Document:

exv10w2

Exhibit 10.2

EXECUTION

Dated
February 12, 2009

(1) TAL group

(2) ZHANG Bangxin ()

(3) CAO Yundong ()

(4) LIU Yachao ()

(5) BAI Yunfeng ()

(6) KTB/UCI China Ventures II Limited

(7) TAL Group Limited

(8) TAL Education Technology (Beijing) Co., Ltd.

()

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

()

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

()

SHARE PURCHASE AGREEMENT

For the Issuance of Series A Preferred Shares in

TAL group

(a company incorporated in Cayman Islands)

 

 

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CONTENT

	 	 	 	 	 
	RECITALS:
	 	 	2	 
	1. AGREEMENT TO PURCHASE AND SELL SHARES
	 	 	3	 
	2. CLOSING; DELIVERY
	 	 	4	 
	3. REPRESENTATIONS AND WARRANTIES OF THE GROUP COMPANIES AND THE FOUNDERS
	 	 	5	 
	4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
	 	 	12	 
	5. COVENANTS OF THE GROUP COMPANIES, THE FOUNDERS AND THE INVESTORS
	 	 	13	 
	6. CONDITIONS TO INVESTORS’ OBLIGATIONS AT THE CLOSING
	 	 	15	 
	7. CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSING
	 	 	17	 
	8. MISCELLANEOUS
	 	 	17	 

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SERIES A PREFERRED SHARE PURCHASE AGREEMENT

     THIS SERIES A PREFERRED SHARE PURCHASE AGREEMENT (this “Agreement”) is made and entered into
as of February 12,2009 by and among TAL group, an exempted limited liability
company organized under the laws of the Cayman Islands (the “Company”); TAL Group Limited, a
limited liability company organized under the laws of Hong Kong Special Administrative Region of
the People’’s Republic of China (the “PRC”) and wholly owned by the Company (the “HK Holdco”); TAL
Education Technology (Beijing) Co., Ltd. (), a wholly foreign-owned
enterprise established under the laws of the PRC (the “WFOE”); Beijing Xueersi Education Technology
Co., Ltd. (), a limited liability company established under the laws of
PRC (“XueErSi Education” or “Domestic Holdco”), Beijing Xueersi Network Technology Co., Ltd.
(), a limited liability company established under the laws of PRC
(“XueErSi Network”); the persons listed on Exhibit A hereto (collectively, the “Founders” and each,
a “Founder”); and the persons listed on Exhibit B hereto (collectively, the “Investors” and each,
an “Investor”).

Each of the Company, the Founders, HK Holdco, the Investors, the Domestic Holdco, XueErSi Network
and the WFOE shall be referred to individually as a “Party” and collectively as the “Parties”.

RECITALS:

     A. The Company was incorporated under the laws of the Cayman Islands on January 2, 2008 with
its registered office at the offices of Offshore Incorporations (Cayman) Limited, Scotia Centre,
4th Floor, P.O. Box 2804, George Town, Grand Cayman, KY1-1112, Cayman Islands;

     B. The HK Holdco is organized on March 11, 2008 and is engaged in the business of holding,
management and disposition of equity interest in the WFOE. Its registered office is in Hong Kong,
and the Company owns 100% of the equity interest in the HK Holdco;

     C. The WFOE is a wholly foreign-owned enterprise established on May 8, 2008, under
the laws of the PRC with its registered address at 2nd Floor, Suzhou Street, No.1,
Haidian District, (), Beijing, China, and the HK Holdco owns 100% of
the equity interest in the WFOE;

     D. The Founders directly and indirectly holds 100% equity interest in the following entities:

     (i) Beijing Xueersi Education Technology Co., Ltd. (), is a
limited liability company established on December 31, 2005 under the laws of the PRC with
its registered address at Suite A413, Zhongding Mansion, Jia No. 18 W. 3rd Ring Rd. N,
Haidian District, Beijing, China;

     (ii) Beijing Xueersi Network Technology Co., Ltd. (), and
previously known as  and ), a
limited liability company established on August 23, 2007 under the laws of the PRC with its
registered address at Suite A509, Zhongding Mansion, Jia No. 18 W. 3rd Ring Rd. N, Haidian
District, Beijing, China;

     (iii) Beijing Haidian District Xueersi Training School (), a
private non-enterprise entity (legal person) established on July 3, 2006 under the laws of
the PRC with its registered address at No. 2 Cui Wei Road, Haidian District, Beijing, China
(the “Haidian School”)];

     (iv) Beijing Dongcheng District Xueersi Training School (), a
private non-enterprise entity (legal person) established on January 5, 2007 under the laws
of the PRC with its registered address at Suite 102, Wanxin Business Mansion, No. 94 Dong Si
Shi Tiao, Dongcheng District, Beijing, China (the “Dongcheng School”);

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     (v) Beijing Xicheng District Xueersi Training School (), a
private non-enterprise entity (legal person) established under the laws of the PRC with its
registered address at Rm. 500, Tower A, Business Building, Nanlishi Road Yi, No.3-2,
 Xicheng District, Beijing, China, (the “Xicheng School”);

     (vi) Qianjiang Hafu English Training Centre (), a private
non-enterprise entity (legal person) established on under the laws of the PRC with its
registered address at the Workers’ Culture Club, Jianshe Road, No.71, Qianjiang Town,,
China (the “Wuhan Qianjiang School”);

     (vii) Wuhan Xiaoxinxing English Training School (), a
private non-enterprise entity (legal person) established under the laws of the PRC with its
registered address at Xinhuaxiao Road, No. 106, Hankou District, Wuhan, China (the “Wuhan
Jianghan School”);

     (viii) Jianli Hafu English Training School (), a private
non-enterprise entity (legal person) established under the laws of the PRC with its
registered address at the Workers’ Culture Club, Yanchen Road, Jianli County, China (the
“Jianli School”);

     (ix) Shanghai Lehai Technology and Information Co., Ltd.
(), a limited liability company established on November, 11,
2008 under the laws of the PRC with its registered address at Xingfa Road, No.65, Fengjing
town, Jinshan District, Shanghai, China (the “Shanghai Company”);

     (x) Shanghai Changning District Xueersi-Jialejia Advanced Study School
(), a private non-enterprise entity (legal person)
established on October 10, 2008 under the laws of the PRC with its registered address at 4th
Floor, Tianshan Road, No.1825, Changning District, Shanghai, China (the “Shanghai Changning
School”);

     (xi) Shanghai Minhang District Jialejia Advanced Study School
(), a private non-enterprise entity (legal person) established on
June 28, 2006 under the laws of the PRC with its registered address at 2nd Floor, Qixin
Road, No.2893, Minhang District, Shanghai, China “Shanghai Minhang School”);

     (xii) Beijing Zhikang Culture Distribution Co., Ltd.(), a
limited liability company established on June 30, 2008 under the laws of the PRC with its
registered address at Rm.1012, Fuxing Road Jia, No. 23, Haidian District, Beijing, China
(the “Zhikang”, and together with the entities listed under (i) to (xii) above, the
“Domestic Subsidiaries” and each a “Domestic Subsidiary”, collectively with the Company, HK
Holdco, WFOE, Domestic Holdco and XueErSi Network and their subsidiaries, the “Group
Companies” and each, a “Group Company”.

     E. The Domestic Entities are engaged in the business of primary, junior high and senior high
school training, and one-to-one tutoring. The business in which each Domestic Entities is engaged
is hereinafter referred to as its respective “Principal Business”.

     WHEREAS, the Investors desire to purchase from the Company the Preferred Shares (as defined in
Section 1.2) and the Company desires to sell the Preferred Shares to the Purchasers pursuant to the
terms and subject to the conditions of this Agreement.

     NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter
set forth, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

1. AGREEMENT TO PURCHASE AND SELL SHARES

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     1.1. Authorization. As of the Closing (as defined below), the Company will have authorized
the issuance, pursuant to the terms and conditions of this Agreement, of up to 5,000,000 series A
preferred shares (the “Series A Preferred Shares”) having the rights, preferences, privileges and
restrictions as set forth in the Amended and Restated Memorandum and Articles of Association of the
Company attached hereto as Exhibit C (the “Restated Articles”).

     1.2. Agreement to Purchase and Sell. Subject to the terms and conditions hereof, the Company
hereby agrees to issue and sell to the Investors, and the Investors hereby agree, severally and not
jointly, to purchase from the Company, the number of Series A Shares set forth opposite the name of
such Investors on Exhibit B, at a price of US$1.00 per share, amounting to an aggregate purchase
price of US$5,000,000 (the “Purchase Price”). The Series A Preferred Shares to be purchased and
sold pursuant to this Agreement will be collectively hereinafter referred to as the “Purchased
Shares”, and the common shares of the Company issuable upon conversion of the Purchased Shares will
be collectively hereinafter referred to as the “Conversion Shares.” At the Closing, the amount of
capital set forth opposite such Investor’s name under the caption “Number of Series A Preferred
Shares as of the Closing” on Exhibit B amounting to an aggregate of US$5,000,000 shall be paid by
the Investors by wire transfer to an account opened by the Company with a bank approved by the
Investors (the “Company Account”), provided that transfer instructions are delivered to the
Investors at least fifteen (15) business days prior to the Closing.

     1.3 Post-Investment Capitalization Structure. Immediately after the Closing (as defined
below), the post-investment capitalization structure of the Company shall be as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Common Shares/	 	 
	Shareholders	 	Preferred Shares	 	Share Percentage
	Zhang Bangxin ()
	 	 	67,800,000 Common Shares	 	 	 	54.24	%
	Cao Yundong ()
	 	 	31,200,000 Common Shares	 	 	 	24.96	%
	Liu Yachao ()
	 	 	12,000,000 Common Shares	 	 	 	9.6	%
	Bai Yunfeng ()
	 	 	9,000,000 Common Shares	 	 	 	7.2	%
	Investors
	 	 	5,000,000 Series A Shares	 	 	 	4.0	%
	Total
	 	 	125,000,000 shares	 	 	 	100	%

2. CLOSING; DELIVERY

     2.1. The Closing. Subject to the terms and conditions set forth in Section 6, the purchase
and sale of the Purchased Shares hereunder shall take place remotely via the exchange of documents
and signatures, on February 15, 2009, - or at such other time and place as the Company the Investors
may mutually agree upon(which time and place are designated sequentially as the “Closing”), which
date shall be no later than fifteen (15) Business Days after the satisfaction or waiver of each
condition to the Closings as set forth in Section 6 (other than conditions that by their nature are
to be satisfied at the Closings, but subject to the satisfaction or waiver of such conditions).

     2.2. Delivery. At the Closing, the Investors shall deposit the Purchase Price by wire
transfer of immediately available U.S. dollar funds into the Company Account. Upon (i) receipt of
payment of the Purchase Price by the Company and (ii) receipt of the duly signed and dated
instruments of transfer and subscription letters relating to the Series A Preferred Shares being
purchased by such Investor, the Company shall cause its share register to be updated to reflect the
Series A Preferred Shares being purchased by such Investor, deliver to the Investors one or more
certificates representing the Purchased Shares and a copy of the Company’s register of members
certified by an authorized officer of the Company, reflecting the number of shares held by each
shareholder of the Company hereunder at such Closing.

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3. REPRESENTATIONS AND WARRANTIES OF THE GROUP COMPANIES AND THE FOUNDERS

     The Company, the HK Holdco, WFOE, Domestic Holdco, XueErSi Network and each Founder, jointly
and severally, hereby represent and warrant to the Investors, except as set forth in the Disclosure
Schedule (the “Disclosure Schedule”) attached to this Agreement as Exhibit E (which Disclosure
Schedule shall be deemed to be representations and warranties to the Investors), as of the date
hereof and the Closing Date hereunder, as follows. In this Agreement, any reference to “Material
Adverse Effect” means the material adverse effect on the condition (financial or otherwise), assets
relating to, or results of operation of or business (as presently conducted and proposed to be
conducted) of the Group Companies as a whole.

     3.l. Organization, Standing and Qualification. Except as set forth in Section 3.1 of the
Disclosure Schedule, each Group Company is duly organized, validly existing and in good standing
(or equivalent status in the relevant jurisdiction) under, and by virtue of, the laws of the place
of its incorporation or establishment and has all requisite power and authority to own its
properties and assets and to carry on its business as now conducted and as proposed to be
conducted, and to perform each of its obligations hereunder and under any agreement contemplated
hereunder to which it is a party. Each Group Company is qualified to do business and is in good
standing (or equivalent status in the relevant jurisdiction) in each jurisdiction where failure to
be so qualified would have a Material Adverse Effect.

     3.2. Capitalization.

     (1) Company. Immediately prior to the Closing, the authorized share capital of the Company
consists of the following:

          (a) Common Shares. A total of 50,000,000 authorized common shares, par value US$0.001 per
share, of the Company (the “Common Shares”), 1,000 of which are issued and outstanding.

          (b) Preferred Shares. A total of 5,000,000 authorized preferred shares, which are designated
as Series A Preferred Shares, none of which are issued and outstanding.

          (c) Except for (i) the conversion privileges of the Purchased Shares to be issued under this
Agreement, and (ii) the rights provided in the Shareholders Agreement to be entered into at the
Closing and attached hereto as Exhibit F (the “Shareholders Agreement”), there are no options,
warrants, conversion privileges or other rights, or agreements with respect to the issuance
thereof, presently outstanding to purchase any of the shares of the Company. Apart from the
exceptions noted in this Section 3.2(1) and the Shareholders Agreement, no shares of the Company’s
outstanding share capital, or shares issuable upon exercise or exchange of any outstanding options
or other shares issuable by the Company, are subject to any preemptive rights, rights of first
refusal or other rights to purchase such shares (whether in favor of the Company or any other
person).

          (d) Outstanding Security Holders. A complete and current list of all outstanding ultimate
and/or beneficial shareholders, option holders and other security holders of the Company as of the
date hereof is set forth in Section 3.2(1)(d) of the Disclosure Schedule, indicating the type and
number of shares, options or other securities held by each such shareholder, option holder or other
security holder.

     (2) HK Holdco. The HK Holdco is the sole legal and beneficial owner of one hundred percent
(100%) of the equity interest of the WFOE.

     (3) Domestic Entities.

          (a) WFOE. Immediately prior to the Closing, the registered capital of the WFOE is
US$4,900,000.

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          (b) Domestic Subsidiaries. Immediately prior to the Closing,

               (i) the registered capital of the XueErSi Education is RMB500,000 and each of Zhang Bangxin
(), Cao Yundong (),
Liu Yachao () and Bai Yunfeng () owns, respectively,
56.5%, 26%, 10% and 7.5% of the equity interests of the XueErSi Education;

               (ii) the registered capital of the Haidian School is RMB500,000 and XueErSi Network owns 100%
of the interests of the Haidian School;

               (iii) the registered capital of the XueErSi Network is RMB3,000,000 and each of Zhang Bangxin
(), Cao Yundong (),
Liu Yachao () and Bai Yunfeng () owns, respectively,
56.5%, 26%, 11.25% and 6.25% of the equity interests of the XueErSi Network;

               (iv) the registered capital of the Dongcheng School is RMB500,000 and XueErSi Education owns
100% of the interests of the Dongcheng School;

               (v) the registered capital of the Xicheng School is RMB500,000 and XueErSi Network owns 100%
of the interests of the Xicheng School;

               (vi) the registered capital of the Wuhan Qianjiang School is RMB150,000 and XueErSi Network
owns 100% of the interests of the Wuhan Qianjiang School;

               (vii)the registered capital of the Wuhan Jianghan School is RMB200,000 and XueErSi Network
owns 100% of the interests of the Wuhan Jianghan School;

               (viii)the registered capital of the Jianli School is RMB50,000 and XueErSi Network owns 100%
of the interests of the Jianli School;

               (ix) the registered capital of the Shanghai Company is RMB 500,000 and XueErSi Network owns
100% of the interests of the Shanghai Company;

               (x) the registered capital of the Shanghai Changning School is RMB100,000 and Shanghai Company
owns 100% of the interests of the Shanghai Changning School;

               (xi) the registered capital of the Shanghai Minhang School is RMB100,000 and Shanghai Company
owns 100% of the interests of the Shanghai Minhang School; and

               (xii) the registered capital of Zhikang is RMB500,000 and XueErSi Network owns 100% of the
interests of Zhikang.

          (c) Domestic Entities. A complete and current list of all outstanding ultimate and/or
beneficial shareholders, option holders and other security holders of the Domestic Entities as of
the date hereof is set forth in Section 3.2(3)(c) of the Disclosure Schedule, indicating the amount
of the registered capital that each such shareholder has contributed to each PRC Company, options
or other securities held by each such shareholder, option holder or other security holder.

     3.3. Subsidiaries; Group Structure. Except for the HK Holdco and the WFOE, the Company does
not presently own or control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association, or other entity. Save for the contractual control
over the businesses of the Domestic Entities after completion of the Restructuring (as defined
below) attached hereto as Exhibit D, the WFOE does not have any subsidiaries, does not own or
control, directly or indirectly, any interest in any other corporation, partnership, trust, joint
venture, association or other entity and does not maintain any offices or branches.

     3.4. Due Authorization. All corporate actions on the part of each Group Company and each
Founder and, as applicable, their respective officers, directors and shareholders necessary for the

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authorization, execution and delivery of, and the performance of all obligations of such Group
Company and such Founder under, this Agreement, the Shareholders Agreement and any other agreements
to which it is a party and the execution of which is contemplated hereunder (the “Ancillary
Agreements”), and the authorization, issuance, reservation for issuance and delivery of all of the
Purchased Shares being sold under this Agreement and the Conversion Shares issuable upon conversion
of such Purchased Shares have been taken or will be taken prior to the Closing. Each of this
Agreement, the Shareholders Agreement and any Ancillary Agreement, when executed and delivered,
will constitute valid and binding obligations of each Group Company and each Founder, to the extent
each is a party to such agreements, enforceable in accordance with its terms except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other
laws of general application relating to or affecting the enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, or (iii) to the extent the indemnification provisions
contained in the Shareholders’ Agreement and the Indemnification Agreement may be limited by
applicable securities laws..

     3.5. Valid Issuance of Purchased Shares.

          (a) The Purchased Shares, when issued, sold and delivered in accordance with the terms of this
Agreement, will be duly and validly issued, fully paid and nonassessable. The Conversion Shares
have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of
the Restated Articles, will be duly and validly issued, fully paid and nonassessable.

          (b) All outstanding share capital of the Company has been duly and validly issued, fully paid
and nonassessable, and all outstanding shares, options, warrants and other securities of the
Company have been issued in full compliance with the requirements of all applicable securities laws
and regulations, including, to the extent applicable, the registration and prospectus delivery
requirements of the United States Securities Act of 1933, as amended (the “Act”), or in compliance
with applicable exemptions therefrom, and all other provisions of applicable securities laws and
regulations.

     3.6. Liabilities. Except as disclosed in Section 3.6 of the Disclosure Schedule, no Group
Company has any indebtedness for borrowed money that it has directly or indirectly created,
incurred, assumed, or guaranteed, or with respect to which the Group Company has otherwise become
directly or indirectly liable.

     3.7. Title to Properties and Assets. Each Group Company has good and marketable title to its
properties and assets as reflected in its balance sheet subject to no mortgage, pledge, lien,
encumbrance, security interest or charge of any kind. With respect to the property and assets it
leases, except as disclosed in Section 3.7 of the Disclosure Schedule, each Group Company is in
compliance with such leases and, to the best of its and the Founders’ knowledge, such Group Company
holds valid leasehold interests free of any liens, encumbrances, security interests or claims of
any party other than the lessors in such property and assets, breach of which would be reasonably
likely to have a Material Adverse Effect to the business of the Group Company

     3.8. Status of Proprietary Assets. For purpose of this Agreement, “Proprietary Assets” means
all patents, patent applications, trademarks, service marks, trade names, domain names, copyrights,
formulas, designs, trade secrets, confidential and proprietary information, proprietary rights,
know-how and processes owned by, licensed to or used by any Group Company. Each Group Company owns
or has a valid right to use all the Proprietary Assets necessary for its business as now conducted
and as proposed to be conducted and, to the best knowledge of each Group Company and each Founder,
without any conflict with or infringement of the rights of others. Section 3.8 of the Disclosure
Schedule contains a complete list of Proprietary Assets of each Group Company necessary for its
business as now conducted and as proposed to be conducted. There are no outstanding options,
licenses or agreements of any kind granted by any Group Company relating to any of its Proprietary
Assets, nor is any Group Company bound by or a party to any options, licenses or agreements of any
kind with respect to the Proprietary Assets of any other person or entity, except, in either case,
for standard end-user agreements with respect to commercially readily available intellectual
property such as “off the shelf” computer software. To the best knowledge of each Group Company
and each Founder, it has not violated or, by conducting its business as proposed,

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would not violate any Proprietary Assets of any other person or entity, nor, to the best
knowledge of such Group Company, is there any reasonable basis therefor. Each Group Company is not
aware that any of its officers, employees or consultants is obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with the use of his,
her or its best efforts to promote the interests of such Group Company or that would conflict with
the business of such Group Company as proposed to be conducted or that would prevent such officers,
employees or consultants from assigning to such Group Company inventions conceived or reduced to
practice in connection with services rendered to such Group Company. Neither the execution nor
delivery of this Agreement, the Shareholders Agreement and any Ancillary Agreement, nor the
carrying on of the business of any Group Company by its employees, nor the conduct of the business
of any Group Company as proposed, will, to the best knowledge of each Group Company and each
Founder, conflict with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which any of such employees
is now obligated. Each Group Company does not believe it is or will be necessary to utilize any
inventions of any of its employees (or people it currently intends to hire) made prior to or
outside the scope of their employment by such Group Company.

     3.9. Material Contracts and Obligations. As of the date hereof, all contracts, agreements,
leases, licenses, instruments, understandings, commitments (oral or written), indebtedness,
liabilities, proposed transactions and other obligations to which any Group Company is a party or
by which it is bound that (i) are material to the conduct and operations of its business and
properties, (ii) involve any of its officers, consultants, directors, employees or shareholders, or
(iii) obligate such Group Company to share, license or develop any product or technology (the
“Material Contracts”) are listed in Section 3.9 of the Disclosure Schedule and have been made
available for inspection by the Investors and their counsel. For purposes of this Section 3.9,
“material” shall mean (i) involving obligation, cost or amount, or imposing liability or contingent
liability on any Group Company, in excess of US$100,000 per annum or in excess of US$100,000 in the
aggregate, (ii) not terminable upon thirty (30) days notice without incurring any penalty or
obligation, (iii) containing exclusivity, non-competition, or similar clauses that impair, restrict
or impose conditions on any Group Company’s right to offer or sell products or services in
specified areas, during specified periods, or otherwise, (iv) not in the ordinary course of
business, (v) transferring or licensing any Proprietary Assets to or from any Group Company (other
than licenses granted in the ordinary course of business or licenses from commercially readily
available “off the shelf” computer software) or (vi) an agreement the termination of which would be
reasonably likely to have a Material Adverse Effect. All the Material Agreements are valid,
binding and enforceable obligations of the parties thereto and the terms thereof have been complied
with by the relevant Group Company, and to the best knowledge of each Group Company and the
Founders, by all the other parties thereto. There are no circumstances likely to give rise to any
breach of such terms, no grounds for rescission, avoidance or repudiation of any of the Material
Contracts and no notice of termination or of intention to terminate has been received in respect of
any Material Contracts.

     3.10. Litigation. There is no action, suit, proceeding, claim, arbitration or investigation
(“Action”) pending (or, to the best knowledge of each Group Company and each Founder, currently
threatened) against any of the Group Companies, Founder, any key employee of each Group Company,
the name of which is listed on Exhibit H (the “Key Employee”) in connection with such Key
Employee’s relationship with the Company. To the best knowledge of each Group Company and each
Founder, there is no factual or legal basis for any such Action that is likely to result,
individually or in the aggregate, in any material adverse change in the business, properties,
assets, financial condition, affairs or prospects of any Group Company. By way of example, but not
by way of limitation, there are no Actions pending against any of the Group Companies or, to the
best knowledge of each Group Company and each Founder, threatened against any of the Group
Companies, relating to the use by any employee of any Group Company of any information, technology
or techniques allegedly proprietary to any of their former employers, clients or other parties. No
Group Company is a party to or subject to the provisions of any order, writ, injunction, judgment
or decree of any court or government agency or instrumentality and there is no Action by any Group
Company currently pending or which it intends to initiate.

