Document:

ex101.htm

Exhibit 10.1

 

TRANSFER AND PAYMENT AGREEMENT

This Transfer and Payment Agreement (this “Agreement”) is dated as of September 2, 2011, by and among Empresario Inc., an Illinois corporation (“Buyer”), Omar Solis, an individual (“Solis”), and  DecisionPoint Systems, Inc., a Delaware corporation (“Seller”).

RECITALS

1. Copernic Inc. (“Copernic”) and Buyer are parties to an Asset Purchase Agreement dated as of May 14, 2009 (the “Purchase Agreement”), whereby Copernic granted to Buyer the right to quiet enjoyment and use of the Purchased Assets, subject to the terms and conditions set forth therein.

 

2. Solis is the chief executive officer and sole shareholder of Buyer and executed a guarantee of certain obligations related to the Purchase Agreement in favor of Copernic, dated as of May 14, 2009 (the “Guarantee”).

 

3. On August 10, 2010, Buyer and Copernic entered into a Convertible Secured Debenture (the “Debenture”), pursuant to which the balance of the Purchase Price then due under the Purchase Agreement was converted to a note.

 

4. Copernic subsequently transferred its rights under the Purchase Agreement, Debenture and Guarantee to Seller.

 

5. Since entering into the Purchase Agreement, Buyer has operated and controlled Mamma.com and the Ad Network, and Buyer wishes to retain the Purchased Assets so that it may continue to operate the Business (as defined in the Purchase Agreement), which was formerly operated by Copernic.

 

6. Buyer and Seller now wish to terminate the Debenture and Guarantee and complete the transfer of the Purchased Assets, the Business, and all rights attendant thereto as set forth herein in exchange for a $500,000 payment from Buyer to Seller.

 

Capitalized terms used herein without definition, but that are defined in the Purchase Agreement, have the meanings given therein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows intending to be legally bound:

1. Termination of Debenture and Guarantee.

 

(a) Seller hereby agrees that upon the payment and receipt by Seller of $500,000 plus $30,000 for legal expenses incurred by Seller (together with supporting documentation) in certified funds (the “Payoff Amount”) (i) the Debenture shall be cancelled, terminated, and of no further force and effect, and all of the obligations of Buyer under the Debenture shall be terminated and cancelled, and Buyer shall have no liability for any obligations under the Debenture, and (ii) the Guarantee shall be cancelled, terminated, and of no further force and effect, all of the obligations of Solis and Buyer under the Guarantee shall be terminated and cancelled, and Solis and Buyer shall have no liability for any obligations under the Guarantee.

 

  

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2. Transfer of Assets and Other Rights.

 

(a) In consideration of and effective upon receipt by Seller of the Payoff Amount, Seller hereby transfers, assigns and conveys to Buyer, free and clear of all mortgages, pledges, security interests, charges, liens, restrictions and encumbrances of any kind whatsoever, the Purchased Assets and the other rights attendant to the Business, including without limitation, all rights, permits, licenses, claims, causes of action, attorney-client, work product and investigatory privileges, intellectual property, URLs, domain names and options and any like rights or claims relating to or pertaining to the ownership, control or operation of the Purchased Assets and the Business.

 

(b) Under the Purchase Agreement, Seller had legal rights to physical possession of the Purchased Assets and the data relating to the Business, including discs, tapes and diskettes used in connection with the operation of the Business.  Following receipt by Seller of the Payoff Amount, upon the written request of Buyer, Seller shall immediately give Buyer physical possession of the Purchased Assets, including all discs, tapes, contracts, licenses, and/or other materials and information used in the Business, or shall promptly and diligently execute any required documents to evidence the Buyer’s ownership of the Purchased Assets and related rights including without limitation, intellectual property rights, URLs, domain names, and other priviledges, permits and licenses, if possession is not reasonably practicable. Seller shall use reasonable efforts to locate and provide such Purchased Assets to Buyer.

 

(c) Effective upon receipt by Seller of the Payoff Amount, as part of the sale of the Business and Purchased Assets and the rights associated therewith, Seller forever relinquishes its right to assert, waive, or pursue any rights, claims, causes of action, or privileges arising from or in connection with the operation and/or management of the Business and Purchased Assets, which includes the business of Mamma.com and the Ad Network business, including without limitation, all rights, permits, licenses, claims, causes of action, attorney-client, work product and investigatory privileges, intellectual property, URLs, domain names  (including all rights and claims relating to such privileges or right to waive or renounce any such right or privilege), and options relating to or pertaining to the ownership, control or operation of the Purchased Assets and the Business.

