waiver of) any rights or restrictions (including any rights of pre-emption) conferred on it or on any other person which may exist in relation to the Shares under the articles of association of the Company or otherwise.

 

3.                                      CONSIDERATION

 

3.1                               The consideration for the sale of the Shares shall be £40,207,805.72 (forty million, two hundred and seven thousand, eight hundred and five pounds and seventy two pence) (the “Consideration”).

 

3.2                               The Seller acknowledges the Retained Group’s obligation to repay the Group Funding Amount to the Target Group. It is also agreed that the Group Funding Amount will be offset by the Reverse Group Funding Amount. Accordingly, the Seller hereby irrevocably and unconditionally directs the Buyer to deduct from the Reorganisation Intercompany Debt Amount an amount equal to the Net Group Funding Amount and to apply such amount on behalf of the Retained Group in repaying the Net Group Funding Amount in full to the relevant Target Group Company, and the Buyer hereby irrevocably and unconditionally undertakes to do so on Completion in accordance with paragraph 1.3 of Part II of Schedule 3. The parties also agree that the set off of the Reverse Group Funding Amount and the repayment of the Net Group Funding Amount will extinguish all liability of the Target Group pursuant to the Reverse Group Funding Amount and all liability of the Retained Group pursuant to the Group Funding Amount.

 

3.3                               Any payment by the Seller under this Agreement shall to the greatest extent permitted by law be treated by the Seller and the Buyer as a reduction in the amount of Consideration paid to the Seller but will not reduce the Consideration below zero.

 

4.                                      EXCHANGE

 

4.1                               On Exchange, the Seller, the Warrantors and the Buyer shall each perform their respective obligations as set out in Schedule 2.

 

Legal Opinion

 

4.2                               The Buyer shall deliver to the Seller, a duly executed copy of the Legal Opinion, within 48 hours of Exchange.

 

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5.                                      COMPLETION

 

5.1                               It is agreed and acknowledged that Completion shall take place on 12 July 2019 (the “Scheduled Completion Date”). For the avoidance of doubt, Completion shall not be conditional on any other conditions save for the effluxion of time.

 

5.2                               Completion shall take place at the offices of the Seller’s Solicitors (or at such other place as is agreed between the Seller and the Buyer).

 

5.3                               On Completion, the Seller and the Buyer shall each perform their respective obligations in relation to the sale and purchase of the Shares in accordance with, and as set out in, Schedule 3.

 

5.4                               Without prejudice to any other remedies or accrued rights which: (a) the Seller may have against the Buyer for failure to comply with clause 5.3; or (b) the Buyer may have against the Seller, for failure to comply with clause 5.3 (a “Completion Default”), the: (i) Seller (in the case of a Completion Default by the Buyer); or (ii) the Buyer (in the case of a Completion Default by a Seller), shall be entitled (at its discretion):

 

5.4.1                                             to defer Completion to any subsequent Business Day falling not more than five (5) Business Days after the Scheduled Completion Date;

 

5.4.2                                             to waive the requirement to fulfil those obligations in whole or in part and following such waiver to complete the sale and purchase of the Shares; or

 

5.4.3                                             so far as practicable, to complete the sale and purchase of the Shares in accordance with Schedule 3.

 

5.5                               Where Completion is deferred in accordance with clause 5.4.1, the provisions of clause 5.3 shall apply to Completion so deferred.

 

6.                                      POSITION PENDING COMPLETION

 

6.1                               With effect from Exchange until Completion, the Seller will exercise its rights (so far as it is reasonably able to do so in its capacity as a direct or indirect shareholder of the Company or any other Target Group Company) to procure that:

 

6.1.1                                             the business of each Target Group Company is carried on in the ordinary course in all material respects; and

 

6.1.2                                             each Target Group Company shall comply with the provisions of Schedule 4,

 

provided that the Seller shall not be required to breach any legal or fiduciary duty applicable to it in order to comply with this clause 6.1.

 

6.2                               The provisions of clause 6.1 shall not operate so as to restrict or prevent:

 

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6.2.1                                             the completion or performance of any obligations undertaken pursuant to any written contract or arrangement entered into by any Target Group Company in the ordinary and usual course of business prior to Exchange;

 

6.2.2                                             any action pursuant to a requirement of law, court or applicable securities exchange, supervisory, regulatory or governmental body or Taxation Authority (and of which the Buyer will be promptly notified);

 

6.2.3                                             any action undertaken at the written request of the Buyer or which is approved in writing by the Buyer (such approval to not be unreasonably withheld or delayed);

 

6.2.4                                             any Permitted Leakage; and/or

 

6.2.5                                             any action or conduct which any Target Group Company is required to take, or omit to take, pursuant to or in order to effect terms of this Agreement or the Transaction Documents.

 

7.                                      LEAKAGE

 

7.1                               Each of:

 

7.1.1                                             the Seller (on behalf of itself and the Seller’s Affiliates (other than the Warrantors and their Related Persons) (being the “Seller Covenantors”)); and

 

7.1.2                                             the Warrantors (on behalf of themselves and their Related Persons),

 

severally warrants and undertakes to the Buyer that in the period from (and including) the day immediately following the Locked Box Date up to (and including) Completion, (i) in respect of the Seller, neither it nor any of the Seller Covenantors, and (ii) in respect of each of the Warrantors, neither he/she nor any of his/her Related Persons, have received or benefitted from any Leakage.

 

7.2                               In the event of a breach of clause 7.1, each of the Seller and the Warrantors undertakes to notify the Buyer in writing as soon as reasonably practicable after becoming actually aware of any Leakage (including details of such Leakage to the extent known).

 

7.3                               If any Leakage occurs at any time in the period from (and including) the day immediately following the Locked Box Date up to (and including) the time that Completion occurs, the Seller and the Warrantors severally covenant to pay to the Buyer (or to such person as the Buyer may direct), promptly following delivery of any notice pursuant to clause 7.2 or 7.4, an amount in cash equal to the amount or value of any Leakage received by (i) in the case of the Seller, it and/or any of the Seller Covenantors or in respect of which it and/or any of the Seller Covenantors has benefitted (directly or indirectly), and (ii) in the case of each Warrantor, by him/her and/or any of his/her Related Persons or in respect of which he/she and/or any of his/her Related Persons has benefitted (directly or indirectly), in each case together with any Tax Leakage arising in respect thereof to the extent not already taken into account under this clause 7.3.

 

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7.4                               Save in the case of fraud by the Seller, any Seller Covenantor, any Warrantor or any of their Related Persons, neither the Seller nor the relevant Warrantors (as applicable) shall be liable for any claim under this clause 7 unless written notice has been given by or on behalf of the Buyer to the Seller or the Warrantor’s Representative (as applicable) on or before the date which is nine (9) months following the Completion Date. Any notice given pursuant to this clause 7.4 shall include reasonable details of the nature and, if reasonably practicable, the amount claimed.

 

7.5                               A claim under this clause 7 shall be the sole remedy available to the Buyer in respect of any Leakage and, save in the case of fraud by the Seller, any Seller Covenantor, any Warrantor or any of their Related Persons, the liability of the Seller or the relevant Warrantors (as applicable) under clause 7 shall not in any circumstances exceed the lower of (i) the aggregate amount of Leakage actually received or benefited from by that Seller and/or the Seller Covenantors and/or the Warrantors and/or their Related Persons (as applicable) together with any Tax Leakage arising in respect thereof to the extent not already taken into account under this clause 7.5 and (ii) in the case of the Seller, the Total Aggregate Cap, and in the case of each Warrantor, an amount equal to their respective Transaction Bonuses (as set out in column (2) of the Schedule to the Bonus Side Letter).

 

8.                                      SELLER’S WARRANTIES AND INDEMNITIES

 

8.1                               On Exchange, subject to clause 8.6, the Seller warrants to the Buyer that:

 

8.1.1                                             the Shares are legally and beneficially owned by it and is fully paid, and that no person has the right to call for the transfer of the Shares;

 

8.1.2                                             the Shares are free from all Security Interests and there is no agreement or commitment to give or create any Security Interest over or affecting the Shares and no claim has been made by any person to be entitled to any such Security Interest;

 

8.1.3                                             it is a corporation validly existing under the laws of England and Wales;

 

8.1.4                                             it has full power and authority and has obtained all necessary consents to enter into and perform the obligations expressed to be assumed by it under the Transaction Documents;

 

8.1.5                                             it is not insolvent or unable to pay its debts within the meaning of any laws relating to insolvency applicable to it;

 

8.1.6                                             the obligations expressed to be assumed by it hereunder are legal, valid and binding and enforceable against it in accordance with their terms; and

 

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8.1.7                                             the execution, delivery and performance by it of this Agreement and each Transaction Document will not result in a breach of, or constitute a default under, any:

 

8.1.7.1                                   agreement or arrangement to which it is a party or by which it is bound; or

 

8.1.7.2                                   applicable law, order, judgment or decree of any court, governmental agency or regulatory body by which it is bound.

