Document:

exh10-8.htm

 

Exhibit 10.8

[This document has been translated from Chinese to English]

 

Call Option Agreement

Founder: Shaoxing Red Green Blue Trading Co., Ltd. (“ Founder”)

Register address: 1788 Shaoxing Keqiao Lake Road East

Call Option Holder:  China Education Schools Co., Ltd (“Party A”)

Registered Address: P.O. Box 3321, Drake Chambers, Road Town, Tortola, British Virgin Islands

The Parties hereby agree as follows:

1. The Founders hold one hundred percent (100%) equity interest in the registered capital of Shaoxing China Textile City High School with the registered address in Shaoxing Keqiao (hereinafter referred to as the “Company”). The Founders acknowledge that the Company’s registered capital is RMB 100,000 and has been fully paid in. The Company’s business license is attached hereto as Appendix I.

2. The Founders hereby confirm that Party A or an entity designated by Party A in writing (hereinafter referred to as the “Call Option Holder”) has the right to purchase from the Founder up to 100% equity interest in the Company. As payment for the rights under this Agreement, Party A shall issue the number of shares of Party A set forth on Appendix II to this Agreement  (unless valuation is required for pricing under the applicable laws) if permitted by applicable laws, including all the equity interest, stock options and similar interests derived from such equity interest (such equity interest and all of the derivative interests are collectively referred to as “Equity Interest”, and the right to purchase Equity Interest by the Call Option Holder is referred to as “Call Option”). If the Call Option Holder elects to purchase part of the equity interest, the exercise price shall be adjusted on a pro rata basis according to the proportion of the equity interest to be purchased in Equity Interest. The equity interest held by the Founders respectively shall be paid-in capital, free from any debt or any third party’s claims.

3. The Call Option Holder shall have the pre-emptive right and may exercise such rights and power at its sole discretion. The Call Option Holder shall notify the Founders in writing when it exercises Call Option. Upon receipt of the written notice from the Call Option Holder, each Founder shall enter into an equity/asset transfer agreement with the Call Option Holder on the date specified on the notice (if any). To the extent permitted by applicable laws and the Call Option Holder determines to exercise Call Option, the Founders shall cooperate and cause the Company to cooperate with the Call Option Holder to proceed with all approvals, permits, registrations, filings and other documents necessary for such transfer. If the Founders refuse to facilitate or delay the transfer, the Call Option Holder may take proper actions independently to complete such transfer.

4. To guarantee the Call Option Holder’s call option and other rights, the Founders agree to surrender the share certificates and other relevant certificates to the Call Option Holder for safekeeping. Without the written consent of the Call Option Holder, the Founders shall not approve or support any equity transfer or capital increase of the Company, or any resolution approving the capital increase, issuance of additional shares, dilution of the existing shareholdings, or affecting the right of the Call Option Holder at any Board or shareholders’ meetings.

5. The Founders undertake not to dispose of the stock dividends or exercise any related rights in any form without the Call Option Holder’s written consent. In the event of dissolution of the Company, all the assets available to the Founders after the liquidation shall be allocated to the Call Option Holder.

6. The Founders agree that, from the date of this Agreement, all profits and shareholders’ equity interests shall belong to the Call Option Holder, all losses and costs related to such Equity Interest shall be borne by the Call Option Holder, all benefits and interests such as dividends, stock rewards or bonus relating to Equity Interest shall belong to the Call Option Holder; any shareholder’s pre-emptive right (if any) to purchase the Company’s additional shares and to purchase the equity interest assigned by other shareholders shall be vested in the Call Option Holder, the Founders shall exercise, deliver or process all the aforementioned benefits, interests and rights under the instructions of the Call Option Holder. Without the written consent of the Call Option Holder, the Founders shall not execute or adopt any resolution approving the distribution of the stock dividends, stock awards or profits at any Board or shareholders’ meetings.