 

3. Representations and Warranties of Seller. Seller hereby represents and warrants to Buyer and Solis that:

 

(a) All actions and proceedings necessary to be taken by or on the part of Seller in connection with the transactions contemplated by this Agreement have been duly and validly taken, and this Agreement has been duly and validly authorized, executed and delivered by Seller and no other action on the part of Seller is required in connection therewith.  Seller has full right, authority, power and capacity to execute and deliver this Agreement and to carry out the transactions contemplated hereby.  This Agreement, when executed and delivered, will constitute the legal, valid and binding obligation of Seller enforceable in accordance with its terms.

 

(b) The execution, delivery and performance by Seller of this Agreement does not and will not (i) violate any provision of the Articles of Incorporation and by-laws of Seller, in each case as amended to date, (ii) constitute a violation of, or conflict with or result in any breach of, acceleration of any obligation under, right of termination under, or default under, any agreement or instrument to which Seller is a party or by which Seller is bound, (iii) violate any judgment, decree, order, statute, rule or regulation applicable to Seller, (iv) require Seller to obtain any approval, consent or waiver of, or to make any filing with, any person or entity (governmental or otherwise) that has not been obtained or made.

 

(c) Copernic assigned and/or otherwise legally transferred all of its rights and delegated all of its obligations to Seller under the Purchase Agreement, the Debenture, the Guarantee and related documents (the “Transaction Documents”). As such, Seller has all material rights and powers as the holder and/or seller, as the case may be, under the Transaction Documents sufficient to consummate the transactions contemplated by this Agreement.

 

  

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(d) With respect to the property and other legal interests transferred to the Buyer pursuant to Section 2, Seller has good and marketable title to all such assets free and clear of all mortgages, pledges, security interests, charges, liens, restrictions and encumbrances of any kind whatsoever (other than  any lien held by Citibank NA pursuant to the UCC Financing Statement, File No. 15524804, the Purchase Agreement and Debenture).

 

4. Representations and Warranties of Buyer. Buyer and Solis hereby represent and warrant to Seller that:

 

(a) All actions and proceedings necessary to be taken by or on the part of Buyer and Solis in connection with the transactions contemplated by this Agreement have been or will be duly and validly taken, and this Agreement has been or will be duly and validly authorized, executed and delivered by Buyer and Solis and no other action on the part of Buyer or Solis is required in connection therewith.  Buyer and Solis have full right, authority, power and capacity to execute and deliver this Agreement and to carry out the transactions contemplated hereby.  This Agreement, when executed and delivered, constitutes the legal, valid and binding obligation of Buyer and Solis, enforceable in accordance with its respective terms.

 

(b) The execution, delivery and performance by Buyer or Solis of this Agreement does not and will not (i) violate any provision of the Articles of Incorporation and by-laws of Buyer, as amended to date, (ii) constitute a violation of, or conflict with or result in any breach of, acceleration of any obligation under, right of termination under, or default under, any agreement or instrument to which Buyer or Solis is a party or by which the Buyer or Solis is bound, (iii) violate any judgment, decree, order, statute, rule or regulation applicable to Buyer or Solis, or (iv) require Buyer or Solis to obtain any approval, consent or waiver of, or to make any filing with, any person or entity (governmental or otherwise) that has not been obtained or made.

 

5. General Release of Solis.  Seller, on behalf of itself and its respective affiliates, parents, and subsidiaries, and all of their shareholders, owners, members, partners, directors, officers, managers, employees, agents, trustees, and representatives, assigns, successors, and designees, past, present and future, and each of them (collectively, “Seller Releasors”), hereby fully releases and discharges forever Solis, and his affiliates, trustees, administrators, heirs, representatives, executors, beneficiaries and each of their successors and assigns (collectively “Solis Releasees”) from any and all claims, demands, rights, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, costs, expenses, fees (including without limitation attorneys’ fees), damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or which may hereafter exist, from the beginning of the world until the date hereof (collectively, “Claims”), other than Seller Releasor Claims arising solely from a breach of this Agreement or the Purchase Agreement to the extent not inconsistent herewith.