 

8.2                               Subject to clause 8.6 and other than in respect of:

 

8.2.1                                             any matters set out in, or contemplated by this Agreement (including, without limitation, the satisfaction of each of the matters required to be performed on Completion in accordance with Schedule 3); and

 

8.2.2                                             any matters addressed by or contemplated in the Reorganisation Documents (including, without limitation, the Transitional Services Agreement and Reverse Transitional Services Agreement),

 

the Seller warrants to the Buyer on Completion (and, for the avoidance of doubt, following the payments to be made by or on behalf of the Buyer pursuant to Part 2 of Schedule 3) that:

 

(a)                                         all sums due to a Target Group Company from the Seller and/or any of the Seller’s Affiliates (including pursuant to the Group Funding Amount) have been repaid in full; and

 

(b)                                         neither it nor any of the Seller’s Affiliates have any claims, rights or causes of action against any Target Group Company or any of their directors or officers, other than in respect of any Permitted Leakage,

 

and, if and to the extent that any Target Group Company or any of its directors or officers has any liability or obligation to pay or confer a benefit on the Seller (and/or any of the Seller’s Affiliates) other than in respect of any matter set out in the preamble of this clause 8.2, the Seller hereby (on behalf of itself and the Seller’s Affiliates) waives and releases (or, as the case may be, shall procure the waiver and release of), the relevant Target Group Company and its directors and officers from any such liability or obligation.

 

8.3                               Save as set out in the Reorganisation Documents, the Seller warrants to the Buyer that, subject to clause 8.6, neither it, nor any of the Seller’s Affiliates, benefit from any guarantee, indemnity or suretyship given by a Target Group Company (a “TG Guarantee”). Following Completion, if and to the extent that any such TG Guarantee is identified and is in existence, the Seller shall indemnify the Buyer (for itself and in relation to the relevant Target Group Company) against any liability or obligation arising in connection with the existence of any such TG Guarantee and shall use all reasonable endeavours to procure that the relevant Target Group Company is released from its obligations under such TG Guarantee (and the Buyer agrees to take all necessary steps and provide such assistance as is reasonably requested by the Seller in connection with the release of such TG Guarantee).

 

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Seller’s Warranties on Completion

 

8.4                               The Warranties given in clauses 8.1, 8.2 and 8.3 shall be deemed repeated by the Seller immediately prior to Completion with references to “Exchange” in the relevant clause replaced with references to “Completion”.

 

8.5                               Save in the case of fraud, any Fundamental Warranty Claim shall be limited in accordance with the Warranty Limitations (as applicable).

 

8.6                               Without prejudice to any other provisions or limitations set out in this Agreement (including the Warranty Limitations), the total aggregate liability of the Seller for all claims under this Agreement shall be limited to the aggregate amount of the Total Aggregate Cap.

 

Seller’s Indemnities on Completion

 

8.7                               The Seller shall indemnify the Buyer, on an after Tax basis, against all Losses suffered or incurred by it, or a Target Group Company, and arising as a direct result of:

 

8.7.1                                             the Reorganisation not having been effected in all material respects in accordance with the Separation Paper and the Reorganisation Documents;

 

8.7.2                                             the structuring of the consideration payment mechanics on the acquisition of CATS China by the Seller (the “CATS China Acquisition”) pursuant to the CATS China Investment Agreement (a “CATS China Indemnity Claim”);

8.7.3                                             the lack of the Operation Permit for Privately Run Schools () in respect of the operation of CATS China in so far as such a permit was legally required for the Target Group to carry on its Business in China prior to Completion;

 

8.7.4                                             the failure to notify the Office of Financial Sanctions Implementation in respect of the transfers detailed in schedules 1 and 2 to a letter by Holman Fenwick Willan LLP, acting as Cambridge Education Group’s legal representatives, dated 21 December 2017; and

 

8.7.5                                             any Employment Related Claims,

 

in each case only to the extent that the matters or circumstances set out in clauses 8.7.1 to 8.7.5 above took place or arose prior to Completion.

 

8.8                               If the Buyer or any member of the Buyer Group becomes aware of any fact, matter or circumstance that forms, or might reasonably be expected to form, the proper basis for a Relevant Indemnity Claim, the Buyer shall as soon as reasonably practicable (and in any event within 20 Business Days) give written notice and reasonable details of such claim or potential claims to the Seller (provided that failure to give notice shall not affect the right of the Buyer to bring a Relevant Indemnity Claim) and shall procure that each member of the Buyer Group shall:

 

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8.8.1                                             act at all times in good faith and take such reasonable steps to mitigate any loss which is the subject matter of a Relevant Indemnity Claim as the Seller may reasonably request (and at the Seller’s cost) including, without limitation, the filing of counterclaims, invalidity strike-out and similar actions;

 

8.8.2                                             not make any admission of liability, agreement, settlement or compromise with any person, body or authority in relation to such claim without prior consultation with the Seller;

 

8.8.3                                             not enter into any material written communications or take any material action in respect of any such claim including proposed action to avoid, dispute, resist, settle, compromise, defend or appeal a Relevant Indemnity Claim without the prior consultation with the Seller;

 

8.8.4                                             allow the Seller and its advisers and agents to investigate (at their cost) such claim (including whether and to what extent any amount is payable in respect thereof);

 

8.8.5                                             promptly provide the Seller and its advisers with all reasonable information and assistance as the Seller may reasonably request as to the progress of such Relevant Indemnity Claim and provide copies of all relevant documents and correspondence related to it; and

 

8.8.6                                             consult in good faith with the Seller as to any ways in which such claim might be avoided, disputed, resisted, mitigated, settled, compromised, defended or appealed,

 

provided nothing in this clause 8.8 shall require the Buyer or any member of the Buyer Group to do or omit to do any act or thing which act or omission would be or be likely to be contrary to the requirements of applicable law or regulation or any competent judicial or regulatory authority or any Recognised Stock Exchange.

 

8.9                               The provisions of paragraph 5.2 of Part 3 of Schedule 8 shall apply to any Relevant Tax Claim (and any written notice given under that paragraph shall be a “Relevant Tax Claim Notification”).

 

8.10                        The Seller shall not be liable for any CATS China Indemnity Claim unless the Buyer procures that the Buyer Group has first used all reasonable endeavours to exercise any right of recovery reasonably available to any member of the Buyer Group against Sam Huang Wei and Joe Chen Zhangming being the sellers on the CATs China Acquisition.

 

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8.11                        The Seller shall not be liable for any Relevant Indemnity Claim unless written notice of any such Relevant Indemnity Claim (the “Indemnity Claim Notification”) has been given by or on behalf of the Buyer to the Seller on or before the date which is 18 months from the Completion Date (the “First Claim Period”).

 

8.12                        Subject always to clause 8.13, the aggregate liability of the Seller for any Indemnity Claims, including any reasonable and properly incurred legal, professional and other fees, costs and expenses relating thereto, shall be capped at an amount, in aggregate, equal to:

 

8.12.1                                      [***] in circumstances where the Indemnity Claim Notification or the Relevant Tax Claim Notification (as applicable) is made on or before the final day of the First Claim Period; and

 

8.12.2                                      [***] in circumstances where the Relevant Tax Claim Notification is made in the 18 month period immediately following the expiry of the First Claim Period.

 

8.13                        In no circumstances shall the aggregate liability of the Seller in respect of any and all Indemnity Claims exceed [***] in aggregate.

 

8.14                        Without prejudice to clause 8.8, the Buyer hereby agrees not to, without the prior written consent of the Seller (such consent not to be unreasonably withheld, conditioned or delayed), (i) actively approach any third party who is or may be the claimant (or a party connected therewith) in respect of a contingent but unasserted Relevant Indemnity Claim; or (ii) actively re-engage with a third party who is or may be the claimant (or a party connected therewith) in respect of a Relevant Indemnity Claim where no correspondence has been received from the relevant claimant (or connected party) for a period of not less than 3 months from the date of the most recent formal correspondence between the relevant parties in relation thereto, provided that nothing in this clause shall prevent any member of the Target Group or the Buyer Group engaging with (i) the customers, suppliers or employees of the Target Group in the ordinary course of business from time to time); or (ii) any person if required under applicable law or regulation or any competent judicial or regulatory authority or any Recognised Stock Exchange.

 

8.15                        For the avoidance of doubt, the provisions of Schedule 6 shall not apply to clauses 8.7 to 8.14.

