AMENDMENT AND RESTATEMENT AGREEMENT TO THE LOAN AGREEMENT between AMBOW EDUCATION HOLDING LTD. as Borrower and AMBOW COLLEGE MANAGEMENT LIMITED AMBOW EDUCATION CO. LTD. AMBOW EDUCATION LTD. AMBOW EDUCATION MANAGEMENT (HONG KONG) LIMITED AMBOW...

Exhibit 4.29

Execution Copy

(Investment Number: 31749)

AMENDMENT AND RESTATEMENT AGREEMENT TO THE LOAN AGREEMENT

between

AMBOW EDUCATION HOLDING LTD.

as Borrower

and

AMBOW COLLEGE MANAGEMENT LIMITED

AMBOW EDUCATION CO. LTD.

AMBOW EDUCATION LTD.

AMBOW EDUCATION MANAGEMENT (HONG KONG) LIMITED

AMBOW EDUCATION (HONG KONG) LIMITED

AMBOW EDUCATION MANAGEMENT LTD.

AMBOW TRAINING MANAGEMENT LIMITED

as Co-Borrowers

and

INTERNATIONAL FINANCE CORPORATION

Dated October 24, 2012

This Amendment and Restatement Agreement (this “Agreement”) to the Loan Agreement (as such term is defined below) is made as an agreement on October 24, 2012 between (1) AMBOW EDUCATION HOLDING LTD., a company organized and existing under the laws of the Cayman Islands (the “Borrower”) and (2) AMBOW COLLEGE MANAGEMENT LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1269010, (3) AMBOW EDUCATION CO. LTD., a company organized and existing under the laws of the Cayman Islands, (4) AMBOW EDUCATION LTD., a company organized and existing under the laws of the Cayman Islands, (5) AMBOW EDUCATION MANAGEMENT (HONG KONG) LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1389402, (6) AMBOW EDUCATION (HONG KONG) LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1195960, (7) AMBOW EDUCATION MANAGEMENT LTD., a company organized and existing under the laws of the Cayman Islands, (8) AMBOW TRAINING MANAGEMENT LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1269002, (each a “Co-Borrower” and, together, the “Co-Borrowers”) and INTERNATIONAL FINANCE CORPORATION, an international organization established by Articles of Agreement among its member countries including the PRC (as defined below) (“IFC”).

RECITALS

A.                                    Pursuant to a loan agreement (the “Loan Agreement”) dated June 12, 2012, IFC has agreed (subject to the terms and conditions set out in the Loan Agreement) to lend and the Borrower and the Co-Borrowers have agreed to borrow the Loan;

B.                                    Pursuant to Section 8.09 (Amendments, Waivers and Consents) of the Loan Agreement, any amendment to the provisions of the Loan Agreement shall be in writing and signed by all of the parties;

C.                                    The parties have agreed to amend and restate the terms and conditions of the Loan Agreement as set out in this Agreement.

IT IS HEREBY AGREED AS FOLLOWS

SECTION 1 - DEFINITIONS AND INTERPRETATION

(a)                                   Unless otherwise defined in this Agreement, capitalised words and expressions used in this Agreement have the meanings ascribed to them in the Loan Agreement.

(b)                                   Section 1.02 (Financial Calculation) and Section 1.03 (Interpretation) of the Loan Agreement applies to this Agreement as though it was set out in full in this Agreement except that, for this purpose, references therein to the Loan Agreement are to be construed as references to this Agreement.

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SECTION 2 - AMENDMENT AND RESTATEMENT OF THE LOAN AGREEMENT

The parties agree that on and from the date of this Agreement, the Loan Agreement is amended and restated as set out in the Annex (Amended and Restated Loan Agreement) to this Agreement.

SECTION 3 - AFFIRMATIONS

(a)                                 The Loan Agreement shall continue in full force and effect as amended and restated by this Agreement.

(b)                                 In accordance with Section 1.03(d) (Interpretation) of the Loan Agreement, the term “Loan Agreement”, as used in this Agreement and all other instruments and Transaction Documents executed thereunder, shall for all purposes refer to the Loan Agreement as amended and restated by this Agreement.

(c)                                  Neither the entry into this Agreement nor the amendment and restatement of the Loan Agreement are intended to nor shall adversely affect nor prejudice the existence and enforceability of the other Transaction Documents.

(d)                                 This Agreement shall constitute and is hereby designated a “Transaction Document” as such term is defined in the Loan Agreement.

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SECTION 4 - REPRESENTATIONS AND WARRANTIES

Each Obligor represents and warrants to IFC on the date of this Agreement as follows:

(a)                                 It has the power and authority, corporate or otherwise, to execute, deliver and perform all of its obligations under this Agreement and the Loan Agreement as amended and restated by this Agreement.

(b)                                 It has taken all necessary action to authorise the execution, delivery and performance by it of this Agreement and the Loan Agreement as amended and restated by this Agreement.

(c)                                  This Agreement has been duly executed and delivered by it and this Agreement and the Loan Agreement as amended and restated by this Agreement constitute its valid and legally binding obligations, enforceable against it in accordance with their respective terms.

(d)                               All Authorisations and actions of any kind necessary for the valid execution, delivery and performance by it of this Agreement and for the valid performance of the Loan Agreement as amended and restated by this Agreement have been obtained and are in full force and effect.

(e)                               The execution and delivery by it of this Agreement and the performance by it of its obligations under this Agreement and under the Loan Agreement as amended and restated by this Agreement do not require the consent or approval of any of its creditors and will not conflict with or constitute a breach or default under or violate any provision of its Charter or any agreement, law, rule, regulation, order, writ, judgement, injunction, decree, determination or award applicable to it.

(f)                                   No Event of Default and no Potential Event of Default has occurred or is continuing on the date hereof.

SECTION 5 - FURTHER ASSURANCES

Each Obligor shall, at the reasonable request of IFC and at its own expense, do all such acts and things necessary or desirable to give effect to the amendments effected or to be effected pursuant to this Agreement.

SECTION 6 - GOVERNING LAW, ARBITRATION AND JURISDICTION

(a)                               This Agreement, and all obligations arising out of or in connection with it, shall be governed by and construed in accordance with the laws of the State of New York, United States of America.

(b)                               Section 8.05 (Applicable Law and Jurisdiction) of the Loan Agreement (as amended and restated by this Agreement) shall be deemed set out herein mutatis mutandis, except that references to “this Agreement” in the Loan Agreement shall be deemed references to “this Agreement” as set out herein.

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SECTION 7 — MISCELLANEOUS

Sections 2.14 (Taxes), 2.15 (Expenses), 8.02 (Notices), 8.03 (English Language), 8.08 (Successors and Assignees) and 8.09 (Amendments, Waivers and Consents) of the Loan Agreement (as amended and restated by this Agreement) shall be deemed set out herein mutatis mutandis, except that references to “this Agreement” in the Loan Agreement shall be deemed references to “this Agreement” as set out herein.

SECTION 8 - COUNTERPARTS

This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

[Signatures on following page]

5

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed in their respective names as of the date first above written.

6

7

8

ANNEX

AMENDED AND RESTATED LOAN AGREEMENT

9

Execution Copy

(Investment Number: 31749)

AMENDMENT AND RESTATEMENT AGREEMENT TO THE LOAN AGREEMENT

between

AMBOW EDUCATION HOLDING LTD.

as Borrower

and

AMBOW COLLEGE MANAGEMENT LIMITED

AMBOW EDUCATION CO. LTD.

AMBOW EDUCATION LTD.

AMBOW EDUCATION MANAGEMENT (HONG KONG) LIMITED

AMBOW EDUCATION (HONG KONG) LIMITED

AMBOW EDUCATION MANAGEMENT LTD.

AMBOW TRAINING MANAGEMENT LIMITED

as Co-Borrowers

and

INTERNATIONAL FINANCE CORPORATION

Dated October 24, 2012

This Amendment and Restatement Agreement (this “Agreement”) to the Loan Agreement (as such term is defined below) is made as an agreement on October 24, 2012 between (1) AMBOW EDUCATION HOLDING LTD., a company organized and existing under the laws of the Cayman Islands (the “Borrower”) and (2) AMBOW COLLEGE MANAGEMENT LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1269010, (3) AMBOW EDUCATION CO. LTD., a company organized and existing under the laws of the Cayman Islands, (4) AMBOW EDUCATION LTD., a company organized and existing under the laws of the Cayman Islands, (5) AMBOW EDUCATION MANAGEMENT (HONG KONG) LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1389402, (6) AMBOW EDUCATION (HONG KONG) LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1195960, (7) AMBOW EDUCATION MANAGEMENT LTD., a company organized and existing under the laws of the Cayman Islands, (8) AMBOW TRAINING MANAGEMENT LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1269002, (each a “Co-Borrower” and, together, the “Co-Borrowers”) and INTERNATIONAL FINANCE CORPORATION, an international organization established by Articles of Agreement among its member countries including the PRC (as defined below) (“IFC”).

RECITALS

A.                          Pursuant to a loan agreement (the “Loan Agreement”) dated June 12, 2012, IFC has agreed (subject to the terms and conditions set out in the Loan Agreement) to lend and the Borrower and the Co-Borrowers have agreed to borrow the Loan;

B.                         Pursuant to Section 8.09 (Amendments, Waivers and Consents) of the Loan Agreement, any amendment to the provisions of the Loan Agreement shall be in writing and signed by all of the parties;

C.                            The parties have agreed to amend and restate the terms and conditions of the Loan Agreement as set out in this Agreement.

IT IS HEREBY AGREED AS FOLLOWS

SECTION 1 - DEFINITIONS AND INTERPRETATION

(a)                        Unless otherwise defined in this Agreement, capitalised words and expressions used in this Agreement have the meanings ascribed to them in the Loan Agreement.

(b)                         Section 1.02 (Financial Calculation) and Section 1.03 (Interpretation) of the Loan Agreement applies to this Agreement as though it was set out in full in this Agreement except that, for this purpose, references therein to the Loan Agreement are to be construed as references to this Agreement.

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SECTION 2 - AMENDMENT AND RESTATEMENT OF THE LOAN AGREEMENT

The parties agree that on and from the date of this Agreement, the Loan Agreement is amended and restated as set out in the Annex (Amended and Restated Loan Agreement) to this Agreement.

SECTION 3 - AFFIRMATIONS

(a)                         The Loan Agreement shall continue in full force and effect as amended and restated by this Agreement.

(b)                        In accordance with Section 1.03(d) (Interpretation) of the Loan Agreement, the term “Loan Agreement”, as used in this Agreement and all other instruments and Transaction Documents executed thereunder, shall for all purposes refer to the Loan Agreement as amended and restated by this Agreement.

(c)                         Neither the entry into this Agreement nor the amendment and restatement of the Loan Agreement are intended to nor shall adversely affect nor prejudice the existence and enforceability of the other Transaction Documents.