 

6. General Release of Buyer.  Seller Releasors hereby fully release and discharge forever Buyer, and its respective affiliates, parents or subsidiaries, and all of their shareholders, owners, members, partners, directors, officers, managers, employees, agents, trustees, and representatives, assigns, successors, and designees, past, present and future, and each of them and their respective affiliates or subsidiaries, (collectively “Buyer Releasees”) from any and all Claims, other than Seller Releasor Claims arising solely from a breach of this Agreement or the Purchase Agreement to the extent not inconsistent herewith.

 

  

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7. General Release of Seller.  The Buyer Releasees and Solis Releasees hereby fully release and discharge forever the Seller Releasors from any and all Claims, other than Claims arising solely from a breach of this Agreement or the Purchase Agreement to the extent not inconsistent herewith.

 

8. Unknown Claims.  The Seller, on the one hand, and Buyer and Solis on the other hand, understand and acknowledge that they may have other claims against one or more of the other that are unknown at the present time.  Each such party specifically and hereby assume all risks for such claims of every nature, known or unknown, suspected or unsuspected.

 

9. Further Assurances.  Each of Buyer and Solis, on the one hand, and Seller, on the other hand, for itself and its successors and permitted assigns, hereby covenants and agrees that it will, without further consideration, from time to time after the date hereof, execute and deliver to the other party further instruments of sale, conveyance, assignment and transfer, and take such other action, upon the reasonable request of such other party, in order more effectively to sell, convey, grant, assign, transfer and deliver all or any portion of the Purchased Assets or the Business and the rights attendant thereto, and to assure and confirm to any other Person the ownership of the Purchased Assets and the Business by Buyer, and to permit Buyer to exercise any of the rights and other assets intended to be sold, conveyed, assigned, transferred and delivered to Buyer hereby.

 

10. Miscellaneous.  This Agreement (a) may not be assigned (whether by operation of law or otherwise) by either party without the prior written consent of the other; provided however it shall be binding upon and shall inure to the benefit of the parties hereto and their successors and permitted assigns, (b) shall be governed by and construed in accordance with the internal laws of the State of New York and any legal action or proceeding with respect to this Agreement shall be brought exclusively in the Federal or state courts located in the New York, New York and each of the parties consents to the exclusive jurisdiction of those courts and (c) may be executed 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. A facsimile signature shall be deemed an original. The invalidity, illegality, or unenforceability of any provision as determined by a court of law or otherwise shall not affect the validity, legality or enforceability of any other provision of this Agreement. 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.  Any term of this Agreement may be amended, waived or modified with the written consent of Buyer and Seller

 

  

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[signatures on next page]

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by it duly authorized officers as of the day and year first above written.

 

	 	 
Empresario, Inc.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Omar Solis	 
	 	 	Name: Omar Solis 	 
	 	 	Title: President 	 
	 	 	 	 
	 	 	 	 
	 	 	/s/ Omar Solis	 
	 	 	 
Omar Solis

	 
	 	 	 	 
	 	 	 	 
	 	 	 
DecisionPoint Systems, Inc.

	 
	 	 	 	 
	 	 	 	 
	 	 	/s/ Donald Rowley	 
	 	 	Name: Donald Rowley	 
	 	 	Title: Chief Financial Officer	 

 

[signature page to Transfer and Payment Agreement]

 

 

5ex101.htm

Exhibit 10.1

 

Equity Transfer Agreement

 

August 31, 2011

 

This equity transfer agreement (hereinafter “Agreement”) is executed by and among the following parties on August 31, 2011:

 

Name of Target Company: Shanxi Rising Education Investment Co., Ltd.

 

Legal Representative: Bai Wukui

 

Address: 108 Guodao, Mingli Section, Yutai Road, Jinzhong City

 

 

Transferor (hereinafter “Party A”)

 

All the equity holders of the target company (16 individuals including Bai Wukui, etc.)

 

 

Transferee (hereinafter “Party B”)

 

Shanxi Taiji Industrial Development Co., Ltd. (“Taiji Co.”)

 

Address: 18 Longbao Street, Taiyuan City

 

Legal Representative: Ren Zhiqing

 

 

In view of:

 

	
1.  

	
Party A and Party B intend to better promote the development of education industry and effectively integrate the educational resources;

 

	
2.  

	
Party A intends to sell all the equity of the target company and Party B is willing to purchase all the equity of the target company held by Party A. The parties agree to negotiate and consult with each other to resolve all the debt and credit issue before the effective date of this Agreement;

 

	
3.  