     3.11. Compliance with Laws; Governmental Consents. None of the Group Companies is in
violation of any applicable statute, rule, regulation, order or restriction of any domestic or
foreign

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government or any instrumentality or agency thereof in respect of the conduct of its business
or the ownership of its properties. Save as set out in Section 3.11 of the Disclosure Schedule,
all consents, permits, licenses, approvals, registrations, qualifications, or filings by or with
any governmental authority and any third party which are required to be obtained or made by each
Group Company and each Founder in connection with the conduct of the Principal Business or the
consummation of the transactions contemplated hereunder shall have been obtained or made prior to
and be effective as of the Closing. All applicable laws of the PRC with respect to the opening and
operation of foreign exchange accounts and foreign exchange activities of the Group Company, where
applicable, have been and will continue to be fully complied with, and all requisite approvals
including any from the PRC State Administration of Foreign Exchange (“SAFE”) or its local branches
as the context may be, required under the SAFE Circular (as defined below) in relation thereto have
been duly and lawfully obtained and are in full force and effect and there exist no grounds on
which any such approval may be cancelled or revoked or each PRC Company or its legal representative
may be subject to liability or penalties for material misrepresentation or failure to disclose
material information to the issuing SAFE authority. Each Founder and each other shareholder of the
Group Companies who is required to comply with the SAFE Circular has obtained registration with
respect to their holding of equity interest in the Company with SAFE in accordance with the SAFE
Circular and other applicable laws of the PRC. “SAFE Circular” shall mean the SAFE Circular on
Issues Relating to the Administration of Foreign Exchange of Company Financing through Offshore
Special Purpose Vehicles and Round-Tripping Investment by PRC Resident
() issued
by SAFE with effect from 1 November 2005, SAFE Circular on Release of Operative Directives for
Circular of the State Administration of Foreign Exchange on Relevant Issues Concerning Foreign
Exchange Administration of Financing and Round-tripped Investment by Domestic Residents through
Offshore Special Purpose Vehicles () issued
by SAFE with effect from 29 May 2007 and any applicable laws
of the PRC in force from time to time which operate to restate, amend or repeal the aforesaid SAFE
Circular or any part thereof.

     3.12. Compliance with Other Instruments and Agreements. Each Group Company is not in, nor
shall the conduct of its business as currently or proposed to be conducted result in, any
violation, breach or default of any term of its constitutional documents of the respective Group
Company which may include, as applicable, memoranda and articles of association, by-laws, joint
venture contracts, feasibility studies for the Domestic Entities and the like (the “Constitutional
Documents”), or in any material respect of any term or provision of any mortgage, indenture,
contract, agreement or instrument to which the Group Company is a party or by which it may be
bound, (the “Group Company Contracts”) or of any provision of any judgment, decree, order, statute,
rule or regulation applicable to or binding upon the Group Company. The execution, delivery and
performance of and compliance with this Agreement, the Shareholders Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and thereby will not result
in any such violation, breach or default, or be in conflict with or constitute, with or without the
passage of time or the giving of notice or both, either a default under any Group Company’s
Constitutional Documents or any Group Company Contract, or, to the best knowledge of each Group
Company and each Founder, a violation of any statutes, laws, regulations or orders, or an event
which results in the creation of any lien, charge or encumbrance upon any asset of any Group
Company.

     3.13. Disclosure. Each Group Company and each Founder has fully provided the Investors with
all the information that the Investors have reasonably requested for deciding whether to purchase
the Purchased Shares and all the information that the Company believes is reasonably necessary to
enable the Investors to make such decision. No representation or warranty by any Group Company or
any Founder in this Agreement and no information or materials provided by any Group Company or any
Founder to the Investors in connection with their due diligence investigation of any Group Company
or the negotiation and execution of this Agreement contains or will contain any untrue statement of
a material fact or omits or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances in which they are
made, not misleading.

     3.14. Registration Rights. Except as provided in the Shareholders Agreement, the Company has
not granted or agreed to grant any person or entity any registration rights (including piggyback
registration rights), nor is the Company obliged to list any of its shares on any securities
exchange. To the best knowledge of each Group Company and each Founder, except as contemplated in
this Agreement, the

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Shareholders Agreement and the Restated Articles, no voting or similar agreements exist
related to the Company’s securities which are presently outstanding or that may hereafter be
issued.

     3.15. Financial Statements. The Company has delivered to the Investors unaudited and
consolidated financial statement for the Group Companies for the respective periods from January 1,
2007 to August 31, 2008 (the foregoing management accounts and any notes thereto are hereinafter
referred to as the “Financial Statements” and August 31, 2008, the “Balance Sheet Date”). Such
Financial Statements (i) fairly present in all material respects the financial condition and
operating results of the Domestic Companies as of the dates, and for the periods, indicated
therein, and (ii) have been prepared in accordance with the US GAAP applied on a consistent basis.
Except as set forth in the Financial Statements, the Domestic Companies has no material liabilities
or obligations, contingent or otherwise, as of the statement date, other than (i) liabilities
incurred in the ordinary course of business subsequent to the statement date, (ii) obligations
under contracts and commitments incurred in the ordinary course of business, and (iii) liabilities
and obligations of a type or nature not required under US GAAP to be reflected in the Financial
Statements, which, in all such cases, individually and in the aggregate would not have a Material
Adverse Effect. Except as disclosed in the Financial Statements, none of the Group Companies is a
guarantor or indemnitor of any indebtedness of any other person or entity. Each Group Company
maintains a standard system of accounting established and administered in accordance with PRC GAAP.

     3.16. Activities Since Balance Sheet Date. Except as set forth in Section 3.16 of the
Disclosure Schedule, since the Balance Sheet Date, with respect to any Group Company, there has not
been:

          (a) any material change in the assets, liabilities, financial condition or operating results
of such Group Company from that reflected in the Financial Statements, except changes in the
ordinary course of business that do not have, in the aggregate, Material Adverse Effects;

          (b) any material change in the contingent obligations of such Group Company by way of
guarantee, endorsement, indemnity, warranty or otherwise;

          (c) any damage, destruction or loss, whether or not covered by insurance, having Material
Adverse Effects (as presently conducted and as presently proposed to be conducted);

          (d) any waiver by such Group Company of a valuable right or of a material debt;

          (e) any satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by such Group Company, except such satisfaction, discharge or payment made in the
ordinary course of business that is not material to the assets, properties, financial condition,
operating results or business of such Group Company;

          (f) any material change or amendment to a material contract or arrangement by which such Group
Company or any of its assets or properties is bound or subject, except for changes or amendments
which are expressly provided for or disclosed in this Agreement;

          (g) any material change in any compensation arrangement or agreement with any present or
prospective employee, contractor or director;

          (h) any sale, assignment or transfer of any Proprietary Assets or other material intangible
assets of such Group Company;

          (i) any resignation or termination of any key officer or employee of such Group Company;

          (j) any mortgage, pledge, transfer of a security interest in, or lien created by such Group
Company, with respect to any of its material properties or assets, except liens for taxes not yet
due or payable;

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          (k) any debt, obligation, or liability incurred, assumed or guaranteed by such Group Company
individually in excess of US$100,000 or in excess of US$100,000 in the aggregate;

          (l) any declaration, setting aside or payment or other distribution in respect of any of such
Group Company’s share capital, or any direct or indirect redemption, purchase or other acquisition
of any of such share capital by such Group Company other than the repurchase of share capital from
employees, officers, directors or consultants pursuant to agreements approved by the Board of
Directors of such Group Company under which such Group Company has the option to repurchase such
shares at cost upon the occurrence of certain events, such as termination of employment or
consulting relationship;

          (m) any failure to conduct business in the ordinary course and consistent with such Group
Company’s past practices;

          (n) any transactions with any Founder or any director, officer or employee of such Group
Company, or any members of their immediate families, or any entity controlled by any of such
individuals;

          (o) any other event or condition of any character which would have a Material Adverse Effect;
or

          (p) any agreement or commitment by such Group Company to do any of the things described above.

     3.17. Tax Matters. The provisions for taxes in the respective Financial Statements are
sufficient for the payment of all accrued and unpaid applicable taxes of the covered Group Company,
whether or not assessed or disputed as of the date of each such balance sheet. There have been no
examinations or audits of any tax returns or reports by any applicable governmental agency. Except
as set forth in Section 3.17 of the Disclosure Schedule, each Group Company has duly filed all tax
returns required to have been filed by it and paid all taxes shown to be due on such returns. Each
Group Company is not subject to any waivers of applicable statutes of limitations with respect to
taxes for any year. Since the Balance Sheet Date, none of the Group Companies has incurred any
taxes, assessments or governmental charges other than in the ordinary course of business and each
Group Company has made adequate provisions on its books of account for all taxes, assessments and
governmental charges with respect to its business, properties and operations for such period.

     3.18. Interested Party Transactions. Except for transactions in the ordinary course of the
business of a Group Company, no Founder or any “Affiliate” or “Associate” (as those terms are
defined in Rule 405 promulgated under the Act) of any such Founder has any agreement,
understanding, proposed transaction with, or is indebted to, any Group Company, nor is any Group
Company indebted (or committed to make loans or extend or guarantee credit) to any of them (other
than for accrued salaries, reimbursable expenses or other standard employee benefits). No Founder
has any direct or indirect ownership interest in any firm or corporation with which a Group Company
is affiliated or with which a Group Company has a business relationship, or any firm or corporation
that competes with a Group Company, except that any such Founder may have record ownership interest
in the Company or own shares in (but not exceeding one percent (1%) of the outstanding shares of)
publicly traded companies that may compete with a Group Company. No Affiliates or Associates of
any Founder is directly or indirectly interested in any material contract with a Group Company. No
Founder or any Affiliate or Associate of any such Founder has had, either directly or indirectly, a
material interest in: (a) any person or entity which purchases from or sells, licenses or furnishes
to a Group Company any goods, property, intellectual or other property rights or services; or (b)
any contract or agreement to which a Group Company is a party or by which it may be bound or
affected.

     3.19. Exempt Offering. The offer and sale of the Purchased Shares pursuant to this Agreement
are exempt from the registration requirements of the Act and from the registration or qualification
requirements of any other applicable securities laws and regulations, and the issuance of the
Conversion Shares in accordance with the Restated Articles will be exempt from such registration or

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qualification requirements.

     3.20. No Other Business. The Company was formed solely to acquire and hold an equity interest
in its operating subsidiaries and since its formation has not engaged in any business and has not
incurred any liability except in the ordinary course of its business of acquiring and holding its
equity interest in its operating subsidiaries.

     3.21. Minute Books. The minute books of each Group Company made available to the Investors
contain minutes of all meetings and substantially material actions taken by directors and
shareholders or equity interest holders of such Group Company since its time of formation, and
reflect all substantially material transactions referred to in such minutes accurately in all
material respects.

     3.22 Employee Matters. Save as disclosed in Section 3.22 of the Disclosure Schedule, each
Group Company has complied in all material aspects with all applicable employment and labor laws.
The Company is not aware that any officer or key employee intends to terminate their employment
with any Group Company, nor does any Group Company have a present intention to terminate the
employment of any officer or key employee. The Company is not a party to or bound by any currently
effective incentive plan, profit sharing plan, retirement agreement or other employee compensation
agreement. Subject to any applicable laws, all employees are employed by the Company on an at-will
basis and the Company may terminate any employment agreement with any employee without cause at any
time without incurring any penalty or obligation unless otherwise required by the applicable law.

     3.23. Other Representations and Warranties Relating to the Domestic Entities.

          (a) The Constitutional Documents and certificates and related contracts and agreements of each
PRC Company are valid and have been duly approved or issued (as applicable) by competent PRC
authorities.

          (b) The capital and organizational structure of each PRC Company upon the completion of the
Restructuring and the conduct by each PRC Company of its applicable business set forth in the
Recitals under such structure is valid and in full compliance with PRC laws.

          (c) None of the Domestic Entities is in receipt of any letter or notice from any relevant
authority notifying revocation of any permits or licenses issued to it for noncompliance or the
need for compliance or remedial actions in respect of the activities carried out directly or
indirectly by such PRC Company.

          (d) The Domestic Entities have been conducting and will conduct their business activities
within the permitted scope of business or are otherwise operating their business in full compliance
with all relevant legal requirements and with all requisite licenses, permits and approvals granted
by competent PRC authorities.

          (e) In respect of approvals, licenses or permits requisite for the conduct of any part of the
business of the Domestic Entities which are subject to periodic renewal, none of Group Company or
Founder has any reason to believe that such requisite renewals will not be granted by the relevant
PRC authorities.

4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

     The Investors represent and warrant to the Company as follows:

     4.1. Accredited Investors. Each Investor is an “Accredited Investor” within the definition
set forth in Rule 501(a) under Regulation D of the Act.

     4.2. Authorization. The Investors have all requisite power, authority and capacity to enter
into this Agreement and the Shareholders Agreement, and to perform its obligations under this

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Agreement and the Shareholders Agreement. This Agreement has been duly authorized, executed
and delivered by the Investors. This Agreement and the Shareholders Agreement, when executed and
delivered by the Investors, will constitute valid and legally binding obligations of such Investor,
subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors’ rights generally and to general equitable
principles.

     4.3. Purchase for Own Account. The Purchased Shares will be acquired for the Investors’ own
account, not as a nominee or agent, and not with a view to or in connection with the sale or
distribution of any part thereof.

     4.4. Exempt from Registration; Restricted Securities. The Investors understand that the
Purchased Shares and the Conversion Shares will not be registered under the Act, on the ground that
the sale provided for in this Agreement is exempt from registration under the Act, and that the
reliance of the Company on such exemption is predicated in part on the Investors’ representations
set forth in this Agreement. The Investors understand that the Purchased Shares and the Conversion
Shares are restricted securities within the meaning of Rule 144 under the Act and that the
Purchased Shares and the Conversion Shares are not registered and must be held indefinitely unless
they are subsequently registered or an exemption from such registration is available. The
Investors acknowledge that if an exemption from registration or qualification is available, they
may be conditioned on various requirements including, but not limited to, the time and manner of
sale, the holding period for the Purchased Shares, and on requirements relating to the Company
which are outside of the Investor’s control, and which the Company is under no obligation and may
not be able to satisfy. The Investors understand that this offering is not intended to be part of
the public offering, and that Purchaser will not be able to rely on the protection of Section 11 of
the Act.

     4.5 No Public Market. The Investor understands that no public market now exists for the
Purchased Shares, and that the Company has made no assurances that a public market will ever exist
for the Purchased Shares.

5. COVENANTS OF THE GROUP COMPANIES, THE FOUNDERS AND THE INVESTORS

     5.1. Covenants of the Group Companies and the Founders. The Group Companies and the Founders
jointly covenant to the Investors as follows:

          5.1.1. Use of Proceeds from the Sale of Purchased Shares. The proceeds from the sale of the
Purchased Shares hereunder shall be used for business expansion, capital expenditures and general
working capital of the Group Companies.

          5.1.2. Ordinary Course of Business. From the date hereof until the Closing, the Founders
shall cause each of the Group Companies to be conducted in the ordinary course of business and
shall use its commercially reasonable efforts to maintain the present character and quality of the
business, including without limitation, its present operations, physical facilities, working
conditions, goodwill and relationships with lessors, licensors, suppliers, customers, employees and
independent contractors. Notwithstanding any other provisions in this Agreement, with respect to
any Group Company, unless otherwise has been disclosed to the Investor, there has not been any
activity as set forth in Article 3.16 of this Agreement from the date hereof until the Closing.

          5.1.3. Directors of the Subsidiaries. Each of the Subsidiaries shall have the same number of
directors as, and the Investors and the holders of outstanding Common Shares shall be entitled to
appoint the same number of directors to the Subsidiaries as they are entitled to appoint to the
Company.

          5.1.4. Confidentiality Agreement; Employment Agreement. Each Founder shall have entered into
a Confidentiality and Non-Competition Agreement with the Company in the form and substance attached
hereto as Exhibit G-1. Each Key Employee, the name of which is listed on Exhibit H,

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shall have entered into an employment agreement (the “Employment Agreement”) with the WFOE or any
other Group Company, as the case may be, in form and substance in the form and substance attached
hereto as Exhibit G-2. Each employee, other than the Key Employee, shall have entered into an
employment agreement with the WFOE or any other Group Company, as the case may be, in form and
substance satisfactory and acceptable to the Investors.

          5.1.5. Indemnification. Subject to the Section 8.2 herein, each of the Group Companies and
the Founders hereby, jointly and severally, indemnifies and holds harmless the Investors and their
affiliates, partners, officers and directors (the “Indemnified Persons” and each, an “Indemnified
Person”) against any and all losses, liabilities, costs, claims, actions, expenses or demands
arising out of, or resulting from any breach of the representations, warranties and covenants of
the Group Companies and the Founders contained herein (the “Indemnifiable Damages”).

          5.1.6. Equity Compensation; Establishment of ESOP. As soon as practicable after the Closing,
the Company agrees to take whatever actions are necessary to establish an employee stock option
plan (the “ESOP”), at the election of the Board of Directors of the Company, for the issuances of
shares to selected members of the Company’s management team, provided, however, that the terms of
the ESOP shall be consistent with the terms of the Restated Articles and the Shareholders’
Agreement, shall be approved by the Board of Directors of the Company, including the approval of
the director appointed by the Investors.

          5.1.7. Shareholders Agreement. Each Group Company and the Founders shall cause a person, to
whom the Company will issue any securities, or any options, warrants or other rights exercisable or
convertible into any securities issuable by the Company after the date of this Agreement, to
execute and deliver the Shareholders Agreement and to agree to be bound by the terms and conditions
thereof by executing an additional counterpart signature page to the Shareholders Agreement, or
such other document evidencing such person’s agreement to be bound thereby; provided that the
obligations of the Group Companies and the Founders under this Section 5.1.7 shall terminate
immediately upon the termination of the Shareholders Agreement.

          5.1.8. Restructuring. Each of the Group Companies and the Founders shall cause all agreements
or documents set forth in Exhibit I (the “Restructuring”) attached hereto (the “Restructuring
Documents”) to which any of the Group Companies, the Founders and/or any other shareholders of the
Domestic Entities is a party to be executed and delivered by any of the Group Companies, the
Founders and/or any other shareholders of the Domestic Entities, which agreements or documents
shall be in the form and substance satisfactory to the Investors .

          5.1.9. Filing of Articles. Immediately following the Closing, the Restated Articles, together
with the special resolution of the Company on approving its adoption, shall have been duly filed
with the Registrar of Companies in the Cayman Islands.

          5.1.10 Assignment of the Application of the Trademark Registration. As soon as practicable
but no later than three (3) months after the Closing, the assignment agreements related to the
assignment of application of the trademark registration applied by
Zhang Bangxin (), XueErSi
Education and XueErSi Network to the WFOE or HK Holdco, respectively, based on the proposals of the
tax planning counsel of the Company shall be executed and delivered by the relevant parties, to the
satisfaction of the Investors, and filed with the Trademark Office of State Administration of
Industry and Commerce.

          5.1.11 Amendment to Purchase Agreement regarding Wuhan Qianjiang School and Jianli School.
The Founder shall cause the execution of a supplemental agreement to the purchase agreement in
respect of XueErSi Network’s acquisition of Wuhan Qianjiang School and Jianli School, respectively,
to procure an amendment to the payment of purchase from the original share swap to a cash
consideration.

          5.1.12 Registration of Each and All Teaching Centers of the Domestic Entities. As soon as
practical but no later than twelve (12) months after the Closing, 50% of the teaching centers set
up by the Domestic Entities listed on Exhibit P attached hereto shall be duly registered with the

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local government authorities in charge of education in the respective locations pursuant to the
laws of the PRC, and the remaining teaching centers shall be duly registered with the local
government authorities in charge of education in the respective locations pursuant to the laws of
the PRC no later than first confidential filing for IPO of the Company.

          5.1.13. Additional Covenants. Except as required by this Agreement, no resolution of the
directors, owners, members, partners or shareholders of either the Group Companies shall be passed,
nor shall any contract or commitment be entered into, in each case, prior to the Closing without
the prior written consent of the Investor, except that the Group Companies may carry on its
respective business in the same manner as heretofore and may pass resolutions and enter into
contracts for so long as they are effected in the ordinary course of business.

          If at any time before the Closing, the Founders and Group Companies come to know of any fact
or event which:

               (a) is in any way inconsistent with any of the representations and warranties given by the
Founders and Group Companies, and/or

               (b) suggests that any fact warranted may not be as warranted or may be misleading, the
Founders and Group Companies shall give immediate written notice thereof to the Investor in which
event the Investor may within five (5) days of receiving such notice terminate this Agreement by
written notice without any penalty whatsoever and without prejudice to any rights that the Investor
may have under this Agreement or applicable law.

     5.2. Covenants of the Investors. The Investors hereby jointly and severally covenant to the
Group Companies and the Founders that, within seven (7) Business Days of the date hereof the
Investors shall expressly notify to the Founders as to whether the Investors have been satisfied
with the fulfillment of the conditions to Investors’ obligations to purchase the Purchased Shares
provided under Section 6 below.

6. CONDITIONS TO INVESTORS’ OBLIGATIONS AT THE CLOSING

     The obligation of the Investors to purchase the Purchased Shares at the Closing is subject to
the fulfillment, to the satisfaction of the Investors on or prior to the Closing, of the following
conditions:

     6.1. Representations and Warranties Are True and Correct. The representations and warranties
made by the Group Companies and the Founders in Section 3 hereof shall be true and correct and
complete when made, and shall be true and correct and complete as of the Closing Date with the same
force and effect as if they had been made on and as of such date.

     6.2. Performance of Obligations. Each of the Group Companies and the Founders shall have
performed and complied with all agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it on or before the Closing and shall have
obtained all approvals, consents and qualifications necessary to complete the transactions
contemplated hereby.

     6.3. Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated hereby and all documents and instruments incident to such transactions
shall be satisfactory in substance and form to the Investors, and the Investors shall have received
all such counterpart originals or certified or other copies of such documents as it may reasonably
request.

     6.4. Consents and Waivers. Each of the Group Companies and the Founders shall have obtained
any and all consents and/or waivers necessary for the conduct of the Principal Business and the
consummation of the transactions contemplated by this Agreement, including, but not limited to, (i)
all consents, permits, approvals, orders, authorizations or registrations, qualifications,
designations, declarations or filings by or with any governmental authority and any third party in
connection with the conduct of the Principal Business; (ii) all filing, registration and reporting
requirements of SAFE in connection with the respective shareholding in any Group Company of the
Founders and other shareholders of the Domestic Entities, if it so required by the applicable laws,
(iii) all other permits, authorizations,

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approvals, consents or permits of any governmental authority or regulatory body, and (iv) the
waiver by the existing shareholders of the Company of any anti-dilution rights, rights of first
refusal, preemptive rights and all similar rights in connection with the issuance of the Purchased
Shares at the Closing.

     6.5. Compliance Certificate. At the Closing, each of the Founders shall deliver to the
Investors certificates, dated the date of the Closing, certifying that the conditions specified in
Sections 6.1 and 6.2 have been fulfilled and stating, where applicable, that there shall have been
no material adverse change in the business, affairs, prospects, operations, properties, assets or
condition of the Group Companies since the Balance Sheet Date, in the form and substance attached
hereto as Exhibit M.

     6.6. Restructuring. The Restructuring Documents shall have been executed and delivered by the
relevant parties, to the satisfaction of the Investors.

     6.7. Board of Directors. At the Closing, the Board of Directors of the Company, HK Holdco,
WFOE, Domestic Holdco and XueErSi Network shall consist of persons elected or appointed in
accordance with the Restated Articles. The Investors shall have received a copy of the Company’s
register of directors, certified by a director of the Company as true and complete as of the date
of the Closing, updated to show such reconstitution of the Board of the Company in accordance with
the Restated Articles. The Investor shall have received the relevant resolutions of each of other
Group Companies where the Investor has the right to nominate director in the board in accordance
with the Restated Articles on the appointment of at least one (1) director nominated by the
Investor to the Board of such company .

     6.8. Register of Members. The Investors shall have received a copy of the Company’s register
of members, certified by a director of the Company as true and complete as of the date of the
Closing, updated to show the Investors as the holders of their respective number of Purchased
Shares.

     6.9. No Material Adverse Change. There shall have not been any Material Adverse Effect on any
Group Company since the Balance Sheet Date.

     6.10. Opinion of Company’s PRC Counsel. The Purchasers shall have received from PRC legal
counsel of the Company a legal opinion, dated as of the Closing, in a form and substance
substantially in the form attached as Exhibit K to this Agreement

     6.11. Opinion of Offshore Counsel. The Purchasers shall have received an opinion from Conyers
Dill & Pearman, special counsel to the Company, dated as of the Closing, in a form and substance
substantially in the form attached as Exhibit J to this Agreement.

     6.12. Key Employee Employment Agreement. Each Key Employee shall have entered into an
Employment Agreement with the WFOE, which should include standard confidentiality and
non-competition provisions in the form and substance attached hereto as Exhibit G-2.

     6.13. Indemnification Agreement. The Company shall have duly executed and delivered an
indemnification agreement with the director appointed by the Investors substantially in the form
set forth in Exhibit L hereto.

     6.14. Management Rights Letter. The Company shall have executed and delivered to the Investor
the Management Rights Letter in the form attached hereto as Exhibit N.