(d)                       This Agreement shall constitute and is hereby designated a “Transaction Document” as such term is defined in the Loan Agreement.

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SECTION 4 - REPRESENTATIONS AND WARRANTIES

Each Obligor represents and warrants to IFC on the date of this Agreement as follows:

(a)                       It has the power and authority, corporate or otherwise, to execute, deliver and perform all of its obligations under this Agreement and the Loan Agreement as amended and restated by this Agreement.

(b)                       It has taken all necessary action to authorise the execution, delivery and performance by it of this Agreement and the Loan Agreement as amended and restated by this Agreement.

(c)                        This Agreement has been duly executed and delivered by it and this Agreement and the Loan Agreement as amended and restated by this Agreement constitute its valid and legally binding obligations, enforceable against it in accordance with their respective terms.

(d)                       All Authorisations and actions of any kind necessary for the valid execution, delivery and performance by it of this Agreement and for the valid performance of the Loan Agreement as amended and restated by this Agreement have been obtained and are in full force and effect.

(e)                       The execution and delivery by it of this Agreement and the performance by it of its obligations under this Agreement and under the Loan Agreement as amended and restated by this Agreement do not require the consent or approval of any of its creditors and will not conflict with or constitute a breach or default under or violate any provision of its Charter or any agreement, law, rule, regulation, order, writ, judgement, injunction, decree, determination or award applicable to it.

(f)                           No Event of Default and no Potential Event of Default has occurred or is continuing on the date hereof.

SECTION 5 - FURTHER ASSURANCES

Each Obligor shall, at the reasonable request of IFC and at its own expense, do all such acts and things necessary or desirable to give effect to the amendments effected or to be effected pursuant to this Agreement.

SECTION 6 - GOVERNING LAW, ARBITRATION AND JURISDICTION

(a)                       This Agreement, and all obligations arising out of or in connection with it, shall be governed by and construed in accordance with the laws of the State of New York, United States of America.

(b)                       Section 8.05 (Applicable Law and Jurisdiction) of the Loan Agreement (as amended and restated by this Agreement) shall be deemed set out herein mutatis mutandis, except that references to “this Agreement” in the Loan Agreement shall be deemed references to “this Agreement” as set out herein.

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SECTION 7 — MISCELLANEOUS

Sections 2.14 (Taxes), 2.15 (Expenses), 8.02 (Notices), 8.03 (English Language), 8.08 (Successors and Assignees) and 8.09 (Amendments, Waivers and Consents) of the Loan Agreement (as amended and restated by this Agreement) shall be deemed set out herein mutatis mutandis, except that references to “this Agreement” in the Loan Agreement shall be deemed references to “this Agreement” as set out herein.

SECTION 8 - COUNTERPARTS

This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

[Signatures on following page]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed in their respective names as of the date first above written.

6

7

8

ANNEX

AMENDED AND RESTATED LOAN AGREEMENT

9

Execution Copy

INVESTMENT NUMBER 31749

Amended and Restated

Loan Agreement

between

AMBOW EDUCATION HOLDING LTD.

as Borrower

and

AMBOW COLLEGE MANAGEMENT LIMITED

AMBOW EDUCATION CO. LTD.

AMBOW EDUCATION LTD.

AMBOW EDUCATION MANAGEMENT (HONG KONG) LIMITED

AMBOW EDUCATION (HONG KONG) LIMITED

AMBOW EDUCATION MANAGEMENT LTD.

AMBOW TRAINING MANAGEMENT LIMITED

as Co-Borrowers

and

INTERNATIONAL FINANCE CORPORATION

TABLE OF CONTENTS

ii

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LOAN AGREEMENT

LOAN AGREEMENT (this “Agreement”) was originally dated 12 June 2012 and is amended and restated on October 24, 2012, between (1) AMBOW EDUCATION HOLDING LTD., a company organized and existing under the laws of the Cayman Islands (the “Borrower”) and (2) AMBOW COLLEGE MANAGEMENT LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1269010, (3) AMBOW EDUCATION CO. LTD., a company organized and existing under the laws of the Cayman Islands, (4) AMBOW EDUCATION LTD., a company organized and existing under the laws of the Cayman Islands, (5) AMBOW EDUCATION MANAGEMENT (HONG KONG) LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1389402, (6) AMBOW EDUCATION (HONG KONG) LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1195960, (7) AMBOW EDUCATION MANAGEMENT LTD., a company organized and existing under the laws of the Cayman Islands, (8) AMBOW TRAINING MANAGEMENT LIMITED, a company incorporated under the laws of Hong Kong, with registration no. 1269002, (each a “Co-Borrower” and, together, the “Co-Borrowers”) and INTERNATIONAL FINANCE CORPORATION, an international organization established by Articles of Agreement among its member countries including the PRC (as defined below) (“IFC”).

RECITAL

The Borrower has requested IFC to provide the Loans described in this Agreement to finance the Transaction (as defined below), as set forth in Annex A and IFC is willing to provide such Loans upon the terms and conditions set forth in this Agreement.

ARTICLE I

Definitions and Interpretation

Section 1.01 Definitions. Wherever used in this Agreement, the following terms have the meanings:

“Accounting Standards” means generally accepted accounting principles in the United States from time to time or in accordance with International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (“IASB”) (which include standards and interpretations approved by the IASB and International Accounting Standards issued under previous constitutions), together with its pronouncements thereon from time to time, and applied on a consistent basis, as applicable;

“Action Plan” means the plan or plans developed by the Borrower, which shall be in form and substance satisfactory to IFC, setting out specific social and environmental measures to be undertaken by the Borrower and its Subsidiaries, to enable their respective Operations to comply with the Performance Standards, as such may be amended or supplemented from time to time in accordance with the terms hereof;

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“ADS” means Borrower’s American depositary shares, each one representing two Class A Ordinary Shares that are listed on the New York Stock Exchange;

“ADS Depositary” means Citibank, N.A., as the depositary under the Deposit Agreement;

“ADS Market Disruption Event” means the occurrence or existence during the one-half hour period ending on the scheduled close of trading on any Trading Day for the ADSs of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by applicable U.S. national securities exchange on which the ADSs are traded or otherwise) in the ADSs or in any options contracts or futures contracts relating solely to the ADSs;

“Affiliate” means any Person directly or Indirectly controlling, controlled by or under common control with, such Person (for purposes of this definition, “control” means the power to direct the management or policies of a Person, directly or indirectly, whether through the ownership of shares or other securities, by contract or otherwise, provided that the direct or indirect ownership of more than 51% of the voting Share Capital of a Person is deemed to constitute control of that Person, and “controlling” and “controlled” have corresponding meanings);

“Ambow Dalian” means Ambow Dalian Education Technology Co., Ltd. (Chinese name:  a company incorporated in the PRC;

“Ambow Shengying” means Beijing Ambow Shengying Education and Technology Co., Ltd. (Chinese name:  a company incorporated in the PRC;

“Ambow Yuhua” means Tianjin Ambow Yuhua Software Technology Co., Ltd. (Chinese name;  a company incorporated in the PRC;

“Amendment and Restatement Agreement” means the amendment and restatement agreement to this Agreement executed or to be executed by the Borrower, the Co-Borrowers and IFC;

“Annual Monitoring Report” means the annual monitoring report setting out the specific social, environmental and developmental impact reporting requirements of the Borrower in respect of its and its Subsidiaries’ Operations, as such may be amended or supplemented from time to time in accordance with the terms hereof;

“Applicable S&E Law” means all applicable statutes, laws, ordinances, rules and regulations of the Country, including but not limited to any license, permit or other governmental Authorization, imposing liability or setting standards of conduct concerning any environmental, social, labour, health and safety or security risks of the type contemplated by the Performance Standards;

“Aaditors” means PricewaterhouseCoopers ▇▇▇▇▇ ▇▇▇▇ CPAs Limited or such other firm that the Borrower appoints from time to lime as its auditors pursuant to Section 5.01(e) (Auditors);

“Authority” means any national, supranational, regional or local government or governmental, administrative, fiscal, judicial, or government-owned body, department, commission, authority, tribunal, agency or entity, or central bank (or any Person, whether or not government owned and howsoever constituted or called, that exercises the functions of a central bank);

“Anthorization” means any consent, registration, filing, agreement, notarization, certificate, license, approval, permit, authority or exemption from, by or with any Authority, whether given by express action or deemed given by failure to act within any specified time period and all corporate, creditors’ and shareholders’ approvals or consents;

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“Authorized Representative” means any natural person who is duly authorized by the Borrower or any of the Co-Borrowers, to act on its behalf for the purposes specified in, and whose name and a specimen of whose signature appear on, the Certificate of Incumbency and Authority most recently delivered by the Borrower or any of the Co-Borrowers to IFC;

“Beijing Ambow” means Beijing Ambow Online Software Co., Ltd. (Chinese name:  a company incorporated in the PRC;

“Board of Directors” means the board of directors of the Borrower or any committee thereof authorized to act on behalf of such board of directors;

“Business Day” means a day when banks are open for business in New York, New York and, solely for the purpose of determining the applicable Interest Rate other than pursuant to Section 2.03(d)(ii) (Interest), London, England;

“Calculation Period” means for any calculation, a period of four consecutive quarters most recently ended prior to the event requiring the calculation for which financial statements should have been delivered to IFC pursuant to this Agreement;

“Cayman Co-Borrowers” means Ambow Education Co. Ltd., Ambow Education Ltd. and Ambow Education Management Ltd. or each individually, “Cayman Co-Borrower”;

“Certificate of Incumbency and Authority” means certificate provided to IFC in the form of Schedule I:

“Change or Control” means any of the following:

(i)                                Dr. ▇▇▇ ▇▇▇▇▇ shall at any time and for any reason fail to own, directly or indirectly, at least 5% of both the economic and voting interests in the Borrower’s issued Share Capital (determined on a fully diluted basis);

(ii)                             Dr. ▇▇▇ ▇▇▇▇▇ shall at any time and for any reason cease to be the chief executive officer of the Borrower;

(iii)                          the Borrower shall at any time and for any reason fail to own, directly or indirectly, at least 100% of both the economic and voting interests in the Co-Borrowers, Ambow Dalian or Ambow Shenying (determined on a fully diluted basis);

(iv)                         the Borrower shall at any time and for any reason fail to own, directly or indirectly, at least 75%, and, with respect to Applied Technology College (Chinese name:  70%, and, with respect to Ambow Yuhua, 87.23%, of both the economic and voting interests in the Share Capital (determined on a fully diluted basis) of each of its Material Subsidiaries;

(v)                            the Board of Directors shall cease to consist of a majority of Continuing Directors; or

(vi)                         a “change of control” or similar event shall occur as provided in any other loan or preferred stock documentation relating to any Obligor or any of its Subsidiaries, except with respect to mergers, consolidations or share acquisitions between Subsidiaries provided that a wholly-owned or wholly-controlled (under VIE Arrangements) Subsidiary is the sole surviving or continuing entity of any such merger, consolidations or share acquisitions;