	
Before the execution of this Agreement, Party A has made a full representation and provided relevant documents regarding the relevant equities and interests, substantial assets, guaranty, contracts and litigation of the target company and its invested education program (including Shanxi rising Experimental High School and Shanxi Rising School); Party B has conducted due diligence on the information provided by Party A;

 

  

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Therefore, after mutual friendly negotiation, the parties have reached the following agreement regarding the equity transfer and resolution of debt issues and shall both abide by the agreement.

 

	
1.  

	
Target of Transfer

 

	
1.1.  

	
Content of Equity Transfer

 

Based on the equity holder list and capital contribution ratio on the target company’s SAIC (State Administration of Industry and Commerce) record prior to the effective date of this Agreement, as all shareholders of the target company, Party A’s capital contribution and respective ratio, etc. is as follows:

 

	
Name

	
Capital Contribution

	
Ratio (%)

	
Way of Capital Contribution

	
ID Number

	
Bai Wukui

	
64,402,500

	
92.003546

	
Currency

	
142401196310080017

	
Bai Xuankui

	
3,512,500

	
5.017857

	
Currency

	
142401195212270031

	
Cheng Guilian

	
1,500,000

	
2.142857

	
Currency

	
142401195405170029

	
Li Shiwei

	
110,000

	
0.1571

	
Currency

	
142422620320181

	
Liu Deshan

	
100,000

	
0.1429

	
Currency

	
142401194609180937

	
Wang Weiming

	
10,000

	
0.01429

	
Currency

	
142401197101221412

	
Bai Kaijing

	
50,000

	
0.07143

	
Currency

	
142401197711171811

	
Zhou Jinbiao

	
10,000

	
0.01429

	
Currency

	
142401691107271

	
Bai Lihua

	
200,000

	
0.2857

	
Currency

	
14240119740414002x

	
Wu Yumei

	
10,000

	
0.01429

	
Currency

	
142401195812070068

	
Zhao Ying

	
30,000

	
0.04286

	
Currency

	
142401195811212714

	
Li Wei

	
10,000

	
0.01429

	
Currency

	
142401198211130313

	
Bai Xizhong

	
30,000

	
0.04286

	
Currency

	
14240119610426451x

	
Shi Dongliang

	
10,000

	
0.01429

	
Currency

	
142401197209160017

	
Chen Xiang

	
5,000

	
0.00715

	
Currency

	
142401620125091

	
Zhang Zhihua

	
10,000

	
0.01429

	
Currency

	
142401195811071819

	
Total

	
70,000,000

	
100%

	  	  

 

(2) Party A warrants and represents that the equity to be transferred to Party B has never been subject to guaranty or other encumbrances;

 

(3) Party A shall transfer 100% of the equity of the target company owned to Party B. After the transfer is completed, Party B shall own 100% of the equity of the target company and through the equity ownership, have all the rights to all the assets, interests, and documents, etc. of the target company (except the property rights excluded from this transaction as provided in Section 4.1(2));

 

(4) With reference to the net assets of the target company before the effective date of this Agreement, the parties confirm that the purchase price for the equity of the target company is RMB 690,000,000

 

 

  

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1.2.  

	
Disposition of Debt

 

Party A shall be responsible for and pay off all the debts incurred before the effective date of this Agreement; Party B shall enjoy or be responsible for all the credits and debts incurred after the effective date of this Agreement.

 

	
2.  

	
Purchase Price and Payment

 

	
2.1.  

	
Pursuant to the letter of intent, Party B has paid Party A a deposit of RMB 72,000,000 during the escrow period before the execution of this Agreement. After the execution of this Agreement, this deposit shall be credited as the first payment for this transaction. Within 20 days after Party B make the full payment for the equity transfer, Party A guarantee that they shall prepare the documents and procedures for the change in the equity ownership and legal representative and timely submit to relevant authorities. Party A shall complete the procedures for  change in equity ownership and legal representative within 20 days after the effective date of this Agreement;

 

	
2.2.  

	
Party A shall be paid RMB 100,000,000 before July 7, 2011;

 

	
2.3.  

	
If Party B fails to timely make full payments to Party A pursuant to Sections 2.1 and 2.2, this Agreement shall automatically terminate and the payment of RMB172,000,000 shall be retained by Party A as liquidated damage; Party B shall be responsible for all the expenses incurred from the restoration of Party A as the equity holder and withdrawal of Party B as a result of the termination of this Agreement

 

	
3.  