     6.15. Due Diligence. The Investors shall have completed their legal, financial, and business
due diligence investigation of the Group Companies to its satisfaction.

     6.16 Investment Committee Approval. Investors’ investment committee shall have approved the
execution of this Agreement, Shareholders’ Agreement and the other documents and the transactions
contemplated hereby and thereby.

     6.17 Execution of this Agreement and Shareholders Agreement. The Company shall have delivered
to the Investor this Agreement and the Shareholders Agreement, duly executed by the

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Company and all other parties thereto (except for the Investor).

     6.18 Amendment to Constitutional Documents. The Restated Articles shall have been duly adopted
by the Company by all necessary corporate action of its Board of Directors and its shareholders and
duly filed with the Registrar of Companies in Cayman Islands.

     6.19 Equity Transfer. The equity transfer documents relating to the equity interest of Liu
Yachao () in Haidian School to the XueErSi Network shall have been executed and delivered by
the relevant parties, to the satisfaction of the Investors;

     6.20 Beijing AIC Letter. The Founders shall cause the WFOE to obtain a written document
issued by Beijing Administration for Industry and Commerce () or its authorized branch
which indicates the approved deadline for HK Holdco to make capital contribution to WFOE.

     6.21 Amendment to Purchase Agreement of Wuhan Jianghan School. The Founder shall cause the
execution of a supplemental agreement to the purchase agreement in respect of XueErSi Network’s
acquisition of Wuhan Jianghan School from YANG Jian and ZENG Jiannan to procure an amendment to the
payment of purchase from the original share swap to a cash consideration.

7. CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSING

     The obligations of the Company under this Agreement are subject to the fulfillment at or
before the Closing of the following conditions:

     7.1. Representations and Warranties. The representations and warranties of the Investors
contained in Section 4 hereof shall be true and correct as of the date of the Closing.

     7.2. Payment of the Purchase Price. The Investors shall have delivered to the Company the
Purchase Price in accordance with the provisions of Section 1.2.

     7.3. Restated Articles Effective. The Restated Articles shall have been duly adopted by the
Company by all necessary corporate action of its Board of Directors and shareholders.

     7.4. Execution of Shareholders Agreement. The Investors shall have executed and delivered to
the Company the Shareholders Agreement.

8. MISCELLANEOUS

     8.1. Governing Law. This Agreement shall be governed by and construed in accordance the laws
of Hong Kong Special Administrative Region of PRC as to matters within the scope thereof, without
regard to its principles of conflicts of laws.

     8.2. Survival. The representations, warranties, covenants and agreements made herein shall
survive any investigation made by any party hereto and the Closing of the transactions contemplated
hereby.

     8.3. Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto whose rights or obligations hereunder are
affected by such amendments. This Agreement and the rights and obligations therein may be assigned
by the Investors without the written consent of the Company except to a transferee or assignee who
is a direct or indirect competitor of the Group Company and except that any such transfer will have
material adverse impact on the business of Group Company and except that any such transfer will at
the reasonable discretion of the Company have material adverse impact on the business of Group
Company, and it is further agreed that any such transfer conducted by the Investors causing adverse
material impact on the business of Group Company should be null and voidon and after the date when
such transfer is executed. Any transfer in violation of this Section 8.3 shall constitute breach
of this Agreement. This Agreement and the rights and obligations therein

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may not be assigned by any Group Company or any Founder without the written consent of the
Investors.

     8.4. Entire Agreement. This Agreement, the Restated Articles, the Shareholders Agreement and
any Ancillary Agreements and the schedules and exhibits hereto and thereto, which are hereby
expressly incorporated herein by this reference, constitute the entire understanding and agreement
between the parties with regard to the subjects hereof and thereof; provided, however, that nothing
in this Agreement or related agreements shall be deemed to terminate or supersede the provisions of
any confidentiality and nondisclosure agreements executed by the parties hereto prior to the date
of this Agreement, which agreements shall continue in full force and effect until terminated in
accordance with their respective terms.

     8.5. Notices. Except as may be otherwise provided herein, all notices, requests, waivers and
other communications made pursuant to this Agreement shall be in writing and shall be conclusively
deemed to have been duly given (a) when hand delivered to the other party; (b) when sent by
facsimile at the number set forth in Exhibit O hereto; (c) seven (7) business days after deposit in
the mail as air mail or certified mail, receipt requested, postage prepaid and addressed to the
other party as set forth in Exhibit O; or (d) three (3) business days after deposit with an
overnight delivery service, postage prepaid, addressed to the parties as set forth in Exhibit O
with next business-day delivery guaranteed, provided that the sending party receives a confirmation
of delivery from the delivery service provider.

     Each person making a communication hereunder by facsimile shall promptly confirm by telephone
to the person to whom such communication was addressed each communication made by it by facsimile
pursuant hereto but the absence of such confirmation shall not affect the validity of any such
communication. A party may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 8.5 by giving, the other party written notice of the new
address in the manner set forth above.

     8.6. Amendments and Waivers. Any term of this Agreement may be amended only with the written
consent of all the parties hereto.

     8.7. Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any Group Company, Founder or the Investors, upon any breach or default of any party
hereto under this Agreement, shall impair any such right, power or remedy of such Group Company,
Founder, or Investors nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach of default thereafter occurring; nor shall any
waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any Group Company, Founder, or the
Investors of any breach of default under this Agreement or any waiver on the part of any Group
Company, Founder or the Investors of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, or by law or otherwise afforded to the Group Companies, the
Founders, or the Investors shall be cumulative and not alternative.

     8.8. Finder’s Fees. Each party hereto (a) represents and warrants to each other party hereto
that it has retained no finder or broker in connection with the transactions contemplated by this
Agreement, and (b) hereby agrees to indemnify and to hold harmless such other party hereto from and
against any liability for any commission or compensation in the nature of a finder’s fee of any
broker or other person or firm (and the costs and expenses of defending against such liability or
asserted liability) for which the indemnifying party or any of its employees or representatives are
responsible.

     8.9. Interpretation; Titles and Subtitles. This Agreement shall be construed according to its
fair language. The titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.

     8.10. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.

     8.11. Severability. The invalidity or unenforceability of any provision hereof shall in no

18

 

EXECUTION

way affect the validity or enforceability of any other provision.

     8.12. Confidentiality and Non-Disclosure. The parties hereto agree to be bound by the
confidentiality and non-disclosure provisions of Section 7 of the Shareholders Agreement.

     8.13. Dispute Resolution

          (a) Negotiation Between Parties. The parties agree to negotiate in good faith to resolve any
dispute between them regarding this Agreement. If the negotiations do not resolve the dispute to
the reasonable satisfaction of all parties within thirty (30) days after the commencement of the
negotiation, subsection (b) shall apply.

          (b) Arbitration. In the event the parties are unable to settle a dispute between them
regarding this Agreement in accordance with subsection (a) above, such dispute shall be referred to
and finally settled by arbitration at the Hong Kong International Arbitration Centre in accordance
with the UNCITRAL Arbitration Rules (the “UNCITRAL Rules”) in effect, which rules are deemed to be
incorporated by reference into this subsection (b). The arbitration tribunal shall consist of three
arbitrators to be appointed according to the UNCITRAL Rules. The language of the arbitration shall
be English.

     8.14 Expenses.

          (a) The Company and the Investors shall each bear its own costs and expenses in connection
with the transaction contemplated hereby, except that the Company will reimburse the Investor for
the Investor’s financial and legal due diligence expenses as well as the legal agreement and other
documentation fees, should the transaction contemplated hereunder consummates. Such fee shall be
paid by the Company based on the record of actual expenses made by the Investor concurrently with
the Closing and will be capped at USD100,000. The Investors may effect such reimbursement at the
Closing by withholding from the payment of the Purchase Price the amount to which the Investors are
entitled to reimbursement pursuant to the preceding sentence.

          (b) For the avoidance of doubt, in the event that the investment transaction does not proceed
if (i) the Investors completes its due diligence and decides to invest while the Company for any
reason does not want to proceed with the Investor for the transaction, or (ii) any written
presentation or representation made by the Company to the Investor is untrue, the Company shall
bear all legal costs and expenses incurred by or on behalf of the Investors for its due diligence
work and in the preparation of this Agreement and all other documents for consummating the
transaction contemplated hereunder. Such fee shall be capped at USD 100,000 as stated above.

          (c) Additionally, in the event that the Investor does not identify any untrue written
presentation or representation made by the Company during its due diligence but decides to
re-negotiate the valuation of the investment, the Investors shall bear all actual expenses made by
the Company for its due diligence work and in the preparation of this Agreement and all other
documents for consummating the transaction contemplated hereunder. Such fee shall be capped at USD
100,000.

     8.15. Termination. This Agreement may be terminated at the election of the Investors on or
after March 31, 2009, if the Closing shall not have occurred on or before such date unless such
date is extended by the mutual written consent of the Company and the Investors, provided that: (i)
the Investors are not in material default of any of their obligations hereunder, and (ii) the right
to terminate this Agreement pursuant to this Section 8.15 shall not be available to the Investors
if their breach of any provision of this Agreement has been the cause of, or resulted, directly or
indirectly, in, the failure of the Closing to be consummated by March 31, 2009. Such termination
under this Section 8.15 shall be without prejudice to any claims for damages or other remedies that
the parties may have under this Agreement or applicable law.

— REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK —

19

 

EXECUTION

     IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	THE COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TAL GROUP	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Bangxin Zhang 	 	 
	 	 	 	 	 	 	 
	 	 	Name: ZHANG Bangxin	 	 
	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HK SUBSIDIARY:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TAL GROUP LIMITED	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Bangxin Zhang 	 	 
	 	 	 	 	 	 	 
	 	 	Name: ZHANG Bangxin	 	 
	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	WFOE:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TAL EDUCATION TECHNOLOGY (BEIJING) CO., LTD.

()
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Bangxin Zhang 	 	 
	 	 	 	 	 	 	 
	 	 	Name: ZHANG Bangxin	 	 
	 	 	Title: Legal Representative	 	 

20

 

EXECUTION

     IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	BEIJING XUEERSI EDUCATION TECHNOLOGY CO., LTD.

()
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Yachao Liu  	 	 
	 
	 	 	 	 	 	 
	 
	 	Name: LIU Yachao 	 	 
	 

	 	Title: Legal Representative	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Beijing Xueersi Network Technology Co., Ltd.

()
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Yachao Liu  	 	 
	 	 	 	 	 	 	 
	 	 	Name: LIU Yachao	 	 
	 	 	Title: Legal Representative	 	 

21

 

EXECUTION

     IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	FOUNDERS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Bangxin Zhang	 	 
	 	 	 	 	 
	 	 	ZHANG BANGXIN
()
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Yundong Cao	 	 
	 	 	 	 	 
	 	 	CAO YUNDONG
()
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Yachao Liu	 	 
	 	 	 	 	 
	 	 	LIU YACHAO
()
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Yunfeng Bai	 	 
	 	 	 	 	 
	 	 	BAI YUNFENG
()

22

 

EXECUTION

     IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized
representatives to execute this Agreement as of the date and year first above written.

	 	 	 	 	 
	     Investors:	KTB/UCI China Ventures II Limited	 
	 
	 	By:  	/s/
Authorized Signatory 	 
	Name:  	 	 	 
	Title:  	 	Legal Representative 	 
	 

23exv10w3

Exhibit 10.3

SHARE PURCHASE AGREEMENT

Dated this 12th Day of August 2009

by and among

BRIGHT UNISON LIMITED,

CENTRAL GLORY INVESTMENTS LIMITED,

PERFECT WISDOM INTERNATIONAL LIMITED,

EXCELLENT NEW LIMITED,

TIGER GLOBAL FIVE CHINA HOLDINGS

KTB CHINA OPTIMUM FUND

and

CERTAIN ADDITIONAL PARTIES NAMED HEREIN

 

 

SHARE PURCHASE AGREEMENT

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	1.	 	PURCHASE AND SALE OF COMMON SHARES	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.1	 	Sale of Common Shares; Purchase Price	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.2	 	Closing	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.3	 	Filing with the Registrar of the Companies of Cayman Islands	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	2.	 	CONDITIONS TO THE OBLIGATIONS OF TIGER AT CLOSING	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.1	 	Completion of Due Diligence	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.2	 	Material Adverse Effect	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.3	 	Proceedings and Documents	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.4	 	Authorizations	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.5	 	Representations and Warranties	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.6	 	Restated Articles	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.7	 	Shareholders’ Agreement	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.8	 	Opinion of Offshore Counsel	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.9	 	Opinion of PRC Counsel	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.10	 	Board of Directors	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.11	 	Letters of Commitment and Non-competition	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.12	 	Compliance Certificates	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.13	 	Director Indemnification Agreement	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.14	 	Management Rights Letter	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.15	 	Key Persons’ Proprietary Information and Inventions Assignment Agreements	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.16	 	Investment Committee Approval	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.17	 	Registration of Equity Pledge	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.18	 	WFOE Registered Address Alteration	 	 	6	 

 

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.19	 	Removal of Contents from Website	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.20	 	Assignment of Cooperation Agreement	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.21	 	Execution of Power of Attorney	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	3.	 	CONDITIONS OF THE OBLIGATIONS OF THE COMPANY AT CLOSING	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1	 	Representations and Warranties	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.2	 	Performance	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.3	 	Qualifications	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	4.	 	REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	5.	 	REPRESENTATIONS AND WARRANTIES OF THE PURCHASER	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	6.	 	UNDERTAKINGS	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.1	 	Ordinary Course of Business	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.2	 	Employee Share Incentive Plan	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.3	 	Exclusivity	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.4	 	Notice of Certain Events	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.5	 	Compliance	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.6	 	Option for Follow-on Investments.	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.7	 	Service Agreement	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.9	 	Registration of Teaching Centres	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.10	 	Amendment to Employment Contract and Teaching Agreement	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.11	 	Foreigner Employment Permit	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.12	 	Foreign Exchange Compliance	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.13	 	Trademark Assignment to the WFOE or HK Company	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.14	 	Social Insurance and Housing Fund Compliance	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.15	 	Restructuring	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.16	 	Insurance	 	 	12	 

 

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.17	 	Consent of Sellers	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.18	 	Audit of the Group Entities	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.19	 	Amendment to Articles of Association	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.20	 	R&D Employees Proprietary Information and Inventions Assignment Agreements	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.21	 	Adjustment for Dilutive Issuances	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.22	 	Tax Covenants	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.23	 	Option for KTB’s Investment	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	7.	 	CURE OF BREACHES; INDEMNITY	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	8.	 	MISCELLANEOUS	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.1	 	Survival of Warranties	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.2	 	Confidentiality	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.3	 	Transfer; Successors and Assigns	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.4	 	Governing Law	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.5	 	Counterparts; Facsimile	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.6	 	Titles and Subtitles	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.7	 	Notices	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.8	 	No Finder’s Fees	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.9	 	Fees and Expenses	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.10	 	Attorney’s Fees	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.11	 	Amendments and Waivers	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.12	 	Severability	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.13	 	Delays or Omissions	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.14	 	Entire Agreement	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.15	 	Dispute Resolution	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.16	 	No Commitment for Additional Financing	 	 	21	 

 

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.17	 	Rights Cumulative	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.18	 	No Waiver	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.19	 	No Presumption	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.20	 	Third Party Beneficiaries	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.21	 	Termination of Agreement	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.22	 	Cross-Guarantees	 	 	23	 

Schedules

	 	 	 
	Schedule 1A

	 	Schedule of the Sellers
	Schedule 1B

	 	Schedule of the Purchaser
	Schedule 1C

	 	Schedule of Founders
	Schedule 2A

	 	Schedule of Schools, Subsidiary Companies and Company Branches
	Schedule 2B

	 	Consent of Spouse
	Schedule 3

	 	Definitions
	Schedule 4

	 	Representations and Warranties of the Warrantors
	Schedule 6

	 	Representations and Warranties of the Purchaser
	Schedule 7

	 	Capitalization Table
	Schedule 8

	 	Notices

 

SHARE PURCHASE AGREEMENT

     This SHARE PURCHASE AGREEMENT (the “Agreement”) is made on August 12, 2009, by and among the
Persons listed on Schedule 1A attached to this Agreement (each a “Seller” and together the
“Sellers”), the individualsas listed on Schedule 1C attached to this Agreement (each a
“Founder” and together the “Founders”), Xueersi International Education Group, a company organized
under the laws of the Cayman Islands (the “Company”); TAL Group Limited (the “HK Company”), a
company organized under the laws of Hong Kong; TAL Education Technology (Beijing) Co., Ltd.
() (the “WFOE”), a wholly foreign-owned enterprise organized under
the laws of the PRC; Beijing Xueersi Education Technology Co., Ltd. ()
(“Xueersi Education”), a company organized under the laws of the PRC; Beijing Xueersi Network
Technology Co., Ltd. (), a company organized under the laws of the PRC
(“Xueersi Technology”, together with Xueersi Education, the “Domestic Companies”) and the Persons
listed on Schedule 1B attached to this Agreement (collectively but not individually, the
“Purchaser”).

Each of the Sellers, the Company, the HK Company, the WFOE, each of the Domestic Companies and the
Purchaser shall be referred to individually as a “Party” and collectively as the “Parties”.

For the purpose of his Agreement, Capitalized terms used herein, if not defined in the main text,
shall have the meaning set forth in Schedule 3 attached hereto.

RECITALS

     WHEREAS, Tiger desires to purchase from the Sellers an aggregate of 21,875,000 Common Shares
of the Company (the Common Shares to be sold and transferred to the Purchaser pursuant to this
Agreement shall be referred herein as the “Shares”) and the Sellers desire to collective sell such
Shares to Tiger pursuant to the terms and subject to the conditions of this Agreement;

     WHEREAS, as of the date hereof, the Company own beneficially and of record 100% of the shares
in the HK Company;

     WHEREAS, as of the date hereof, the HK Company own beneficially and of record 100% of the
equity in the WFOE;

     WHEREAS, as of the date hereof, the Founders own beneficially and of record 100% of the equity
interests respectively in the Domestic Companies; and

     WHEREAS, as of the date hereof, the Domestic Companies own beneficially and of record,
directly or indirectly, 100% of capital contribution of certain schools (the “Schools”) listed on
Schedule 2A and 100% of equity of the subsidiary companies listed on Schedule 2A
(the “Subsidiary Companies”), and wholly owned branches listed on Schedule 2A (the
“Company Branches).

     WHEREAS, each of the Schools operates certain teaching centres to engage in the education and
training activities in the PRC (“Teaching Centres”, together with the Schools, the

2

 

Subsidiary
Companies and the Company Branches, the Company, the HK Company, the WFOE, the Domestic Companies,
each a “Group Entity”, and collectively, the “Group Entities”).

     NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

			
	1.	 	PURCHASE AND SALE OF COMMON SHARES.

	1.1	 	Sale of Common Shares; Purchase Price.

Subject to the terms and conditions of this Agreement, Tiger hereby agrees to purchase at the
Closing (as defined below) from each Seller and each Seller hereby agrees to sell and transfer to
Tiger that number of Shares set forth opposite such Seller’s name on Schedule 1A, at a
purchase price of US$1.60 per Share (the “Purchase Price”).

	1.2	 	Closing.

	 	(a)	 	Closing. The purchase and sale of the Shares shall take place
remotely via the exchange of documents and signatures, on a date specified by the
Parties, or at such other time and place as the Sellers and Tiger mutually agree upon,
which date shall be no later than five (5) Business Days after the satisfaction or
waiver of each condition to the Closing by Tiger set forth in Section 2 and
Section 3 (other than conditions that by their nature are to be satisfied at
the Closing, but subject to the satisfaction or waiver of such conditions) (which time
and place are designated as the “Closing”).

	 	(1)	 	At the Closing, the Sellers shall cause the Company’s share
register to be updated to reflect the Shares purchased by Tiger, and the
Sellers shall deliver, or cause the Company to deliver a copy of such updated
share register to Tiger, certified as a true and correct copy by the Company’s
registered agent in the Cayman Islands.
	 
	 	(2)	 	At or prior to the Closing, each Seller shall deliver the
original share certificates(s) representing the Common Shares held by such
Seller (such share certificates to be cancelled and reissued to reflect the
sale of Shares) together with executed copies of such transfer documents as
may be required by the Company’s registered agent in the Cayman Islands to
effectively transfer title to the Shares to Tiger.
	 
	 	(3)	 	At the Closing, Tiger shall wire transfer immediately
available U.S. dollar funds representing that portion of the aggregate
Purchase Price to which each Seller is entitled as set forth opposite such
Seller’s name on Schedule 1A (less the pro rata portion of Tiger’s
fees and expenses pursuant to Section 8.9 hereof) to an
account designated by each such Seller; provided that each such Seller
delivers wire transfer instructions to Tiger at least three (3) business
days prior to the Closing.
	 
	 	(4)	 	At the Closing, the Company shall deliver to Tiger an updated
copy of the Company’s register of directors, reflecting the addition of CHEN
Xiaohong 

3

 

	 	 	 	designated by Tiger to the Company’s board of directors, certified as
a true and correct copy by the Company’s registered agent in the Cayman
Islands.

	 	(b)	 	Within five (5) Business Days after the Closing, the Seller shall cause the
Company’s secretary to deliver to Tiger one or more certificates representing the
Shares.

	1.3	 	Filing with the Registrar of the Companies of Cayman Islands.
	 
	 	 	Within three (3) days after the Closing and upon the receipt of the respective Purchase
Price by each and all the Sellers, the Sellers shall, serverally and jointly, cause the
Company to file the Restated Articles, change to the updated Register of Directors, the
resolutions of the members adopting the Restated Articles with the Registrar of the
Companies of Cayman Islands.

			
	2.	 	CONDITIONS TO THE OBLIGATIONS OF TIGER AT CLOSING.

	 	 	The obligations of Tiger to purchase the Shares at the Closing are subject to the
fulfillment, on or before the Closing, of each of the following conditions, unless
otherwise waived in writing by Tiger:

	2.1	 	Completion of Due Diligence. 
	 
	 	 	Tiger shall have satisfactorily completed its business, legal and financial due diligence
review.

	2.2	 	Material Adverse Effect.
	 
	 	 	Since the date of this Agreement, no event, circumstance or change shall have occurred
that, individually or in the aggregate with one or more other events, circumstances or
changes, have had or reasonably could be expected to have a Material Adverse Effect on the
Company or any other Group Entity.

	2.3	 	Proceedings and Documents.
	 
	 	 	All corporate and other proceedings in connection with the transactions contemplated at the
Closing and all documents incidental thereto shall be reasonably satisfactory in form and
substance to Tiger, and Tiger (or their legal counsel) shall have received all such
counterpart original and certified or other copies of such documents as reasonably
requested. Such documents may include good standing certificates or analogous certificates
in other jurisdictions. Each
Seller and the Company shall have each performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are required to be
performed or complied with by such parties on or before the Closing.

	2.4	 	Authorizations.
	 
	 	 	Each Seller shall have obtained any and all authorizations, approvals, waivers or permits
of 

4

 

	 	 	any Person or any Governmental Authority necessary for the consummation of all of the
transactions contemplated by this Agreement and other Transaction Documents, including
without limitation, the consent of such Seller’s spouse (if applicable) in the form
attached hereto as Schedule 2B and any other authorizations, approvals, waivers or
permits that are required in connection with the lawful sale or transfer of the Shares.
Each Seller shall have fully satisfied (including with respect to rights of timely
notification) or obtained enforceable waivers in respect of any preemptive or similar
rights directly or indirectly affecting any of its shares or securities (including the
waiver of holders of Series A Preferred Shares of its preemptive rights in their entirety),
as applicable.

	2.5	 	Representations and Warranties.
	 
	 	 	The representations and warranties of the Warrantors contained in Schedule 4 shall
be true, complete and correct in all respects as of the Closing, except for (i) those
representations and warranties that address matters only as of a particular date, which
representations will have been true and correct in all respects as of such particular date;
and (ii) those disclosures as set out in the Disclosure Schedule.
	 
	2.6	 	Restated Articles.
	 
	 	 	The memorandum and articles of association of the Company shall have been amended as set
forth in the form attached hereto as Exhibit A (the “Restated Articles”). Such
Restated Articles shall have been duly adopted by all necessary actions of the Board of
Directors and/or the members of the Company.
	 
	2.7	 	Shareholders’ Agreement.
	 
	 	 	Each Seller, the Company, the Purchaser, the HK Company, the Domestic Companies, the WFOE
and the holder of Series A Preferred Shares shall have executed and delivered the
Shareholders’ Agreement in the form attached hereto as Exhibit B-1.
	 
	2.8	 	Opinion of Offshore Counsel.
	 
	 	 	The Company and the Sellers shall have delivered to Tiger from Conyers Dill & Pearman, the
Cayman Islands legal counsel to the Company, a legal opinion, dated as of the Closing, in a
form and substance substantially in the form attached as Exhibit C to this
Agreement.
	 