  

  

  

7. The Founders further agree that:

Before the Call Option Holder exercises Call Option to obtain all the equity interest and assets, the Founders shall not engage in and shall not cause the Company to engage in the following activities:

1) Selling, assigning or otherwise disposing of any assets, lawful income and business revenues of the Company, or making security pledge on the Company (other than those made in the ordinary course of business or have been disclosed to and approved by the Call Option Holder in writing);

2) Entering into any transactions that may substantially affect the Company’s assets, liabilities, operations, equity and other legitimate interests (other than those made in the ordinary course of business or have been disclosed to and approved by the Call Option Holder in writing);

3) Supplementing, altering or modifying the Company’s charter documents in any form, which will substantially affect the Company’s assets, liabilities, operations, equity and other legitimate interests (except the proportional capital increase as required by law); and

4) Appointing any other third as the Company’s agent or representative.

8. The Call Option Holder may assign Call Option and any rights and interests hereunder, and the Founders shall not raise an objection. The Founders shall also undertake that they will enter into a new call option agreement similar to this Agreement with the successor to the Call Option Holder upon the written request of the Call Option Holder.

9. If any part of this Agreement is declared or held invalid by a competent judicial authority, such part shall be deemed as deleted from this Agreement and the other parts of this Agreement shall remain valid. The Parties shall negotiate in good faith to modify the deleted terms and enter into a supplemental agreement to effectively carry out the original intent of such terms.

10. If any dispute arises out of the interpretation or performance of this Agreement, the Parties shall negotiate in good faith to resolve such dispute; if such dispute cannot be resolved within thirty (30) days of the beginning of such negotiations, either Party may submit such dispute to the China International Economic and Trade Arbitration Commission in Beijing for arbitration in accordance with its then effective arbitration rules.

11. Any failure of the Call Option Holder to promptly exercise any of its rights hereunder shall not constitute a waiver of such rights; single or partial exercise of any rights shall not preclude any exercise of such rights in the future; failure to exercise certain rights shall not preclude any exercise of any other rights.

12. Without the Parties’ prior consent, either Party shall keep this Agreement confidential and shall not disclose or make any announcements with regard to this Agreement to any third parties, provided the provisions in this Section do not prohibit (i) any disclosures made under applicable laws or the provisions of any exchange rules; (ii) any disclosures in connection with any information that is publicly available, which is not a consequence of the disclosing party’s breach of contract; (iii) any disclosures made to the Parties’ investors, legal counsels, accountants, financial advisors or other professional consultants; or (iv) any disclosures made to either Party or any potential buyers of either Party’s equity/assets, other investors, or creditors, in which the receiving parties shall undertake proper confidentiality obligations (where the assignor is not the Call Option Holder, the Call Option Holder’s consent shall have been obtained).

13. This Call Option is not subject to any time limit, and shall become effective upon execution by the Parties. This Agreement shall not terminate until the Call Option Holder exercises Call Option and the Equity Interest has been fully vested in the Call Option Holder or a person designated by the Call Option Holder or upon termination by the Call Option Holder in writing.

This Agreement is signed on November 25, 2010.

Founder:  Shanxing Red Green Blue Trading Co., Ltd. (Seal)

Signature: /s/ Guotong Chen

Call Option Holder:  China Education Schools Co., Ltd. (Party A)

 

  

  

  

Appendix I

Business License

Appendix II

4,800,000 Shares of China Education Schools Co., Ltd, a British Virgin Island Companyexh10-9.htm

 

Exhibit 10.9

[This document has been translated from Chinese to English]

 

Executive Cooperation Agreement

Between

Party A: Hangzhou Kunjiang Education Technology Co., Ltd.

And

Party B: Shaoxing Red Green Blue Trading Co., Ltd.

Party C: Shaoxing China Textile City High School

November 25, 2010

  

  

  

Exclusive Cooperation Agreement

This Executive Cooperation Agreement (“Agreement”) is made and entered into by and between the following Parties on November 25, 2010 in Beijing, the People’s Republic of China (“China”):

(1) Party A, a wholly foreign owned company established and existing under the laws of China, with its registered address at Gongshu District, Hangzhou City, Zhejiang Province (“Party A”); and

(2) Party B, a limited liability company established and existing under the law of China, with its registered address at Shaoxing County, Zhejiang Province (“Party B”).