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“Charter” means:

(i)                                with respect to the Borrower and each Co-Borrower, its Certificate of Incorporation (including all Certificates of Incorporation on Change of Name), Memorandum and Articles of Association, latest Business Registration Certificate, register of directors and register of members;

(ii)                             with respect to each Material Subsidiary, its latest version of its business license showing the pass of 2010 annual examination, latest version of its articles of association, Organizational Code Certificate, and to the extent applicable, the latest version of its joint venture contract, the approval certificate and approval letter for its establishment and existing issued by the competent commerce authority, and its foreign exchange registration certificate; or

(iii)                          with respect to any other Person, the memorandum and articles of association and/or such other constitutive document, howsoever called, of such Person;

“Class A Ordinary Shares” means the ordinary Class A shares, $0.0001 par value per share of the Borrower;

“Closing Sale Price” means the price per ADS on the relevant date, determined: (i) on the basis of the closing sale price per ADS (or if no closing sale price per ADS is reported, the average of the bid and ask prices per ADS or, if more than one in either case, the average of the average bid and the average ask prices per ADS) on such date on the New York Stock Exchange or other U.S. principal national securities exchange on which the ADSs are listed; (ii) if the ADSs are not listed on a U.S. national securities exchange, as reported by the National Association of Securities Dealers Automated Quotation System; or (iii) if no such closing price is available, the average of the bid prices of any market makers for such security as reported in the “pink sheets” by Pink OTC Markets Inc.. In the absence of a quotation, the Closing Sale Price shall be such price as the Borrower shall reasonably determine on the basis of such quotations as most accurately reflecting the price that a fully informed buyer, acting on his own accord, would pay to a fully informed seller, acting on his own accord in an arm’s-length transaction, for each such ADS. The Closing Sale Price shall be determined without reference to the extended or after hours trading;

“Coercive Practice” means, subject to the interpretive guidelines contained in Annex J, the impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party;

“Collusive Practice” means, subject to the interpretive guidelines contained in Annex J, an arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly the actions of another party;

“Compliance Advisor/Ombudsman” means the independent accountability mechanism for IFC that impartially responds to environmental and social concerns of affected communities and aims to enhance outcomes (also “CAO”);

“Continuing Director” means, with respect to the Borrower, an individual who was serving as a member of the Borrower’s Board of Directors as of the date of this Agreement or whose appointment or election by the Board of Directors or nomination for election by the Borrower’s shareholders was approved by a vote of at least a majority of the directors then still in office who either were directors as of the date of this Agreement or whose election, appointment or nomination for election was previously so approved;

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“Consolidated” or “Consolidated Basis” means (with respect to any financial statements to be provided, or any financial calculation to be made, under or for the purposes of this Agreement and any other Transaction Document) the method referred to in Section 1.02(b) (Financial Calculations); and the entities whose accounts are to be consolidated with the accounts of the Borrower are all the Subsidiaries of the Borrower;

“Conversion Date” shall have the meaning set forth in Section 7.01(b) (Exercise of Conversion Rights; Issuance of ADSs on Conversion);

“Conversion Notice” shall have the meaning set forth in Section 7.01(b) (Exercise of Conversion Rights; Issuance of ADSs on Conversion);

“Conversion Price” means the price per share of ADS, which is set at $10.00 per ADS;

“Conversion Rate” means the number of ADSs into which each $1,000 of the Convertible Portion of the IFC C Loan is convertible, which is initially 100 ADSs, subject to adjustments as set forth herein;

“Convertible Portion” shall have the meaning set forth in Section 7.01(b) (Exercise of Conversion Rights; Issuance of ADSs on Conversion);

“Corrupt Practice” means the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence improperly the actions of another party;

“Country” means the People’s Republic of China;

“Current Assets” means with respect to any Person, the Consolidated cash, inventories, investments classified as “held for trading”, investments classified as “available for sale”, trade and other receivables realizable within one year, and prepaid expenses of that Person or specified group of Persons which are to be charged to income within one year;

“Current Liabilities” means with respect to any Person, the Consolidated liabilities of that Person or specified group of Persons falling due on demand or within one year (including the portion of Long-term Debt falling due within one year);

“Current Ratio” means with respect to any Person, the result obtained by dividing Current Assets of that Person (less prepaid expenses) by Current Liabilities of that Person;

“Deposit Agreement” means the deposit agreement, dated as of August 10, 2010, among the Borrower, Citibank, N.A., as ADS Depositary, and the holders and beneficial owners from time to time of the ADSs issued thereunder;

“Depositary” means the Depositary Trust Company, its nominees and successors;

“Depository Trust Company” means a limited-purpose trust company under New York State banking law and a registered clearing agency with the SEC;

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“Derivative Transaction” means any swap agreement, cap agreement, collar agreement, futures contract, forward contract or similar arrangement with respect to interest rates, currencies or commodity prices;

“Disbursement” means any disbursement of the Loans;

“Dollars” and “$” means the lawful currency of the United States of America;

“Dr. ▇▇▇ ▇▇▇▇▇” means Dr. ▇▇▇ ▇▇▇▇▇, the chief executive officer of the Borrower as of the date of this Agreement;

“EBITDA” means for any period for any Person or specified group of Persons, Net Income for such period (without giving effect to (x) any extraordinary gains, (y) any non-cash income, and (z) any gains or losses from sales of assets other than inventory sold in the ordinary course of business) adjusted by adding thereto (in each case to the extent deducted in determining Net Income for such period), without duplication, the amount of (i) total interest expense (inclusive of amortization of deferred financing fees and other original issue discount and banking fees, charges and commissions (e.g., letter of credit fees and commitment fees)) of such person or specified group of Persons determined on a Consolidated Basis for such period, (ii) tax expense based on income and foreign withholding taxes for such Person or specified group of Persons determined on a Consolidated Basis for such period, and (iii) all depreciation and amortization expense of such Person or specified group of Persons determined on a Consolidated Basis for such period;

“Equity Pledge” means (i) the Equity Pledge (Ambow Dalian), (ii) the Equity Pledge (Ambow Shengying), and (iii) the Equity Pledge (Ambow Yuhua); and “Equity Pledges” means any two or more of them, as the context may require;

“Equity Pledge (Ambow Dalian)” means the equity pledge over its equity interest in Ambow Dalian executed or to be executed by Ambow Education (Hong Kong) Limited, Ambow Dalian and IFC, such pledge shall be in form and substance satisfactory to IFC;

“Equity Pledge (Ambow Shengying)” means the equity pledge over its equity interest in Ambow Shengying executed or to be executed by Ambow Training Management Limited, Ambow Shengying and IFC, such pledge shall be in form and substance satisfactory to IFC;

“Equity Pledge (Ambow Yuhua)” means the equity pledge over its equity interest in Ambow Yuhua executed or to be executed by Ambow College Management Limited, Ambow Yuhua and IFC, such pledge shall be in form and substance satisfactory to IFC;

“Event of Default” means any one of the events specified in Section 6.02 (Events of Default);

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder;

“Financial Debt” means as to any Person:

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(i)                                any indebtedness of such Person for or in respect of borrowed money;

(ii)                             the outstanding principal amount of any bonds, debentures, notes, loan stock, commercial paper, acceptance credits, bills or promissory notes drawn, accepted, endorsed or issued by such Person;

(iii)                          any indebtedness of such Person for or in respect of the deferred purchase price of assets or services (except trade accounts incurred and payable in the ordinary course of business to trade creditors of such Person within 90 days of the date they are incurred and which are not overdue);

(iv)                         non-contingent obligations of such Person to reimburse any other Person for amounts paid by that Person under a letter of credit or similar instrument (excluding any letter of credit or similar instrument issued for the account of such Person with respect to trade accounts incurred and payable in the ordinary course of business to trade creditors of such Person within 90 days of the date they are incurred and which are not overdue);

(v)                            the amount of any obligation of such Person in respect of any Financial Lease;

(vi)                         amounts raised by such Person under any other transaction having the financial effect of a borrowing and which would be classified as a borrowing under the Accounting Standards;

(vii)                      the amount of the obligations of such Person under derivative transactions entered into in connection with the protection against or benefit from fluctuation in any rate or price (but only the net amount owing by such Person after marking the relevant derivative transactions to market);

(viii)                   all indebtedness of the types described in the foregoing items secured by a Lien on any property owned by such Person, whether or not such indebtedness has been assumed by such Person;

(ix)                         all obligations of such Person to pay a specified purchase price for goods and services, whether or not delivered or accepted (i.e., take or pay or similar obligations);

(x)                            any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, any liability of such Person under any sale and leaseback transactions that do not create a liability on the balance sheet of such Person, any obligation under a “synthetic lease” or any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person;

(xi)                         the amount of any obligation in respect of any guarantee or indemnity given by such Person for any of the foregoing items incurred by any other Person; and

(xii)                      any premium payable by such Person on a redemption or replacement of any of the foregoing items;

“Financial Debt to EBITDA Ratio” means the result obtained by dividing Financial Debt by EBITDA;

“Financial Lease” means any lease or hire purchase contract which would, under the Accounting Standards be treated as a finance or capital lease;

“Financial Plan” means the proposed sources of financing for the Transaction as set forth in Annex A;

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“Financial Year” means with respect to any Borrower, any of the Co-Borrowers or any of their respective Subsidiaries, the accounting year of the Borrower, the relevant Co-Borrower or the relevant Subsidiary, as the case may be, commencing each year on 1 January and ending on the following 31 December, or such other period as the Borrower or, as the case may be, the relevant Co-Borrower or the relevant Subsidiary, with IFC’s consent, from time to time designates as its accounting year;

“Fraudulent Practice” means any action or omission, including misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial benefit or to avoid an obligation;

“HK Co-Borrowers” means Ambow College Management Limited, Ambow Education Management (Hong Kong) Limited, Ambow Education (Hong Kong) Limited and Ambow Training Management Limited or each individually, “HK Co-Borrower”;

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC;

“IFC A Loan” means the Loan specified in Section 2.01 (The Loans), or, as the context requires, its principal amount from time to time outstanding;

“IFC A Loan Disbursement” means any disbursement of IFC A Loan;

“IFC C Loan” means the Loan specified in Section 2.01 (The Loans), or, as the context requires, its principal amount from time to time outstanding;

“IFC C Loan Disbursement” means any disbursement of IFC C Loans;

“IFC Financing Documents” means collectively, this Agreement, the Amendment and Restatement Agreement, the Security Documents, the Registration Rights Agreement and the Share Retention Agreement agreed by IFC, the Borrower and the Co-Borrowers;

“IFC Policy Rights Agreement” means the agreement to be entered into between the Borrower and IFC pursuant to Section 7.01 (m) (IFC Policy Rights Agreement);

“IFC Security” means the Lien created by or pursuant to the Security Documents to secure all or any amounts owing by any Obligor to IFC under this Agreement and the other IFC Financing Documents to which it is a party;