	2.9	 	Opinion of PRC Counsel.
	 
	 	 	Tiger shall have received from PRC legal counsel of the Company a legal opinion, dated as
of the Closing, in a form and substance substantially in the form attached as Exhibit
D to this Agreement.
	 
	2.10	 	Board of Directors.
	 
	 	 	As of the Closing, the authorized size of the Board of Directors of the Company shall be up
to five(5) and the Board of Directors shall be comprised of the following members: ZHANG
Bangxin, YEH Aieming Amy, CHEN Xiaohong, and the vacancies to be filled by 

5

 

	 	 	directors
jointly appointed by the Shareholders.

	2.11	 	Letters of Commitment and Non-competition.
	 
	 	 	Each Seller shall have entered into a Letter of Commitment and Non-Compete in the form and
substance attached hereto as Exhibit E-1.
	 
	2.12	 	Compliance Certificates.
	 
	 	 	Tiger shall have received (a) a certificate executed and delivered by the chief executive
officer of the Company in the form attached hereto as Exhibit F-1, and (b) a
certificate executed and delivered by each Seller in the form attached as Exhibit
F-2.
	 
	2.13	 	Director Indemnification Agreement.
	 
	 	 	The Company shall have executed and delivered the Director Indemnification Agreement with
respect to the Tiger nominated directors in the form and substance attached hereto as
Exhibit G.
	 
	2.14	 	Management Rights Letter.
	 
	 	 	The Company shall have executed and delivered to Tiger a Management Rights Letter in the
form attached hereto as Exhibit H.
	 
	2.15	 	Key Persons’ Proprietary Information and Inventions Assignment Agreements.
	 
	 	 	Each of the Key Persons of the Group Entities, the name of which are listed on Exhibit
E-3 attached hereto, shall have entered into a confidentiality and proprietary
information agreement with the WFOE in the form and substance attached hereto as
Exhibit E-2, as an integral part of his/her employment agreement with the WFOE,
that shall include provisions relating to the assignment of inventions, duty of
non-solicitation and non-competition during and after termination of employment agreement.
	 
	2.16	 	Investment Committee Approval.
	 
	 	 	Tiger’s investment committee shall have approved the execution of this Agreement and the
other Transaction Documents and the transactions contemplated hereby and thereby.
	 
	2.17	 	Registration of Equity Pledge.
	 
	 	 	The Company shall have registered the equity pledge agreement (included as part of the
variable interest “control documents”) with the competent administration for industry and
commerce pursuant to the Measures on Equity Pledge Registration effective as of October 1,
2008 and shall have provided the registration approval for the examination of Tiger.
	 
	2.18	 	WFOE Registered Address Alteration.
	 
	 	 	The WFOE’s registered address alteration from the 2nd Floor, No.1 Suzhou Street, Haidian
District, Beijing to Room 1702-1703, Lantian Hesheng Plaza, No. 32, 

6

 

	 	 	Zhongguancun St.,
Haidian District, Beijing () shall have been
duly registered with Beijing Administration for Industry and Commerce, and as a result of
such alteration, there is not any education or training activities being conducted on the
leased premise of the WFOE.

	2.19	 	Removal of Contents from Website.
	 
	 	 	All textbooks and audio materials displayed on the Company’s website (www.eduu.com) that is
known to infringe upon the intellectual properties of a third party shall be removed from
the website in its entirety, it being understood that known offending content posted by
third party users on the Company’s bulletin board system (BBS) after that day which is
three days prior to the Closing may not have been removed at Closing but shall be timely
addressed by the Company following the Closing through regular monitoring.
	 
	2.20	 	Assignment of Cooperation Agreement.
	 
	 	 	The rights and obligations of Haidian School under the Cooperation Agreement entered into
by and between Haidian School and Audio-Video Publishing House of Beijing Normal University
of Education in connection with the publishing of certain textbooks on May 12, 2008 shall
have been assigned to Xueersi Network or terminated in accordance with an agreement duly
signed by relevant parties.
	 
	2.21	 	Execution of Power of Attorney.
	 
	 	 	The shareholders of the Domestic Companies shall have entered into a power of attorney with
the WFOE in a form and substance acceptable to Tiger, pursuant to which, the shareholders
of the Domestic Companies shall have authorized the WFOE to exercise their rights as
shareholders of the Domestic Companies.

			
	3.	 	CONDITIONS OF THE OBLIGATIONS OF THE COMPANY AT CLOSING.

	 	 	The obligations of each Seller to sell the Shares to Tiger at the Closing are subject to
the fulfillment by Tiger, on or before the Closing, of each of the following conditions,
unless otherwise waived by writing:

	3.1	 	Representations and Warranties.
	 
	 	 	The representations and warranties of the Purchaser contained in Schedule 6 shall
be true, complete and correct in all material respects as of the Closing.
	 
	3.2	 	Performance.
	 
	 	 	The Purchaser shall have performed and complied with all covenants, agreements, obligations
and conditions contained in this Agreement that are required to be performed or complied
with by it on or before the Closing.
	 
	3.3	 	Qualifications.

7

 

	 	 	All authorizations, approvals or permits, if any, of any Governmental Authority that are
required in connection with the lawful sale of the Shares pursuant to this Agreement shall
be obtained and effective as of the Closing.

			
	4.	 	REPRESENTATIONS AND WARRANTIES OF THE WARRANTORS.

	 	 	The Warrantors hereby, jointly and severally, represent and warrant to the Purchaser that
the statements contained in Schedule 4 attached hereto are true, correct and
complete with respect to (i) each Warrantor, on and as of the Execution Date, and (ii) each
Warrantor, on and as of the date of the Closing (with the same effect as if made on and as
of the date of the Closing), except as set forth on the Disclosure Schedule attached hereto
as Schedule 5 (the “Disclosure Schedule”), which exceptions shall be deemed to be
representations and warranties as if made hereunder.

			
	5.	 	REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

	 	 	The Purchaser represents and warrants to the Sellers that the statements contained in
Schedule 6 attached hereto are true, correct and complete with respect to the
Purchaser as of the Closing.

			
	6.	 	UNDERTAKINGS.

	6.1	 	Ordinary Course of Business.
	 
	 	 	From the Execution Date until the earlier of the Termination Date or the Closing, the
Founders, the Sellers and the Company, jointly and severally, shall cause each Group Entity
to be conducted in the ordinary course of business and shall use its
commercially reasonable efforts to maintain the present character and quality of the
business, including without limitation, its present operations, physical facilities,
working conditions, goodwill and relationships with lessors, licensors, suppliers,
customers, employees and independent contractors. Commencing with the execution and
delivery of this Agreement and continuing until the earlier of the Termination Date or the
Closing, no Group Entity may take any of the actions specified in Section 5.2 of
the Shareholders Agreement without written consent of Tiger.

	6.2	 	Employee Share Incentive Plan.

	 	(a)	 	In the event that the Company adopts a share option or an employee share
incentive plan to selected officers, directors, employees and consultants of the
Company (a “Share Plan”) at any time after Closing, such Share Plan shall be subject
to the following conditions: (i) option grants shall be at a minimum exercise price
per share of no less than the Purchase Price (as appropriately adjusted for stock
dividends, stock splits, reverse stock splits and the like), (ii) Zhang Bangxin and
Cao Yundong shall not be entitled to receive any option grants, restricted stock
grants or other equity incentives from the Company under a Share Plan or otherwise,
and (iii) without the written consent of Tiger, the total number of options reserved
or issued under the Share Plan shall not be more than 8% of the then effective
capitalization of the Company. Notwithstanding the foregoing, the 

8

 

	 	 	 	Company may grant 2%
of the total options reserved under the Share Plan at an exercise price per share that
is less than the Purchase Price.
	 
	 	(b)	 	The Company and the Sellers shall use, and shall cause the WFOE and the
Domestic Company to use, their best efforts to obtain (or cause the Subsidiaries to
obtain) all authorizations, consents, orders and approvals of all Governmental
Authorities and officials that may be or become necessary to adopt the Share Plan in
compliance with the Laws of the PRC, and will cooperate fully with the Purchaser in
promptly seeking to obtain all such authorizations, consents, orders and approvals.

	6.3	 	Exclusivity.
	 
	 	 	From the Execution Date until the earlier of the Termination Date or the Closing, each
Warrantor agrees not to (i) discuss the sale of any equity securities or any other
instruments convertible into the equity securities of any Group Entity with any third
party, or (ii) to provide any information with respect to any Group Entity to a third party
in connection with a potential investment by such third party in any equity securities or
any other instruments convertible into the equity securities of such Group Entity, or (iii)
to close any financing transaction of any equity securities or any other instruments
convertible into the equity securities of any Group Entity with any third party (the
“Exclusivity Period”).
	 
	6.4	 	Notice of Certain Events.
	 
	 	 	If, at any time before the Closing, any Warrantor becomes aware of any material fact or
event which: (i) is in any way inconsistent with any of the representations and warranties
in this Agreement; (ii) suggests that any fact warranted hereunder may not be as warranted
or may be misleading; or (iii) might affect the willingness of a prudent investor to
purchase the Shares on the terms contained in the Transaction Documents or the amount of
the consideration a prudent investor would be prepared to pay for the Shares; then the
Warrantors shall immediately notify the Purchaser in writing, describing the fact or event
in reasonable detail.
	 
	6.5	 	Compliance.
	 
	 	 	The Company and each Group Entity, and each of the Sellers shall take necessary steps to
ensure that the Company and each Group Entity, shall comply with all applicable laws and
regulations, including without limitation compliance with all contributions required to be
made under the PRC social insurance and housing schemes.
	 
	6.6	 	Option for Follow-on Investments.

	 	(a)	 	The Company and each of the Sellers, jointly and severally, grant an option to
Tiger to acquire such additional securities of the Company, prior to the Company’s IPO
to enable Tiger to increase its equity in the Company to 25% (on fully-diluted basis)
at a fair market value (which shall not in any event fall below the par value of the
shares of the Company where the Company is issuing new shares of the Company) to be
determined by the Company or selling party(ies), as the case may be.

9

 

	 	(b)	 	Notwithstanding the above, in the event that the foregoing option is exercised
by way of share transfer by any Seller to Tiger (“Transfer of Secondary Shares”), each
of Tiger and KTB (or KTB/UCI China Ventures II Limited substituting KTB) may purchase
its respective pro rata portion of the shares offered by any such Seller by following
the procedures provided in Section 11.1(b)(i) through (iv) of the
Shareholders’ Agreement.
	 
	 	 	 	To avoid doubt, set forth below are the formula for calculating the number of shares each of Tiger and KTB:

	 	(i)	 	Number of shares that KTB is entitled to purchase = [X /
(X+Y)] × selling shares offered by any of the Sellers
	 
	 	(ii)	 	Number of shares that Tiger is entitled to purchase = [Y /
(X+Y)] × selling shares offered by any of the Sellers

	 	 	 	X = number of shares then held by KTB and KTB/UCI China Ventures II Limited in the
Company
	 
	 	 	 	Y = number of shares then held by Tiger in the Company
	 
	 	 	 	Further, the Parties understand that in the event of the Transfer of Secondary
Shares, each of the Seller/Sellers, who do not elect or is/are not required to sell
shares to Tiger, shall waive, pursuant to Section 11.1 (b) of the Shareholders’
Agreement,their respective rights of first refusal that they would otherwise have
under Section 11 of the Shareholders’ Agreement and Section 9 of
Schedule A of the Restated Articles.

	6.7	 	Service Agreement.
	 
	 	 	As soon as practicable and in any event prior to the IPO, (i) the Sellers and the Company
shall, jointly and severally, cause Xueersi Education and the Schools within the Group
Entity to enter into the service agreements, pursuant to which, the Company Branches under
Xueersi Education will provide administrative services including without limitation to
student enrolment and tuition collection services to the Training Centres opened by the
School; (ii) the Seller and the Company shall jointly and severally cause each of the
Schools (other than Haidian School) within the Group Entities to enter into a set of
service agreements with the WFOE including technical support and technical service
agreement, education material research and development agreement, education software
license agreement, and etc.
	 
	6.8	 	Filing for Incorporation of Tianjin Subsidiary.
	 
	 	 	As soon as practicable following the Closing, the Company shall file the documents
required for the incorporation of subsidiary in Tianjin by Xueersi Education to Tianjin
Administration for Industry and Commerce and shall have provided the relevant filing
documents to Tiger.

10

 

	6.9	 	Registration of Teaching Centres.
	 
	 	 	As soon as practicable following the Closing and in any event prior to the IPO of the
Company, the Sellers and the Company shall use its best efforts to have substantial all of
the Teaching Centres operated by the Schools registered with the competent district
education commission.
	 
	6.10	 	Amendment to Employment Contract and Teaching Agreement.
	 
	 	 	As soon as practicable following the Closing, the Domestic Companies shall use commercially
reasonable effort to amend, and shall cause the Schools to amend the labor contracts
entered into by and between the relevant Group Entities and all the employees in the Group
Entities to make them not in violation of the PRC Labor Contract Law.
	 
	6.11	 	Foreigner Employment Permit.
	 
	 	 	As soon as practicable following the Closing, the Sellers and the Company shall use its
best efforts to apply for Foreigner Employment Certificate () from Shanghai
Human Resource and Social Security Protection
Bureau () for the employees of foreign nationality of the Group
Entities.
	 
	6.12	 	Foreign Exchange Compliance.
	 
	 	 	Each Seller of the Company shall update its registration with the Beijing Branch of the
State Foreign Exchange Administration in accordance with the requirements of Notice
Regarding Certain Administrative Measures on Financing and Inbound Investments by PRC
Residents Through Offshore Special Purpose Vehicles and any successor rules or regulations
under Laws of the PRC within thirty (30) Business Days following the Closing.
	 
	6.13	 	Trademark Assignment to the WFOE or HK Company.
	 
	 	 	Within two (2) years following the Closing, the Domestic Companies and the Sellers (as the
case may be) have entered into a trademark assignment agreement with the WFOE or the HK
Company, pursuant to which certain trademarks shall be assigned to the WFOE or the HK
Company other than those trademarks that are necessary for the operation of value added
telecommunication business via the website of the Company using the domain name “eduu.com”.
The foregoing trademark assignment shall be conducted based on the opinion of the tax
advisor acceptable to Tiger.
	 
	6.14	 	Social Insurance and Housing Fund Compliance.
	 
	 	 	Prior to the IPO of the Company, the Domestic Companies shall duly pay, and shall cause
the Schools to duly pay, for the social insurance and housing fund in full compliance with
the Laws of the PRC.
	 
	6.15	 	Restructuring.

	 	(a)	 	Xueersi Education shall set up a subsidiary in Tianjin, which shall be the
capital 

11

 

	 	 	 	contributor of the schools to be established in Tianjin. Following the
completion of the foregoing restructuring, (i) the schools in Tianjin shall continue
the education and training activities originally conducted by Xueersi Education
Tianjin Branch, and (ii) Xueersi Education Tianjin Branch shall cease to conduct any
education and training activities and shall be converted into a service branch
supporting the administration of schools in Tianjin.
	 
	 	(b)	 	For the purpose of avoiding any potential negative tax consequences that the
current structure may impose on Tiger, the Sellers and the Company agree to undertake
any restructuring of the Group Entities reasonably requested by Tiger.

	6.16	 	Insurance.
	 
	 	 	Within six (6) months following the Closing, the Company shall have purchased from
financially sound and reputable insurers (i) director’s and officer’s liability insurance,
and (ii) property and casualty insurance, in each case upon terms acceptable to Tiger, and
will use best efforts to cause such insurance policies to be maintained until such time as
Tiger determines that such insurance should be discontinued.
	 
	6.17	 	Consent of Sellers.
	 
	 	 	The Parties understand that Xueersi Network entered into two share purchase agreements both
dated June 19, 2008 in connection with its acquisition of Hubei Qianjiang School and Wuhan
Jianghan School, respectively, from the relevant original sponsors of the two schools (the
“School Purchase Agreements”). In the event that the original sponsors require Xueersi
Network to settle the unpaid consideration, when it is due, in the form of equity interest
in the Company when listed pursuant to the School Purchase Agreements, the Sellers agree
jointly and severally that they shall take such actions, or cause such actions to be taken
as necessary to (i) assume and discharge in full Xueersi Network’s obligations under the
School Purchase Agreement with respect to the settlement of the unpaid consideration
thereunder; and (ii) avoid Tiger’s equity interests in the Company being in any way diluted
by such settlement.
	 
	6.18	 	Audit of the Group Entities.
	 
	 	 	The Sellers and the Company shall jointly and severally cause the Group Entities be audited
by one of the Big 4 accounting firms (i.e., PricewaterhouseCoopers, KPMG, Deloitte & Touche
or Ernst & Young) at a certain time following the Closing that is acceptable to Tiger.
	 
	6.19	 	Amendment to Articles of Association.
	 
	 	 	As soon as practicable and in any event prior to the IPO of the Company, the Articles of
Association of Wuhan Jianghan School and Hubei Jianli School shall have been amended to include
provisions setting forth a reasonable return on investment to the capital contributors in
accordance with the PRC Non-state Education Promotional Law () and its
implementing rules.

12

 

	6.20	 	R&D Employees Proprietary Information and Inventions Assignment Agreements.
	 
	 	 	Within three (3) months following the Closing, each of employees engaged in research and
development of software and teaching materials for the Group Entities shall have entered
into a confidentiality and proprietary information agreement with his/her respective
employer within the Group Entities, in the form and substance attached hereto as Exhibit
E-2, as an integral part of his/her employment agreement with such employer, that shall
include provisions relating to the assignment of inventions, duty of non-solicitation and
non-competition after termination of employment agreement.
	 
	6.21	 	Adjustment for Dilutive Issuances.
	 
	 	 	If, after the Closing, the Company issues additional equity securities for a per share
consideration (the “Future Issuance Price”) less than the Purchase Price (as appropriately
adjusted for stock splits, stock dividends and the like), then in such event, immediately
prior to such issuance, each of the Sellers shall transfer such additional shares (on a
post-split or post-stock dividend basis, if applicable) to Tiger in accordance with the
following formula hereunder:
	 
	 	 	Additional Shares = (X/Future Issuance Price) – (X/Purchase Price)

X = amount of consideration received by such Seller for selling Shares to Tiger.
	 
	6.22	 	Tax Covenants.

	 	(a)	 	In the event that the Company is determined by counsel or accountants for the
Purchaser to be a CFC with respect to the shares held by the Purchaser, the Company
agrees (a) to use commercially reasonable efforts to avoid generating Subpart F Income
(as defined in Section 952 of the Code) (“Subpart F Income”) and (b) to the
extent permitted by law, to annually make dividend distributions to the Purchaser in an
amount equal to 50% of any income deemed distributed to the Purchaser that would have
been deemed distributed to the Purchaser pursuant to Section 951(a) of the Code had the
Purchaser been a “United States person” as such term is defined in Section 7701(a)(30)
of the Code (or such lesser amount determined by the Purchaser in its sole discretion).
No later than 45 days following the end of each Company taxable year, the Company
shall provide the following information to the Purchaser: (i) the Company’s
capitalization table as of the end of the last day of such taxable year and (ii) a
report regarding the Company’s status as a CFC. In addition, the Company shall provide
the Purchaser with access to such other Company information as may be required by the
Purchaser to determine the Company’s status as a CFC and to determine whether the
Purchaser or any of the Purchaser’s Partners is required to report its pro rata portion
of the Company’s Subpart F Income on its United States federal income tax return, or to
allow the Purchaser or such Purchaser’s Partners to otherwise comply with applicable
United States federal income tax laws. For purposes of this Section 6.21, (i)
the term “Purchaser’s Partners” shall mean each of the Purchaser’s shareholders,
partners, members or other equity holders and any direct or indirect equity owners of
such entities and (ii) the “Company” shall mean the Company and any of its
subsidiaries.

13

 

	 	(b)	 	The Company shall engage a Big 4 accounting firm (i.e., PricewaterhouseCoopers,
KPMG, Deloitte & Touche or Ernst & Young) to determine the Company’s status as a PFIC
on an annual basis and shall report such status to the Purchaser on or prior to
February 15 of each calendar year and further provide a copy of the written
certification from its accounting firm regarding such status. In addition, to ensure
that the Purchaser’s Partners have sufficient information to make a “Qualified Electing
Fund” election or file a “Protective Statement” pursuant to Treasury Regulation Section
1.1295-3, as amended (or any successor thereto), the Company shall provide annual
financial information to the Purchaser in the form provided in the attached PFIC
Exhibit in Exhibit I (or in such other form as may be required to reflect
changes in applicable law) as soon as reasonably practicable following the end of each
taxable year of the Company (but in no event later than 45 days following the end of
each such taxable year), and shall provide the Purchaser with access to such other
Company information as may be required for purposes of filing U.S. federal income tax
returns in connection with such Qualified Electing Fund election or Protective
Statement. In the event that an Purchaser’s Partner has made a “Qualified Electing
Fund” election must include in its gross income for a particular taxable year its pro
rata share of the Company’s earnings and profits pursuant to Section 1293 of the Code,
the Company agrees to make a dividend distribution to the Purchaser (no later than 45
days following the end of the Company’s taxable year or, if later, 45 days after the
Company is informed by the Purchaser that the Purchaser’s Partner has been required to
recognize such an income inclusion) in an amount equal to 50% of the amount that would
be included by the Purchaser if the Purchaser were a “United States person” as such
term is defined in Section 7701(a)(30) of the Code and had the Purchaser made a valid
and timely “Qualified Electing Fund” election which was applicable to such taxable
year.
	 
	 	(c)	 	The Company shall take such actions, including making an election to be treated
as a corporation or refraining from making an election to be treated as a partnership,
as may be required to ensure that at all times the Company is treated as corporation
for United States federal income tax purposes.
	 
	 	(d)	 	The Company shall make due inquiry with its tax advisors (and shall cooperate
with the Purchaser’s tax advisor’s with respect to such inquiry) on at least an annual
basis regarding whether the Purchaser’s or any Purchaser’s Partner’s direct or indirect
interest in the Company is subject to the reporting requirements of either or both of
Sections 6038 and 6038B of the Code (and the Company shall duly inform the Purchaser of
the results of such determination), and in the event that the Purchaser’s or any
Purchaser’s Partner’s direct or indirect interest in Company is determined by the
Company’s tax advisors or the Purchaser’s tax advisors to be subject to the reporting
requirements of either or both of Sections 6038 and 6038B, the Company agrees, upon a
request from the Purchaser, to provide such information as may be necessary to fulfill
the Purchaser’s or the Purchaser’s Partner’s obligations thereunder.
	 
	 	(e)	 	The Parties acknowledge that neither the Group Entities nor the Purchaser be

14

 

	 	 	 	responsible in any way for any taxes or any withholdings related to the transactions
contemplated in this agreement.

	6.23	 	Option for KTB’s Investment.
	 
	 	 	Each of the Sellers, jointly and severally, grants an option to KTB to acquire such number
of Shares set forth opposite such Seller’s name on Schedule 1A and in the column of “Number
of Common Shares to be Sold to KTB”, on a date no later than September 4, 2009, at the
Purchase Price for an aggregate purchase price of no more than US$5,000,000. The obligations
of KTB to exercise such option are subject to the fulfilment, of each of the following
conditions, unless otherwise waived in writing by KTB:

	 	(a)	 	Opinion of Offshore Counsel.
	 
	 	The Company and the Sellers shall have delivered to KTB from Conyers Dill & Pearman, the
Cayman Islands legal counsel to the Company, a legal opinion, dated as of the Closing by
Tiger, in a form and substance substantially in the form attached as Exhibit C to
this Agreement.
	 
	 	(b)	 	Opinion of PRC Counsel.
	 
	 	KTB shall have received from PRC legal counsel of the Company a legal opinion, dated as of
the Closing by Tiger, in a form and substance substantially in the form attached as
Exhibit D to this Agreement.
	 
	 	(c)	 	Delivery to KTB of all the documents as set forth in Section 1.2(a)(1) and 1.2(a)(2)
hereof as applicable mutatis mutandis to KTB.
	 
	 	The Existing Shareholders (as defined in the Assumption Agreement) of the Company hereby
authorize, either by way of signing this Agreement or pursuant to Section 16.11 of
the Shareholders’ Agreement, the Company, on behalf of itself and as agent for the Existing
Shareholders of the Company, to enter into the Assumption Agreement with KTB in the form
attached as Exhibit B-2 of this Agreement, when KTB exercises its option of
investment provided hereunder.