(3) Party C, a private school established solely by Party B in accordance with China law, with its registered address at Shaoxing County, Zhejiang Province. (“Party C or Party B’s school”)

(Hereinafter referred as a “Party” individually and as the “Parties” collectively)

WHEREAS,

 

(1) Party A is a company specialized in educational information consulting, management and service development.

(2) Party B is engaged in trading business, and owns and operates Shaoxing China Textile City High School (“School”).

(3) Party A agrees to provide Party C with support and assistance, and Party B agrees that Party C is to pay Party A with service fees.

Now, therefore, through friendly consultation, the Parties have reached the following agreement:

1. Nature and Objective of Cooperation

The cooperation between the Parties is intended to utilize the Parties’ respective expertise and advantages to further promote Party B’s education services, expand their market share and develop new types of value-added education services.

2. Scope of Cooperation

2.1 Technical Services and Support

2.1.1 Party A will provide exclusive technical and market consulting services and support to Party B in connection with Party B’s School. Such services and support shall include but not limit to:

(a) To lease computer devices and servers to Party C as request by Party C;

(b) To grant Party C the permission to use Party A’s software applications;

(c) To provide relevant sales and market consulting services;

(d) To provide system operation solutions and technical support;

(e) To provide training for technical personnel and technical consulting services.

(f)  When Party C needs cash flow, the relevant payment under this agreement can be lend to Party B’s school as loan.

 

2.1.2 Party B and Party C agree to appoint Party A as the exclusive provider of technical services and market consulting services, and to pay Party A for such services.

During the term of the cooperation, Party B and Party B’s school shall be responsible for:

2.2.1 Maintaining the continued validity of the permits for the various distance education services, including but not limit to, all permits required for the operation of the School.

  

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2.2.2 Completing and maintaining files for computer and server network security.

2.2.3 Completing and maintaining files for the School’s operations.

2.2.4 Establishing the responsibility and supervisory mechanism for complying with Chinese laws in relation to the School, and the rules and requirements formulated by various related operators.

2.2 Business Development

Subject to consultations with Party A, Party B will be responsible for developing the market, maintaining business relationships with various educational agencies, enterprises and other partners, and executing relevant necessary business agreements.

3. Service Fee and Expenses

3.1 Service Fee

3.2 All Parties acknowledge that Party B and Party B’s school shall pay Party A the service fee equivalent to (i) if Party B’s school pays income tax, then service fee amount should be 65% of Party B’s school   pre-tax profits. (ii) if Party B’s school doesn’t pay income tax, then the service fee amount shall be 90% of its net income. Party A shall have the right to adjust such percentage at any time at its sole discretion according to the actual operation of  Party B's school.

3.3 Settlement and Payment Method

All Parties acknowledge that the accounting shall be conducted for Party B’s school on a quarterly basis. Within 10 business days after the end of each quarter, Party B’ school shall pay the service fee to Party A’s designated bank account as instructed by Party A in a written notice. The Parties may also set up payment schedule in writing otherwise as needed. Upon receipt of Party B’s school’s payment of the service fee, Party A shall produce relevant commercial invoices to Party B’s school according to law.

3.4 Costs and Expenses

Unless otherwise agreed by the Parties in writing, the costs and expenses incurred as a result of the performance of this Agreement shall be borne by the Parties respectively.

4. Representations and Warranties

4.1 Each Party represents and warrants that, as of the date of this Agreement,

4.1.1 As an independent legal person, it has the right to execute this Agreement and has the capacity and necessary authority to perform its responsibilities and obligations hereunder; and

4.1.2 It will execute all documents and take all actions necessary to complete the performance of this Agreement.

4.2 Party B and Party B’s school hereby represents and warrants that its operation is in compliance with the laws and regulations of China and the requirements of relevant competent authorities.

5. Exclusivity and Limitation on Rights

5.1 All Parties agree that the cooperation contemplated by this Agreement is exclusive. Party B and Party B’s school shall not transfer, pledge or assign to any third party the aforementioned rights and obligations or use such rights and obligations for the benefit of any third party, without Party A’s written consent.

5.2 Party B and Party B’s school agree to use the rights authorized by Party A strictly in accordance with the provisions herein, not to use such rights in any way deemed by Party A as misleading, and the way in which it uses such rights shall not prejudice Party A’s goodwill and interests.