“Increased Costs” means the amount certified in an Increased Costs Certificate to be the net incremental costs of, or reduction in return to, IFC or any Participant in connection with the making or maintaining of the Loans or its Participation that result from:

(i)                                any change after the date of this Agreement in any applicable law or regulation or directive (whether or not having the force of law) or in its interpretation or application by any Authority charged with its administration; or

(ii)                             compliance with any request made after the date of this Agreement or a change made after the date of this Agreement to any requirement of, any central bank or other monetary or other Authority;

which, in either case, after the date of this Agreement:

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(a)                            imposes, modifies or makes applicable any reserve, special deposit or similar requirements against assets held by, or deposits with or for the account of, or Loans made by, IFC or that Participant;

(b)                            imposes a cost on IFC as a result of IFC having made the Loans or on that Participant as a result of that Participant having acquired its Participation or reduces the rate of return on the overall capital of IFC or that Participant that it would have achieved, had IFC not made the Loans or that Participant not acquired its Participation, as the case may be;

(c)                             changes the basis of taxation on payments received by IFC in respect of the Loans or by that Participant with respect to its Participation (otherwise than by a change in taxation of the overall net income of IFC or that Participant imposed by the jurisdiction of its incorporation or in which it books its Participation or in any political subdivision of any such jurisdiction); or

(d)                            imposes on IFC or that Participant any other condition regarding the making or maintaining of the Loans or its Participation;

“Increased Costs Certificate” means a certificate provided from time to time by IFC (based on a certificate to IFC from any Participant, if Increased Costs affect its Participation), certifying:

(i)                                the circumstances giving rise to the Increased Costs;

(ii)                             that the costs of IFC or, as the case may be, that Participant, have increased or the rate of return of either of them has been reduced;

(iii)                          that, IFC or, as the case may be, that Participant, has, in its opinion, exercised reasonable efforts to minimize or eliminate the relevant increase or reduction, as the case may be; and

(iv)                         the amount of Increased Costs;

“Interest Determination Date” means except as otherwise provided in Section 2.03(d)(ii) (Interest), the second Business Day before the beginning of each Interest Period;

“Interest Payment Date” means May 15 and November 15 in each year;

“Interest Period” means each period of 6 months in each case beginning on an Interest Payment Date and ending on the day immediately before the next following Interest Payment Date, except in the case of the first period applicable to the Disbursement when it means the period beginning on the date on which the Disbursement is made and ending on the day immediately before the next following Interest Payment Date;

“Interest Rate” means for any Interest Period, the rate at which interest is payable on the relevant Loan during that Interest Period, determined in accordance with Section 2.03 (Interest);

“Liabilities” means the aggregate of all obligations (actual or contingent) of any Person to pay or repay money, including without limitation:

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(i)                                Financial Debt of such Person;

(ii)                             the amount of all liabilities of such Person under any conditional sale or a transfer with recourse or obligation to repurchase, including, by way of discount or factoring of book debts or receivables;

(iii)                          Taxes (including deferred Taxes) of such Person;

(iv)                         trade accounts that are payable in the ordinary course of business to trade creditors of such Person within 90 days of the date they are incurred and which are not overdue (including letters of credit or similar instruments issued for the account of such Person with respect to such trade accounts);

(v)                            accrued expenses of such Person, including wages and other amounts due to employees and other services providers;

(vi)                         the amount of all liabilities of such Person howsoever arising to redeem any of its shares; and

(vii)                      to the extent (If any) not included in the definition of Financial Debt, the amount of all liabilities of any other Person to the extent such Person guarantees them or otherwise obligates itself to pay them;

“Liabilities to Tangible Net Worth Ratio” means with respect to any Person, the result obtained by dividing the Liabilities of that Person by the Tangible Net Worth of that Person;

“LIBOR” means the British Bankers’ Association (“BBA”) interbank offered rates for deposits in the Loan Currency which appear on the relevant page of the Telerate Service (currently page 3750) or, if not available, on the relevant pages of any other service (such as Bloomberg Financial Markets Service) that displays such BBA rates; provided that if BBA for any reason ceases (whether permanently or temporarily) to publish interbank offered rates for deposits in the Loan Currency, “LIBOR” shall mean the rate determined pursuant to Section 2.03 (Interest);

“Lien” means any mortgage, pledge, charge, assignment, hypothecation, security interest, title retention, preferential right, trust arrangement, right of set-off, counterclaim or banker’s Lien, privilege or priority of any kind having the effect of security, any designation of loss payees or beneficiaries or any similar arrangement under or with respect to any insurance policy or any preference of one creditor over another arising by operation of law;

“Loan(s)” means the IFC A Loan and the IFC C Loan, specified in Section 2.01 (The Loans) or, as the context requires, the principal amount from time to time outstanding of the IFC A Loan and the IFC C Loan;

“Loan Currency” means Dollars;

“Long-term Debt” means Financial Debt whose final maturity falls due more than one year after the date it is incurred (including the current maturities thereof);

“Loan Market Disruption Event” means that, before the close of business in London on the Interest Determination Date for the relevant Interest Period, the cost to IFC or Participants whose Participations in the Loans represent in the aggregate 30% or more of the outstanding principal amount of the Loans (as notified to IFC by such Participants), of funding the Loans or such Participations (as applicable) would be in excess of LIBOR;

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“Material Adverse Effect” means a material adverse effect on:

(i)          the Borrower, the Co-Borrowers and their respective Subsidiaries’ business, operations, property, liabilities, condition (financial or otherwise), prospects or the carrying on of the Borrower, the Co-Borrowers and their respective Subsidiaries’ business or operations;

(ii)         the implementation of the Transaction or the Financial Plan; or

(iii)        the ability of the Borrower, the Co-Borrowers and their respective Subsidiaries to comply with their respective obligations under this Agreement or under any other Transaction Document to which any of them is a party;

“Material Subsidiaries” means (i) the Subsidiaries of the Borrower designated as Material Subsidiaries listed in Annex D hereto, (ii) any Subsidiary which becames the owner of key assets relating to the business of the Borrower and its Subsidiaries, whether as a result of a transfer, acquisition or otherwise, such Subsidiary to be designated a Material Subsidiary upon IFC’s request, by written notice, to the Borrower, (iii) any Subsidiary that, from time to time, owns the majority voting interest of a Material Subsidiary, (iv) any Subsidiary that, from time to time, controls a Material Subsidiary through the VIE Arrangements and (y) any Subsidiary that, in any Financial Year accounts for 5% or more of the Net Revenue of the Borrower and its Subsidiaries on a Consolidated Basis;

“Net Income” means for any Calculation Period, the excess (if any) of gross income over total expenses (provided that income taxes shall be treated as part of total expenses) for such Calculation Period for any Person or specified group of Persons;

“Net Revenue” means for any Calculation Period, gross revenue minus sales taxes for such Calculation Period for any Person or specified group of Persons;

“Net Sale Proceeds” means for any sale or other disposition of assets by the Borrower, the Co-Borrowers or any of their respective Subsidiaries, the gross cash proceeds (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received) received from such sale or other disposition of assets, net of (i) reasonable transaction costs (including, without limitation, any underwriting, brokerage or other customary selling commissions, reasonable legal, advisory and other fees and expenses (including title and recording expenses) associated therewith and sales, valued added tax and transfer taxes arising therefrom), (ii) payments of unassumed liabilities relating to the assets sold or otherwise disposed of at the time of, or within 30 days after, the date of such sale or other disposition, (iii) the amount of such gross cash proceeds required to be used to permanently repay any Financial Debt (other than the Loans) which is secured by the respective assets which were sold or otherwise disposed of, and (iv) the estimated net marginal increase in income taxes which will be payable by the Borrower’s Consolidated group or any Subsidiary thereof with respect to the Financial Year of the Borrower, the Co-Borrowers and their respective Subsidiaries in which the sale or other disposition occurs as a result of such sale or other disposition; provided, however, that such gross proceeds shall not include any portion of such gross cash proceeds which the Borrower, the Co-Borrowers and their respective Subsidiaries determine in good faith should be reserved for post-closing adjustments (to the extent the Borrower, the Co-Borrowers and their respective Subsidiaries deliver to IFC a certificate signed by an Authorized Representative as to such determination), it being understood and agreed that on the day that all such post-closing adjustments have been determined (which shall not be later than 6 months following the date of the respective asset sale), the amount (if any) by which the reserved amount in respect of such sale or disposition exceeds the actual post-closing adjustments payable by the Borrower, the Co-Borrowers or any of their respective Subsidiaries shall be taken into account for purposes of determining Net Sale Proceeds;

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“Non-cash Items” means for any Calculation Period, the net aggregate amount (which may be a positive or negative number) of all non-cash “income” (as a negative item) and non-cash “expense” (as a positive item) items which (under accrual accounting) were added or subtracted in determining Net Income for any Person or specified group of Persons for such Calculation Period, including, without limitation, equity earnings in Subsidiaries, asset revaluations, depreciation, amortization, deferred taxes, and provisions for severance pay of staff and workers;

“Non-Reputabe Party” means any party that is on the lists promulgated by the United Nations Security Council, or the Word Bank Listing of Ineligible Firms (see ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇), as updated from time to time or any other party that IFC informs the Borrower or any Co-Borrower that it views as “Non-Reputable Party” within 15 Business Days of being notified of the proposed transfer, sale or disposal;

“Obligor” means the Borrower and any Co-Borrower; and “Obligors” means any two or more of them, as the context may require;

“Obstructive Practice” means (i) deliberately destroying, falsifying, altering or concealing of evidence material to the investigation or making of false statements to investigators, in order to materially impede a World Bank Group investigation into allegations of a Corrupt Practice, Fraudulent Practice, Coercive Practice or Collusive Practice, and/or threatening, harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation, or (ii) acts intended to materially impede the exercise of IFC’s access to contractually required information in connection with a World Bank Group investigation into allegations of a Corrupt Practice, Fraudulent Practice, Coercive Practice or Collusive Practice;

“Operations” means the operations, activities and facilities of any Person (including the design, construction, operation, maintenance, management and monitoring thereof, as applicable) in the PRC;

“Ordinary Shares” means (1) Class A Ordinary Shares and (2) the ordinary Class B shares, $0.0001 par value per share, in each case of the Borrower, or such other Share Capital of the Borrower into which the Borrower’s Ordinary Share is reclassified or changed;

“Participant” means any Person who aequires a Participation;

“Participation” means the interest of any Participant in the IFC A Loan or the IFC C Loan, or as the context requires, in the IFC A Loan Disbursement or an IFC C Loan Disbursement;

“Peak Debt Service Coverage Ratio” means the ratio obtained by dividing:

(i)          the aggregate, for the Financial Year most recently ended prior to the relevant date of calculation for which audited financial statements are available, of (A) Net Income for that Financial Year, (B) Non-cash Items and (C) the amount of all payments that were due during that Financial Year on account of interest and other charges on Financial Debt (to the extent deducted from Net Income);

by

(ii)         the aggregate of (A) the highest aggregate amount, in any Financial Year after the Financial Year described in clause (i) above until the final scheduled maturity of the Loans, of all scheduled payments (including balloon payments) falling due on account of principal of Long-term Debt and interest and other charges on all Financial Debt and (B) without double counting any payment already counted in the preceding sub-clause (A), any payment required to be made to any debt service account in such Financial Year under the terms of any agreement providing for Financial Debt;

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(iii)        where, for the purposes of sub-section (ii) above:

(x) subject to sub-clause (y), for the computation of interest payable during any period for which the applicable rate is not yet determined, that interest shall be computed at the rate in effect at the time of the relevant date of calculation;

(y) interest on Short-term Debt in such Financial Year shall be computed by reference to the aggregate amount of interest thereon paid during that Financial Year in which the relevant date of calculation falls up to the end of the period covered by the latest quarterly financial statements prepared by the Borrower multiplied by a factor of 4, 2 or 4/3 depending on whether the computation is made by reference to the financial statements for the first quarter, the first two quarters or the first three quarters, respectively;

“Performance Standards” means IFC’s Performance Standards on Social & Environmental Sustainability, dated January 1, 2012, a copy of which has been delivered to and receipt of which has been acknowledged by the Borrower and each Co-Borrower;

“Permitted Acquisition” means the acquisition by the Borrower, the Co-Borrowers or any of their respective Subsidiaries, excluding the VIEs, of a person or business (including by way of merger of such person or business with and into the Borrower (so long as the Borrower is the surviving corporation), provided that (in each case) (A) the consideration paid or to be paid by the Borrower, the Co-Borrowers or any of their respective Subsidiaries consists solely of cash, common stock of the Borrower, the issuance or incurrence of Financial Debt otherwise permitted by the IFC Financing Documents and/or the assumption/acquisition of any Financial Debt (calculated at face value) of such acquired person or business which is permitted to remain outstanding in accordance with the requirements of the IFC Financing Documents, (B) the acquired person or business acquired is in a business permitted by the IFC Financing Documents and (C) all other requirements of the IFC Financing Documents applicable to Permitted Acquisitions are satisfied;

“Permitted Liens” means

(i)            the IFC Security;

(ii)           Liens in existence on the date hereof which are listed and the property subject thereto described, in Annex G without giving effect to any extensions or renewal thereof;

(iii)          Liens not otherwise permitted under paragraphs (i) or (ii) above, provided that such Liens do not secure obligations in an aggregate amount exceeding at any time (A) $15,000,000 prior to May 15, 2015, and (B) $20,000,000 after May 15, 2015 and prior to the conversion or repayment in full of the IFC C Loan, and (C) $30,000,000 in respect of all Liens thereafter, and provided further that to the extent that any existing Financial Debt secured by any Lien listed in paragraph (ii) above is refinanced or subject to any extension or renewal by the Borrower or, as applicable, any Co-Borrower, such Liens shall be included in the aggregate amounts indicated above for the purposes of determining whether any Lien in respect of such Financial Debt shall be a Permitted Lien; and

(iv)          any Lien arising from any tax, assessment or other governmental charge or other Lien arising by operation of law, in each case if the obligation underlying any such Lien is not yet due or, if due, is being contested in good faith by appropriate proecedings so long as those proceedings do not involve any substantial danger of the sale, forfeiture or loss of any material asset(s), title thereto or any interest therein, nor interfere in any material respect with the use or disposition thereof or the implementation of the Transaction or the carrying on of the business or Operations of the Borrower, any of the Co-Borrowers or any of their respective Subsidiarias;

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“Person” means any natural person, corporation, company, partnership, firm, voluntary association, joint venture, trust, unincorporated organization, Authority or any other entity whether acting in an individual, fiduciary or other capacity;

“Potential Event of Default” means any event or circumstance which would, with notice, lapse of time, the making of a determination or any combination thereof, become an Event of Default;

“PRC” means the People’s Republic of China;

“Pro Forma Basis” means with respect to any Person, in connection with any calculation of compliance with any financial covenant or financial term, the calculation thereof after giving effect on a pro forma basis to (x) the incurrence of any Financial Debt, (y) the permanent repayment of any Financial Debt after the first day of the relevant Calculation Period and (z) any Permitted Acquisition consummated during the relevant Calculation Period, with the following rules to apply in connection therewith:

(i)          all Financial Debt (A) incurred or issued after the first day of the relevant Calculation Period shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the first day of such Calculation Period and remain outstanding through the date of determination and (B) permanently retired or redeemed after the first day of the relevant Calculation Period shall be deemed to have been retired or redeemed on the first day of such Calculation Period and remain retired through the date of determination; and

(ii)         all Financial Debt assumed to be outstanding pursuant to preceding clause (i) shall be deemed to have borne interest at (x) in the case of fixed rate Financial Debt, the rate applicable thereto, or (y) in the case of floating rate Financial Debt, the rates which would have been applicable thereto during the respective period when the same was deemed outstanding;

“Prohibited Activities” means the activities specified in Annex I;

“Project” means (i) the development of the career enhancement campuses in Beijing and Guangzhou, Guangdong Province; (ii) the expansion of the career enhancement campuses in Kunshan, Jiangsu Province; and (iii) the refurbishment of the career enhancement campuses in Dalian, Liaoning Province in the Country;

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“Project Documents” means:

(i)          The Charters, by-laws or equivalent documents of the Borrower and each Co- Borrower, as the case may be;

(ii)         the VIE Documents; and

(iii)        any other agreements or documents essential for the Transaction (to be mutually determined).

“Prospective Debt Service Coverage Ratio” means the ratio obtained by dividing:

(iv)       the aggregate, for the Financial Year most recently ended prior to the relevant date of calculation for which audited financial statements are available, of (A) Net Income for that Financial Year, (B) Non-cash Items and (C) the amount of all payments that were due during that Financial Year on account of interest and other charges on Financial Debt (to the extent deducted from Net Income);

by:

(v)        the aggregate of (A) all scheduled payments (including balloon payments) that fall due during the Financial Year in which the relevant date of calculation falls on account of principal of Long-term Debt and interest and other charges on all Financial Debt and (B) without double counting any payment already counted in the preceding sub-clause (A), any payment made or required to be made to any debt service account under the terms of any agreement providing for Financial Debt but excluding voluntary prepayments;

where, for the purposes of clause (ii) above:

(x) subject to sub-clause (y) below, for the computation of interest payable during any period for which the applicable rate is not yet determined, that interest shall be computed at the rate in effect at the time of the relevant date of calculation;

(y) interest on Short-term Debt payable in the Financial Year in which the relevant date of calculation falls shall be computed by reference to the aggregate amount of interest thereon paid during that Financial Year up to the end of the period covered by the latest quarterly financial statements prepared by the Borrower multiplied by a factor of 4, 2 or 4/3 depending on whether the computation is made by reference to the financial statements for the first quarter, the first two quarters or the first three quarters, respectively;

“Registration Rights Agreement” means the Registration Rights Agreement to be entered between the Borrower and IFC on or prior to the first Disbursement of the IFC C Loan;

“Registration Statement” means a registration statement including the prospectus and other documents filed with the SEC to effect registration under the Securities Act;

“Restricted Payment” means with respect to any Person, the (i) declaration or payment of a dividend, distribution or return of any equity capital to its stockholders, partners or members or authorization or making of any other distribution, payment or delivery of property (other than common stock of such Person) or cash to its stockholders, partners or members in their capacity as such, or (ii) redemption, retirement, purchase or other acquisition of, or permitting of any Subsidiary of such Person to redeem, retire, purchase or otherwise acquire, directly or indirectly, any shares of any class of its capital stock outstanding on or after the date of this Agreement (or any options or warrants issued by such Person with respect to its capital stock), or setting aside of any funds for any of the foregoing purposes, or (iii) making of any payment of any kind on or in respect of Financial Debt held by any Affiliate of such Person;

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“Sanctionable Practice” means any Corrupt Practice, Fraudulent Practice, Coercive Practice, Collusive Practice, or Obstructive Practice, as those terms are defined herein and interpreted in accordance with the Anti-Corruption Guidelines attached to this Agreement as Annex J;

“S&E Management System” means the Borrower’s social and environmental management system enabling it to identify, assess and manage risks in respect of its and its Subsidiaries’ Operations on an ongoing basis;

“SEC” means the United States Securities and Exchange Commission or any other federal agency at the time administering the Securities Act;

“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal U.S. national securities exchange on which the ADSs are listed;

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder;

“Security Documents” means the documents providing for the IFC Security consisting of: (i) Share Mortgages; (ii) the Equity Pledges; and (iii) and any other document that may at any time be executed by any person creating, evidencing or perfecting any Lien to secure all or part of the Loans under or in connection with any IFC Financing Document; and each or any of them as the context may require;

“Share Capital” means of any Person, any and all shares, interests, participations or other equivalents (however designated) of share capital of such Person and all warrants or options to acquire such share capital;

“Share Mortgages” means (i) the Share Mortgage (Ambow College Management Limited), (ii) the Share Mortgage (Ambow Education Management (Hong Kong) Limited), (iii) the Share Mortgage (Ambow Education (Hong Kong) Limited), (iv) the Share Mortgage (Ambow Education Co. Ltd.), (v) the Share Mortgage (Ambow Education Ltd.), (vi) the Share Mortgage (Ambow Education Management Ltd.) and (vii) the Share Mortgage (Ambow Training Management Limited); and Share Mortgages means any two or more of them, as the context may require;

“Share Mortgage (Ambow College Management Limited)” means the mortgage over the entire issued Share Capital of Ambow College Management Limited, executed or to be executed by Ambow Education Management Ltd. and IFC, such deed shall be in form and substance satisfactory to IFC;

“Share Mortgage (Ambow Education Management (Hong Kong) Limited)” means the mortgage over the entire issued Share Capital of Ambow Education Management (Hong Kong) Limited, executed or to be executed by Ambow Education Co. Ltd. and IFC, such deed shall be in form and substance satisfactory to IFC;

“Share Mortgage (Ambow Education (Hong Kong) Limited)” means the mortgage over the entire issued Share Capital of Ambow Education (Hong Kong) Limited executed or to be executed by Ambow Education Ltd. and IFC, such deed shall be in form and substance satisfactory to IFC;

“Share Mortgage (Ambow Education Co. Ltd.)” means the mortgage over the entire issued Share Capital of Ambow Education Co. Ltd. executed or to be executed by the Borrower and IFC, such deed shall be in form and substance satisfactory to IFC;

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“Share Mortgage (Ambow Education Ltd.)” means the mortgage over the entire issued Share Capital of Ambow Education Ltd. executed or to be executed by the Borrower and IFC, such deed shall be in form and substance satisfactory to IFC;