			
	7.	 	CURE OF BREACHES; INDEMNITY.

	7.1	 	In the event of: 

	 	(a)	 	any breach or violation of, or inaccuracy or misrepresentation in, any
representation or warranty made by the Warrantors or the Purchaser contained herein or
any of the other Transaction Documents; and
	 
	 	(b)	 	any breach or violation of any covenant or agreement contained herein or any
of the other Transaction Documents attributable to the Warrantors or the Purchaser;
	 
	 	(each of (a) and (b), a “Breach”), then (i) if the Breach is on the part of the Warrantors,
the Sellers shall, jointly and severally, cause the Company or cause the other Warrantors,
as

15

 

	 	the case may be, to, cure such Breach (to the extent that such Breach is curable); and (ii)
if the Breach is on the part of the Purchaser, the Purchaser shall cure such Breach (to the
extent that such Breach in curable).

	7.2	 	Each Seller and the Founder holding such Seller shall, severally and not jointly, indemnify
and keep indemnified the Group Companies, the Purchaser and the Purchaser’s Affiliates,
limited partners, members, stockholders, employees, agents and representatives (the
“Indemnitees”) at all times and hold the Indemnitees harmless against any and all losses,
liabilities, damages, liens, claims, obligations, penalties, settlements, deficiencies, costs
expenses, diminution in value and lost opportunities paid, suffered, sustained or incurred by
the Indemnitees including without limitation reasonable advisor’s fees and other reasonable
expenses of investigation, assessment, contesting of, any claim, settlement of any claim or
any legal proceedings (each, an “Indemnifiable Loss”), resulting from, or arising out of, or
due to, directly or indirectly, (A) any claim that such Seller and/or Founder has failed to
(x) properly make any tax filing or report the proceeds of the transactions contemplated by
this Agreement in accordance with applicable law and/or (y) pay any applicable taxes related
to the income or gain derived by such Seller and/or Founder in the transactions contemplated
by this Agreement in accordance with applicable laws and regulations or (B) any claim that any
Group Company and/or the Purchaser is responsible for any taxes or withholdings for the
transactions contemplated by this Agreement.
	 
	7.3	 	Notwithstanding any other provision contained herein, absent fraud, gross negligence or
willful misconduct by any of the Warrantors, this Section 7 shall be the sole and
exclusive remedy of the Indemnitees for any claim against the Warrantors for any Breach.

			
	8.	 	MISCELLANEOUS.

	8.1	 	Survival of Warranties. 
	 
	 	 	Unless otherwise set forth in this Agreement, the representations and warranties of the
Warrantors contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing and shall in no way be affected by any
investigation or knowledge of the subject matter thereof made by or on behalf of the
Purchaser or the Sellers.
	 
	8.2	 	Confidentiality.

	 	(a)	 	Disclosure of Terms. The terms and conditions of this Agreement, any
term sheet or memorandum of understanding entered into pursuant to the transactions
contemplated hereby, all exhibits and schedules attached hereto and thereto, and the
transactions contemplated hereby and thereby (collectively, the “Transaction Terms”),
including their existence, shall be considered confidential information and shall not
be disclosed by any party hereto to any third party except as permitted in accordance
with the provisions set forth below.
	 
	 	(b)	 	Permitted Disclosures. Notwithstanding the foregoing, the Sellers and
Company may disclose (i) the existence of the investment to its bona fide prospective

16

 

	 	 	 	Purchaser, employees, Directors, bankers, lenders, accountants, legal counsels and
business partners, or to any person or entity to which disclosure is approved in
writing by the Purchaser; and (ii) the transaction terms to its current
shareholders, employees, Directors, bankers, lenders, accountants and legal
counsels, in each case only where such persons or entities are under appropriate
nondisclosure obligations substantially similar to those set forth in this
Section 8.2, or to any person or entity to which disclosure is approved in
writing by the Purchaser. The Purchaser may disclose (x) the existence of the
investment and the Transaction Terms to any Affiliate, partner, limited partner,
former partner, potential partner or potential limited partner of the Purchaser or
other related third parties and (y) the fact of the investment to the public, in
each case as it deems appropriate in its sole discretion. Any Party hereto may also
provide disclosure in order to comply with applicable Laws, as set forth in
Section 8.2(c) below.

	 	(c)	 	Legally Compelled Disclosure. In the event that any Party is requested
or becomes legally compelled (including without limitation, pursuant to any applicable
tax, securities, or other Laws and regulations of any jurisdiction) to disclose the
existence of this Agreement or content of any of the Transaction Terms, such party (the
“Disclosing Party”) shall provide the other parties with prompt written notice of that
fact and shall consult with the other parties regarding such disclosure. At the
request of another party, the Disclosing Party shall, to the extent reasonably possible
and with the cooperation and reasonable efforts of the other parties, seek a protective
order, confidential treatment or other appropriate remedy. In any event, the
Disclosing Party shall furnish only that portion of the information that is legally
required and shall exercise reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded such information.
	 
	 	(d)	 	Other Exceptions. Notwithstanding any other provision of this
Section 8.2, the confidentiality obligations of the parties shall not apply to:
(i) information which a restricted party learns from a third party having the right to
make the disclosure, provided the restricted party complies with any restrictions
imposed by the third party; (ii) information which is rightfully in the restricted
party’s possession prior to the time of disclosure by the protected party and not
acquired by the restricted party under a confidentiality obligation; or (iii)
information which enters the public domain without breach of confidentiality by the
restricted party.
	 
	 	(e)	 	Press Releases, Etc. No announcements regarding the Purchaser’s
investment in the Company may be made by any party hereto in any press conference,
professional or trade publication, marketing materials or otherwise to the public
without the prior written consent of the Purchaser and the Company, provided,
that any such announcement made by any partner, limited partner, bona fide potential
partner or bona fide potential limited partner of the Purchaser shall not be subject to
the consent of the Company or the Sellers. Further, the Company and the Sellers shall
not use the Purchaser’s name and logo in any manner, context or format (including
references or links to websites, press releases, etc,) without obtaining the approval
from the Purchaser in writing.

17

 

	 	(f)	 	Other Information. The provisions of this Section 8.2 shall
terminate and supersede the provisions of any separate nondisclosure agreement executed
by any of the Parties with respect to the transactions contemplated hereby.

	8.3	 	Transfer; Successors and Assigns.
	 
	 	 	The terms and conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties. Save as expressly provided in this
Agreement, nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.
	 
	8.4	 	Governing Law.
	 
	 	 	This Agreement shall be governed by and construed in accordance with the Law of the State of
New York as to matters within the scope thereof, without regard to its principles of
conflicts of laws.
	 
	8.5	 	Counterparts; Facsimile.
	 
	 	 	This Agreement may be executed and delivered by facsimile or other electronic signature and
in two or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
	 
	8.6	 	Titles and Subtitles.
	 
	 	 	The titles and subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.
	 
	8.7	 	Notices.
	 
	 	 	All notices and other communications given or made pursuant to this Agreement shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the party to
be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal
business hours of the recipient, and if not so confirmed, then on the next business day, (c)
five (5) days after having been delivered by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after delivery by an internationally
recognized overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the respective parties at their address as set
forth on the signature pages, Schedule 1 or Schedule 2, as the case may be,
or to such e-mail address, facsimile number or address as subsequently modified by written
notice given in accordance with this Section 8.7.
	 
	8.8	 	No Finder’s Fees.
	 
	 	 	Each Party represents that it neither is nor will be obligated for any finder’s fee or
commission in connection with this transaction. Each Purchaser agrees to indemnify and to
hold harmless the Company and the Sellers from any liability for any commission or

18

 

	 	 	compensation in the nature of a finder’s or broker’s fee arising out of this transaction
(and the costs and expenses of defending against such liability or asserted liability) for
which each Purchaser or any of its officers, employees, or representatives is responsible.
The Company and the Sellers agree to indemnify and hold harmless each Purchaser from any
liability for any commission or compensation in the nature of a finder’s or broker’s fee
arising out of this transaction (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of its officers, employees or
representatives is responsible.
	 
	8.9	 	Fees and Expenses.
	 
	 	 	Each Seller shall each pay all of his or its own costs and expenses incurred in connection
with the negotiation, execution, delivery and performance of this Agreement and other
Transaction Documents and the transactions contemplated hereby and thereby. The Sellers
shall pay all reasonable costs and expenses incurred or to be incurred by the Purchaser on a
pro rata basis based on the relative number of Shares sold hereunder, including all
reasonable costs and expenses in conducting due diligence investigations on the Group
Entities and in preparing, negotiating and executing all documentation, including all
reasonable fees and expenses of any outside legal counsel, as well as all costs and expenses
related to the financial due diligence review of the Group Entities, up to a maximum
aggregate amount of US$150,000 for Tiger and up to a maximum aggregate amount of RMB150,000
for KTB, which shall be deducted from the aggregate Purchase Price paid by Tiger and KTB
respectively to each Seller at each Closing.
	 
	8.10	 	Attorney’s Fees.
	 
	 	 	If any action at law or in equity (including arbitration) is necessary to enforce or
interpret the terms of any of the Transaction Documents, the prevailing party shall be
entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled. 
	 
	8.11	 	Amendments and Waivers.
	 
	 	 	Any term of this Agreement may be amended, terminated or waived only with the written
consent of the Seller, the holders of a majority-in-interest among the Purchaser. Any
amendment or waiver effected in accordance with this Section 8.11 shall be binding
upon the Company, the Sellers, the Purchaser, and each transferee of the Shares and each
future holder of all such securities.
	 
	8.12	 	Severability.
	 
	 	 	The invalidity or unenforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision.
	 
	8.13	 	Delays or Omissions.
	 
	 	 	No delay or omission to exercise any right, power or remedy accruing to any party under this
Agreement, upon any breach or default of any other party under this Agreement, shall

19

 

	 	 	impair any such right, power or remedy of such non-breaching or non-defaulting party nor
shall it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor shall any
waiver of any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this Agreement, or any
waiver on the part of any party of any provisions or conditions of this Agreement, must be
in writing and shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to any party,
shall be cumulative and not alternative.

	8.14	 	Entire Agreement.
	 
	 	 	This Agreement (including the Schedules and Exhibits hereto), the Restated Articles and the
other Transaction Documents constitute the full and entire understanding and agreement
between the parties with respect to the subject matter hereof, and any other written or oral
agreement relating to the subject matter hereof existing between the parties are expressly
canceled.
	 
	8.15	 	Dispute Resolution.

	 	(a)	 	Any dispute, controversy or claim arising out of or relating to this Agreement,
or the interpretation, breach, termination or validity hereof, shall first be subject
to resolution through consultation of the parties to such dispute, controversy or
claim. Such consultation shall begin within seven (7) days after one Party hereto has
delivered to the other Parties involved a written request for such consultation. If
within thirty (30) days following the commencement of such consultation the dispute
cannot be resolved, the dispute shall be submitted to arbitration upon the request of
any Party with notice to the other Parties.
	 
	 	(b)	 	The arbitration shall be conducted in Hong Kong under the auspices of the Hong
Kong International Arbitration Centre (the “HKIAC”). There shall be three arbitrators.
The complainant and the respondent to such dispute shall each select one arbitrator
within thirty (30) days after giving or receiving the demand for arbitration. Such
arbitrators shall be freely selected, and the Parties shall not be limited in their
selection to any prescribed list. The Chairman of the HKIAC shall select the third
arbitrator, who shall be qualified to practice Law in New York. If either party to the
arbitration does not appoint an arbitrator who has consented to participate within
thirty (30) days after selection of the first arbitrator, the relevant appointment
shall be made by the Chairman of the HKIAC.
	 
	 	(c)	 	The arbitration proceedings shall be conducted in English. The arbitration
tribunal shall apply the Arbitration Rules of the HKIAC in effect at the time of the
arbitration. However, if such rules are in conflict with the provisions of this
Section 8.15, including the provisions concerning the appointment of
arbitrators, the provisions of this Section 8.15 shall prevail.

20

 

	 	(d)	 	The arbitrators shall decide any dispute submitted by the parties to the
arbitration strictly in accordance with the substantive Law of the State of New York
and shall not apply any other substantive law.
	 
	 	(e)	 	Each Party hereto shall cooperate with any party to the dispute in making full
disclosure of and providing complete access to all information and documents requested
by such party in connection with such arbitration proceedings, subject only to any
confidentiality obligations binding on the Party receiving the request.
	 
	 	(f)	 	The award of the arbitration tribunal shall be final and binding upon the
disputing parties, and any party to the dispute may apply to a court of competent
jurisdiction for enforcement of such award.
	 
	 	(g)	 	Any party to the dispute shall be entitled to seek preliminary injunctive
relief, if possible, from any court of competent jurisdiction pending the constitution
of the arbitral tribunal.

	8.16	 	No Commitment for Additional Financing.
	 
	 	 	The Company and the Sellers acknowledge and agree that the Purchaser has not made any
representation, undertaking, commitment or agreement to provide or assist the Company in
obtaining any financing, investment or other assistance, other than the purchase of the
Shares as set forth herein and subject to the conditions set forth herein. In addition, the
Company acknowledges and agrees that (i) no oral statements made by any Purchaser or its
representatives on or after the date of this Agreement shall create an obligation,
commitment or agreement to provide or assist the Company in obtaining any financing or
investment, (ii) the Company shall not rely on any such statement by any Purchaser or its
representatives and (iii) an obligation, commitment or agreement to provide or assist the
Company in obtaining any financing or investment may only be created by a written agreement,
signed by such Purchaser and the Company, setting forth the terms and conditions of such
financing or investment and stating that the parties intend for such writing to be a binding
obligation or agreement. Each Purchaser shall have the right, in it sole and absolute
discretion, to refuse or decline to participate in any other financing of or investment in
the Company, and shall have no obligation to assist or cooperate with the Company in
obtaining any financing, investment or other assistance.
	 
	8.17	 	Rights Cumulative.
	 
	 	 	Each and all of the various rights, powers and remedies of a Party will be considered to be
cumulative with and in addition to any other rights, powers and remedies which such Party
may have at law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy will neither
constitute the exclusive election thereof nor the waiver of any other right, power or remedy
available to such Party.
	 
	8.18	 	No Waiver.
	 
	 	 	Failure to insist upon strict compliance with any of the terms, covenants, or conditions

21

 

	 	 	hereof will not be deemed a waiver of such term, covenant, or condition, nor will any waiver
or relinquishment of, or failure to insist upon strict compliance with, any right, power or
remedy power hereunder at any one or more times be deemed a waiver or relinquishment of such
right, power or remedy at any other time or times.

	8.19	 	No Presumption.
	 
	 	 	The Parties acknowledge that any applicable law that would require interpretation of any
claimed ambiguities in this Agreement against the Party that drafted it has no application
and is expressly waived. If any claim is made by a Party relating to any conflict, omission
or ambiguity in the provisions of this Agreement, no presumption or burden of proof or
persuasion will be implied because this Agreement was prepared by or at the request of any
Party or its counsel.
	 
	8.20	 	Third Party Beneficiaries.
	 
	 	 	Each of the Indemnitees shall be a third party beneficiary of this Agreement with the full
ability to enforce Section 7 of this Agreement as if it were a Party hereto.
	 
	8.21	 	Termination of Agreement.

	 	(a)	 	This Agreement may be terminated before the Closing as follows:

	 	(1)	 	at the election of the Purchaser on or after October 31, 2009,
if the Closing shall not have occurred on or before such date unless such date
is extended by the mutual written consent of the Seller and the Purchaser,
provided that: (i) the Purchaser are not in material default of any of their
obligations hereunder, and (ii) the right to terminate this Agreement pursuant
to this Section 8.22(a) shall not be available to the Purchaser if
their breach of any provision of this Agreement has been the cause of, or
resulted, directly or indirectly in, the failure of the Closing to be
consummated by October 31, 2009;
	 
	 	(2)	 	by mutual written consent of the Sellers and the Purchaser as
evidenced in writing signed by each of the Sellers and the Purchaser;
	 
	 	(3)	 	by the Purchaser in the event of any breach or violation of any
representation or warranty, covenant or agreement contained herein or in any of
the other Transaction Documents by any Warrantor that is not cured or curable
within thirty (30) Business Days of written notice;
	 
	 	(4)	 	by the Purchaser if any event, circumstance or change shall
have occurred that, individually or in the aggregate with one or more other
events, circumstances or changes, have had or reasonably could be expected to
have a Material Adverse Effect on the Company or any other Group Entity; or
	 
	 	(5)	 	by the Sellers jointly in the event of any breach or violation
of any

22

 

	 	 	 	representation or warranty, covenant or agreement contained herein or in any
of the other Transaction Documents by the Purchaser with respect to such
Purchaser that is not cured or curable within thirty (30) Business Days of
written notice.

	 	(b)	 	Effect of Termination. The date of termination of this Agreement pursuant to
Section 8.21(a) hereof shall be referred to as “Termination Date”. In the
event of termination by the Sellers and/or the Purchaser pursuant to Section
8.21(a) hereof, written notice thereof shall forthwith be given to the other Party
and this Agreement shall terminate, and the purchase of the Shares hereunder shall be
abandoned and rescinded, without further action by the Parties hereto. Each of the
Parties shall be relieved of their duties and obligations arising under this Agreement
after the date of such termination and such termination shall be without liability to
the Sellers or the Purchaser; provided that no such termination shall relieve any party
hereto from liability for any breach of this Agreement. The provisions of this
Section 8.21, Section 7, Section 8.1, Section 8.2,
Section 8.9 and Section 8.15, hereof shall survive any termination of
this Agreement.

	8.22	 	Cross-Guarantees. 
	 
	 	 	Each of Zhang Bangxin, Cao Yundong, LIU Yachao and BAI Yunfeng shall unconditionally
guarantees the performance of BRIGHT UNISON LIMITED, CENTRAL GLORY INVESTMENTS LIMITED,
PERFECT WISDOM INTERNATIONAL LIMITED and EXCELLENT NEW LIMITED respectively under this
Agreement and vice versa, each of BRIGHT UNISON LIMITED, CENTRAL GLORY INVESTMENTS LIMITED,
PERFECT WISDOM INTERNATIONAL LIMITED and EXCELLENT NEW LIMITED shall unconditionally
guarantees the performance of Zhang Bangxin, Cao Yundong, LIU Yachao and BAI Yunfeng
respectively under this Agreement.

[Remainder
of Page Intentionally Left Blank]

23

 

     IN WITNESS WHEREOF, the parties have executed this Share Purchase Agreement as of the date
first written above.

	 	 	 
	SELLERS

	 	BRIGHT UNISON LIMITED
	 
	 	 
	 

	 	By: /s/ Bangxin Zhang
	 

	 	Name: ZHANG Bangxin ()
	 
	 	 
	 
	 	 
	 

	 	CENTRAL GLORY INVESTMENTS LIMITED
	 
	 	 
	 

	 	By: /s/ Yundong Cao
	 

	 	Name: CAO Yundong ()
	 
	 	 
	 
	 	 
	 

	 	PERFECT WISDOM INTERNATIONAL LIMITED
	 
	 	 
	 

	 	By: /s/ Yachao Liu
	 

	 	Name: LIU Yachao ()
	 
	 	 
	 
	 	 
	 

	 	EXCELLENT NEW LIMITED
	 
	 	 
	 

	 	By: /s/ Yunfeng Bai
	 

	 	Name: BAI Yunfeng ()

SIGNATURE PAGE TO SHARE PURCHASE AGREEMENT

 

 

     IN WITNESS WHEREOF, the parties have executed this Share Purchase Agreement as of the date
first written above.

	 	 	 	 	 
	FOUNDERS	 	ZHANG Bangxin ()
	 
	 	 	 	 
	 

	 	By:	 	/s/ Bangxin Zhang 
	 

	 	 	 	 
	 	 	Name: ZHANG Bangxin
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	CAO YUNDONG ()
	 
	 	 	 	 
	 

	 	By:	 	/s/ Yundong Cao 
	 

	 	 	 	 
	 	 	Name: CAO Yundong
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	LIU Yachao ()
	 
	 	 	 	 
	 

	 	By:	 	/s/ Yachao Liu 
	 

	 	 	 	 
	 	 	Name: LIU Yachao
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	BAI YUNFENG ()
	 
	 	 	 	 
	 

	 	By:	 	/s/ Yunfeng Bai 
	 

	 	 	 	 
	 	 	Name: BAI Yunfeng

SIGNATURE PAGE TO SHARE PURCHASE AGREEMENT

 

 

     IN WITNESS WHEREOF, the parties have executed this Share Purchase Agreement as of the date
first written above.

	 	 	 	 	 
	COMPANY:	 	XUEERSI INTERNATIONAL EDUCATION GROUP
	 
	 	 	 	 
	 

	 	By:	 	/s/ Bangxin Zhang 
	 

	 	 	 	 
	 	 	Name: ZHANG Bangxin
	 	 	Title: Director
	 
	 	 	 	 
	 
	 	 	 	 
	HK COMPANY:	 	 TAL GROUP LIMITED
	 
	 	 	 	 
	 

	 	By:	 	/s/ Bangxin Zhang 
	 

	 	 	 	 
	 	 	Name: ZHANG Bangxin
	 	 	Title: Director
	 
	 	 	 	 
	 
	 	 	 	 
	WFOE:	 	TAL EDUCATION TECHNOLOGY (BEIJING) CO., LTD.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Bangxin Zhang 
	 

	 	 	 	 
	 	 	Name: ZHANG Bangxin
	 	 	Title: Legal Representative
	 
	 	 	 	 
	 	 	Affix Seal:

SIGNATURE PAGE TO SHARE PURCHASE AGREEMENT

 

 

     IN WITNESS WHEREOF, the parties have executed this Share Purchase Agreement as of the date
first written above.

	 	 	 	 	 
	DOMESTIC COMPANIES	 	BEIJING XUEERSI EDUCATION TECHNOLOGY CO., LTD.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Yachao Liu 
	 

	 	 	 	 
	 	 	Name: LIU Yachao
	 	 	Title: Legal Representative
	 
	 	 	 	 
	 	 	Affix Seal:
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	BEIJING XUEERSI NETWORK TECHNOLOGY CO., LTD.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Yachao Liu 
	 

	 	 	 	 
	 	 	Name: LIU Yachao
	 	 	Title: Legal Representative
	 
	 	 	 	 
	 	 	Affix Seal:

SIGNATURE PAGE TO SHARE PURCHASE AGREEMENT

 

 

     IN WITNESS WHEREOF, the parties have executed this Share Purchase Agreement as of the date
first written above.

	 	 	 	 	 
	PURCHASER:	 	Tiger Global Five China Holdings
	 
	 	 	 	 
	 

	 	By:	 	/s/ Authorized Signatory 
	 

	 	 	 	 
	 	 	Name:
	 	 	Title:

SIGNATURE PAGE TO SHARE PURCHASE AGREEMENT

 

 

     IN WITNESS WHEREOF, the parties have executed this Share Purchase Agreement as of the date
first written above.

	 	 	 	 	 
	PURCHASER:	 	KTB CHINA OPTIMUM FUND
	 
	 	 	 	 
	 

	 	By:	 	/s/ Authorized Signatory 
	 

	 	 	 	 
	 	 	Name:
	 	 	Title: Legal
Representative

SIGNATURE PAGE TO SHARE PURCHASE AGREEMENT

 

 

SCHEDULE 1A

SCHEDULE OF SELLERS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Number of	 	 	 	Number of	 	 
	 	 	Number of Common	 	Common Shares	 	Consideration	 	Common	 	Consideration
	 	 	Shares Held Prior to	 	to be Sold to	 	Paid by Tiger	 	Shares to be	 	Paid by KTB
	Name	 	Closing	 	Tiger	 	(US$)	 	Sold to KTB	 	(US$)
	BRIGHT UNISON LIMITED
	 	67,800,000	 	5,000,000	 	8,000,000	 	250,000	 	400,000
	 
	 	 	 	 	 	 	 	 	 	 
	CENTRAL GLORY
	 	31,200,000	 	10,087,500	 	16,140,000	 	812,500	 	1,300,000
	INVESTMENTS LIMITED
	 	 	 	 	 	 	 	 	 	 
	PERFECT WISDOM
INTERNATIONAL
LIMITED
	 	12,000,000	 	3,875,000	 	6,200,000	 	812,500	 	1,300,000
	EXCELLENT NEW
LIMITED
	 	9,000,000	 	2,912,500	 	4,660,000	 	1,250,000	 	2,000,000
	 
	 	 	 	 	 	 	 	 	 	 
	Total
	 	120,000,000	 	21,875,000	 	35,000,000	 	3,125,000	 	5,000,000

 

 

SCHEDULE 1B

SCHEDULE OF PURCHASER

	 	 	 	 	 	 	 
	Purchaser	 	Number of Shares	 	Consideration
	Tiger Global Five China Holdings

	 	21,875,000	 	US$35,000,000
	 
	 	 	 	 	 	 
	[KTB CHINA OPTIMUM FUND]

	 	3,125,000	 	US$5,000,000
	Total

	 	25,000,000	 	US$40,000,000

SCHEDULE
1B
1

 

SCHEDULE 1C

SCHEDULE OF FOUNDERS

	 	 	 
	Name	 	Identity Card
	ZHANG Bangxin ()

	 	3211 8219 8010 0129 13
	 
	 	 
	CAO Yundong ()

	 	3728 3119 7910 2056 18
	 
	 	 
	LIU Yachao ()

	 	2111 0319 8110 1521 38
	 
	 	 
	BAI Yunfeng ()

	 	3605 2119 8109 2400 73

SCHEDULE
1C
1

 

SCHEDULE 2A

SCHEDULE OF SCHOOLS

	 	 	 	 	 
	 	 	Definitions	 	Full Name of the Schools
	1.