 

9.                                      BUYER’S WARRANTIES AND GUARANTEE

 

9.1                               The Buyer warrants to the Seller on Exchange and immediately prior to Completion that, apart from the Disclosed Matters, neither it nor any other member of the Buyer Group (excluding the Target Group Companies) is actually aware of any fact, matter, event or circumstance which does, or would or might constitute a breach of this Agreement as at Exchange. For this purpose, the Buyer and the relevant members of the Buyer Group shall be deemed to have knowledge of anything of which any of [***] or [***] are actually aware.

 

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9.2                               Save as set out in the Reorganisation Documents, following Completion, if and to the extent that any guarantee, indemnity or suretyship given by the Seller (or any member of the Retained Group) in favour of a member of the Target Group is identified and is in existence (a “RG Guarantee”), the Buyer shall indemnify the Seller (for itself and in relation to the relevant member of the Retained Group) against any liability or obligation arising in connection with the existence of any such RG Guarantee and shall use all reasonable endeavours to procure that the Seller (or the relevant member of the Retained Group) is released from its obligations under such RG Guarantee (and the Seller agrees to take all necessary steps and provide such assistance as is reasonably requested by the Buyer in connection with the release of such RG Guarantee).

 

9.3                               The Buyer warrants to the Seller as at Exchange and immediately prior to Completion that:

 

9.3.1                                             it is a corporation validly existing under the laws of England and Wales;

 

9.3.2                                             it has full power and authority and has obtained all necessary consents to enter into and perform the obligations expressed to be assumed by it under the Transaction Documents;

 

9.3.3                                             it is not insolvent or unable to pay its debts within the meaning of any laws relating to insolvency applicable to it;

 

9.3.4                                             the obligations expressed to be assumed by it hereunder are legal, valid and binding and enforceable against it in accordance with their terms; and

 

9.3.5                                             the entry into, delivery and performance by it of the Transaction Documents will not result in a breach of, or constitute a default under, any:

 

(a)                                 agreement or arrangement to which it is a party or by which it is bound;or

 

(b)                                 applicable law, order, judgment or decree of any court, governmental agency or regulatory body by which it is bound.

 

9.4                               Guarantee

 

9.4.1                                             On Exchange, the Guarantor irrevocably and unconditionally:

 

(a)                                 guarantees to the Seller the performance and observance by the Buyer of each of the Buyer’s obligations under this Agreement; and

 

(b)                                 undertakes to the Seller that if for any reason the Buyer does not pay any amount when due under or in connection with this Agreement, the Guarantor agrees (as an independent and primary obligation), to pay to the Seller within 5 Business Days of a demand such unpaid amount as if it were the principal obligor,

 

so that the same benefits are conferred on the Seller as it would have received if such obligation had been performed and satisfied by the Seller and provided that the Guarantor’s liability under this clause 9.4 shall be no greater than the Buyer’s liability under this Agreement.

 

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9.4.2                                             The obligations of the Guarantor under this clause 9.4 shall not be affected in whole or in part by any act, omission, matter or thing (whether or not known to the Guarantor, the Buyer or the Seller) which, but for this clause 9.4, might operate to reduce, release or prejudice the Guarantor’s obligations, including:

 

(a)                                 any variation of this Agreement;

 

(b)                                 any time, waiver, forbearance or consent granted to, or composition or arrangement with, the Buyer or other person;

 

(c)                                  the release of the Buyer or any other person under the terms of any composition or arrangement with any creditor of the Buyer;

 

(d)                                 any incapacity or lack of power, authority or legal personality of, or dissolution or change in the members or status of, the Buyer or any other person;

 

(e)                                  any unenforceability, invalidity or illegality of any obligation of the Buyer; or

 

(f)                                   any insolvency proceedings of the Buyer.

 

9.4.3                                             The guarantee in this clause 9.4 is a continuing guarantee and accordingly shall remain in force until all of the obligations of the Buyer under this Agreement have been fully performed or fully satisfied regardless of any intermediate performance or discharge in whole or in part. The guarantee in this clause 9.4 shall be in addition to, and without prejudice to and not in substitution for, the performance and observance of the Buyer’s obligations under this Agreement.

 

9.4.4                                             The Guarantor warrants to the Seller on Exchange and immediately prior to Completion that:

 

(a)                                 it is a corporation validly existing under the laws of its jurisdiction of incorporation;

 

(b)                                 it has full power and authority and has obtained all necessary consents to enter into and perform the obligations expressed to be assumed by it under this Agreement;

 

(c)                                  it is not insolvent or unable to pay its debts within the meaning of any laws relating to insolvency applicable to it;

 

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(d)                                 the obligations expressed to be assumed by it hereunder are legal, valid and binding and enforceable against it in accordance with their terms; and

 

(e)                                  the entry into, delivery and performance by it of this Agreement will not result in a breach of, or constitute a default under, any:

 

(i)                                     agreement or arrangement to which it is a party or by which it is bound; or

 

(ii)                                  applicable law, order, judgment or decree of any court, governmental agency or regulatory body by which it is bound.

 

9.4.5                                             Each payment to be made by the Guarantor pursuant to this clause 9.4 shall be made in the currency and manner in which the relevant amount is payable by the Buyer.

 

10.                               WARRANTIES

 

10.1                        Each Warrantor severally warrants to the Buyer in the terms of the Warranties that each of the Warranties is true and accurate as at Exchange.

 

10.2                        Each Warrantor shall only be liable for a breach of Warranty if he was actually aware of the facts, matters or circumstances giving rise to such breach as at Exchange (and such awareness shall be deemed only to include those facts, matters or circumstances of which each Warrantor was actually aware as at Exchange having made reasonable enquiry of each other Warrantor and of each of David Johnson, Phil Symes, Martin Cawsey, Laura Wardley-Smith, Paul Mortlock, Joe Chen and Kate Taylor but excluding, in each case, and for the avoidance of doubt, any implied or constructive awareness).

 

10.3                        Each Warranty is given subject to the Disclosed Matters and any Warranty Claim shall be limited in accordance with the Warranty Limitations, provided that the Warranty Limitations shall not apply in respect of a Warranty Claim made against a Warrantor if and to the extent that the matter giving rise to the Warranty Claim involves an act of fraud or fraudulent misrepresentation by the Warrantor.

 

10.4                        The Warranties shall continue in full force and effect notwithstanding Completion.

 

10.5                        In applying any Warranty to any Target Group Company which is not a company incorporated in England and Wales or to any TG Property which is not located in England and Wales, any reference to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official, Tax or any legal concept or thing shall be deemed to include what most nearly approximates that English legal term in the relevant jurisdiction and any reference to any English statute, regulation, order or other statutory provision shall be deemed to include what nearly approximates that statute, regulation, order or other statutory provision in the relevant jurisdiction.

 

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10.6                        Each Warrantor agrees with the Buyer:

 

10.6.1                                      that the giving by any Target Group Company and/or any of their respective officers, employees, agents or advisers (past or present) to the Warrantors (or any of them) or their agents or advisers (past or present) of any information or opinion in connection with the Warranties, the Disclosure Letter or otherwise in relation to the business or affairs of any Target Group Company or in connection with the negotiation and preparation of any of the Transaction Documents shall not be deemed to be a representation, warranty or guarantee to the Warrantors of the accuracy of such information or opinion;

 

10.6.2                                      save in the case of fraud or fraudulent misrepresentation, to waive any right or claim which he may have against any Target Group Company and/or any of their respective officers, employees, agents or advisers for any error, omission or misrepresentation in any such information or opinion; and

 

10.6.3                                      that any such right or claim shall not constitute a defence to any claim by the Buyer under or in relation to this Agreement (including the Warranties).

 

11.                               INSURANCE

 

11.1                        The Buyer shall procure that, as soon as reasonably practicable following Completion, a directors’ and officers’ (“D&O”) run-off insurance policy (the “Run-off Policy”) is placed by the Target Group providing a minimum of six years coverage from the Completion Date in relation to the Outgoing Directors in amounts which are not less than, and otherwise on terms which are not materially less favourable (as to scope of coverage or otherwise) than, the D&O insurance cover maintained by the Target Group immediately prior to Completion. The Buyer shall provide the Outgoing Directors with a copy of the terms and conditions of the Run-off Policy and proof of the premium payment. The Buyer undertakes that it shall not knowingly take or omit to take (and shall procure that each Buyer Group Company shall not knowingly take or omit to take) any action which has the effect of invalidating the Run-Off Policy.

 

11.2                        The Buyer shall ensure that the W&I Policy includes an express waiver, in a form satisfactory to the Warrantors, of any rights of subrogation against any Warrantor (the “Subrogation Waiver”) (except in the case of fraud or dishonesty by a Warrantor, in which case such waiver shall cease to apply in respect of that Warrantor only) and shall deliver evidence of the Subrogation Waiver to the Warrantors in accordance with its obligation under sub-paragraph 5 of Part 2 of Schedule 2.

