Equity Transfer Agreement August 31, 2011

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

3.2.  

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.

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.

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

(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.

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.

(4)  

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

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.

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.

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.

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:

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.

9.1.  

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.

10.1.  

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