	 	Beijing Haidian School
	 	Beijing Haidian Xueersi Training
School ()
	 
	 	 	 	 
	2.

	 	Beijing Dongcheng School
	 	Beijing Dongcheng Xueersi Training
School ()
	 
	 	 	 	 
	3.

	 	Beijing Xicheng School
	 	Beijing Xicheng Xueersi Training
School ()
	 
	 	 	 	 
	4.

	 	Shanghai Changning School
	 	Shanghai Changning Lejiale Training
School ()
	 
	 	 	 	 
	5.

	 	Shanghai Minhang School
	 	Shanghai Minhang Lejiale Training
School ()
	 
	 	 	 	 
	6.

	 	Wuhan Jianghan School
	 	Wuhan Jianghan Small New Star English
Training School

()
	 
	 	 	 	 
	7.

	 	Hubei Jianli School
	 	Hubei Jianli Harvard English School ()
	 
	 	 	 	 
	8.

	 	Hubei Qianjiang School
	 	Hubei Qianjiang Small Harvard English
Training School

()

SCHEDULE OF SUBSIDIARY COMPANIES

	 	 	 	 	 
	 	 	Definitions	 	Full Name of Subsidiary Companies
	1.

	 	Beijing Zhikang
	 	Beijing Zhikang Cultural Co., Ltd.
()
	 
	 	 	 	 
	2.

	 	Shanghai Lehai
	 	Shanghai Lehai Information Technology Co., Ltd.

()

SCHEDULE OF COMPANY BRANCHES

	 	 	 	 	 
	 	 	Definitions	 	Full Name of Company Branches
	1.

	 	Xueersi Education No. 2
Branch
	 	No. 2 Branch of Xueersi Education Technology
Co., Ltd.

()
	 
	 	 	 	 
	2.

	 	Xueersi Education No. 3
Branch
	 	No. 3 Branch of Xueersi
Education Technology Co., Ltd.

()
	 
	 	 	 	 
	3.

	 	Xueersi Education Haidian
No. 4 Branch
	 	Haidian No. 4 Branch of Xueersi Education
Technology Co., Ltd.

()

SCHEDULE 2A
1

 

	 	 	 	 	 
	 	 	Definitions	 	Full Name of Company Branches
	4.

	 	Xueersi Education No. 5
Branch
	 	No. 5 Branch of Xueersi Education Technology
Co., Ltd.
()
	 
	 	 	 	 
	5.

	 	Xueersi Education Haidian
No. 6 Branch
	 	Haidian No. 7 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	6.

	 	Xueersi Education Haidian
No. 7 Branch
	 	Haidian No. 7 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	7.

	 	Xueersi Education Haidian
No. 8 Branch
	 	Haidian No. 7 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	8.

	 	Xueersi Education Haidian
No. 9 Branch
	 	Haidian No. 7 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	9.

	 	Xueersi Education Haidian
No. 10 Branch
	 	Haidian No. 7 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	10.

	 	Xueersi Education Haidian
No. 11 Branch
	 	Haidian No. 7 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	11.

	 	Xueersi Education Chaoyang
No. 1 Branch
	 	Chaoyang No. 1 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	12.

	 	Xueersi Education Chaoyang
No. 2 Branch
	 	Chaoyang No. 2 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	13.

	 	Xueersi Education Chaoyang
No. 3 Branch
	 	Chaoyang No. 2 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	14.

	 	Xueersi Education Chaoyang
No. 4 Branch
	 	Chaoyang No. 4 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	15.

	 	Xueersi Education Chaoyang
No. 5 Branch
	 	Chaoyang No. 5 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	16.

	 	Xueersi Education Chaoyang
No. 6 Branch
	 	Chaoyang No. 5 Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	17.

	 	Xueersi Education Shijingshan Branch
	 	Shijingshan Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	18.

	 	Xueersi Education Fangzhuang Branch
	 	Fangzhuang Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	19.

	 	Xueersi Education Dengshikou Branch
	 	Fangzhuang Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	20.

	 	Xueersi Education Dongcheng Branch
	 	Dongcheng Branch of Xueersi Education Technology
Co., Ltd.
()

SCHEDULE 2A
2

 

	 	 	 	 	 
	 	 	Definitions	 	Full Name of Company Branches
	21.

	 	Xueersi Education Pinganli

Branch
	 	Pinganli Branch of Xueersi Education Technology
Co., Ltd.

()
	 
	 	 	 	 
	22.

	 	Xueersi Education

Fuchengmen Branch
	 	Fuchengmen Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	23.

	 	Xueersi Education

Zhichunlu Branch
	 	Fuchengmen Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	24.

	 	Xueersi Education Fengtai
No. Branch
	 	Fuchengmen Branch of Xueersi Education
Technology Co., Ltd.

()
	 
	 	 	 	 
	25.

	 	Xueersi Education Tianjin

Branch
	 	Tianjin Branch of Xueersi Education Technology
Co., Ltd.
()

SCHEDULE 2A
3

 

SCHEDULE 2B

CONSENT OF SPOUSE

     I, [          ], spouse of                     , have read and approve the Share Purchase Agreement (the
“Agreement”), dated August 12, 2009, by and among the Sellers listed on Schedule 1 (the
“Sellers”), the Founders, the Purchaser listed on Schedule 1B, the Company, TAL Group
Limited, a company organized and existing under the Laws of Hong Kong, Beijing Xueersi Education
Technology Co., Ltd. () (“Xueersi Education”) and Beijing Xueersi Network
Technology Co., Ltd. (), companies organized and existing under the Laws
of the PRC, and TAL Education Technology (Beijing) Co., Ltd. (), a
wholly foreign owned enterprise organized and existing under the Laws of the PRC, and certain other
parties. In consideration of granting of the right to my spouse to sell Common Shares of the
Company, as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in
respect to the exercise of any rights under the Agreement and agree to be bound by the provisions
of the Agreement insofar as I may have any rights in said Agreement or any shares issued pursuant
thereto under the community property laws or similar laws relating to marital property in effect in
the state of our residence as of the date of the signing of the foregoing Agreement.

     I further acknowledge that I am executing this Spousal Consent voluntarily.

	 	 	 	 	 
	 	 	 
	 	Name: [          ]

Date: [          ]	 

SCHEDULE 2B
1

 

SCHEDULE 3

DEFINITIONS

	1.	 	“Affiliate” means, with respect to any specified Person, any other Person who or which,
directly or indirectly, controls, is controlled by, or is under common control with such
specified Person, including, without limitation, any partner, officer, director, member or
employee of such Person and any venture capital fund now or hereafter existing that is
controlled by or under common control with one or more general partners or managing members
of, or shares the same management company with, such Person.
	 
	2.	 	“Agreement” has the meaning ascribed to it in the Preamble to this Agreement.
	 
	3.	 	“Beneficial Owner” has the meaning set forth in Section 10(c) of Exhibit G,
for the purpose of Director Indemnification Letter only.
	 
	4.	 	“Breach” has the meaning set forth in Section 7.1.
	 
	5.	 	“Board of Directors” means the Company’s Board of Directors.
	 
	6.	 	“Business Day” means any day, other than a Saturday, Sunday or other day on which the
commercial banks in Hong Kong or Beijing are authorized or required to be closed for the
conduct of regular banking business.
	 
	7.	 	“Business Plan” has the meaning set forth in Section 29 of Schedule 4.
	 
	8.	 	“Change in Control” has the meaning set forth in Section 10(c) of Exhibit G,
for the purpose of Director Indemnification Letter only.
	 
	9.	 	“Commitment Period” has the meaning ascribed to it in Section 1 of Exhibit E.
	 
	10.	 	“Common Share” means Common Share of par value US$0.001 in the capital of the Company.
	 
	11.	 	“Company” means Xueersi International
Education Group, an exempted company duly
incorporated with limited liability and validly existing under the Laws of the Cayman Islands.
	 
	12.	 	“Company Branches” mean those branches indirectly controlled by the Company, as listed on
Schedule 2A.
	 
	13.	 	“Company Intellectual Property” means all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, trade secrets, licenses, domain names,
mask works, information and proprietary rights and processes as are necessary to the conduct
of the Company’s business as now conducted and as presently proposed to be conducted.
	 
	14.	 	“Company Law” means the Companies Law (as amended) of the Cayman Islands.

SCHEDULE 3
1

 

	15.	 	“Confidential Information” has the meaning ascribed to it in Section 8 of Exhibit
E.
	 
	16.	 	“Confidential Information Agreements” has the meaning ascribed to it in Section 21 of
Schedule 4.
	 
	17.	 	“Contract” means a legally binding contract, agreement, understanding, indenture, note, bond,
loan, instrument, lease, mortgage, franchise or license.
	 
	18.	 	“Control” or “control” of a given Person means the power or authority, whether exercised or
not, to direct the business, management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise, which power or
authority shall conclusively be presumed to exist upon possession of beneficial ownership or
power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at
a meeting of the members or shareholders of such Person or power to control the composition of
a majority of the board of directors of such Person; the terms “Controlling” and “Controlled”
(and their lower-case counterparts) have meanings correlative to the foregoing.
	 
	19.	 	“Convertible Securities” means, with respect to any specified Person, securities convertible
or exchangeable into any shares of any class of such specified Person, however described and
whether voting or non-voting.
	 
	20.	 	“Director” or “Directors” means a member or the members of the Board of Directors.
	 
	21.	 	“Disclosing Party” has the meaning ascribed to it in Section 8.2(c).
	 
	22.	 	“Disclosure Schedule” has the meaning ascribed to it in Section 4.
	 
	23.	 	“Domestic Companies” means Beijing Xueersi Education Technology Co., Ltd.
() (“Xueersi Education”) and Beijing Xueersi Network Technology Co.,
Ltd. (), companies organized and existing under the laws of the PRC.
	 
	24.	 	“Employee Benefit Plans” has the meaning ascribed to it in Section 16.7 of
Schedule 4.
	 
	25.	 	“Employment Agreement” has the meaning ascribed to it in Section 2.16.
	 
	26.	 	“Establishment Documents” has the meaning ascribed to it in Section 22.2 of
Schedule 4.
	 
	27.	 	“Exchange Act” has the meaning ascribed it in Section 8(a) of Exhibit G, for
the purpose of Director Indemnification Letter only.
	 
	28.	 	“Exclusivity Period” has the meaning ascribed to it in Section 6.3.
	 
	29.	 	“Execution Date” shall mean the date of this Agreement.
	 
	30.	 	“Financial Statements” shall mean the consolidated balance sheet, income statement and
statement of cash flows, prepared in accordance with the PRC GAAP and applied on a 

SCHEDULE 3
2

 

	 	 	consistent
basis throughout the periods indicated.

	31.	 	“fines” has the meaning set forth in Section 10(b) of Exhibit G, for the
purpose of Director Indemnification Letter only.
	 
	32.	 	“Foreigner Employment Certificate” shall mean the certificate to be applied with and issued
by the human resource and social security department, only by virtue of which, the foreigners
is permitted to work with the entities in the PRC.
	 
	33.	 	“Founders” or “Founder” includes ZHANG Bangxin (a PRC citizen with ID Card No. 3211 8219 8010
0129 13), CAO Yundong (a PRC citizen with ID Card No. 3728 3119 7910 2056 18), LIU Yachao (a
PRC citizen with ID Card No. 2111 0319 8110 1521 38) and BAI Yunfeng (a PRC citizen with ID
Card No. 3605 2119 8109 2400 73), each a “Founder”.
	 
	34.	 	“Future Issuance Price” has the meaning ascribed to it in Section 6.20.
	 
	35.	 	“Fund” has the meaning ascribed to it in the preamble of Exhibit G, for the purpose
of Director Indemnification Letter only.
	 
	36.	 	“Governmental Authority” means the government of any nation, province, state, city, locality
or other political subdivision of any thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government, regulation or
compliance, and any corporation or other entity owned or controlled, through share or capital
ownership or otherwise, by any of the foregoing.
	 
	37.	 	“Group Entities” means the Company, the WFOE, the Domestic Company, and any other direct or
indirect Subsidiary of any Group Entity collectively, and “Group Entity” means any one of
them.
	 
	38.	 	“GC Product or Service” has the meaning ascribed to it in Section 8.7 of Schedule
4.
	 
	39.	 	“Hong Kong” means the Hong Kong Special Administrative Region of the PRC.
	 
	40.	 	“HKIAC” has the meaning ascribed to it in Section 8.15(b).
	 
	41.	 	“HK Company” means TAL Group Limited incorporated and existing under the laws of Hong Kong.
	 
	42.	 	“Indemnifiable Loss” has the meaning set forth in Section 7.2.
	 
	43.	 	“Indemnitees” has the meaning set forth in Section 7.2.
	 
	44.	 	“Independent Legal Counsel” has the meaning set forth in Section 10(d) of Exhibit
G, for the purpose of Director Indemnification Letter only.
	 
	45.	 	“Intellectual Property” means all patents, patent applications, trademarks, service marks,
trade names, copyrights, trade secrets, processes, compositions of matter, formulas, 

SCHEDULE 3
3

 

	 	 	designs,
inventions, proprietary rights, know-how and any other confidential or proprietary information
owned or otherwise used by the Group Entities.

	46.	 	“IPO” means an initial public offering by the Company of its Common Shares on a public stock
exchange of the United States that has been registered under the Securities Act, or in a
similar public offering of Common Shares in a jurisdiction and on a recognized securities
exchange outside of the United States, provided such an initial public offering in terms of
price, offering proceeds and regulatory approval is reasonably equivalent to the aforesaid
public offering in the United States.
	 
	47.	 	“Key Persons” means those individuals listed on Exhibit E-3 of this Agreement.
	 
	48.	 	“Knowledge” including the phrase “to the Warrantors’ knowledge” shall mean the actual
knowledge after reasonable investigation of the Sellers.
	 
	49.	 	“KTB” means KTB CHINA OPTIMUM FUND.
	 
	50.	 	“Law” means any constitutional provision, statute or other law, rule, regulation, official
policy or interpretation of any Governmental Authority and any injunction, judgment, order,
ruling, assessment or writ issued by any Governmental Authority.
	 
	51.	 	“Letter of Commitment” shall mean the Letter of Commitment and Non-competition (Sellers) as
provided under Exhibit E.
	 
	52.	 	“Lien” means any mortgage, pledge, claim, security interest, encumbrance, title defect, lien,
charge or other restriction or limitation.
	 
	53.	 	“Material Adverse Effect” means a material adverse effect on the business, assets (including
intangible assets), liabilities, financial condition, property, prospects or results of
operations of the Group Entities, taken as a whole.
	 
	54.	 	“Material Agreements” has the meaning ascribed to such term in Section 10.1 of
Schedule 4.
	 
	55.	 	“New Concept English” means an English teaching textbook and audio material published by
Foreign Language Teaching and Research Press and Longman Press.
	 
	56.	 	“not opposed to the best interests of the Company” has the meaning set forth in Section
10(b) of Exhibit G, for the purpose of Director Indemnification Letter only.
	 
	57.	 	“Order” means any order, injunction, judgment, decree, ruling, writ, assessment or
arbitration award of a Governmental Authority.
	 
	58.	 	“OFAC” has the meaning ascribed to it in Section 18.2(a) of Schedule 4.
	 
	59.	 	“OFAC Sanctions” has the meaning ascribed to it in Section 18.2(a) of Schedule
4.
	 
	60.	 	“OFAC Sanctioned Person” has the meaning ascribed to such term is Section 18.2(b) of

SCHEDULE 3
4

 

	 	 	Schedule 4.

	61.	 	“other enterprise” has the meaning set forth in the Section 10(b) of the Exhibit
G, for the purpose of Director Indemnification Letter.
	 
	62.	 	“Party” and “Parties” has the meaning set forth in the Preamble hereof.
	 
	63.	 	“Period of Non-competition” has the meaning ascribed to such term in Section 4 of
Exhibit E.
	 
	64.	 	“Permitted Liens” means (i) Liens for taxes not yet delinquent or the validity of which are
being contested and (ii) Liens incurred in the ordinary course of business, which (x) do not
in the aggregate materially detract from the value of the assets that are subject to such
Liens and (y) were not incurred in connection with the borrowing of money.
	 
	65.	 	“Person” means any individual, corporation, partnership, limited partnership, proprietorship,
association, limited liability company, firm, trust, estate or other enterprise or entity.
	 
	66.	 	“PFIC” has the meaning ascribed to such term in Section 17.3 of Schedule 4.
	 
	67.	 	“PRC” means the Peoples’ Republic of China, excluding Hong Kong, the Macau Special
Administrative Region and Taiwan.
	 
	68.	 	“PRC GAAP” means the generally accepted accounting principles applicable in the PRC.
	 
	69.	 	“Purchase Price” has the meaning ascribed to it in Section 1.1.
	 
	70.	 	“Projections” has the meaning ascribed to it in Section 28 of Schedule 4.
	 
	71.	 	“Public Official” means an employee of a Governmental Authority, a member of a political
party, a political candidate, an officer of a public international organization, or an officer
or employee of a state-owned enterprise, including a PRC state-owned enterprise.
	 
	72.	 	“Public Software” has the meaning ascribed to it in Section 8.7 of Schedule
4.
	 
	73.	 	“Purchaser” has the meaning ascribed to it in Preamble hereof.
	 
	74.	 	“Related Party” has the meaning ascribed to it in Section 11.4 of Schedule 4.
	 
	75.	 	“Related Party Transaction” means any transaction between any Group Entity on the one hand,
and any Founder, or any Affiliate of any Founder on the other hand, other than transactions
arising in the ordinary course of an employer/employee relationship.
	 
	76.	 	“Representative” has the meaning set forth in Section (1) of Exhibit H-2, for
the purpose of Director Indemnification Letter only.
	 
	77.	 	“Reserve” or “Reservation” has the meaning ascribed to it in Section 4 of
Schedule 4.

SCHEDULE 3
5

 

	78.	 	“Restated Articles” has the meaning ascribed to it in Section 2.6.
	 
	79.	 	“Restricted Securities” has the meaning ascribed to it in Section 5 of Schedule
6.
	 
	80.	 	“Reviewing Party” has the meaning set forth in Section 10(e) of Exhibit G,
for the purpose of Director Indemnification Letter only.
	 
	81.	 	“RMB” means the Renminbi, the lawful currency of the PRC.
	 
	82.	 	“Schools” means those education and training schools indirectly controlled by the Company, as
listed on Schedule 2A.
	 
	83.	 	“SDN List” has the meaning ascribed to such term is Section 18.2(b) of Schedule
4.
	 
	84.	 	“SEC” has the meaning ascribed to such term in Section 7 of Schedule 6.
	 
	85.	 	“Secretary” has the meaning ascribed to such term is Section 18.2(a) of Schedule
4.
	 
	86.	 	“Securities Act” means the United States Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (or comparable Laws in jurisdictions other than the
United States).
	 
	87.	 	“Sellers” and “Sellers” has the meaning ascribed to such terms in the Preamble.
	 
	88.	 	“Series A Preferred Shares” means the series A preferred shares, par value US$0.001 each of
the Company, issued pursuant to the Series A Purchase Agreement.
	 
	89.	 	“Series A Purchase Agreement” means the share purchase agreement entered into by and among
the Company, KTB and certain other parties thereto on February 12, 2009 for the issuance of
series A preferred shares in the Company.
	 
	90.	 	“serving at the request of the Company” has meaning as set forth in Section 10(b) of
Exhibit G, for the purpose of Director Indemnification Letter only.
	 
	91.	 	“Shares” has the meaning ascribed to it in Recitals.
	 
	92.	 	“Shareholders” means a holder of Shares from time to time or its lawful successor.
	 
	93.	 	“Shareholders’ Agreement” means the agreement proposed to be entered into among the Company,
the Sellers, the Purchaser and certain other parties thereto, in the form of Exhibit C
attached to this Agreement.
	 
	94.	 	“Share Purchase Agreement” the agreement proposed to be entered into among the Company, the
Sellers, the Purchaser and certain other parties thereto concerning the purchase of certain
Common Shares of the Company by the Purchaser from the Sellers.
	 
	95.	 	“Share Plan” has the meaning ascribed to it in Section 6.2(a). “Seller” and “Sellers”
shall mean each of the Persons listed in Schedule 1A.

SCHEDULE 3
6

 

	96.	 	“Statement Date” has the meaning ascribed to it in Section 14.1 of Schedule
4.
	 
	97.	 	“Subsidiary” or “subsidiary” means, as of the relevant date of determination, with respect to
any Person (the “subject entity”), (i) any Person (x) more than 50% of whose shares or other
interests entitled to vote in the election of directors or (y) more than a 50% interest in the
profits or capital of such Person are owned or controlled directly or indirectly by the
subject entity or through one (1) or more Subsidiaries of the subject entity, (ii) any Person
whose assets, or portions thereof, are consolidated with the net earnings of the subject
entity and are recorded on the books of the subject entity for financial reporting purposes in
accordance with International Financial Reporting Standards or U.S. GAAP, or (iii) any Person
with respect to which the subject entity has the power to otherwise direct the business and
policies of that entity directly or indirectly through another subsidiary. For the avoidance
of doubt, the Subsidiaries of the Company shall include the Group Entities.
	 
	98.	 	“Subsidiary Companies” mean those companies indirectly controlled by the Company, as listed
on Schedule 2A.
	 
	99.	 	“Tiger” means Tiger Global Five China Holdings, a company organized under the laws of
Mauritius, and its Affiliates or any of its (or their) successor(s).
	 
	100.	 	“Training Centres” means the teaching centres operated by the Schools that are engaging in
education and training activities in the PRC.
	 
	101.	 	“Termination Date” has the meaning ascribed to it Section 8.21(b).
	 
	102.	 	“Transaction Documents” means this Agreement, the Shareholders’ Agreement and any other
agreements, instruments or documents entered into in connection with this Agreement.
	 
	103.	 	“Transaction Terms” has the meaning ascribed to it in Section 8.2(a).
	 
	104.	 	“United States Person” has the meaning ascribed to such term is Section 18.2(c) of
Schedule 4.
	 
	105.	 	“Unrepresented Party” has the meaning set forth in Section (1) of Exhibit
H-2, for the purpose of Management Rights Letter only.
	 
	106.	 	“US$” means the United States dollar, the lawful currency of the United States of America.
	 
	107.	 	“Warrantors” means each of the Founders and the Sellers, the Company, the HK Company, the
WFOE, each of the Domestic Companies, and “Warrantor” means any one of them.
	 
	108.	 	“WFOE” means TAL Education Technology (Beijing) Co., Ltd. (), a
wholly foreign-owned enterprise established and existing under the laws of the PRC.
	 
	109.	 	“Xueersi Education” means Beijing Xueersi Education Technology Co., Ltd.
(), a company established and existing under the laws of the PRC.

SCHEDULE 3
7

 

	110.	 	“Xueersi Technology” means Beijing Xueersi Education Technology Co., Ltd.
(), a company established and existing under the laws of the PRC.

SCHEDULE 3
8

 

SCHEDULE 4

REPRESENTATIONS AND WARRANTIES OF

THE WARRANTORS

			
	1.	 	Organization, Good Standing, Corporate Power and Qualification.

	 	 	Each Group Entity is a corporation duly organized, validly existing and in good standing
under the laws of their jurisdiction of incorporation and has all requisite corporate power
and authority to carry on its business as presently conducted and as proposed to be
conducted. Each Group Entity is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure to so qualify would have a Material Adverse
Effect.

			
	2.	 	Capitalization of the Company.

	 	 	The authorized capital of the Company consists, immediately prior to the Closing, of:
	 
	2.1	 	195,000,000 Common Shares, of which 120,000,000 shares are issued and outstanding,
immediately prior to the Closing. All of the outstanding Common Shares have been duly
authorized, are fully paid and nonassessable and were issued in compliance with all applicable
securities laws.
	 
	2.2	 	5,000,000 Series A Preferred Shares, of which 5,000,000 shares have been designated Series A
Preferred Shares, all of which have been issued and outstanding immediately prior to the
Closing. The rights, privileges and preferences of the Series A Preferred Shares are as
stated in the Restated Articles and as provided by the Company Law.
	 
	2.3	 	The Company has not reserved any Common Shares, any class of preferred shares or equity
securities of any kind for issuance to officers, directors, employees and consultants of the
Company under any equity incentive plan, stock option plan or other similar plan.
	 