 

11.3                        The Buyer acknowledges and agrees that the monetary limitations set out in Schedule 6 shall continue to apply notwithstanding any subsequent non-payment under the W&I Policy or any vitiation or expiry or termination of the W&I Policy or the insolvency of the underwriters of that policy or for any other reason whatsoever.

 

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11.4                        The Seller shall, as soon as reasonably practical following written notice by the Buyer of a claim or incident arising in the period prior to Completion which could result in a claim under any insurance policy in which any member of the Target Group has an interest, notify the relevant insurers of the relevant claim or incident provided that if the notice is received on or after Completion the Seller shall notify the insurer only if a claim can still be validly made by a member of the Target Group under the terms of the relevant policy.

 

12.                               PROTECTION OF GOODWILL

 

12.1                        The Seller and the Warrantors (together the “Covenantors”)  each severally undertakes to the Buyer that it/he will not, and in the case of the Seller will procure, so far as it is reasonably able to do so in its capacity as a direct or indirect controlling shareholder of each Retained Group Company, that each Retained Group Company will not, (directly or indirectly):

 

12.1.1                                      within the Restricted Territories, at any time during the applicable Restricted Period, engage in any business which is carried on in competition with any part of the Business (as it is carried on at the Completion Date);

 

12.1.2                                      at any time during the applicable Restricted Period, solicit or endeavour to solicit the custom of, or deal or endeavour to deal with, any person who is at the Completion Date or, at any time during the period of twelve (12) months prior to the Completion Date, was a customer of any Target Group Company, other than: (a) any such customer who is over the age of 18; or (b) to the extent any such customer is 18 years old or under, such solicitation or dealing is done with the prior written consent of the Target Group (and, for the avoidance of doubt, solicitation of customers under a signed agency agreement entered into between the Retained Group and the Target Group onto a university Pathways programme run by the Retained Group will be deemed to have been consented to);

 

12.1.3                                      at any time during the applicable Restricted Period, interfere or endeavour to interfere with the continuance of supplies to any Target Group Company (or the terms relating to those supplies) by any person who is at the Completion Date or, at any time during the period of twelve (12) months prior to the Completion Date, was a supplier to any Target Group Company; and/or

 

12.1.4                                      at any time during the applicable Restricted Period, solicit or entice away, or endeavour to solicit or entice away, from the Company or any other Target Group Company any Senior Employee of any Target Group Company.

 

12.2                        The Buyer undertakes to the Seller that it will not, and it will procure that each Target Group Company will not, (directly or indirectly) at any time during the period of twenty-four (24) months from the Completion Date, solicit or entice away, or endeavour to solicit or entice away, from any Retained Group Company any Retained Group Senior Employee.

 

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12.3                        The Buyer covenants with the Seller (and each member of the Retained Group) that:

 

12.3.1                                      it shall not, and shall procure that no other member of the Target Group shall, at any time after Completion use (other than in accordance with terms of the Transitional Services Agreement), permit the use or interfere with the use by the Seller or any member of the Retained Group or any of their licensees of any of the trade marks owned by any member of the Retained Group (each a “CEG Mark”),  whether by using or interfering with the use of that name as part of a corporate name, trade or business name, domain name, trade mark or otherwise; and

 

12.3.2                                      immediately upon cessation of any entitlement to use each CEG Mark in any particular way pursuant to Transitional Services Agreement, it shall cease and it shall procure that each member of the Target Group shall cease to use each CEG Mark in that way.

 

12.4                        Nothing contained in clause 12.3 shall:

 

12.4.1                                      affect any licence granted to the Target Group pursuant to the Transitional Services Agreement in relation to the use of any CEG Mark for historical reference purposes; or

 

12.4.2                                      require the Buyer to, or to procure that the Target Group, commit or omit any act which is not in accordance with applicable law and regulation or the approval, consent or guidance of any regulator.

 

12.5                        Nothing contained in clause 12.1 shall prevent the Covenantors, the Seller or any Retained Group Company, from:

 

12.5.1                                      continuing to operate the businesses carried on as at Exchange by the Retained Group;

 

12.5.2                                      selling or otherwise disposing of the shares, assets or any other interest in any Retained Group Company or the Seller to any third party purchaser;

 

12.5.3                                      being the holder or beneficial owner, by way of bona fide personal investment, of any class of securities in any company if such class of securities is listed, or dealt in, on a Recognised Stock Exchange, provided that it neither holds nor is beneficially interested in more than a total of 3% of any single class of the securities in that company;

 

12.5.4                                      placing or procuring the placing of any recruitment advertisement for employees and communicating with or recruiting, employing or otherwise contracting with any person who responds to such an advertisement; or

 

12.5.5                                      performing any acts contemplated by or addressed in the Reorganisation Documents and/or undertaking any obligations contained therein.

 

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12.6                        Nothing contained in Clause 12.2 shall prevent the Buyer or any Target Group Company from:

 

12.6.1                                      placing or procuring the placing of any recruitment advertisement for employees and communicating with or recruiting, employing or otherwise contracting with any person who responds to such an advertisement; or

 

12.6.2                                      at any time, soliciting or enticing away, or endeavouring to solicit or entice away, from the Seller or any Retained Group Company, any employee of the Seller or any Retained Group Company to the extent that the Seller has given its prior written approval to the soliciting or enticing of such employee.

 

12.7                        Each of the undertakings contained in clause 12.1 is a separate undertaking by each Covenantor and shall be enforceable by the Buyer (on its own behalf and on behalf of each Buyer Group Company) separately and independently of its right to enforce any one or more of the other undertakings contained in clause 12.1. Each Covenantor agrees (having taken independent legal advice) that the undertakings contained in clause 12.1 are reasonable and necessary for the protection of the legitimate interests of the Buyer and the Company and any other Target Group Company and that these restrictions do not work harshly on it/him. It is nevertheless agreed that, if any such undertaking shall be found to be void but would be valid if some part were deleted, then such undertaking shall apply with such deletions as may be necessary to make it valid and enforceable. Without prejudice to any other remedy which may be available to the Buyer, the Buyer may be entitled to seek injunctive or other equitable relief in relation to any breach or prospective breach of the undertakings in clause 12.1, it being acknowledged that an award of damages may not be an adequate remedy for such a breach.

 

12.8                        For the purposes of clause 12.1:

 

12.8.1                                      “directly or indirectly” shall (without limiting the expression) mean any Covenantor, acting either alone or jointly with or on behalf of any other person whether as principal, partner, manager, employee, contractor, director, consultant, investor (subject to clause 12.3), shareholder or otherwise;

 

12.8.2                                      “Restricted Period” shall mean (i) in respect of the Seller the period of twenty-four (24) months from the Completion Date, and (ii) in respect of a Warrantor, the period of twelve (12) months from the Completion Date; and

 

12.8.3                                      “Restricted Territories” shall mean the United Kingdom and any other country in which the Business operates as at Exchange.

 

12.9                        The Seller shall, and shall procure that each relevant member of the Retained Group shall, in respect of the domain names that were assigned to the Company in the APA, execute all documents and take all steps as may reasonably be requested by the Buyer to ensure that these domain names are registered in the name of the Company as soon as is reasonably practicable following the request by the Buyer.

 

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13.                               CONFIDENTIALITY

 

13.1                        From Completion and subject to clause 13.2:

 

13.1.1                                      the Seller and each Warrantor undertakes to the Buyer in respect of the Target Confidential Information;

 

13.1.2                                      the Buyer undertakes to the Seller in respect of the Retained Group Confidential Information; and

 

13.1.3                                      each party with effect from Exchange severally undertakes to each other party to this Agreement in respect of the Transaction Confidential Information,

 

to: (a) keep it confidential; (b) not at any time to disclose, announce, or make it known in any other way, to any other person; and/or (c) not use it for its own or any other person’s benefit or to the detriment of: (i) in the case of clause 13.1.1, any Target Group Company; (ii) in the case of clause 13.1.2 the Seller and/or any Retained Group Company; and (iii) in the case of clause 13.1.3, any other party, provided that this clause 13.1 shall not prevent the Permitted Use of Confidential Information.

 

13.2                        Nothing in clause 13.1 shall restrict any Buyer Group Company or the Seller or any of the Seller’s Affiliates from informing customers and suppliers of the fact, but not any term, of the acquisition of the Target Group by the Buyer after Completion.

 

13.3                        The Buyer and the Seller shall use reasonable endeavours to, or to procure that, the Confidentiality Agreement is terminated as soon as reasonably practicable following Completion.

 

14.                               TAXATION

 

Tax Schedule and Relevant Tax Claims

 

14.1                        The provisions of Schedule 7 and Schedule 8 shall apply with effect from Completion.

 

VAT de-grouping

 

14.2                        The Seller shall take reasonable steps to procure that such of the Target Group Companies as are within the group of companies for the purposes of sections 43 to 43C VATA 1994, of which CEG Administrative Services Limited is the representative member (the “Seller’s VAT Group”) are excluded from such group with effect from Completion or the earliest date permitted thereafter.