5.3 Party B and Party B’s school agree not to raise an objection to Party A’s relevant technology rights or the effectiveness of this Agreement during or after the cooperation. This provision shall survive the termination of this Agreement.

  

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6. Confidentiality

6.1 Either Party shall hold all information about the other Party that is known or received in connection with the execution and performance of this Agreement during the cooperation in confidence. Either Party may only use such business information for purposes of performing its obligations under this Agreement. Either Party shall not disclose such trade secrets (including the execution, performance and contents of this Agreement) to any third party without the other Party’s written consent; otherwise, such Party shall be liable for breach of contract and indemnify for losses incurred.

6.2 Either Party shall, subject to obtaining the other Party’s written consent, ensure that it shall disclose such trade secrets to its employees, consultants, agents or contractors only for purposes of performing this Agreement, and shall undertake to the other Party that its employees, consultants, agents or contractors will hold such trade secrets confidential; otherwise, such Party shall be responsible for the related compensation.

6.3 Either Party shall, at the request of the other Party, return, destroy or otherwise dispose of all documents, materials or software that contain the other Party’s trade secrets, and cease to use such trade secrets.

7. Liability for Breach

7.1 Where either Party breaches any provisions herein or any of its representations and warranties hereunder, fails to perform its obligations hereunder or fails to perform its obligations as agreed hereunder, the non-breaching Party (“Non-Breaching Party”) shall, upon ten (10) days’ written notice, have the right to require the breaching Party (“Breaching Party”) to redress such breach, continue to perform this Agreement, take adequate, effective and prompt actions to eliminate the consequences arising out of the breach, and indemnify the Non-Breaching Party for the losses incurred by it as a result of the breach by the Breaching Party.

7.2 The Breaching Party shall compensate the Non-Breaching Party for its breach. The compensation shall be equal to the losses arising out of such breach, including the interests that become available after the performance of the Agreement, but shall not exceed the losses incurred arising out of the breach of this Agreement that were reasonably foreseen (or should have been foreseen) at the time this Agreement is entered into by the Parties.

7.3 Where both Parties breach this Agreement, the Parties shall respectively assume the liabilities as determined in Section 7.1 and 7.2 to the extent of their respective actual fault.

8. Force Majeure

8.1 Force Majeure means any events or circumstance beyond the reasonable control including any act of God or act of War.

8.2 If either Party fails to perform this Agreement in part or in whole due to Force Majeure, such Party may be exempted from all or any of its liabilities hereunder to the extent of the effect of the Force Majeure, except otherwise provided under the Chinese law.

8.3 If either Party delays the performance of its obligations hereunder before the Force Majeure occurs, such Party shall not be exempted from its liabilities.

8.4 If either Party fails to perform this Agreement due to Force Majeure, it shall accurately notify the other Party of the circumstances and reasons for such failure of performance immediately after the occurrence of such Force Majeure in a timely manner so as to reduce the losses incurred by the other Party, and shall produce a lawful certificate issued by a notary public (or any other appropriate authority) in the place where such Force Majeure occurs within a reasonable period of time upon the notice of Force Majeure.

8.5 The Party affected by the Force Majeure may suspend the performance of its obligations hereunder until the effect of such Force Majeure is eliminated, but shall use its best efforts to remove any obstacles as a result of such Force Majeure to eliminate any impact and minimize the losses arising out of such Force Majeure.

  

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9. Effectiveness and Term

9.1 This Agreement shall come into effect upon the date of execution and shall remain effective for a period of twenty (20) years. Except in the circumstances specified in Section 10.2, this Agreement may be renewed through consultations upon expiration.

9.2 If either Party intends to renew this Agreement, it shall notify the other Party in writing of such intention within thirty (30) days prior to the expiration of this Agreement, and the other Party shall give a written reply within ten (10) days upon receipt of such notice.

10. Amendment and Termination

10.1 This Agreement shall not be amended or assigned unless approved by a written agreement signed by the authorized representatives of both Parties.