	2.4	 	Schedule 7 sets forth the capitalization of the Company immediately following the
Closing including the number of shares of the following: (i) issued and outstanding Common
Shares, including, with respect to restricted Common Shares, vesting schedule and repurchase
price; (ii) issued and granted stock options; (iii) stock options not yet issued but reserved
for issuance, including vesting schedule and exercise price; (iv) each Series A Preferred
Shares; and (v) warrants or stock purchase rights, if any. Except for (A) the conversion
privileges of the Series A Preferred Shares issued under the Series A Purchase Agreement dated
February 12, 2009, (B) the rights provided in the Shareholders’ Agreement, and (C) the rights
described in Section 6.6 of the Agreement, there are no outstanding options, warrants,
rights (including conversion or preemptive rights and rights of first refusal or similar
rights) or agreements, orally or in writing, to purchase or acquire from the Company any
Common Share or Series A Preferred Share, or any securities convertible into or exchangeable
for Common Share or Series A Preferred Share. The Company’s issued and outstanding Common
Shares held by the Sellers and all the

0

 

	 	 	Company’s underlying outstanding options are subject to (i) a right of first refusal in
favor of the Company upon any proposed transfer (other than transfers for estate planning
purposes); and (ii) a lock-up or market standoff agreement of not less than 180 days
following the Company’s IPO pursuant to a registration statement filed with the SEC under
the Securities Act.
	 
	2.5	 	The Company is the sole legal and beneficial owner of one hundred percent (100%) of shares of
the HK Company.
	 
	2.6	 	The HK Company is the sole legal and beneficial owner of one hundred percent (100%) of the
equity of the WFOE.
	 
	2.7	 	The Sellers are the sole legal and beneficial owner(s) of the Common Shares of the Company.
	 
	2.8	 	Section 2.7 of the Disclosure Schedule sets forth the capitalization and
equity holders of the Domestic Companies, including all issued and outstanding equity capital
of the Domestic Companies. There are no outstanding options, warrants, rights (including
conversion or, preemptive rights and rights of first refusal or similar rights) or agreements,
orally or in writing, to purchase or acquire any equity interest or share capital, or any
securities convertible into or exchangeable for an equity interest or share capital, of the
Domestic Companies.

			
	3.	 	Subsidiaries.

	 	 	Except as set forth in Section 3 of the Disclosure Schedule, the Company and
each Group Entity do not currently own or control, directly or indirectly, any interest in
any other company, corporation, partnership, trust, joint venture, association, or other
business entity. Neither the Company nor any Group Entity is a participant in any joint
venture, partnership or similar arrangement.

			
	4.	 	Authorization.

	 	 	All corporate action required to be taken by the relevant Group Entity’s board of directors
and shareholders in order to authorize each respective Group Entity to enter into the
Transaction Documents to which such Group Entity is a party, and to issue the Shares at the
Closing, has been taken or will be taken prior to the Closing. All action on the part of
the officers of the relevant Group Entity necessary for the execution and delivery of the
Transaction Documents, the performance of all obligations of such Group Entity under the
Transaction Documents to be performed as of the Closing, and the issuance and delivery of
the Shares has been taken or will be taken prior to the Closing. All action on the part of
the officers of the relevant Group Entity necessary for the performance of all obligations
of such Group Entity under the Transaction Documents to be performed as of the Closing has
been taken or will be taken prior to the Closing. The Transaction Documents, when executed
and delivered by the relevant Group Entity, shall constitute valid and legally binding
obligations of the relevant Group Entity, enforceable against such Group Entity in
accordance with their respective terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general

SCHEDULE 4
1

 

	 	 	application relating to or affecting the enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies, or (iii) to the extent the indemnification provisions contained in
the Shareholders’ Agreement and the Indemnification Agreement may be limited by applicable
securities laws. The sale of the Shares or is not subject to any preemptive rights or rights
of first refusal, or if any such preemptive rights or rights of first refusal exist, waiver
of such rights has been obtained from the holders thereof. For the purpose only of this
Agreement, “reserve,” “reservation” or similar words with respect to a specified number of
Common Shares or Series A Preferred Shares of the Company shall mean that the Company shall,
and the Board of Directors of the Company shall procure that the Company shall, refrain from
issuing such number of shares so that such number of shares will remain in the authorized
but unissued share capital of the Company until the conversion rights of the holders of any
Convertible Securities exercisable for such shares are exercised in accordance with the
Restated Articles or otherwise.

			
	5.	 	Title to Shares.

	5.1	 	Except for the restrictions on transfer contained in the Agreement and listed on Section
12.5(3) and Section 12.5(4) in the Shareholders’ Agreement, all of the Common Shares owned
and held by each Seller and listed opposite such Seller’s name on Schedule 1 hereto
have been duly authorized, are validly issued and outstanding, are fully paid non-assessable,
and are owned by such Sellers, free and clear of any lien, claim, restriction upon transfer
(other than pursuant to applicable securities laws), option, charge, security interest or
other encumbrance.
	 
	5.2	 	Upon delivery by each Seller or the Company of the certificates representing the Common
Shares owned and held by such Sellers and listed opposite such Seller’s name on Schedule
1 hereto pursuant to this Agreement, and assuming the Purchaser acquires such Shares
without knowledge of any adverse claim thereto, the Purchaser will acquire good valid title to
the Shares, free and clear of any Lien.
	 
	5.3	 	The Shares, when issued, sold and delivered in accordance with the terms and for the
consideration set forth in this Agreement, will be validly issued, fully paid and
nonassessable and free of restrictions on transfer other than restrictions on transfer under
this Agreement, the Shareholders’ Agreement, applicable securities laws and liens or
encumbrances created by or imposed by the Purchaser. Subject in part to the accuracy of the
representations of the Purchaser in Schedule 6 of this Agreement, the Shares will be
issued in compliance with all applicable securities laws.
	 
	5.4	 	All presently outstanding Common Shares of the Company were duly and validly issued, fully
paid and non-assessable, and are free and clear of any liens and free of restrictions on
transfer (except for any restrictions on transfer under applicable securities laws) and have
been issued in compliance in all material respects with the requirements of all applicable
securities laws and regulations, including, to the extent applicable, the Securities Act.

			
	6.	 	Governmental Consents and Filings.

SCHEDULE 4
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	 	 	No consent, approval, order or authorization of or registration, qualification, designation,
declaration or filing with, any Governmental Authority is required on the part of the
Company is required in connection with the valid execution, delivery and consummation of the
transactions contemplated by this Agreement, Shareholder’s Agreement or the offer or sale of
the Shares.

			
	7.	 	Litigation.

	 	 	Save as set out in the Section 7 of the Disclosure Schedule, there is no
claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or
to the Warrantors’ knowledge, currently threatened (i) against any Group Entity or any
officer, director or employee of any Group Entity that would either individually or in
aggregate, reasonably be expected to have a Material Adverse Effect; or (ii) to the
Warrantors’ knowledge, that questions the validity of the Transaction Documents or the right
of any Group Entity to enter into them, or to consummate the transactions contemplated by
the Transaction Documents. None of the Group Entities, its officers or directors, is a
party or is named as subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality which would either individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect. There is no
action, suit, proceeding or investigation by any Group Entity pending or which any Group
Entity intends to initiate. The foregoing includes, without limitation, actions, suits,
proceedings or investigations pending or threatened in writing (or any basis therefor known
to the Warrantors) involving the prior employment of any of the Group Entity’s employees,
their services provided in connection with Group Entity’s business, or any information or
techniques allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers.

			
	8.	 	Intellectual Property.

	8.1	 	Each Group Entity owns or possesses sufficient legal rights to (i) all trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information and proprietary rights
and processes and (ii) to the Warrantors’ knowledge, all patents and patent rights, as are
necessary to the conduct of such Group Entity’s business as now conducted and as presently
proposed to be conducted, without any known conflict with, or infringement of, the rights of
others. Section 8.1 of the Disclosure Schedule contains a complete and
accurate list of all Intellectual Property owned, licensed to or used by each Group Entity,
whether registered or not, and a complete and accurate list of all licenses granted by such
Group Entity to any third party with respect to any Intellectual Property. No product or
service marketed or sold (or proposed to be marketed or sold) by any Group Entity violates or
will violate any license or infringe any intellectual property rights of any other party.

	8.2	 	No Group Entity has received any communications alleging that any Group Entity has violated
or, by conducting its business, would violate any of the patents, trademarks, service marks,
trade names, copyrights, trade secrets or other proprietary rights or processes of any other
person or entity. Except as set forth in Section 8.2.1 of the Disclosure
Schedule, each Group Entity has obtained and possesses valid licenses to use all of the
software programs present on the computers and other software-enabled electronic

SCHEDULE 4
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	 	 	devices that it owns or leases or that it has otherwise provided to its employees for their
use in connection with such Group Entity’s business. To the Warrantors’ knowledge, it will
not be necessary to use any inventions of any of its employees (or persons it currently
intends to hire) made prior to their employment by a Group Entity. Each employee has
assigned to the Group Entities all intellectual property rights he or she owns that are
related to the Group Entities’ business as now conducted. Section 8.2.2 of the
Disclosure Schedule lists all patents, patent applications, registered trademarks,
trademark applications, registered service marks, service mark applications, registered
copyrights and domain names of each Group Entity.
	 
	8.3	 	Other than with respect to commercially available software products under standard end-user
object code license agreements, there are no outstanding options, licenses, agreements,
claims, encumbrances or shared ownership interests of any kind relating to the foregoing, nor
is any Group Entity bound by or a party to any options, licenses or agreements of any kind
with respect to the patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information, proprietary rights and processes of any other person or
entity.
	 
	8.4	 	No proceedings or claims, in which any Group Entity alleges that any person is infringing
upon, or otherwise violating, its Intellectual Property rights are pending, and none has been
served, instituted or asserted by any Group Entity.
	 
	8.5	 	None of the employees of any Group Entity or the Sellers is obligated under any Contract
(including a Contract of employment), or subject to any judgment, decree or order of any court
or administrative agency, that would interfere with the use of his or her best efforts to
promote the interests of the Group Entities, or that would conflict with the business of any
Group Entity as presently conducted. To the knowledge of the Warrantors, it will not be
necessary to utilize in the course of any Group Entity’s business operations any inventions of
any of the employees of any Group Entity made prior to their employment by the such Group
Entity, except for inventions that have been validly and properly assigned or licensed to such
Group Entity as of the date hereof.
	 
	8.6	 	Each Group Entity has taken all security measures that in the judgment of such Person are
commercially prudent in order to protect the secrecy, confidentiality, and value of its
material Intellectual Property.
	 
	8.7	 	To the best knowledge of the Warrantors, no Public Software (as defined below) forms
substantial part of any product or service provided by any Group Entity (“GC Product or
Service”), and no Public Software was or is used in connection with the development of any GC
Product or Service or is incorporated into, in substantial part, or has been distributed with,
in substantial part, any GC Product or Service. As used in this Section 8.7, “Public Software”
means any software that contains, or is derived in any manner (in whole or in part) from, any
software that is distributed as free software (as defined by the Free Software Foundation),
open source software (e.g., Linux or software distributed under any license approved by the
Open Source Initiative as set forth www.opensource.org) or similar licensing or distribution
models which require the distribution or making available of source code as well as object
code of the software to licensees without charge (except for

SCHEDULE 4
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	 	 	the cost of the medium) and (b) the right of the licensee to modify the software and
redistribute both the modified and unmodified versions of the software, including software
licensed or distributed under any of the following licenses: (i) GNU’s General Public
License (GPL) or Lesser/Library GPL (LGPL); (ii) the Artistic License (e.g., PERL); (iii)
the Mozilla Public License; (iv) the Netscape Public License; (v) the BSD License; or (vi)
the Apache License.

			
	9.	 	Compliance with Other Instruments.

	9.1	 	The Group Entities and the Sellers are not in violation or default (i) of any provisions of
its Memorandum of Association (if any), Articles of Association or any other applicable
constitutional document, (ii) of any instrument, judgment, order, writ or decree, (iii) under
any note, indenture or mortgage, or (iv) under any lease, agreement, contract or purchase
order to which it is a party or by which it is bound that is required to be listed on the
Disclosure Schedule, or (v) of any provision of statute, rule or regulation applicable to such
Group Entity, the violation of which would either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. The execution, delivery and performance of the
Transaction Documents and the consummation of the transactions contemplated by the Transaction
Documents will not result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either (i) a default under any such
provision, instrument, judgment, order, writ, decree, contract or agreement or (ii) an event
which results in the creation of any lien, charge or encumbrance upon any assets of any Group
Entity or the suspension, revocation, forfeiture, or nonrenewal of any material permit or
license applicable to any Group Entity, which would either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
	 
	9.2	 	Penalties and Fines.
	 
	 	 	Except as disclosed in Section 9.2 of the Disclosure Schedule, there are no
penalties and fines of whatsoever nature that has ever been imposed on the any of the Group
Entity.

			
	10.	 	Agreements; Actions.

	10.1	 	Save for the agreements set out in Section 10.1 of the Disclosure Schedule
(the “Material Agreements”) and the Transaction Documents, there are no other agreements,
understandings, instruments, contracts or proposed transactions to which any Group Entity is a
party or by which it is bound that involve (i) obligations (contingent or otherwise) of, or
payments to, any Group Entity in excess of US$100,000 per annum or in excess of US$100,000 in
the aggregate, (ii) the transfer or license of any patent, copyright, trade secret or other
proprietary right to or from any Group Entity, other than from or to another Group Entity or
from a Founder to a Group Entity, (iii) the grant of rights to manufacture, produce, assemble,
license, market, or sell its products to any other person or affect any Group Entity’s
exclusive right to develop, manufacture, assemble, distribute, market or sell its products, or
(iv) indemnification by any Group Entity with respect to infringements of proprietary rights.
All the Material Agreements are valid, binding and enforceable obligations of the parties
thereto and the terms thereof have been complied with by the

SCHEDULE 4
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	 	 	relevant Group Entity, and to the knowledge of the Warrantors’, by all the other parties
thereto. There are to the knowledge of the Warrantors’, no circumstances likely to give rise
to any material breach of such terms, no grounds for rescission, avoidance or repudiation of
any of the Material Agreements which would have a Material Adverse Effect and no notice of
termination or of intention to terminate has been received in respect of any Material
Agreement.
	 
	10.2	 	Save as set out in Section 10.2 of the Disclosure Schedule, the Company has
not declared or paid any dividends, or authorized or made any distribution upon or with
respect to any class of its share capital, and no Group Entity has (i) incurred any
indebtedness for money borrowed or incurred any other liabilities individually in excess of
US$100,000 or in excess of US$100,000 in the aggregate, (ii) made any loans or advances to any
person, other than ordinary advances for travel expenses and trade receivables in the ordinary
course of business, or (iii) sold, exchanged or otherwise disposed of any of its assets or
rights, other than the sale of its inventory in the ordinary course of business or otherwise
envisaged in this Agreement. For the purposes of Sections 10.1 and 10.2 of
this Schedule 4 all indebtedness, liabilities, agreements, understandings,
instruments, contracts and proposed transactions involving the same person or entity shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of such
subsection.
	 
	10.3	 	No Group Entity is a guarantor or indemnitor of any indebtedness of any other person, firm or
corporation that is not a Group Entity.
	 
	10.4	 	Save as set out in Section 10.4 of the Disclosure Schedule or in connection
with this Agreement and the other Transaction Documents, no Group Entity has engaged in the
past three (3) months in any discussion with any representative of any corporation,
partnership, trust, joint venture, limited liability company, association or other entity, or
any individual, regarding (i) a sale of all or substantially all of such Group Entity’s
assets, or (ii) any merger, consolidation or other business combination transaction of such
Group Entity with or into another corporation, entity or person. 

			
	11.	 	Conflict of Interest and Related Party Transactions.

	11.1	 	Other than (i) standard employee benefits generally made available to all employees, (ii)
standard director and officer indemnification agreements approved by the Board of Directors,
and (iii) the purchase of the Company’s share capital in accordance with applicable law, and
the issuance of options to purchase the Company’s Common Shares, in each instance, disclosed
in Section 11.1 of the Disclosure Schedule, there are no agreements,
understandings or proposed transactions between any Group Entity and any of its officers,
directors, consultants or employees, or any Affiliate thereof, respectively.
	 
	11.2	 	No Group Entity is indebted, directly or indirectly, to any of its directors, officers or
employees or to their respective immediate family members or to any Affiliate of any of the
foregoing, other than in connection with expenses or advances of expenses incurred in the
ordinary course of business or employee relocation expenses. None of the Group Entities’
directors, officers or employees, or any members of their immediate families, or any Affiliate
of the foregoing (i) are, directly or indirectly, indebted to any Group Entity or,

SCHEDULE 4
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	 	 	(ii) to the Warrantors’ knowledge, have any direct or indirect ownership interest in any
firm or corporation with which the Company is affiliated or with which any Group Entity has
a business relationship, or any firm or corporation which competes with any Group Entity
except that directors, officers or employees or shareholders of the Company may own shares
in (but not exceeding one percent (1%) of the outstanding shares of) publicly traded
companies that may compete with any Group Entity. To the Warrantors’ knowledge, none of the
Group Entities’ employees or directors or any members of their immediate families or any
Affiliate of any of the foregoing are, directly or indirectly, interested in any contract
with any Group Entity. None of the directors or officers, or any members of their immediate
families, has any material commercial, industrial, banking, consulting, legal, accounting,
charitable or familial relationship with any of the Group Entities’ five (5) largest
business relationship partners, service providers, joint venture partners, licensees and
competitors.
	 
	11.3	 	Except for the Group Entities and the entities set forth in Section 11.3 of
Disclosure Schedule, there are no corporations, partnerships, trusts, joint ventures,
limited liability companies or other business entities in which any Founder owns or controls,
directly or indirectly, 10% or more of the outstanding voting interests.
	 
	11.4	 	Except as disclosed in Section 11.4 of the Disclosure Schedule, no employee,
officer, or director of any Group Entity (“Related Party”) or member of such Related Party’s
immediate family, or any corporation, limited liability company, partnership or other entity
in which such Related Party is an officer, director or partner, or in which such Related Party
has significant ownership interests or otherwise controls, loans, or extend or guarantee
credit) to any of them. To the Company’s knowledge and except as provided in Section 11.4
of the Disclosure Schedule, none of such persons has any direct or indirect
ownership interest in any firm or corporation with which the Company is affiliated or with
which the Company has a business relationship, or any firm or corporation that competes with
the Company, except that employees, officers, or directors of the Company and members of such
Related Party’s immediate families may own stock in publicly traded companies that may compete
with the Company. Except as provide in Section 11.4 of the Disclosure
Schedule, no Related Party or member of their immediate family is directly or indirectly
interested in any material contract with the Company.

			
	12.	 	Rights of Registration and Voting Rights.

	 	 	Except as provided in the Shareholders’ Agreement, no Group Entity is under any obligation
to register under the Securities Act or any other applicable securities laws, any of its
currently outstanding securities or any securities issuable upon exercise or conversion of
its currently outstanding securities. To the Warrantors’ knowledge, except as contemplated
in the Shareholders’ Agreement, no shareholder of any Group Entity has entered into any
agreements with respect to the voting of shares in the capital of the Company. Except as
contemplated by or disclosed in the Transaction Documents, no Founder is a party to or has
any knowledge of any agreements, written or oral, relating to the acquisition, disposition,
registration under the Securities Act, or voting of the shares or securities of any Group
Entity.

SCHEDULE 4
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	13.	 	Absence of Liens.

	 	 	Except as provided in Section 13 of the Disclosure Schedule, the property
and assets owned by the Group Entities are free and clear of all mortgages, deeds of trust,
liens, loans and encumbrances, except for statutory liens for the payment of current taxes
that are not yet delinquent and encumbrances and liens that arise in the ordinary course of
business and do not materially impair the Group Entities’ ownership or use of such property
or assets. With respect to the property and assets it leases, each Group Entity is in
compliance with such leases and, to the Warrantors’ knowledge, holds a valid leasehold
interest free of any liens, claims or encumbrances other than those of the lessors of such
property or assets.

			
	14.	 	Financial Statements.

	14.1	 	The Domestic Companies have delivered to the Purchaser its unaudited Financial Statements as
of December 31, 2008 and for the fiscal year ended December 31, 2008 and its unaudited
Financial Statements as of June 30, 2009 and for the six-month period ended June 30, 2009 (the
“Statement Date”). The unaudited Financial Statements may not contain all footnotes required
by generally accepted accounting principles. The Financial Statements fairly present in all
material respects the financial condition and operating results of the Domestic Companies and
Schools as of the dates, and for the periods, indicated therein, subject in the case of the
unaudited Financial Statements to normal year-end audit adjustments. Except as set forth in
the Financial Statements, the Domestic Companies and the Schools has no material liabilities
or obligations, contingent or otherwise, as of the Statement Date, other than (i) liabilities
incurred in the ordinary course of business subsequent to the Statement Date, (ii) obligations
under contracts and commitments incurred in the ordinary course of business and (iii)
liabilities and obligations of a type or nature not required under generally accepted
accounting principles to be reflected in the Financial Statements, which, in all such cases,
individually and in the aggregate would not have a Material Adverse Effect. The Domestic
Companies and the Schools maintain and will continue to maintain a standard system of
accounting established and administered in accordance with generally accepted accounting
principles.
	 
	14.2	 	The Company and each Group Entity has filed (or has had filed on its behalf), will timely
file or will cause to be timely filed, or has timely filed for an extension of the time to
file all tax returns and reports (including information returns and reports) as required by
law. These returns and reports are true and correct in all material respects except to the
extent that a reserve has been reflected on the Financial Statements in accordance with the
applicable accounting principles. The Company and each Group Entity has paid all taxes and
other assessments due, except those contested by it in good faith that are listed in
Section 14.2 of the Disclosure Schedule and except to the extent that a reserve has
been reflected on the Financial Statements in accordance with the applicable accounting
principles. The provision for taxes of the Company and the Group Entities as shown in the
Financial Statements is adequate for taxes due or accrued as of the date thereof. Neither the
Company nor any Group Entity has made any elections pursuant to the United States Internal
Revenue Code of 1986, as amended (the “Code”) or pursuant to the applicable tax laws
of any jurisdiction other than the United States (other than elections that relate solely to
methods of accounting, depreciation or amortization) that would have a material adverse

SCHEDULE 4
8

 

	 	 	effect on the Company’s consolidated financial condition, business as presently conducted or
proposed to be conducted or any of its properties or material assets. Neither the Company
nor any Group Entity has had any tax deficiency assessed, or to the knowledge of the Company
or the Founder, proposed against it or has executed any waiver of any statute of limitations
on the assessment or collection of any tax or governmental charge that remains in effect.
Neither the Company’s nor any Group Entity’s tax returns, federal, state or otherwise, have
been audited by any relevant governmental authority. Since the Financial Statement Date,
neither the Company nor any Group Entity has incurred any taxes, assessments or governmental
charges other than in the ordinary course of business and the Company has made adequate
provisions on its books of account for all taxes, assessments and governmental charges with
respect to their businesses, properties and operations for such period. The Group Entities
have withheld or collected from each payment made to each of their employees, the amount of
any taxes required to be withheld or collected therefrom, and have timely paid (or has had
timely paid on its behalf) the same to the proper tax receiving officers or authorized
depositories.

			
	15.	 	Changes.

	 	 	Since the Statement Date, except as set forth in Section 15 of the Disclosure
Schedule or as contemplated by this Agreement or the Transaction Documents, there has
not been:

	 	(a)	 	any change in the assets, liabilities, financial condition or operating results
of any Group Entity from that reflected in the Financial Statements, except changes in
the ordinary course of business that have not caused, in the aggregate, a Material
Adverse Effect on a Group Entity;
	 
	 	(b)	 	any damage, destruction or loss, whether or not covered by insurance, that
would have a Material Adverse Effect on a Group Entity;
	 
	 	(c)	 	any waiver or compromise by any Group Entity of a valuable right or of a
material debt owed to it;
	 
	 	(d)	 	any satisfaction or discharge of any lien, claim, or encumbrance or payment of
any obligation by any Group Entity, except in the ordinary course of business and the
satisfaction or discharge of which would not have a Material Adverse Effect;
	 
	 	(e)	 	any material change to a material contract or agreement by which any Group
Entity or any of its assets is bound or subject;
	 
	 	(f)	 	any material change in any compensation arrangement or agreement with any
employee, officer, director or shareholder;
	 
	 	(g)	 	any resignation or termination of employment of any officer or employee of any
Group Entity that might affect the continuity of business operation of the relevant
Group Entity;
	 
	 	(h)	 	any mortgage, pledge, transfer of a security interest in, or lien, created by
any Group Entity, with respect to any of its material properties or assets, except
liens

SCHEDULE 4
9

 

	 	 	 	for taxes not yet due or payable and liens that arise in the ordinary course of
business and do not materially impair such Company’s ownership or use of such
property or assets;
	 
	 	(i)	 	any dividend, loans or guarantees made by any Group Entity to or for the
benefit of its employees, officers or directors, or any members of their immediate
families, other than travel advances and other advances made in the ordinary course of
its business;
	 
	 	(j)	 	any declaration, setting aside or payment or other distribution in respect of
any Group Entity’s share capital, or any direct or indirect redemption, purchase, or
other acquisition of any of such shares by any Group Entity;
	 
	 	(k)	 	any sale, assignment or transfer of any Group Entity Intellectual Property that
could reasonably be expected to result in a Material Adverse Effect;
	 
	 	(l)	 	receipt of notice that there has been a loss of, or material order cancellation
by, any major customer of any Group Entity;
	 
	 	(m)	 	to the Warrantors’ knowledge, any other event or condition of any character,
other than events affecting the economy or the Company’s industry generally, that
could reasonably be expected to result in a Material Adverse Effect; or
	 
	 	(n)	 	any arrangement or commitment by the Company to do any of the things described
in this Section 15.