 

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14.3                        As regards supplies made between members of the Seller’s VAT Group and third parties on or before the date on which the relevant Target Group Companies are excluded from the Seller’s VAT Group, such payments shall be made between the relevant Target Group Companies that are within the Seller’s VAT Group and the representative member of the Seller’s VAT Group as shall ensure that the resulting position for VAT purposes for the relevant Target Group Companies and the remaining members of the Seller’s VAT Group is the same as it would have been had the Target Group Companies not been members of the Seller’s VAT Group but had been registered as a separate group for VAT purposes, except that if those supplies are ignored for VAT purposes because they are made between the relevant Target Group Companies and another member of the Seller’s VAT Group (including another member of the Target Group), those supplies shall also be ignored for the purposes of this paragraph 14.3.

 

14.4                        Any payments to be made under paragraph 14.3 shall be made promptly following the end of the VAT prescribed accounting period to which the payments relate.

 

Group Relief

 

14.5                        The Seller and the Buyer shall procure that the Target Group Companies and each relevant Retained Group Company shall not amend or revoke any valid claim to, or valid notification or consent to the surrender of, Group Relief by or to the Company where the valid claim, notice or consent was made on or prior to Exchange or made in accordance with this clause 14.

 

14.6                        In respect of any Relevant Pre-LBD Accounting Period, the Seller and the relevant members of the Retained Group shall to the extent permitted by law surrender to the relevant Target Group Companies such amount of Group Relief as is specified in, or taken into account in determining the provision for corporation tax provided for in the Draft FY18 Tax Computations or, as the case may be, the Locked Box Accounts and may in its sole discretion, surrender any additional amount, subject to the maximum permitted by law.

 

14.7                        In respect of the Relevant Post-LBD Accounting Period, the Seller and the relevant members of the Retained Group shall be entitled to surrender to the relevant Target Group Companies such amounts of Group Relief as the Seller may request, subject to the maximum permitted by law.

 

14.8                        In respect of Group Relief surrenders made pursuant to clauses 14.6 or 14.7, the claimant company shall pay to the surrendering company an amount equal to the corporation tax which would have been payable by the claimant company but for that surrender.

 

14.9                        The Buyer shall promptly take any action which the Seller may reasonably request to enable full effect to be given to any surrenders to be made pursuant to clauses 14.6 or 14.7, including procuring that the relevant Target Group Companies comply with all relevant procedural requirements.

 

14.10                 Any payments to be made under clause 14.8 shall be made on the later of Completion, the date on which corporation tax would have been payable by the claimant company but for the surrender, or (in a case where the corporation tax has already been paid and is repaid as a result of the surrender) within five Business Days of such repayment.

 

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14.11                 If any amounts of Group Relief surrendered pursuant to clauses 14.6 or 14.7 prove to be unavailable to the claimant company:

 

14.11.1                               the Buyer shall procure that the relevant Target Group Company takes such steps as the Seller may reasonably request to accept a surrender of Group Relief from another member of the Retained Group; and

 

14.11.2                               if notwithstanding such steps, the Group Relief surrender (including any Group Relief surrender made pursuant to clause 14.11.1) remains ineffective in whole or in part, the surrendering company shall promptly repay to the claimant company any amount, or the relevant proportion of any amount, paid to it in respect of that Group Relief.

 

Group Payment Arrangement

 

14.12                 The Seller shall procure that such of the Target Group Companies as are members of the group payment arrangement made pursuant to section 59F Taxes Management Act 1970, of which Cambridge Education Group Limited is the nominated company (the “Seller’s GPA”) are removed from such arrangement with effect from a date falling on or before Completion.

 

14.13                 The Buyer shall procure that the relevant Target Group Companies pays to the nominated company of the Seller’s GPA, within five Business Days of written request by the Seller, an amount equal to any Taxation (after taking into account the surrender of Group Relief validly made pursuant to clauses 14.6 or 14.7), which is required to be discharged by such nominated company on behalf of any Target Group Company under the Seller’s GPA in respect of any Accounting Periods of the Target Group Companies which end on or before Completion, or which are current at Completion.

 

PAYE Settlement Agreement

 

14.14                 The Buyer shall procure that the relevant Target Group Companies pay to the Seller, within five Business Days of written request by the Seller, an amount equal to any liability of any Retained Group Company under a PSA to account for Tax to the extent attributable to, or in respect of qualifying general earnings of, any employees of the Target Group (including, for the avoidance of doubt, any employees transferred to a member of the Target Group pursuant to the Separation).

 

15.                               COSTS

 

Save for Permitted Leakage or as otherwise expressly provided in this Agreement or agreed in writing between the parties, each party shall pay its own costs and expenses incurred in connection with the preparation, negotiation and completion or termination of the Transaction Documents. In particular, all stamp duty and any other transfer taxes payable in respect of the transfer of Shares pursuant to this Agreement shall be payable by the Buyer.

 

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16.                               POST-COMPLETION ARRANGEMENTS

 

Tax records

 

16.1                        Without prejudice to the provisions of the Transitional Services Agreement and/or the Reverse Transitional Services Agreement, the Buyer agrees that for the period of seven (7) years from Completion it will, and will procure that each member of the Target Group will:

 

16.1.1                                      preserve all books, records and documents relating to the Taxation of each Target Group Company as at Completion (“Historic Tax Records”);  and

 

16.1.2                                      allow upon reasonable notice and during normal business hours, the Seller (and/or its employees, agents and professional advisers) access to such Historic Tax Records and the right to inspect the same, and reasonable access to any officer, employee or adviser of the Target Group, but solely to the extent that the Seller reasonably requires such access for (i) tax, accounting or insurance purposes; or (ii) complying with any applicable law or regulation or the requirements (including disclosure requirements) of any judicial, tax or regulatory authority or Recognised Stock Exchange.

 

16.2                        Without prejudice to the provisions of the Transitional Services Agreement and/or the Reverse Transitional Services Agreement, the Seller shall procure that:

 

16.2.1                                      all books of account, records, documents and information of any Target Group Company relating to the period prior to Completion shall, from Completion, (i) if they do not relate to the Seller, be deemed to be the property of, and be held on trust for the relevant Target Group Company and any such items shall be delivered or made available by the Seller to the relevant Target Group Company promptly following a request to the Seller for the same; and (ii) if they also relate to the Seller, or a Retained Group Company, be preserved by the Seller (“Retained Information”),  for the period of seven (7) years from Completion; and

 

16.2.2                                      allow upon reasonable notice and during normal business hours, the Buyer (and/or its employees, agents and professional advisers) access to such, and to take copies (at the Buyer’s expense) of, the Retained Information.

 

CRC

 

16.3                        The Buyer (on behalf of itself and each member of the Buyer Group) undertakes to the Seller that until the earlier of (i) 31 March 2025, or (ii) such time as the Seller has confirmed to the Buyer in writing that this undertaking is no longer required:

 

16.3.1                                      it shall procure that the Target Group within such timeframe and in such format as the Seller may (acting reasonably) request from time to time, make available to the Seller such documents, information and data for any Target Group Company, in relation to energy supply arrangements, energy consumption or greenhouse gas emissions of any Target Group Company in each case which are necessary to enable the Investor Ultimate Shareholders and the Bridgepoint Group to comply with any law, regulation, code of practice, statutory guideline or requirement of a regulatory authority in connection with the CRC Scheme; and

 

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16.3.2                                      it shall procure the payment by the Target Group of any CRC Costs (or any part of any such CRC Costs) that the Investor Ultimate Shareholders and/or the Bridgepoint Group, shall have made or be obliged to make in discharge of the Target Group’s obligations pursuant to the CRC Scheme and arising after Completion and any monetary penalties that the Investor Ultimate Shareholders and/or the Bridgepoint Group may have incurred or may incur, by virtue of the failure of any Target Group Company to comply with the provisions of the CRC Scheme after Completion.

 

Real Estate

 

16.4                        Where the Seller or a Retained Group Company has guaranteed a TG Lease or provided an authorised guarantee agreement in accordance with clause 6 of the APA (an “AGA”), the Buyer and/or the relevant Target Group Company that is the tenant under that TG Lease or the lease to which the AGA relates will use all reasonable endeavours (in each case with the assistance of the Seller and the relevant Retained Group Company where reasonably requested) to agree alternative arrangements with the relevant landlord (and where the Retained Group has guaranteed a TG Lease this includes using all reasonable endeavours to agree a substitute guarantor or alternative security acceptable to the landlord) so that the Seller and/or the Retained Group Company is fully released from all and any of its obligations and liabilities in relation to the relevant TG Lease and/or the AGAs and/or the leases to which the AGAs relate and until the date of such release the Buyer will keep each of the Seller and, the relevant Retained Group Company at all times fully indemnified on an after Tax basis against all Losses however suffered by the Seller and/or the relevant Retained Group Company, including without limitation all claims, whether present or contingent, (including interest at the official rate, as defined in s. 189 of the Insolvency Act 1986) of all landlords of the TG Leases guaranteed by any member of the Retained Group and the landlords of leases to which any AGA relate and who are admitted as creditors in the liquidation of the Seller and/or a Retained Group Company but only so far as any such claims relate to the aforementioned leases and not any other claims made by these landlords) (the “Real Estate Indemnified Matters”).