10.2 This Agreement may be terminated through consultations between the Parties by mutual agreement, provided that

10.2.1 If the Breaching Party fails to redress its breach or take adequate, effective and promt actions to eliminate the consequences arising out of the breach, and indemnify the Non-Breaching Party for the losses incurred by it as a result of the breach by the Breaching Party within 10 days after the Non-Breaching Party issues the written notice as specified in Section 7.1 hereof, the Non-Breaching Party may terminate this Agreement upon written notice.

10.2.2 If this Agreement cannot be performed because the Force Majeure persists for thirty (30) days, either Party shall have the right to terminate this Agreement upon written notice.

10.3 The termination or expiration of this Agreement due to any reason shall not affect:

10.3.1 The effectiveness of the settlement and damages clauses in this Agreement;

10.3.2 The obligations of Party B and Party B’s school’s concerning the restrictions on rights specified in Section 5;

10.3.3 The confidentiality obligations of both Parties under Section 6.

11. Dispute Resolution and Governing Law

In the event of any dispute with respect to the interpretation and implementation of this Agreement, the Parties shall negotiate in good faith to resolve the dispute. In the event the Parties fail to reach an agreement on the resolution of such dispute within 30 days after the negotiation begins, either Party may submit such dispute to the China International Economic and Trade Arbitration Commission for arbitration in accordance with its then effective arbitration rules.

11.2 The execution, effectiveness, interpretation and implementation of this Agreement and the resolution of disputes hereunder shall be governed by the laws of China.

11.3 In the course of arbitration, the Parties shall try to perform any part of this Agreement that has not been submitted for arbitration.

12. Notices

12.1 Unless notified in writing by the other Party of a new address beforehand, all notices arising in the performance of this Agreement shall be sent to the following addresses by personal delivery, courier, facsimile, registered mail or e-mail:

Party A:                      Hangzhou Kunjiang Education Technology Co., Ltd.

Address:      4028 South Loop Road, Zhongheng Century Technology Park, Binjiang District, Hangzhou, Zhejiang, China

Post Code:                      310000

Telephone:                     0571-88855286

Fax:                          0571-88855286

  

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Party B:                      Shaoxing Red Green Blue Trading Co., Ltd.

Address:                      1788 Keqiao Lake Road East, Shaoxing, Zhejiang, China

Post Code:                      312030

Telephone:                       0575-84220510

Fax:                      0575-84220510

Party B:                      Shaoxing China Textile City High School

Address:                      1788 Keqiao Lake Road East, Shaoxing, Zhejiang, China

Post Code:                      312030

Telephone:                      0575-84220510

Fax:                       0575-84220510

 12.2 The dates on which notices and communications shall be deemed to have been effectively given shall be determined as follows:

12.2.1 Notices given by facsimile transmission shall be deemed effectively given at the time displayed on the transmission record. If the time displayed on the transmission record is after five o’clock in the afternoon, or if such time occurs in a non-business day in the recipient’s place, the time of receipt shall be the immediate next business day in the time of the recipient’s place.

12.2.2 Notices given by personal delivery (including courier) shall be deemed effectively given upon the date when such notices are signed by the receiving “party”.

12.2.3 Notices given by registered mail shall be deemed effectively given upon fifteen days after the post office issues the receipt.

12.2.4 Notices given by e-mail shall be deemed effectively given at the time when the sender prints out the record for sending the relevant notices.

13. Supplemental Provisions

13.1 Either Party’s failure to excise promptly or failure to exercise its rights hereunder shall not be deemed a waiver of such rights; and any single or partial exercise of any rights shall not preclude such party’s exercise of such rights in the future.

13.2 The invalidity of any provisions of this Agreement shall not affect the validity of the other provisions of this Agreement.

13.3 Any matters not covered by this Agreement shall be determined by the Parties separately through consultations and shall be in compliance with the laws of China.

14. IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Agreement on the date first above written.

Party A (Seal) Hangzhou Kunjiang Education Technology Co., Ltd.

Authorised Representative: /s/ Hangzhou Kunjiang Education Technology Co., Ltd.

Party B (Seal) Shaoxing Red Green Blue Trading Co., Ltd.

Authorized Representative: /s/ Guotong Chen

Party C (Seal) Shaoxing China Textile City High School

Authorized Representative: /s/ Guotong Chen

 

  

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