“Share Mortgage (Ambow Education Management Ltd.)” means the mortgage over the entire issued Share Capital of Ambow Education Management Ltd. executed or to be executed by the Borrower and IFC, such deed shall be in form and substance satisfactory to IFC;

“Share Mortgage (Ambow Training Management Limited)” means the mortgage over the entire issued Share Capital of Ambow Training Management Limited executed or to be executed by Ambow Education Management Ltd. and IFC, such deed shall be in form and substance satisfactory to IFC;

“Share Retention Agreement” means a share retention agreement to be entered between, Dr. ▇▇▇ ▇▇▇▇▇, Spin-Rich, the Borrower and IFC on or prior to the first Disbursement of the IFC C Loan;

“Short-term Debt” means all Financial Debt other than Long-term Debt;

“Spread” means with respect to (i) the IFC A Loan, 4.5% per annum, which will be reduced to 4.3% on May 15, 2014 provided that the Borrower, all Co-Borrowers and their respective Subsidiaries are in compliance with all the covenants set out in Section 5.01 (t) (ii) (Financial Ratios), on a Pro Forma Basis and (ii) with respect to the IFC C Loan, 4.5% per annum, subject to the Step Down Provision;

“Spin-Rich” means Spin-Rich Ltd., a company organized and existing under the laws of the British Virgin Islands and wholly-owned by Dr. ▇▇▇ ▇▇▇▇▇;

“Step Down Provision” means, upon the Borrower’s compliance with Section 5.01 (bb), the Spread with respect to the IFC C Loan shall be 4.2% for future IFC C Loan interest payments and:

(i)          within 12 months from the date of this Agreement, 3.5% for future IFC C Loan interest payments if the Borrower’s ADSs trade at an average trading price of $7.0 or above for any 3 consecutive month period; and

(ii)         at any time prior to the fifth anniversary of the date of the first Disbursement of the IFC C Loan, 3.0% for future IFC C Loan interest payments if the Borrower’s ADSs trade at an average trading price of $12.0 or above for any 4 consecutive months period;

the Borrower shall provide IFC a notice within 30 days upon its compliance with Section 5.01 (bb) and IFC shall adjust the Spread with respect to the IFC C Loan on the next Interest Payment Date after such notice is received and confirmed. Further and subsequently, if any of condition (i) or (ii) above is met, the Borrower shall within 30 days provide IFC a notice and IFC shall adjust the Spread with respect to the IFC C Loan on the next Interest Payment Date after such notice is received and confirmed;

“Suzhou Wenjian” means Suzhou Wenjian Venture Investment Management Consulting Co., Ltd. (Chinese name: ), a company incorporated in the PRC;

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“Subsidiary” means

(i)          with respect to any Person, any Affiliate over 50% of whose capital is owned, directly or indirectly, by that Person; and

(ii)         in the case of the Borrower or the Co-Borrowers, an Affiliate directly or indirectly held through the VIE Arrangements;

“Tangible Net Worth” means with respect to any Person, the aggregate of:

(i)          (A)     the amount paid up or credited as paid up on the Share Capital of such Person; and

(B)     the amount standing to the credit of the reserves of such Person (excluding asset revaluation reserves and including, without limitation, any share premium account, capital redemption reserve funds and any credit balance on the accumulated profit and loss account);

after deducting from the amounts in (A) and f B):

(C)     any debit balance on the profit and loss account or impairment of the issued Share Capital of such Person (except to the extent that deduction with respect to that debit balance or impairment has already been made);

(D)     amounts set aside for dividends to the extent not already deducted from equity;

(E)     amounts of deferred tax assets; and

(F)     amounts attributable to capitalized items such as goodwill, trademarks, deferred charges, licenses, patents and other intangible assets; and

(ii)         if applicable, that part of the net results of operations and the net assets of any subsidiary of such Person attributable to interests that are not owned, directly or indirectly, by such Person;

“Taxes” means any present or future taxes, withholding obligations, duties and other charges of whatever nature levied by any Authority;

“Termination of Trading” means when neither the ADSs of the Borrower (or other securities into which the Convertible Portion of the IFC C Loan is then convertible) nor the Class A Ordinary Shares represented by the ADSs are listed for trading on a U.S. national securities exchange;

“Trading Day” means any day during which all of the following conditions are satisfied: (i) trading in the ADSs generally occurs; (ii) there is no ADS Market Disruption Event; and (iii) a Closing Sale Price for the ADSs is provided on the New York Stock Exchange or, if the ADSs are not then listed on the New York Stock Exchange, on the principal other U.S. national securities exchange on which the ADSs are then listed;

“Transaction” means the financing for certain capital expenditures incurred with respect to the Project, each as set forth in Annex A;

“Transaction Documents” means:

(i)          the IFC Financing Documents; and

(ii)         the Project Documents;

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“U.S.” or “United States” means the United States of America;

“VIE” means:

(i)         Beijing Ambow Shida Education Technology Co., Ltd., Ambow Sihua Education and Technology Co., Ltd., Shanghai Ambow Education Information Consulting Co., Ltd., Suzhou Wenjian Venture Investment Management Consulting Co Ltd. and all of their Subsidiaries;

(ii)         Any entities of which the Borrower or each of the Co-Borrowers or each of their respective Subsidiaries does not hold shares or share equivalents but exercise control through various contractual arrangements (each of them a “VIE” and together, the “VIEs”);

“VIE Arrangements” means any legal relationship or arrangement created by or pursuant to the VIE Documents;

“VIE Docnments” means the following documents:

(i)         VIE Procurement Agreements;

(ii)        VIE Equity Pledge Agreements;

(iii)       VIE Call Option Agreements;

(iv)          VIE Power of Attorneys;

(v)           VIE Loan Agreements; and

(vi)          any other agreements or documents essential for the VIE Arrangements;

each as set forth in Annex L;

“VIE Equity Pledge Agreements” means the equity pledge agreements between the Borrower, the Co-Borrowers or Beijing Ambow and the shareholders of the VIEs including, but not limited to, the documents listed in AnnexL hereto;

“VIE Call Option Agreements” means the call option agreements between the Borrower, the Co-Borrowers or Beijing Ambow and the shareholders of the VIEs, including, but not limited to, the documents listed in Annex L hereto;

“VIE Power of Attorneys” means the powers of attorneys issued by the shareholders of VIEs to the Borrower, the Co-Borrowers or Beijing Ambow, including, but not limited to, the documents listed in Annex L hereto;

“VIE Procurement Agreements” means the service agreements, the cooperation agreements, the intangible asset sales/licensing/leasing agreements, the tangible asset sales/leasing agreements, and the software licensing/sales agreements that have been entered into, or will be entered into from time to time in the future, by and between: (a) the Borrower, any of the Co-Borrowers, Beijing Ambow, Ambow Yuhua, or any other onshore offshore Subsidiary which is wholly owned, directly or indirectly, by both the Borrower and any of the Co-Borrowers on the one hand as the seller, vender, transferor, assignor, licensor, or lessor; and (b) any of the VIEs on the other hand as the buyer, purchaser, transferee, assignee, licensee, or lessee. For the avoidance of doubt, VIE Procurement Agreements shall include, but not limited to, each of the VIE Procurement Agreements listed in Annex L hereto;

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“VIE Loan Agreements” means the loan agreements between the Borrower, the Co-Borrowers or Beijing Ambow and the shareholders of the VIEs including, but not limited to, the documents listed in Annex L hereto;

“Wenjian Gongying” means Wenjian Gongying Venture Investment Enterprise (Chinese name: ), a company incorporated in the PRC; and

“World Bank” means the International Bank for Reconstruction and Development, an international organization established by Articles of Agreement among its member countries.

Section 1.02 Financial Calculations. All financial calculations to be made under, or for the purposes of, this Agreement and any other Transaction Document shall be made in accordance with the Accounting Standards and, except as otherwise required in this Agreement or to conform to any provision of this Agreement, shall be calculated from the then most recently issued quarterly financial statements which the Borrower is obligated to furnish to IFC under Section 5.03 (Reporting Requirements).

(a)        Where quarterly financial statements from the last quarter of a Financial Year are used for the purpose of making certain financial calculations then, at IFC’s option, those calculations may instead be made from the audited financial statements for such Financial Year.

(b)        lf a financial calculation is to be made under or for the purposes of this Agreement or any other Transaction Document on a Consolidated Basis, that calculation shall be made by reference to the sum of all amounts of similar nature reported in the relevant financial statements of each of the entities whose accounts are to be consolidated with the accounts of the Borrower plus or minus the consolidation adjustments customarily applied to avoid double counting of transactions among any of those entities, including the Borrower.

Section 1.03 Interpretation. In this Agreement, unless the context otherwise requires:

(a)        headings are for convenience only and do not affect the interpretation of this Agreement;

(b)        words importing the singular include the plural and vice versa;

(c)        a reference to an Annex, Article, party, Schedule or Section is a reference to that Article or Section of, or that Annex, party or Schedule to, this Agreement;

(d)        a reference to a document includes an amendment or supplement to, or replacement or novation of, that document but disregarding any amendment, supplement, replacement or novation made in breach of this Agreement;

(e)        a reference to a party to any document includes that party’s successors and permitted assigns; and

(f)        the words “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

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Section 1.04 Business Day Adjustment.

(a)                                 When an Interest Payment Date is not a Business Day, then such Interest Payment Date shall be automatically changed to the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

(b)                                 When the day on or by which a payment (other than a payment of principal or interest) is due to be made is not a Business Day, that payment shall be made on or by the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

ARTICLE II

The Loans

Section 2.01 The Loans. Subject to the provisions of this Agreement, IFC agrees to lend, and the Borrower and each of the Co-Borrowcrs agrees to borrow:

(a)                                 the IFC A Loan consisting of a principal amount of $30,000,000; and

(b)                                 the IFC C Loan consisting of a principal amount of $20,000,000.

Section 2.02 Disbursement Procedure. The Borrower and each of the Co-Borrowers may request Disbursements by delivering to IFC, at least 10 Business Days prior to the proposed date of disbursement, a Disbursement request substantially in the form of Schedule 2.

(a)                                 Each Disbursement shall be made by IFC at a bank in New York, New York for further credit to the Borrower’s account at a bank in Hong Kong, or any other place acceptable to IFC, all as specified by the Borrower and each of the Co-Borrowers in the relevant Disbursement request.

(b)                                 The Borrower shall deliver to IFC a receipt, substantially in the form of Schedule 3, within 5 Business Days following each Disbursement.

(c)                                  Each Disbursement (other than the last one) shall be made in an amount of not less than $10,000,000. Disbursements shall not exceed 2 in number with respect to the IFC A Loan and shall not exceed 1 in number with respect to the IFC C Loan.

(d)                                 The Borrower and the Co-Borrowers shall deliver to IFC a receipt, substantially in the form provided for in Schedule 3, within 5 Business Days following each Disbursement.