	
Payment of Outstanding Balance

 

	
3.1.  

	
The payment shall be made pursuant to the following schedule:

 

	
(1)  

	
Party B shall pay Party A RMB 168,000,000 before August 31, 2011;

 

	
(2)  

	
As to the remaining balance, Party B shall pay RMB 150,000,000 before August 31, 2012, RMB100,000,000 before August 31, 2013 and RMB100,000,000 before August 31, 2014.

 

Special Statement of Party B: the obligation to make the aforementioned payments is irrevocable and Party B shall not refuse to make any payment for any reason. After Party B actually controls the target company, Party B and the target company shall be jointly responsible for the aforementioned payments to Party A.

 

 

  

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3.2.  

	
If Party B and the target company actually controlled by Party B fails to timely make full payments in accordance with Section 3.1 of this Agreement, the parties agree to abide by the following:

 

	
(1)  

	
In addition to the full payment, Party B shall pay past due liquidated damages at a rate of 20% per annum based on the days that are past due.

 

	
(2)  

	
If the payment is over 180 days past due, Party A shall have the right to determine whether to terminate this Agreement and any damages resulting therefrom shall be borne by Party A.

 

	
3.3.  

	
On the condition that Party B or the target company actually controlled by Party B timely makes full payments pursuant to Section 3.1 of this Agreement, if  Party A fails to timely solve the debt issues which is harmful to Party B and the target company actually controlled by it, Party A shall be responsible for all the losses resulting therefrom.

 

If a creditor demands the target company to pay off its debt, Party A shall handle all relevant matters.  If Party A fails to handle or handles improperly which causes the target company to pay off the debt, Party B shall have the right to deduct the amount of debt paid and any expenses incurred thereof from the payment due.

 

When Party A resolves the debt, Party B shall provide all necessary facilitation. Otherwise, Party A shall not be responsible for any losses incurred therefrom.

 

	
3.4.  

	
When it makes the payments under this Agreement, Party B may follow the procedures below:

 

	
(1)  

	
Party A entrusts Bai Wukui as representative to receive all the payments from Party B under this Agreement;

 

	
(2)  

	
Upon receipt of the payments, the representative of Party A shall make proportionate payments to the other equity holders; Party B shall not take any responsibility for allocation of the payments between the Party A equity holders.

 

	
(3)  

	
The representative of Party A shall issue payment receipt every time Party B makes a payment.

 

  

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4.  

	
Assets Check and Transition

 

	
4.1.  

	
From the date of the execution of this Agreement, the parties shall designate special staff to check the assets and employees of the target company and two schools and shall complete the transition within one week from the effective date of this Agreement. The parties have agreed to the following:

 

	
(1)  

	
The parties shall check the current assets of the target company on the date of execution of this Agreement. After the check, a report and detailed list of assets (Appendix I) shall be issued, confirmed and stamped by the parties. The confirmation of the report by the parties shall mean the completion of transition.

 

	
(2)  

	
 The parties confirm that the following properties of the target company before the effectiveness of this Agreement shall be excluded from this transaction:

 

	
A.  

	
The property rights of buildings on the land, west of Huitong Road, north of the campus and north of the exiting roads and land use right thereof;

 

	
B.  

	
The property right of the boiler room on the southwest of the south campus and the land use right thereof;

 

	
C.  

	
 The property right of the buildings, west of the north gate of the current campus,  occupied by Jinzhong Development Zone Huitong Road Bureau of Public Security for offices free of charge and the underlying land use right (offset by corresponding government expenses of the target company)

 

	
D.  

	
The properties left on the campus by Agriculture University during the cooperation between the target company and Agriculture University

 

In addition to the aforementioned properties, all other assets of the target company and the two schools shall be transferred, which shall be confirmed by the parties on the report and detailed list of assets.

 

	
(3)  

	
Current management of the target company shall not be transferred. However, the stamps, licenses and certificates of the target company shall be transferred after the completion of the equity transfer. If Party B needs to reasonably use the stamps, licenses and certificates before transfer, Party A shall facilitate the use.

 

  

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Special statement of Party A: If the name on the certificates to be transferred was not changed timely (the name of the target company was still its former name “Yuci Rising Education Investment Co., Ltd.”)  or there is no ownership certificate for the property to be transferred, Party A guarantee that the defects shall be cured within one year from the effectiveness of this Agreement and the perfected certificate shall be transferred to  Party B.