 

16.5                        The Buyer shall provide notice in writing to the Seller of:

 

16.5.1                                      any claim, threat of claim, dispute, demand, action or proceedings brought or issued by a third party against any member of the Buyer Group which is likely to give rise to a risk of a Real Estate Indemnified Matter; and/or

 

16.5.2                                      any action or omission carried out by a member of the Buyer Group which is likely to give rise to a risk of a Real Estate Indemnified Matter, as soon as reasonably practicable after the Buyer (or any member of the Buyer Group) becomes aware of it, and in any event no later than 5 Business Days after such party becomes so aware.

 

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Transaction Bonuses

 

16.6                        The Buyer shall procure, as soon as reasonably practicable following Completion, and in any event within 10 Business Days of Completion, that the Transaction Bonuses as set out in column (1) of the schedule to the Bonus Side Letter are paid to the relevant beneficiaries through the payroll of the relevant Target Group Company.

 

Target Group Share Certificates

 

16.7                        The Seller shall deliver, or shall procure the delivery of, all original share certificates and any documents of title which relate to the security released pursuant to the Security Releases as soon as reasonably practicable following Completion and in any event within 7 Business Days of Completion.

 

Model Clauses

 

16.8                        To the extent that any Retained Group Companies transfer any personal data to any Target Group Companies under the Reverse Transitional Services Agreement, the relevant Retained Group Companies and the relevant Target Group Companies shall, as soon as reasonably practicable following Completion, use reasonable endeavours to adopt, or procure the adoption of, European Commission approved standard contractual clauses, substantially in the agreed form.

 

Letters of Credit

 

16.9                        The Seller undertakes on Completion to post cash collateral in favour of the TG L/C Bank in respect of the TG L/C Bank’s liabilities under the relevant TG Letter of Credit.

 

16.10                 The Buyer and/or the relevant Target Group Company that is the tenant to which the TG Letter of Credit relates undertakes to use all reasonable endeavours within 90 days following Completion (in each case with the assistance of the Seller and the relevant Retained Group Company where reasonably requested but without any liability to be incurred on their behalf) to agree alternative arrangements with the relevant TG L/C Bank (and this includes using all reasonable endeavours to agree substitute security in favour of the relevant TG L/C Bank or alternative security acceptable to the relevant landlord) so that the Seller and/or the Retained Group Company is fully released from all and any of its obligations and liabilities in relation to each TG Letter of Credit (the “TG L/C Release”).

 

16.11                 Until the date of each TG L/C Release, the Buyer undertakes to keep each of the Seller and the relevant Retained Group Company at all times fully indemnified on an after Tax basis against all Losses however suffered by the Seller and/or the relevant Retained Group Company following Completion which relate to or arise out of any TG Letter of Credit (the “L/C Indemnified Matters”).

 

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16.12                 The Buyer shall provide notice in writing to the Seller of:

 

16.12.1                               any claim, threat of claim, dispute, demand, action or proceedings brought or issued by a third party against any member of the Buyer Group which is likely to give rise to a risk of a L/C Indemnified Matter; and/or

 

16.12.2                               any action or omission carried out by a member of the Buyer Group which is likely to give rise to a risk of a L/C Indemnified Matter,

 

as soon as reasonably practicable after the Buyer (or any member of the Buyer Group) becomes aware of it, and in any event no later than 5 Business Days after such party becomes so aware.

 

Transferring Employees

 

16.13                 The parties acknowledge that:

 

16.13.1                               it is intended, following the establishment of various overseas branches by the Target Group, that the Sales Employees will cease to be employed by the Retained Group and will be re-engaged by the Target Group (the “Transfer”);  and

 

16.13.2                               until the Transfer, the Retained Group shall continue to employ the Sales Employees and the services of the Sales Employees will be provided by the Retained Group to the Target Group under the terms of the Transitional Services Agreement.

 

16.14                 The parties agree to use all reasonable endeavours to effect the Transfer of the Sales Employees and as soon as reasonably practicable following Completion in accordance with the contracts of employment or engagement of the Sales Employees and applicable laws.

 

16.15                 The parties acknowledge and agree that:

 

16.15.1                               the Retained Group shall be responsible for the Sales Employees who transfer to the Target Group and any Losses associated with the employment or termination of employment of those Sales Employees up to the date of the Transfer;

 

16.15.2                               the Target Group shall be responsible for the Sales Employees who transfer to the Target Group and any Losses associated with the employment or termination of employment of those Sales Employees for the period following the Transfer; and

 

16.15.3                               for the avoidance of doubt, in respect of any Sales Employees that do not transfer to the Target Group for any reason, such Sales Employees will remain employees of the Retained Group.

 

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17.                               WARRANTORS’ REPRESENTATIVE

 

17.1                        Where, under the terms of the Transaction Documents, the Warrantors are entitled or obliged to exercise or enforce any right or discretion, take any action (including incurring any cost or approving, signing or executing and/or delivering any deed, agreement or other document), give any direction, consent or notice and/or agree any matter (unless otherwise expressly provided herein) such right or discretion may be validly exercised or enforced (except where specifically provided otherwise herein), such action may be validly taken, such direction, consent or notice may be validly given, and/or such matter may be validly agreed by the Warrantors’ Representative.

 

17.2                        Each party irrevocably acknowledges and confirms to the Warrantors’ Representative that the Warrantors’ Representative owes no responsibility, duty of care or liability whatsoever in connection with their appointment as the Warrantors’ Representative and the Warrantors agree that if any loss, damage or other liability of any Warrantor is incurred or increased as a result of any act, omission, agreement, approval, consent or decision of the Warrantors’ Representative or by any deed, agreement, instrument, consent or other document agreed, approved, signed, executed and/or delivered by the Warrantors’ Representative, in each case acting in good faith in the proper execution and discharge of its appointment under this clause 17.2, the Warrantors’ Representative shall not be responsible for, or have any liability to any Warrantor in relation to, any such loss, damage or other liability or such increased loss, damage or other liability.

 

17.3                        If the Warrantors’ Representative dies or becomes mentally or physically incapacitated or is otherwise unable or unwilling to act as Warrantors’ Representative, the Majority of the Warrantors shall appoint a replacement Warrantors’ Representative (and shall notify the Buyer in writing of such replacement) or, if they fail to so appoint a replacement Warrantors’ Representative, the Seller, at the request of the Buyer, shall appoint a replacement Warrantors’ Representative and shall notify the Buyer in writing of such replacement. Any person appointed as a Warrantors’ Representative pursuant to this clause 17.3 must be a Warrantor and, for the purposes of this clause, “Majority of the Warrantors”  means a majority in number of the Warrantors who are still alive and mentally capable at the time of such appointment.

 

18.                               TRANSITIONAL SERVICES AGREEMENT, REVERSE TRANSITIONAL SERVICES AGREEMENT, APA, AND REVERSE APA

 

From Completion until the date on which the Transitional Services Agreement, Reverse Transitional Services Agreement, APA, and/or Reverse APA (as the case may be) have been terminated of expired, the Seller and the Buyer shall each comply, and shall procure the compliance of the Retained Group and the Target Group respectively, with the applicable provisions of the Transitional Services Agreement, Reverse Transitional Services Agreement, APA and Reverse APA (as the case may be).

 

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19.                               GENERAL

 

Entire agreement

 

19.1                        This Agreement (together with the other Transaction Documents) contains the entire agreement and understanding of the parties and supersedes all prior agreements, understandings or arrangements (both oral and written) relating to the subject matter of this Agreement and any such other document.

 

19.2                        Each of the parties acknowledges and agrees that:

 

19.2.1                                      it is not entering into this Agreement on the basis of, and is not relying and has not relied on, any statement or representation (whether negligent or innocent) or warranty or other provision (in any case whether oral, written, express or implied) made, given or agreed to by any person (whether a party to this Agreement or not) except those expressly repeated or referred to in this Agreement or the Disclosure Letter and the only remedy or remedies available to it in respect of any misrepresentation or untrue statement made to it shall be a claim for breach of contract under this Agreement; and

 

19.2.2                                      nothing in this clause 19.2 shall exclude any liability in respect of fraud or fraudulent misrepresentation made by or on behalf of any party.