Section 2.03 Interest. Suhject to the provisions of Section 2.04 (Default Rate Interest), the Borrower and the Co-Borrowers shall pay interest on the Loans in accordance with this Section 2.03:

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(a)                                 During each Interest Period, the Loans (or with respect to the first Interest Period for each Disbursement, the amount of that Disbursement) shall bear interest at the applicable Interest Rate for that Interest Period.

(b)                                 Interest on the Loans shall accrue from day to day, be prorated on the basis of a 360-day year for the actual number of days in the relevant Interest Period and be payable in arrears on the Interest Payment Date immediately following the end of that Interest Period; provided that with respect to any Disbursement made less than 15 days before an Interest Payment Date, interest on that Disbursement shall be payable commencing on the second Interest Payment Date following the date of that Disbursement.

(c)                                  Subject to sub-sections (e) and (f) below, the Interest Rate for any Interest Period shall be the rate which is the sum of:

(i)                             the Spread; and

(ii)                          LIBOR on the Interest Determination Date for that Interest Period for 6 months (or, in the case of the first Interest Period for any Disbursement, for 1 month, 2 months, 3 months or 6 months, whichever period is closest to the duration of the relevant Interest Period (or, if two periods are equally close, the longer one)) rounded upward to the nearest three decimal places.

(d)                                 If, for any Interest Period, IFC cannot determine LIBOR by reference to the Telerate Service or any other service that displays BBA rates, IFC shall notify the Borrower and each Co-Borrower and shall instead determine LIBOR:

(i)                             on the second Business Day before me beginning of the relevant Interest Period by calculating the arithmetic mean (rounded upward to the nearest three decimal places) of the offered rates advised to IFC on or around 11:00 a.m., London time, for deposits in the Loan Currency and otherwise in accordance with sub-section (ii) below, by any 4 major banks active in the Loan Currency in the London interbank market, selected by IFC; provided that if less than four quotations are received, IFC may rely on the quotations so received if not less than 2; or

(ii)                          if less than 2 quotations are received from the banks in London in accordance with sub-section (i) above, on the first day of the relevant Interest Period, by calculating the arithmetic mean (rounded upward to the nearest three decimal places) of the offered rates advised to IFC on or around 11:00 a.m., New York time, for Loans in the Loan Currency and otherwise in accordance with Section 2.03(c)(ii), by a major bank or banks in New York selected by IFC.

(e)                                  Subject to any alternative rate of interest agreed as contemplated by sub-section (f) below, if a Loan Market Disruption Event occurs in relation to all or any part of the Loans for any Interest Period, IFC shall promptly notify the Borrower and each Co-Borrower of such event and the relevant Interest Rate for the relevant Loan, or a portion of the relevant Loan, for that Interest Period shall be the rate which is the sum of:

(i)                             the Spread; and

(ii)                          either: (A) the rate which expresses as a percentage rate per annum the cost to IFC (or the relevant Participant, as notified to IFC as soon as practicable and in any event not later than the close of business on the first day of the relevant Interest Period) of funding its participation in the relevant Loan from whatever source it may reasonably select; or (B) at the option of IFC (or any such Participant, as the case may be), LIBOR for the relevant period as determined in accordance with Section 2 03(c)(ii) above.

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(f)                                   (i)                             If a Loan Market Disruption Event Occurs in relation to a Loan and the Borrower and each Co-Borrower so requires, within 5 Business Days of the notification by IFC pursuant to Section 2.03(e) above, IFC and the Borrower and each Co-Borrower shall enter into good faith negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest applicable to the relevant Loan.

(ii)                          Any alternative basis agreed pursuant to sub-paragraph (i) above shall take effect in accordance with its terms and be binding on each party hereto.

(iii)                       If agreement cannot be reached, the Borrower and each Co-Borrower may prepay the relevant portion of the relevant Loan, except for the IFC C Loan, in accordance with Section 2.06 (Prepayment).

(g)                                  On each Interest Determination Date for any Interest Period, IFC shall determine the Interest Rate applicable to that Interest Period and promptly notify the Borrower and each Co-Borrower of that rate.

(h)                                 The determination by IFC, from time to time, of the applicable Interest Rate shall be final and conclusive and bind the Borrower and each Co-Borrower (unless the Borrower and each Co-Borrower show to IFC’s satisfaction that the determination involves manifest error).

Section 2.04 Default Rate Interest.

(a)                                 Without limiting the remedies available to IFC under this Agreement or otherwise (and to the maximum extent permitted by applicable law), if the Borrower and each Co-Borrower fails to make any payment of principal or interest (including interest payable pursuant to this Section) or any other payment provided for in Section 2.07 (Fees) when due as specified in this Agreement (whether at stated maturity or upon acceleration), the Borrower and each Co-Borrower shall pay interest on the amount of that payment due and unpaid at the rate which shall be 2% per annum above the Interest Rate.

(b)                                 Interest at the rate referred to in Section 2.04(a) shall accrue from the date on which payment of the relevant overdue amount became due until the date of actual payment of that amount (as well after as before judgment), and (b) shall be payable on demand or, if not demanded, on each Interest Payment Date falling after any such overdue amount became due.

Section 2.05 Repayment.

(a)                                 Subject to Section 1.04 (Business Day Adjustment), the Borrower and each Co-Borrower shall repay:

(i)                             the IFC A Loan on the following Interest Payment Dates and in the following amounts:

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(ii)                          the IFC C Loan on the following Interest Payment Dates and in the following amounts:

(b)                                 Upon each Disbursement, the amount disbursed shall be allocated for repayment on each of the respective dates for repayment of principal set out in the table in Section 2.05(a) in amounts which are pro rata to the amounts of the respective instalments shown opposite those dates in the table (with IFC adjusting those allocations as necessary so as to achieve whole numbers in each case).

(c)                                  Any principal amount of the Loans repaid under this Agreement may not be re-borrowed.

Section 2.06 Prepayment.

(a)                                 IFC A Loan:

Without prejudice to Section 2.03 (Interest), Section 2.06(a)(iii) (Prepayment), Section 2.10 (Increased Costs), Section 2.14 (Taxes), Section 2.16 (Illegality of Participation) and Section 5.04 (c)(i) (Application of Proceeds):

(i)                             The Borrower and each Co-Borrower may prepay on any Interest Payment Date all or any part of the IFC A Loan, on not less than 30 days’ prior notice to IFC, but only if:

(A)                        the Borrower and each Co-Borrower simultaneously pay all accrued interest and Increased Costs (if any) on the amount of the IFC A Loan to be prepaid, together with the prepayment premium specified in Section 2.06(a)(ii) and all other amounts then due and payable under this Agreement, including the amount payable under Section 2.11 (Unwinding Costs), if the prepayment is not made on an Interest Payment Date;

(B)                        for a partial prepayment, that prepayment is an amount not less than $5,000,000; and

(C)                        if requested by IFC, the Borrower and each Co-Borrower deliver to IFC, prior to the date of prepayment, evidence satisfactory to IFC that all necessary Authorizations with respect to the prepayment have been obtained.

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(ii)                          On the date of any prepayment of the IFC A Loan in accordance with sub-section (a)(i), the Borrower and each Co-Borrower shall pay a prepayment premium consisting of an amount in the Loan Currency equal to the relevant percentage of:

(A)                        if the prepayment is made on or before November 15, 2017, 2% on the principal amount to be prepaid;

(B)                        if the prepayment is made after November 15, 2017, but on or before Novermber 15, 2019, 1.5% on the principal amount to be prepaid; or

(C)                        if the prepayment is made after November 15, 2019, 1% on the principal amount to be prepaid.

The determination by IFC of the prepayment premium shall be final and conclusive and bind the Borrower and each Co-Borrower unless the Borrower and each Co-Borrower show, to the satisfaction of IFC, that such determination involved manifest error.

(iii)                       unless otherwise agreed in writing by IFC, the Borrower and, if applicable, any Co-Borrower shall prepay the outstanding principal amount of the IFC A Loan, together with accrued interest and Increased Costs (if any) thereon and all other amounts payable under this Agreement, including the amount payable under Section 2.11 (Unwinding Costs) if the prepayment is not made on an Interest Payment Date, as follows:

(A)                        if IFC so requires, within 180 days of receipt thereof, from 100% of the Net Sale Proceeds in respect of a sale of assets permitted under Section 5.02(u)(ii) (Asset Purchases); and

(B)                        as required by IFC under Section 5.04(c) (Application of Proceeds) in connection with any property or casualty insurance claim or Section 5.02(r) (Prepayment of Financial Debt);

(iv)                      Amounts of principal prepaid under this Section shall be applied by IFC to all the outstanding instalments of principal of the IFC A Loan in inverse order of maturity.

(v)                         Upon delivery of a notice in accordance with Section 2.06(a), the Borrower and each Co-Borrower shall make the prepayment in accordance with the terms of that notice.

(vi)                      Any principal amount of the IFC A Loan prepaid under this Agreement may not be re-borrowed.

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(b)                                 IFC C Loan:

Save for any prepayment made at the direction of IFC pursuant to Section 2.17 (Non-Reputable Party) and Section 5.04(c)(i) (Application of Proceeds), the IFC C Loan may not be prepaid.

Section 2.07 Fees.

(a)                                 The Obligors shall pay to IFC a commitment fee:

(i)                             with respect to: (A) the IFC A Loan, at the rate of 0.5 % per annum on that part of the IFC A Loan that from time to time has not been disbursed or cancelled, beginning to accrue on the date of this Agreement; and (B) the IFC C Loan, at the rate of 0.5 % per annum on that part of the IFC C Loan that from time to time has not been disbursed or cancelled, beginning to accrue on the date of this Agreement;

(ii)                          pro rated on the basis of a 360-day year for the actual number of days elapsed; and

(iii)                       payable semi-annually, in arrears, on each Interest Payment Date, the first such payment to be due on November 15, 2012.

(b)                                 The Obligors shall also pay to IFC:

(i)                             a front-end fee: (A) on the IFC A Loan of $300,000; and (B) on the IFC C Loan of $200,000, each to be paid on the earlier of; (x) the date which is 30 days after the date of this Agreement; and (y) the date immediately preceding the date of the first Disbursement of the IFC A Loan and IFC C Loan respectively;

(ii)                          a portfolio supervision fee of $10,000 per annum, payable upon receipt of a statement from IFC; and

(iii)                       if the Borrower and each Co-Borrower and IFC agree to restructure all or part of the Loans, the Borrower and each Co-Borrower and IFC shall negotiate in good faith an appropriate amount to compensate IFC for the additional work of IFC staff required in connection with such restructuring.

Section 2.08 Currency and Place of Payment.

(a)                                 The Borrower and each Co-Borrower shall make all payments of principal, interest, fees, and any other amount due to IFC under this Agreement in the Loan Currency, in same day funds, to the account of IFC at Northern Trust International Banking Corporation, New York, New York, U.S.A., ABA#▇▇▇▇▇▇▇▇▇, for credit to IFC’s account number 10215220300, or at such other bank or account in New York as IFC from time to time designates. Payments must be received in IFC’s designated account no later than 1:00 p.m., New York time.