 

After Party A transfer the assets as is, Party B shall not make any objection or claim based on incompleteness of educational assets and defective equipment and facilities. But Party A shall be responsibility for the ownership of the transferred assets. Except the facts or limitations on rights that are particularly stated in this Agreement, Party A shall guarantee that the assets transferred has clear title and is free of encumbrances. Otherwise, Party B shall have the right to make objections and claims.

 

After the transition is completed, Party B shall determine, organize and conduct all the operation and management of the target company. At the same time, Party B shall be responsible for preparing, changing and obtaining all the administrative approval, permit, license and other relevant procedures and shall pay for all expenses incurred thereof. Party A shall actively cooperate.

 

	
4.2.  

	
 In view of the complexity of the takeover of the two schools, the parties have agreed to the following:

 

	
(1)  

	
In order to maintain a stable teaching environment for the two schools during the performance of this Agreement, from the takeover date, Party B shall organize and arrange all the teaching management activities of the two schools, receive and manage the employees, teachers and students of the two schools, and ensure the regular and smooth continuation of the teaching activities. Before Party B’s takeover, Party A shall ensure the stability of the employees, teachers, teaching plan and all teaching activities of the two schools and shall provide necessary assistance to Party B for a smooth and transition of work. The parties shall work together to achieve the stability of teaching and management environment of the two schools before the takeover.

 

	
(2)  

	
After the effective date of this Agreement, all the employment agreements, labor contracts, etc. shall be assumed by Party B;

 

	
(3)  

	
Party B shall continue to fulfill its obligation to educate the students who are registered with the two schools and have paid tuition, living expenses (including exempted expenses) in accordance with the original fee rate. Party B shall not repeat charging any fees or increase the fees unreasonably for the period for which all fees have been paid. After the effective date of this Agreement, Party B may implement its own fee rates for tuition and living expenses.

 

Prior to the takeover, if the registered students have paid the target company and the two schools tuition, living expenses,  deposits, or borrowed money for a period after the takeover, the total expenses shall be calculated based on the actual number of students and the amount paid. Party A shall transfer all these expenses to Party B. To facilitate the takeover, the parties agree that these expenses shall be deducted from the balance of the purchase price;

 

The original receipts for the aforementioned tution and living expenses, etc. and the student records shall be transferred to Party B. In the event that Party A needs to use them, Party B shall facilitate.

 

  

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(4)  

	
The information, documents, archives of teachers, employees and registered students shall be transferred to Party B.

 

	
5.  

	
Other Important Provisions

 

	
5.1.  

	
Party A and Party B each shall be responsible for their respective taxes and expenses incurred during the performance of this Agreement pursuant to laws and regulations;

 

	
5.2.  

	
At present, the target company only partially own the heating system on the south campus and jointly own other parts of the heating system with the proprietors of Phase I and Phase II of Wenjiaocheng (approximately 110,000 square meters).Shanxi Wanzhong Heating Co., Ltd. (“Wanzhong Heating”) is responsible for operating the heating system and collecting the heating fees. Wanzhong Heating charges the two schools and the proprietors of Phase I and Phase II of Wenjiaocheng for heating costs and provides heating. After the effective date of this Agreement, Party B agrees to continue the heating contract to ensure the normal operation of teaching activities and the provision of heat to the proprietors of Phase I and Phase II of Wenjiaocheng. If Party B needs to take back the operation right afterwards, Party B may negotiate with Wanzhong Heating.

 

	
5.3.  

	
Party A’s agreements with China Tietong, China Mobile and China Netcom prior to the effective date of this Agreement shall be assumed by Party B;

 

	
5.4.  

	
Prior to the effective date of this Agreement, there were disputes between the target company and Shanxi Agriculture University regarding the cooperative education agreement and the parties are currently in litigation. Any liability arising out of this litigation shall be borne by Party A, any debt or claims arising thereof shall be borne by Party A and shall not have anything to do with Party B.

 

If Party A fails to solve or handle improperly which causes the target company to pay off debts or handling any affairs, Party B shall have the right to deduct from the balance of the purchase price the amount of debt paid and necessary expenses incurred for dealing any affair;

 

If the aforementioned circumstance occurs after all the payments for the equity transfer and resolution of debt issues have been made, Party B shall have the recourse to claim from Party A who shall not refuse to pay for any reason.

 

  

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5.5.  