			
	16.	 	Employee Matters.

	16.1	 	Section 16.1 of the Disclosure Schedule sets forth a detailed description of
all compensation, including salary, bonus, severance obligations and deferred compensation
paid or payable for each officer, employee, consultant and independent contractor of any Group
Entity who received compensation in excess of US$100,000 for the past tweleve (12) months.
	 
	16.2	 	To the Warrantors’ knowledge, no employee of any Group Entity is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement, or subject to
any judgment, decree or order of any court or administrative agency, that would materially
interfere with such employee’s ability to promote the interest of the Group Entities or that
would conflict with the Group Entities’ business. Neither the execution or delivery of the
Transaction Documents, nor the carrying on of the Company’s business by the employees of the
Group Entities, nor the conduct of the business as now conducted and as presently proposed to
be conducted, will, to the Warrantors’ knowledge, conflict with or result in a breach of the
terms, conditions, or provisions of, or constitute a default under, any contract, covenant or
instrument under which any such employee is now obligated.
	 
	16.3	 	No Group Entity is delinquent in payments to any of its employees, consultants, or
independent contractors for any wages, salaries, commissions, bonuses, or other direct

SCHEDULE 4
10

 

	 	 	compensation for any service performed for it to the date hereof or amounts required to be
reimbursed to such employees, consultants, or independent contractors. Each Group Entity has
complied in all material respects with all applicable laws related to employment, including
those related to wages, hours, worker classification, and collective bargaining, and the
payment and withholding of taxes and other sums as required by law except where
noncompliance with any applicable law would not result in a Material Adverse Effect. Each
Group Entity has withheld and paid to the appropriate governmental entity or is holding for
payment not yet due to such governmental entity all amounts required to be withheld from
employees of such Group Entity and is not liable for any arrears of wages, taxes, penalties,
or other sums for failure to comply with any of the foregoing.
	 
	16.4	 	To the Warrantors’ knowledge, no employee who is crucial for the business operation of the
Company Entities intends to terminate employment with any Group Entity or is otherwise likely
to become unavailable to continue as a employee, nor does any Group Entity have a present
intention to terminate the employment of any of the foregoing. The employment of each
employee of the Company is terminable at the will of the Company. Except as set forth in
Section 16.4 of the Disclosure Schedule or as required by law, upon
termination of the employment of any such employees, no severance or other payments will
become due. Except as set forth in Section 16.4 of the Disclosure Schedule,
the Company has no policy, practice, plan, or program of paying severance pay or any form of
severance compensation in connection with the termination of employment services.
	 
	16.5	 	The Company has not made any representations regarding equity incentives to any officer,
employees, director or consultant that are inconsistent with the share amounts and terms set
forth in the Company’s board minutes.
	 
	16.6	 	Each former employee whose employment was terminated by the Company has entered into an
agreement with the Company providing for the full release of any claims against the Company or
any related party arising out of such employment.
	 
	16.7	 	Save as set out in Section 16.7 of the Disclosure Schedule, each Group Entity
has completed its social security registration with the relevant labor bureau in the PRC, and
has duly performed its legal obligations in all material aspects to make social security
(including basic pension, basic medical insurance, unemployment insurance, work-related injury
insurance and maternity insurance) and housing fund contributions (the “Employee Benefit
Plans”) for its employees in full and on a timely basis as required by applicable laws.
	 
	16.8	 	No Group Entity is bound by or subject to (and none of its assets or properties is bound by
or subject to) any written or oral, express or implied, contract, commitment or arrangement
with any labor union, and no labor union has requested or, to the Warrantors’ knowledge, has
sought to represent any of the employees, representatives or agents of any Group Entity.
There is no strike or other labor dispute involving any Group Entity pending, or to the
Warrantors’ knowledge, threatened, which could have a Material Adverse Effect, nor is the
Company aware of any labor organization activity involving its employees.
	 
	16.9	 	To the Warrantors’ knowledge, none of the Sellers or directors of any Group Entity during

SCHEDULE 4
11

 

	 	 	the previous four (4) years, has been (a) subject to voluntary or involuntary petition under
any applicable bankruptcy laws or any state insolvency laws or the appointment of manager, a
receiver or similar officer by a court for his business or property; (b) convicted in a
criminal proceeding or named as a subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses); (c) subject to any order, judgment, or decree
(not subsequently reversed, suspended, or vacated) of any court of competent jurisdiction
permanently or temporarily enjoining him from engaging, or otherwise imposing limits or
conditions on his engagement in any securities, investment advisory, banking, insurance, or
other type of business or acting as an officer or director of a public company; or (d) found
by a court of competent jurisdiction in a civil action or by any relevant regulatory
organization to have violated any applicable securities, commodities, or unfair trade
practices law, which such judgment or finding has not been subsequently reversed, suspended,
or vacated.

			
	17.	 	Tax Matters.

	17.1	 	The provisions for taxes as shown on the balance sheet included in the Financial Statements
are sufficient in all material respects for the payment of all accrued and unpaid applicable
taxes of the Group Entities as of the date of each such balance sheet, whether or not assessed
or disputed as of the date of each such balance sheet. Except as set forth in Section
17 of the Disclosure Schedule, there have been no extraordinary examinations or
audits of any tax returns or reports by any applicable Governmental Authority. Except as set
forth in Section 17 of the Disclosure Schedule, each Group Entity has filed or
caused to be filed on a timely basis all tax returns that are or were required to be filed (to
the extent applicable), all such returns are correct and complete, and each Group Entity has
paid all taxes that have become due, or have reflected such taxes in accordance with US GAAP
(or another international recognized accounting standard acceptable to the Board of Directors
including the approval of Series A Director) as a reserve for taxes on the Financial
Statements. There are in effect no waivers of applicable statutes of limitations with respect
to taxes for any year.
	 
	17.2	 	Immediately after the Closing, the Company will not be a “Controlled Foreign Corporation”
(“CFC”) as defined in the U.S. Internal Revenue Code of 1986, as amended (or any successor
thereto) (the “Code”) with respect to the shares held by the Purchaser.
	 
	17.3	 	The Company has never been, and, to the best of its knowledge after consultation with its tax
advisors, will not be with respect to its taxable year during which the Closing occurs, a
“passive foreign investment company” (“PFIC”) within the meaning of Section 1297 of the Code.
The Company shall use its best efforts to avoid being a PFIC.
	 
	17.4	 	The Company hereby represents, warrants and acknowledges that (i) it has no plan to (and it
has not engaged in any transactions to) complete the direct or indirect acquisition of
substantially all of the properties held directly or indirectly by a domestic corporation or
substantially all of the properties constituting a trade or business of a domestic
partnership, (ii) it is not a “surrogate foreign corporation” within the meaning of Section
7874(a)(2)(B) of the Code.

SCHEDULE 4
12

 

	17.5	 	No shareholder of any member of a Group Entity, solely by virtue of its status as shareholder
of such Group Entity, have personal liability under local law for the debts and claims of such
Group Entity. There has been no communication from any tax authority relating to or affecting
the tax classification of any member of the Group Entities.

			
	18.	 	OFAC Compliance.

	18.1	 	Neither the Company nor any Group Entity or, to the Company’s knowledge, any directors,
administrators, officers, board of directors (supervisory and management) members or employees
of the Company or any Group Entity is an OFAC Sanctioned Person (as defined below). The Group
Entities and, to the Company’s knowledge, their directors, administrators, officers,
administrators, board of directors (supervisory and management) members or employees are in
compliance with, and have not previously violated, the USA Patriot Act of 2001, and all other
applicable United States and PRC anti-money laundering laws and regulations. None of (i) the
purchase and sale of the Shares, (ii) the execution, delivery and performance of this
Agreement or any of the documents in Exhibits attached hereto, or (iii) the
consummation of any transaction contemplated hereby or thereby, or the fulfillment of the
terms hereof or thereof, will result in a violation by anyone, including without limitation
the Shareholder, of any of the OFAC Sanctions or of any anti-money laundering laws of the
United States, the PRC or any other jurisdiction.
	 
	18.2	 	For the purposes of this Section 18:

	 	(a)	 	“OFAC Sanctions” means any sanctions program administered by the Office of
Foreign Assets Control of the United States Department of the Treasury (“OFAC”) under
authority delegated to the Secretary of the Treasury (the “Secretary”) by the President
of the United States or provided to the Secretary by statute, and any order or license
issued by, or under authority delegated by, the President or provided to the Secretary
by statute in connection with a sanctions program thus administered by OFAC. For ease
of reference, and not by way of limitation, OFAC Sanctions programs are described on
OFAC’s website at www.treas.gov/ofac.
	 
	 	(b)	 	“OFAC Sanctioned Person” means any government, country, corporation or other
entity, group or individual with whom or which the OFAC Sanctions prohibit a United
States Person from engaging in transactions, and includes without limitation any
individual or corporation or other entity that appears on the current OFAC list of
Specially Designated Nationals and Blocked Persons (the “SDN List”). For ease of
reference, and not by way of limitation, OFAC Sanctioned Persons other than government
and countries can be found on the SDN List on OFAC’s website at
ww.treas.gov/offices/enforcement/ofac/sdn.
	 
	 	(c)	 	“United States Person” means any United States citizen, permanent resident
alien, entity organized under the laws of the United States (including foreign
branches), or any person (individual or entity) in the United States, and, with respect
to the Cuban Assets Control Regulations, also includes any corporation or other entity
that is owned or controlled by one of the foregoing, without regard to where it is
organized or doing business.

SCHEDULE 4
13

 

			
	19.	 	Foreign Corrupt Practices Act.

	 	 	None of the Company or any Group Entity or, to the Company’s or the Sellers’ knowledge, any
of their directors, administrators, officers, board of directors (supervisory and
management) members or employees have made, directly or indirectly, any payment or promise
to pay, or gift or promise to give or authorized such a promise or gift, of any money or
anything of value, directly or indirectly, to (a) any foreign official (as such term is
defined in the FCPA) for the purpose of influencing any official act or decision of such
official or inducing him or her to use his or her influence to affect any act or decision of
a governmental authority, or (b) any foreign political party or official thereof or
candidate for foreign political office for the purpose of influencing any official act or
decision of such party, official or candidate or inducing such party, official or candidate
to use his, her or its influence to affect any act or decision of a foreign governmental
authority, in the case of both (a) and (b) above in order to assist the Company or any Group
Entity to obtain or retain business for, or direct business to the Company or any Group
Entity, as applicable. None of the Company, any Group Entity or any of their directors,
administrators, officers, board of directors (supervisory and management) members or
employees has made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment of funds or received or retained any funds in violation of any law, rule or
regulation.

			
	20.	 	Insurance.

	 	 	Section 20 of the Disclosure Schedule provides a complete list of each Group
Entity’s insurance policies currently in effect. No Group Entity has done or omitted to do
or suffered anything to be done or not to be done other than any acts in the ordinary course
of business which has or would render any policies of insurance taken out by it or by any
other person in relation to any such Group Entity’s assets void or voidable or which would
result in an increase in the rate of premiums on the said policies and there are no claims
outstanding and no circumstances which would give rise to any claim under any such policies
of insurance.

			
	21.	 	Confidential Information and Invention Assignment Agreements.

	 	 	Each current and former employee, consultant and officer of the Company or any Group Entity
has executed an agreement with the Company or such Group Entity regarding confidentiality
and proprietary information substantially in the form or forms delivered to the counsel for
the Purchaser (the “Confidential Information Agreements”). No current or former employee
has excluded works or inventions from his or her assignment of inventions pursuant to such
employee’s Confidential Information Agreement. The Company and any Group Entity are not
aware that any of the employees is in violation thereof.

			
	22.	 	Governmental and Other Permits.

	 	 	Save as set out in Section 16.7 of the Disclosure Schedule, each Group Entity has
all franchises, governmental permits, licenses and any similar authority necessary for the

SCHEDULE 4
14

 

	 	 	conduct of its business. No Group Entity is in default in any material respect under any of
such franchises, governmental permits, licenses or other similar authority.
	 
	22.1	 	The Domestic Companies have applied and obtained all requisite licenses, clearance and
permits required under PRC Laws as necessary for the conduct of its businesses, and the
Domestic Companies have complied in all material respects with all PRC Laws in connection with
foreign exchange, including without limitation, carrying out all relevant filings,
registrations and applications for relevant permits with the PRC State Administration of
Foreign Exchange and any other relevant authorities, and all such permits are validly
subsisting.
	 
	22.2	 	The registered capital of the Domestic Companies and the WFOE has been fully paid up in
accordance with the schedule of payment stipulated in its respective articles of association,
approval document, certificate of approval and legal person business license (hereinafter
referred to as the “Establishment Documents”) and in compliance with PRC Laws and regulations,
and there is no outstanding capital contribution commitment.
	 
	22.3	 	The Establishment Documents of the Domestic Companies and the WFOE have been duly approved
and filed in accordance with the laws of the PRC and are valid and enforceable.
	 
	22.4	 	The business scope specified in the Establishment Documents of the Domestic Companies comply
with the requirements of all relevant PRC Laws. The operation and conduct of the business by
and the term of operation of the Domestic Companies in accordance with the Establishment
Documents is in compliance with the Laws of the PRC.
	 
	22.5	 	The Domestic Companies and the Schools have passed its annual inspection by the relevant
governmental authorities for their operation in its last three years (where applicable), and
the relevant administration for industry and commerce has affixed an annual inspection chop on
its business license.
	 
	22.6	 	The Disclosure Schedule sets out full and accurate details of all loan agreements entered
into between any one Group Entity regarding any inter-company loan, shareholders loan or
foreign exchange loan obtained by them. Such loan agreements have been duly registered in
accordance with the laws of the PRC (where necessary) and all such registrations are validly
subsisting under the laws of the PRC.

			
	23.	 	Corporate Documents.

	 	 	The Memorandum and Articles of Association, and all other constitutional documents (or
analogous constitutional documents) of each Group Entity made after the closing of the
previous financing of the Company are in the form provided to the Purchaser. The copy of the
minute books of the Company provided to the Purchaser contains minutes of all meetings of
directors and shareholders and all actions by written consent without a meeting by the
directors and shareholders since the date of incorporation and accurately reflects in all
material respects all actions by the directors (and any committee of directors) and
shareholders with respect to all transactions referred to in such minutes.

			
	24.	 	Liabilities.

SCHEDULE 4
15

 

	 	 	Except as set forth in Section 24 of the Disclosure Schedule or arising
under the instruments set forth in Section 10 of the Disclosure Schedule,
the Domestic Companies and the WFOE have no liabilities of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, except for (i)
liabilities set forth in the Financial Statements, (ii) trade or business liabilities
incurred in the ordinary course of business, and (iii) other liabilities that do not exceed
US$20,000 in the aggregate.

			
	25.	 	Compliance with Laws. 

	25.1	 	Except as set forth in Section 25.1 of the Disclosure Schedule, each Group
Entity is in material compliance with all applicable laws applicable to it or to the conduct
or operation of its business or the ownership or use of any of its assets or properties;
	 
	25.2	 	Except as set forth in Section 25.2 of the Disclosure Schedule, no event has
occurred and no circumstance exists that to the Warrantors’ knowledge (i) may constitute or
result in a violation by any Group Entity, or a failure on the part of any Group Entity to
comply with any law, or (ii) may give rise to any obligation on the part of any Group Entity
to undertake, or to bear all or any portion of the cost of, any remedial action of any nature,
except for such violations or failures by a Group Entity that, individually or in the
aggregate, would not result in any Material Adverse Effect;
	 
	25.3	 	No Group Entity has received any written notice from any Governmental Authority regarding (i)
any actual, alleged or likely material violation of, or material failure to comply with, any
law, or (ii) any actual, alleged or likely material obligation on the part of any Group Entity
to undertake, or to bear all or any portion of the cost of, any remedial action of any nature;
	 
	25.4	 	No Group Entity, nor any director, agent, employee or any other person acting for or on
behalf of any Group Entity, has directly or indirectly (i) made any contribution, gift, bribe,
payoff, influence payment, kickback, or any other fraudulent payment in any form, whether in
money, property, or services to any public official or otherwise (A) to obtain favorable
treatment in securing business for a Group Entity, (B) to pay for favorable treatment for
business secured, or (C) to obtain special concessions or for special concessions already
obtained, for or in respect of any Group Entity, in each case which would have been in
violation of any applicable law or (ii) established or maintained any fund or assets in which
any Group Entity shall have proprietary rights that have not been recorded in the books and
records of a Group Entity.

			
	26.	 	Environmental and Safety Laws.

	 	 	To the knowledge of the Company, no Group Entity is in violation of any applicable statute,
law, or regulation relating to the environment or occupational health and safety, except
where such failure would not have a material adverse effect on such Group Entity’s business
or properties, and no material expenditures are or will be required in order to comply with
any such existing statute, law or regulation.

			
	27.	 	Manufacture, Marketing and Development Rights.

SCHEDULE 4
16

 

	 	 	No Group Entity has granted rights to manufacture, produce, assemble, license, market, or
sell its respective products or services to any other person and is not bound by any
agreement that affects any Group Entity’s exclusive rights to develop, manufacture,
assemble, distribute, market or sell its respective products or services.

			
	28.	 	Disclosure; Projections.

	 	 	The Company and the Sellers has made available to the Purchaser all the information
reasonably available to the Company that the Purchaser have requested for deciding whether
to acquire the Shares, including certain of financial projections with respect to the
Company (the “Projections”), each of which were prepared in good faith. To the Warrantors’
knowledge, no representation or warranty of any Warrantor contained in this Agreement, as
qualified by the Disclosure Schedule, and no certificate furnished or to be furnished to the
Purchaser at the Closing contains any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made.

			
	29.	 	Business Plan and Budget.

	 	 	The Company has delivered to the Purchaser on or before the Closing a business plan and
budget for the twelve (12) months following the Closing (the “Business Plan”). Such
Business Plan was prepared in good faith based upon assumptions and projections which the
Sellers believe are reasonable and not materially misleading.

			
	30.	 	Entire Business.

	 	 	The Company was formed solely to acquire and hold equity interest in the Group Entities, and
since its formation has not engaged in any business and has not incurred any material
liability in the course of its business of acquiring and holding its equity interest in the
Group Entities. The Group Entities are engaged solely in the principal businesses disclosed
to the Purchaser and have no other activities.

	31.	 	SAFE Requirements.The Sellers and all other shareholders of the Company who are
deemed PRC domestic residents have completed the overseas investment foreign exchange
registration procedures as required by the State Administration on Foreign Exchange with
regard to the capitalization of the Group Entities.

SCHEDULE 4
17

 

SCHEDULE 6

REPRESENTATIONS AND WARRANTIES OF

THE PURCHASER

			
	1.	 	Authorization.

			
		 	Such Purchaser has full power, authority and legal capacity to enter into, deliver and
perform the Transaction Documents. The Transaction Documents to which the Purchaser is a
party, when executed and delivered by such Purchaser, will constitute valid and legally
binding obligations of the Purchaser, enforceable in accordance with their terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement of creditors’
rights generally, and as limited by laws relating to the availability of a specific
performance, injunctive relief, or other equitable remedies, or (ii) to the extent the
indemnification provisions contained in the Shareholders’ Agreement may be limited by
applicable securities laws.

			
	2.	 	Compliance with other Instruments.

			
		 	The execution, delivery and performance by the Purchaser of the Transaction Documents does
not and will not contravene, breach or violate the terms of any agreement, document or
instrument to which such Purchaser is a party or by which any of such Purchaser’s assets or
properties are bound.

			
	3.	 	Disclosure of Information.

			
		 	Such Purchaser has had an opportunity to discuss the Group Entities’ business, management,
financial affairs and the terms and conditions of the offering of the Shares with the Group
Entities’ management and has had an opportunity to review the Group Entities’ facilities.
The foregoing, however, does not limit or modify the representations and warranties of the
Warrantor in Schedule 4 of this Agreement, or the right of the Purchaser to rely
thereon save as set forth in the Disclosure Schedule.

			
	4.	 	Purchase Entirely for Own Account.

			
		 	This Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to
the Company, which by the Purchaser’s execution of this Agreement, the Purchaser hereby
confirms, that the Shares to be acquired by the Purchaser will be acquired for investment
for the Purchaser’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that the Purchaser has no present intention
of selling, granting any participation in, or otherwise distributing the same. By executing
this Agreement, the Purchaser further represents that the Purchaser does not presently have
any contract, undertaking, agreement or arrangement with any Person to sell, transfer or
grant participations to such Person or to any third Person, with respect to

SCHEDULE 6 
1

 

			
	 	 	any of the Shares. The Purchaser has not been formed for the specific purpose of acquiring
the Shares.]

			
	5.	 	Restricted Securities.

			
		 	The Purchaser understands that the Shares have not been, and will not be, registered under
the Securities Act, by reason of a specific exemption from the registration provisions of
the Securities Act which depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of the Purchaser’s representations as expressed herein.
The Purchaser understands that the Shares are “Restricted Securities” under applicable U.S.
federal and state securities laws and that, pursuant to these laws, the Purchaser must hold
the Shares indefinitely unless they are registered with the Securities and Exchange
Commission and qualified by state authorities, or an exemption from such registration and
qualification requirements is available. The Purchaser acknowledges that the Company has no
obligation to register or qualify the Shares for resale except as set forth in the
Shareholders’ Agreement. The Purchaser further acknowledges that if an exemption from
registration or qualification is available, it may be conditioned on various requirements
including, but not limited to, the time and manner of sale, the holding period for the
Shares, and on requirements relating to the Company which are outside of the Purchaser’s
control, and which the Company is under no obligation and may not be able to satisfy. The
Purchaser understands that this offering is not intended to be part of the public offering,
and that the Purchaser will not be able to rely on the protection of Section 11 of the
Securities Act.

			
	6.	 	No Public Market.

			
		 	The Purchaser understands that no public market now exists for the Shares, and that the
Company has made no assurances that a public market will ever exist for the Shares.

			
	7.	 	Accredited Investor.

			
		 	The Purchaser is an accredited investor as defined in the Securities and Exchange Commission
(“SEC”) Rule 501(a) of Regulation D, as presently in effect, under the Securities Act.

SCHEDULE 6
2

 

SCHEDULE 7

CAPITALIZATION TABLE

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Shareholding
	 	 	Shareholder	 	 	No. of Shares	 	 	Percentage
	Pre-Closing	 	BRIGHT UNISON LIMITED	 	 	67,800,000	 	 	 	54.240	%
	 
	CENTRAL GLORY INVESTMENTS LIMITED	 	 	31,200,000	 	 	 	24.960	%
	 
	PERFECT WISDOM INTERNATIONAL LIMITED	 	 	12,000,000	 	 	 	9.600	%
	 
	EXCELLENT NEW LIMITED	 	 	9,000,000	 	 	 	7.200	%
	 
	KTB/UCI China Ventures II Limited	 	 	5,000,000	 	 	 	4.000	%
	 
	Number of Shares	 	 	125,000,000	 	 	 	100.000	%
	 
	Post-Closing	 	BRIGHT UNISON LIMITED	 	 	62,800,000	 	 	 	50.240	%
	 
	CENTRAL GLORY INVESTMENTS LIMITED	 	 	21,112,500	 	 	 	16.890	%
	 
	PERFECT WISDOM INTERNATIONAL LIMITED	 	 	8,125,000	 	 	 	6.500	%
	 
	EXCELLENT NEW LIMITED	 	 	6,087,500	 	 	 	4.870	%
	 
	Tiger Global Five China Holdings	 	 	21,875,000	 	 	 	17.500	%
	 
	KTB/UCI China Ventures II Limited	 	 	5,000,000	 	 	 	4.000	%
	 
	Number of Shares	 	 	125,000,000	 	 	 	100.000	%

SCHEDULE 7
3

 

SCHEDULE 8

NOTICES

SCHEDULE 8
1

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