 

19.3                        The Buyer acknowledges and agrees that the express terms of this Agreement are in lieu of all warranties, conditions, terms, undertakings and obligations implied by statute, common law or otherwise all of which are hereby excluded to the fullest extent permitted by law.

 

19.4                        This Agreement shall not be construed as creating any partnership or agency relationship between any of the parties.

 

Variations and waivers

 

19.5                        No variation of this Agreement shall be effective unless made in writing signed by or on behalf of: (i) the Buyer; (ii) the Seller; and (iii) the Warrantors’ Representative, and expressed to be such a variation.

 

19.6                        No waiver by any party of any requirement of this Agreement, or of any remedy or right under this Agreement, shall have effect unless given in writing and signed by such party. No waiver of any particular breach of the provisions of this Agreement shall operate as a waiver of any repetition of such breach.

 

Assignment and novation

 

19.7                        Subject to clauses 19.8 and 19.9, no party shall be entitled to assign, transfer, novate or create any trust in respect of the benefit or burden of any provision of this Agreement (or other Transaction Document) without the prior written consent of: (i) the Buyer, in the case of the Seller or any Warrantor; or (ii) the Seller, in the case of the Buyer.

 

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19.8                        The Seller may novate, on providing three (3) Business Days prior written notice to the Buyer, the burden of any provision of this Agreement to any parent undertaking of the Seller, provided that:

 

19.8.1                                      if any such parent undertaking at any time ceases to be a parent undertaking of the Seller, any provision of this Agreement which has been so novated shall be novated back to the Seller or another parent undertaking of the Seller; and

 

19.8.2                                      notice of any such novation shall include details of: (i) the nature of the burdens novated; (ii) the identity of the person(s) to whom such burdens have been novated to; and (iii) information and evidence to the Buyer’s reasonable satisfaction that such parent undertaking has sufficient financial substance to assume the burdens proposed to be novated under this Agreement (or other Transaction Document). For the avoidance of doubt should the information and evidence in sub-limb (iii) of this clause 19.8.2 be insufficient in the reasonable opinion of the Buyer, the Seller shall not be entitled to proceed with any such proposed novation.

 

19.9                        The Buyer may: (i) assign; and (ii) in the case of clause 19.9.3 only, charge or otherwise grant security over, all or any of its rights under this Agreement (including in respect of the Warranties) to and/or in favour of:

 

19.9.1                                      any other member of the Buyer Group; and/or

 

19.9.2                                      a buyer of substantially all of the issued share capital of a Target Group Company or business or assets of the Target Group; and/or

 

19.9.3                                      any Lender, by way of security for any borrowings or other indebtedness of the Buyer Group from time to time,

 

without the consent of any other party to this Agreement, provided that: (a) if any assignee pursuant to clause 19.9.1 at any time ceases to be a member of the Buyer Group, any rights under this Agreement which have been assigned to it shall be assigned to, or made the subject of a trust in favour of, another member of the Buyer Group; and (b) in the event that any assignment, charging and/or grant of security occurs, the liability of the Seller under this Agreement shall be no greater than it would have been had such assignment, charging and/or grant of security not occurred.

 

19.10                 As soon as practicable after any assignment, charging and/or grant of security in accordance with clause 19.9, the Buyer will give written notice thereof to the Seller and the Warrantors’ Representative, such notice to provide reasonable details of: (i) the nature of the rights assigned, charged and/or over which security has been granted; and (ii) the identity of the person(s) to whom such rights have been assigned and/or charged or secured in favour of, but shall not require the Seller or the Warrantors’ Representative to give any acknowledgement in respect of such assignment, charging and/or grant of security.

 

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Effect of Completion

 

19.11                 The provisions of this Agreement, insofar as the same shall not have been fully performed at Completion, shall remain in full force and effect notwithstanding Completion.

 

Counterparts

 

19.12                 This Agreement may be executed as two or more counterparts and execution by each of the parties of any one of such counterparts will constitute due execution of this Agreement.

 

Further assurance

 

19.13                 Each party shall from time to time and at its own cost do, execute and deliver or procure to be done, executed and delivered all such further acts, documents and things required by, and in a form satisfactory to, the Buyer or Seller (as applicable) in order to give full effect to this Agreement and its rights, powers and remedies under this Agreement including, but not limited to, using all reasonable endeavours (in so far as it is able to do so in its capacity as a direct or indirect shareholder of a Retained Group Company or a Target Group Company) to procure that any necessary third party shall, do and execute and perform all such further deeds, documents, assurances, acts and things as may reasonable be required to give effect to this Agreement.

 

Other remedies

 

19.14                 The Buyer acknowledges and irrevocably agrees with the Seller that it will have no rights, remedies or powers provided by law or otherwise (including rights of rescission or termination) for breach of any provision of this Agreement save for a right to claim damages for breach of contract, and the Buyer hereby irrevocably waives any such other rights, remedies and powers.

 

Third party rights

 

19.15                 Save for clauses 8.3, 9.2, 10.6.2 and clause 11 which confer a benefit on the persons named therein (respectively) and are intended to be enforceable by such parties in accordance with the Contracts (Rights of Third Parties) Act 1999 (the “Third Party Rights Act”),  no provisions of this Agreement which confer rights upon any person who is not a party to this Agreement shall be enforceable pursuant to the Third Party Rights Act (or otherwise) by any such person.

 

19.16                 This Agreement may be terminated and any term of this Agreement may be amended or waived without the consent of any person who is not a party to this Agreement.

 

Several liability

 

19.17                 Except where this Agreement provides otherwise, obligations, covenants, warranties, representations and undertakings expressed to be assumed or given by two or more persons shall in each case be construed as if expressed to be given severally and not jointly or jointly and severally.

 

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Successors

 

19.18                 This Agreement shall be binding on the parties’ assigns and successors in title, provided that the liability of an individual and his estate shall cease on the death of that individual.

 

20.                               APPLICABLE LAW AND JURISDICTION

 

20.1                        This Agreement and the rights and obligations of the parties including all non-contractual obligations arising under or in connection with this Agreement shall be governed by and construed in accordance with the laws of England and Wales.

 

20.2                        The parties irrevocably submit to the exclusive jurisdiction of the courts of England and Wales in respect of any claim, dispute or difference arising out of or in connection with this Agreement and/or any non-contractual obligation arising in connection with this Agreement.

 

21.                               NOTICES

 

Form of notice

 

21.1                        Any notice, consent, request, demand, approval or other communication to be given or made under or in connection with this Agreement (each a “Notice”  for the purposes of this clause) shall be in English, in writing and signed by or on behalf of the person giving it.

 

Method of service

 

21.2                        Service of a Notice must be effected by one of the following methods:

 

21.2.1                                      by hand to the relevant address specified in clause 21.4 and shall be deemed served upon delivery if delivered during a Business Day, or at the start of the next Business Day if delivered at any other time; or

 

21.2.2                                      by prepaid first-class post to the relevant address specified in clause 21.4 and shall be deemed served at the start of the second Business Day after the date of posting; or

 

21.2.3                                      by prepaid international airmail to the relevant address specified in clause 21.4 and shall be deemed served at the start of the fourth Business Day after the date of posting; or

 

21.2.4                                      by email to the relevant email address specified in clause 21.4 and shall be deemed served at the time of sending if sent by email, provided that receipt shall not occur if the sender receives an automated message indicating that the message has not been delivered to the recipients.

 

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21.3                        In clause 21.2 “during a Business Day”  means any time between 9.30 a.m. and 5.30 p.m. on a Business Day based on the local time at the location where the recipient of the Notice is located. References to “the start of [a] Business Day”  and “the end of [a] Business Day”  shall be construed accordingly.

 

Address for service

 

21.4        Notices shall be addressed as follows:

 

21.4.1                                      Notices for the Buyer shall be marked for the attention of:

 

Name:                                                           Junli He

 

Address:                                                 [***]

 

Email:                                                            [***]

 

21.4.2                                      Notices for the Guarantor shall be marked for the attention of:

 

Name:                                                           Junli He

 

Address:                                                 [***]

 

Email:                                                            [***]

 

And addressed to the Buyer’s address as set out in clause 21.4.1 above.

 

21.4.3                                      Notices for the Seller shall be marked for the attention of:

 

Name:                                                           The Directors

 

Address:                                                 [***]

 

Email:                                                            [***]

 

21.4.4                                      Notices for any Warrantor shall be marked for the attention of the Warrantors’ Representative at the address or email address set out next to her/his name in Schedule 1.