	
In the event the actions of the target company and the two schools prior to the effectiveness of this Agreement cause any debt, litigation, penalty, dispute and other problems, Party A shall be responsible.

 

If Party A fails to solve or handle improperly which causes the target company to pay off debts or handling any affairs, Party B shall have the right to deduct from the balance of the purchase price the amount of debt paid and necessary expenses incurred for dealing any affair;

 

If the aforementioned circumstance occurs after all the payments for the equity transfer and resolution of debt issues have been made, Party B shall have the recourse to claim from Party A who shall not refuse to pay for any reason.

 

	
5.6.  

	
 Before Party A makes all the payments pursuant to this Agreement, the parties agree that Party A shall keep the financial office, office of general manager, administration office and three rooms for its use. Party A shall designate its personnel to handle the payment of debts and related issues. The fees including water and electricity expenses that are reasonably incurred shall be paid by Party B.

 

Party A’s designated personnel shall not interfere with the order of operation and teaching of the target company and the two schools for any reason. Otherwise, Party B shall have the right to demand Party A to replace its designated personnel and to bear any liability. After Party B make the full payment for the transfer, Party A’s designated personnel shall be retreated within three days.

 

	
6.  

	
Liability for Breach

 

Upon the effectiveness and performance of this Agreement, each party shall fully perform its obligations prescribed in this Agreement and shall not willfully terminate this Agreement or have any breach. Otherwise, the breaching party shall bear all the liabilities and shall compensate the non-breaching party and other third parties for all the economic or reputation losses resulting thereof.

 

  

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7.  

	
Effectiveness and Termination

 

	
7.1.  

	
Prior to execution of this Agreement, the board of directors of the target company and Taiji Co. have approved the equity transfer prescribed in this Agreement (Appendix 2).

 

	
7.2.  

	
This Agreement shall become effective upon the signing by Party A’s authorized representative and Party B’s legal representative and stamping by the target company;

 

	
7.3.  

	
This Agreement shall terminate under the following circumstances:

 

After mutual consent of party A and Party B or occurrence of stipulated circumstances for termination.

 

	
8.  

	
Confidentiality

 

	
8.1.  

	
 All the terms of this Agreement and all the information obtained from the parties of this Agreement shall be kept in confidence except where required to be disclosed by law.

 

	
8.2.  

	
The parties agree that they shall not use the confidential information for any purpose except the following: expressly required by law or agreement, or any litigation, arbitration or administrative penalty resulting from this Agreement. The parties shall strictly follow the requirements of the laws to use the confidential information even under the aforementioned exceptions.

 

	
9.  

	
Governing Laws and Dispute Resolution

 

	
9.1.  

	
This Agreement shall be governed and interpreted by the laws and regulations of the People’s Republic of China.

 

	
9.2.  

	
 The parties shall friendly resolve any dispute relevant to or arising out of this Agreement by negotiation. If negotiation fails, any party may resort to the local People’s Court regarding the dispute.

 

	
10.  

	
Miscellaneous

 

	
10.1.  

	
 The party shall not transfer to any third party its rights and obligations under this Agreement without approval of the other party.

 

  

9

  

 

	
10.2.  

	
The parties may enter into supplementary agreements on matters that are not stipulated in this Agreement. The supplementary agreements shall have the same legal effective as this Agreement;

 

	
10.3.  

	
The appendixes are part of this Agreement and have the same legal effect as the text of this Agreement;

 

	
10.4.  

	
This Agreement has six copies with three copies to each party. Each copy has the same legal effect.

 

Appendix to this Agreement:

	
1.  

	
Asset Assessment Report

	
2.  

	
Board resolutions of the target company and Party B

 

It is hereby certified that this Agreement was executed by the parties on the date written on the first page of this Agreement.

  

10

  

 

 

(This page contains no text of the Agreement and is the signature/stamp page of the Share Transfer Agreement)

 

 

	Target Company:	 	 
	 	 	 
	/stamp/ Shanxi Rising Education Investment Co., Ltd.	 	 
	 	 	 
	Party A authorized representative:	 	 
	 	 	 
	/s/ Bai Xuankui	 	 
	 	 	 
	Party B:	 	 
	 	 	 
	/stamp/ Shanxi Taiji Industrial Development Co., Ltd.	 	 
	 	 	 
	Legal Representative:	 	 
	 	 	 
	/s/ Ren Zhiqing	 	 

 

 

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