 

Copies of Notices

 

21.5                        Copies of all Notices sent to the Seller shall also be: (i) sent or given to Travers Smith LLP of 10 Snow Hill, London EC1A 2AL (marked for the attention of Paul Dolman with reference B.2374-315) and Bridgepoint of 95 Wigmore Street, Marylebone, London W1V 1FB (marked for the attention of Chris Bell); and (ii) emailed to [***] and [***]. Such copies shall be sent or given in accordance with one of the methods described in clause 21.2. Failure to communicate such copies shall not invalidate such Notice.

 

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21.6                        Copies of all Notices sent to the Buyer and/or the Guarantor shall also be: (i) sent or given to White & Case LLP of 5 Old Broad Street, London EC2N 1DW (marked for the attention of Tom Matthews with reference 4460080-0002); and (ii) emailed to tom.matthews@whitecase.com. Such copies shall be sent or given in accordance with one of the methods described in clause 21.2. Failure to communicate such copies shall not invalidate such Notice.

 

Change of details

 

21.7                        A party may change her/his/its address for service provided that the new address is within the United Kingdom and that she/he/it gives the other parties not less than 14 days’ prior notice in accordance with this clause 21. Until the end of such notice period, service on either address shall remain effective.

 

THIS AGREEMENT has been duly executed and delivered as a deed on the date first stated above.

 

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SCHEDULE 1

 

ULTIMATE SHAREHOLDERS, WARRANTORS AND RETAINED GROUP COMPANIES

 

[***]

 

53

 

SCHEDULE 2 EXCHANGE DELIVERABLES

 

[***]

 

54

 

SCHEDULE 3

 

COMPLETION OBLIGATIONS

 

[***]

 

55

 

SCHEDULE 4

 

CONDUCT OF BUSINESS

 

[***]

 

56

 

SCHEDULE 5

 

WARRANTIES

 

[***]

 

57

 

SCHEDULE 6

 

LIMITATIONS ON CLAIMS

 

[***]

 

58

 

SCHEDULE 7

 

TAX COVENANT

 

[***]

 

59

 

SCHEDULE 8

 

SPECIFIC TAX INDEMNITIES

 

[***]

 

60

 

	
THE   SELLER
    	
 
    	
/s/ P   Symes
    
	
 
    	
 
    
	
EXECUTED   and DELIVERED as   a DEED
    	
)
    
	
for and on behalf of
    	
)
    
	
CAMBRIDGE   EDUCATION GROUP LIMITED
    	
)
    	
Director
    

 

	
in the presence of:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Signature:
    	
/s/ Hannah MacDonald
    	
 
    
	
Witness Name:
    	
Hannah MacDonald
    	
 
    
	
Witness Address:
    	
TRAVERS SMITH LLP
    	
 
    
	
 
    	
10 SNOW HILL
    	
 
    
	
 
    	
LONDON EC1A 2AL
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Occupation:
    	
Trainee Solicitor
    	
 
    

 

 

	
THE   WARRANTORS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTED   and DELIVERED as a   DEED by
    	
)
    	
 
    
	
DAVID   NEWTON
    	
)
    	
 
    
	
 
    	
)
    	
/s/ David Newton
    
	
 
    	
 
    	
Authorised Attorney
    

 

	
in the presence of:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Signature:
    	
/s/ Hannah MacDonald
    	
 
    
	
Witness Name:
    	
Hannah MacDonald
    	
 
    
	
Witness Address:
    	
TRAVERS SMITH LLP
    	
 
    
	
 
    	
10 SNOW HILL
    	
 
    
	
 
    	
LONDON EC1A 2AL
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Occupation:
    	
Trainee Solicitor
    	
 
    

 

	
EXECUTED   and DELIVERED as   a DEED by
    	
)
    	
 
    
	
CHRISTOPHER   STACEY
    	
)
    	
 
    
	
 
    	
)
    	
/s/ Christopher Stacey
    
	
 
    	
 
    	
Authorised Attorney
    

 

	
in the presence of:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Signature:
    	
/s/ Hannah MacDonald
    	
 
    
	
Witness Name:
    	
Hannah MacDonald
    	
 
    
	
Witness Address:
    	
TRAVERS SMITH LLP
    	
 
    
	
 
    	
10 SNOW HILL
    	
 
    
	
 
    	
LONDON EC1A 2AL
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Occupation:
    	
Trainee Solicitor
    	
 
    

 

 

	
EXECUTED and DELIVERED as a DEED by
    	
)
    	
 
    
	
KARIN ASKHAM
    	
)
    	
 
    
	
acting   by their duly authorised attorney
    	
)
    	
/s/ David Newton
    
	
 
    	
 
    	
Authorised Attorney
    
	
 
    
	
in the presence of:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness Signature:
    	
/s/ Hannah MacDonald
    	
 
    	
 
    
	
Witness Name:
    	
Hannah MacDonald
    	
 
    	
 
    
	
Witness Address:
    	
TRAVERS SMITH LLP
    	
 
    	
 
    
	
 
    	
10 SNOW HILL
    	
 
    	
 
    
	
 
    	
LONDON EC1A 2AL
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness Occupation:
    	
Trainee Solicitor
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
EXECUTED and DELIVERED as a DEED by
    	
)
    	
 
    
	
STEPHEN CARTER
    	
)
    	
 
    
	
acting   by their duly authorised attorney
    	
)
    	
/s/ David Newton
    
	
 
    	
 
    	
 
    	
Authorised Attorney
    
	
 
    	
 
    	
 
    	
 
    
	
in the presence of:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness Signature:
    	
/s/ Hannah MacDonald
    	
 
    	
 
    
	
Witness Name:
    	
Hannah MacDonald
    	
 
    	
 
    
	
Witness Address:
    	
TRAVERS SMITH LLP
    	
 
    	
 
    
	
 
    	
10 SNOW HILL
    	
 
    	
 
    
	
 
    	
LONDON EC1A 2AL
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness Occupation:
    	
Trainee Solicitor
    	
 
    	
 
    

 

 

	
EXECUTED   and DELIVERED as a DEED by
    	
)
    	
 
    
	
CRAIG   WILSON
    	
)
    	
 
    
	
acting by their duly   authorised attorney
    	
)
    	
/s/ David Newton
    
	
 
    	
 
    	
Authorised Attorney
    

 

	
in the presence of:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Signature:
    	
/s/ Hannah MacDonald
    	
 
    
	
Witness Name:
    	
Hannah MacDonald
    	
 
    
	
Witness Address:
    	
TRAVERS SMITH LLP
    	
 
    
	
 
    	
10 SNOW HILL
    	
 
    
	
 
    	
LONDON EC1A 2AL
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Occupation:
    	
Trainee Solicitor
    	
 
    

 

	
EXECUTED and DELIVERED as a DEED   by
    	
)
    	
 
    
	
PETE JACKSON
    	
 
    	
)
    	
 
    
	
acting   by their duly authorised attorney
    	
)
    	
/s/ David Newton
    
	
 
    	
 
    	
Authorised Attorney
    
				

 

	
in the   presence of:
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Signature:
    	
/s/ Hannah MacDonald
    	
 
    
	
Witness Name:
    	
Hannah MacDonald
    	
 
    
	
Witness Address:
    	
TRAVERS SMITH LLP
    	
 
    
	
 
    	
10 SNOW HILL
    	
 
    
	
 
    	
LONDON EC1A 2AL
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Occupation:
    	
Trainee Solicitor
    	
 
    

 

 

	
THE   BUYER
    	
 
    	
/s/   Junli He
    
	
 
    	
 
    
	
EXECUTED   and DELIVERED as   a DEED
    	
)
    
	
for and on behalf of
    	
)
    
	
BRIGHT   SCHOLAR (UK) HOLDINGS LIMITED
    	
)
    
	
 
    	
 
    	
Authorised Signatory
    
	
 
    	
 
    	
 
    
	
in the presence of:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Signature:
    	
/s/ Tom Matthews
    	
 
    
	
Witness Name:
    	
Tom Matthews
    	
 
    
	
Witness Address:
    	
5 OLD BROAD STREET
    	
 
    
	
 
    	
London   EC2N 1DW
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Occupation:
    	
Solicitor
    	
 
    
	
 
    	
 
    	
 
    
	
THE   GUARANTOR
    	
 
    	
/s/   Junli He
    
	
 
    	
 
    
	
EXECUTED   and DELIVERED as   a DEED
    	
)
    
	
for and on behalf of
    	
)
    
	
BRIGHT   SCHOLAR EDUCATION HOLDINGS LIMITED
    	
)
    
	
 
    	
 
    	
Authorised Signatory
    
					

 

	
in the presence of:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Signature:
    	
/s/ Tom Matthews
    	
 
    
	
Witness Name:
    	
Tom Matthews
    	
 
    
	
Witness Address:
    	
5 OLD BROAD STREET
    	
 
    
	
 
    	
London   EC2N 1DW
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness Occupation:
    	
Solicitor
    	
 
    

 

65

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00302-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00302-of-00352.parquet"}]]