(b)                                 The tender or payment of any amount payable under this Agreement (whether or not by recovery under a judgment) in any currency other than the Loan Currency shall not novate, discharge or satisfy the obligation of the Borrower and each Co-Borrower to pay in the Loan Currency all amounts payable under this Agreement except to the extent that (and as of the date when) IFC actually receives funds in the Loan Currency in the account specificd in, or pursuant to, Section 2.08(a).

(c)                                  The Borrower and each Co-Borrower shall indemnify IFC against any losses resulting from a payment being received or an order or judgment being given under this Agreement in any currency other than the Loan Currency or any place other than the account specified in, or pursuant to, Section 2.08(a). The Borrower and each Co-Borrower shall, as a separate obligation, pay such additional amount as is necessary to enable IFC to receive, after conversion to the Loan Currency at a market rate and transfer to that account, the full amount due to IFC under this Agreement in the Loan Currency and in the account specified in, or pursuant to, Section 2.08(a).

(d)                                 Notwithstanding the provisions of Section 2.08(a) and Section 2.08(b), IFC may require the Borrower and each Co-Borrower to pay (or reimburse IFC) for any Taxes, fees, costs, expenses and other amounts payable under Section 2.14(a) (Taxes) and Section 2.15 (Expenses) in the currency in which they are payable, if other than the Loan Currency.

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Section 2.09 Allocation of Partial Payments. If at any time IFC receives less than the full amount then due and payable to it under this Agreement, IFC may allocate and apply the amount received in any way or manner and for such purpose or purposes under this Agreement as IFC in its sole discretion determines, notwithstanding any instruction that the Borrower and each Co-Borrower may give to the contrary.

Section 2.10 Increased Costs. On each Interest Payment Date, the Borrower and each Co-Borrower shall pay, in addition to interest, the amount which IFC from time to time notifies to the Borrower and each Co-Borrower in an Increased Costs Certificate as being the aggregate Increased Costs of IFC and each Participant accrued and unpaid prior to that Interest Payment Date.

Section 2.11 Unwinding Costs.

(a)                                 If IFC or any Participant incurs any cost, expense or loss as a result of any Borrower:

(i)                             failing to borrow in accordance with a request for Disbursement made pursuant to Section 2.02 (Disbursement Procedure);

(ii)                          failing to prepay in accordance with a notice of prepayment;

(iii)                       prepaying all or any portion of the Loans on a date other than an Interest Payment Date; or

(iv)                      after acceleration of any Loan, paying all or a portion of the relevant Loan on a date other than an Interest Payment Date;

then the Borrower and each Co-Borrower shall immediately pay to IFC the amount that IFC from time to time notifies to the Borrower and each Co-Borrower as being the amount of those costs, expenses and losses incurred.

(b)                                 For the purposes of this Section, “costs, expenses or losses” include any premium, penalty or expense incurred to liquidate or obtain third party deposits, borrowings, ▇▇▇▇▇▇ or swaps in order to make, maintain, fund or hedge all or any part of any Disbursement or prepayment of the Loans, or any payment of all or part of the Loans upon acceleration.

Section 2.12 Suspension or Cancellation by IFC.

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(a)                                 IFC may, by notice to the Borrower and each Co-Borrower, suspend the right of the Borrower and each Co-Borrower to the Disbursement or cancel the undisbursed portion of the relevant Loan in whole or in part;

(i)                             if the first Disbursement has not been made, in the case of the IFC A Loan, by March 31, 2013 and, in the case of the IFC C Loan, September 30, 2012, or such other date as the parties agree;

(ii)                          if any Event of Default has occurred and is continuing or if the Event of Default specified Section 6.02(e) (Expropriation, Nationalization, Etc.) is, in the reasonable opinion of IFC, imminent;

(iii)                       if any event or condition has occurred which has or can be reasonably expected to have a Material Adverse Effect; or

(iv)                      if the last Disbursement has not been made, in the case of the IFC A Loan, on or after September 30, 2013.

(b)                                 Upon the giving of any such notice, the right of the Borrower to any Disbursement shall be suspended or cancelled, as the case may be. The exercise by IFC of its right of suspension shall not preclude IFC from exercising its right of cancellation, either for the same or any other reason specified in Section 2.12(a) and shall not limit any other provision of this Agreement. Upon any cancellation, the Borrower shall pay to IFC all fees and other amounts accrued (whether or not then due and payable) under this Agreement up to the date of that cancellation. A suspension shall not limit any other provision of this Agreement.

(c)                                  In the case of partial cancellation of the IFC A Loan or IFC C Loan pursuant to sub-section (a) of this Section 2.12 or Section 2.13(a) (Cancellation by the Borrower), interest on the amount then outstanding of the relevant Loan remains payable as provided in Section 2.03 (Interest).

Section 2.13 Cancellation by the Borrower.

(a)                                 The Borrower may, by notice to IFC prior to the Disbursement, irrevocably request IFC to cancel the undisbursed portion of the IFC A Loan on the date specified in that notice (which shall be a date not earlier than 30 days after the date of that notice).

(b)                                 IFC shall, by notice to the Borrower, cancel the undisbursed portion of the IFC A Loan effective as of that specified date if IFC has received all fees and other amounts accrued (whether or not then due and payable) under this Agreement up to such specified date.

(c)                                  Any undisbursed portion of the IFC A Loan, if cancelled under this Section 2.13, may not be reinstated or disbursed.

(d)                                 The IFC C Loan may not be cancelled by the Borrower.

Section 2.14 Taxes.

(a)                                 The Borrower and Co-Borrowers shall pay or cause to be paid all Taxes (other than taxes, if any, payable on the overall income of IFC) on or in connection with the payment of any and all amounts due under the IFC Financing Documents that are now or in the future levied or imposed by any Authority of the Country or any jurisdiction through or out of which a payment is made.

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(b)                                 All payments of principal, interest, fees and other amounts due under the IFC Financing Documents shall be made without deduction for or on account of any Taxes.

(c)                                  If the Borrower or any Co-Borrower is prevented by operation of law or otherwise from making or causing to be made those payments without deduction, the principal or (as the case may be) interest, fees or other amounts due under the IFC Financing Documents shall be increased to such amount as may be necessary so that IFC receives the full amount it would have received (taking into account any Taxes payable on amounts payable by the Borrower and Co-Borrowers under this sub-section) had those payments been made without that deduction.

(d)                                 If Section 2.14(c) applies and IFC so requests, the Borrower and Co-Borrowers shall deliver to IFC official tax receipts evidencing payment (or certified copies of them) within 30 days of the date of that request.

(e)                                  Section 2.14(a) and Section 2.14(b) do not apply to Taxes which directly result from a Participant (or, as the case may be, a participant with a comparable participation in the Loans having its principal office in the Country or having or maintaining a permanent office or establishment in the Country, if and to the extent that such permanent office or establishment acquires the relevant Participation (or a comparable participation in the Loans).

Section 2.15 Expenses.

(a)                                 The Borrower and Co-Borrowers shall pay or, as the case may be, reimburse IFC or its assignees, without duplication of amounts paid pursuant to Section 2.14(b), any amounts paid by them on account of, all Taxes (including stamp taxes), duties, fees or other charges payable on or in connection with the execution, issue, delivery, registration or notarization of the Transaction Documents and any other documents related to this Agreement or any other Transaction Document.

(b)                                 The Borrower and Co-Borrowers shall pay to IFC or as IFC may direct:

(i)                             the fees and expenses of IFC’s counsel in the U.S., Hong Kong, the Cayman Islands and the PRC incurred in connection with:

(A)                        the preparation of the investment by IFC provided for under this Agreement and any other Transaction Document;

(B)                        the preparation and/or review, execution and, where appropriate, translation and registration of the Transaction Documents and any other documents related to them;

(C)                        the giving of any legal opinions required by IFC under this Agreement and any other Transaction Document;

(D)                        the administration by IFC of the investment provided for in this Agreement or otherwise in connection with any amendment, supplement or modification to, or consents or waiver under, any of the Transaction Documents;

(E)                         the registration (where appropriate) and the delivery of the evidences of indebtedness relating to any Loan and its disbursement;

(F)                          the occurrence of any Event of Default or Potential Event of Default;

(G)                        the release of the IFC Security following repayment in full of the Loans; and

(H)                       the protection of IFC’s interest under the IFC Financing Documents;

(ii)                          without duplication of amounts paid pursuant to Section 2.15(b)(i) the costs and expenses incurred by IFC to enforce or protect its rights under any Transaction Document, or in exercising its rights or powers consequent upon or arising out of the occurrence of any Event of Default or Potential Event of Default, including legal and other professional consultants’ fees on a full indemnity basis:

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Section 2.16 Illegality of Participation. If, after the date of this Agreement, any change made in any applicable law or regulation or official directive (or its interpretation or application by any Authority charged with its administration) (the “Relevant Change”) makes it unlawful for any Participant to continue to maintain or to fund its Participation:

(a)                                 the Borrower and Co-Borrowers shall, upon request by IFC (but subject to any applicable Authorization having been obtained), prepay in full that part of the Loans that IFC advises corresponds to that Participation;

(b)                                 concurrently with the prepayment of the part of the Loans corresponding to the Participation affected by the Relevant Change, the Borrower and Co-Borrowers shall pay all accrued interest, Increased Costs (if any) on that part of the Loans (and, if that prepayment is not made on an Interest Payment Date, any amount payable in respect of the prepayment under Section 2.11 (Unwinding Costs));

(c)                                  the Borrower and Co-Borrowers agree to take all reasonable steps to obtain, as quickly as possible after receipt of IFC’s request for prepayment, the Authorization referred to in Section 2.16(a) if any such Authorization is then required; and

(d)                                 the Borrower and Co-Borrowers shall have no further right to disbursement of the undisbursed portion of the Loans corresponding to that Participation after it has received IFC’s request for prepayment under this Section.

Section 2.17 Non-Reputable Party. In the event that any Person other than the existing key shareholders who currently own more than 5% of the Share Capital of the Borrower as set out in Annex E, whether directly or indirectly, controls 10% or above of the outstanding issued Share Capital of the Borrower and, is deemed by IFC as a Non-Reputable Party, IFC shall have the option to have:

(a)                                 the entire outstanding principal amount of the IFC A Loan prepaid, and

(b)                                 the IFC C Loan prepaid with an amount that will provide an internal rate of return (“IRR”) of 12.5% on the IFC C Loan;

The calculation of the IRR for the IFC C Loan shall include any interest payments paid prior to the mandatory prepayment amount under this Section.

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ARTICLE III

Representations and Warranties

Section 3.01 Representations and Warranties. Subject to a disclosure letter provided by the Borrower as set forth in Schedule 8, each Obligor represents and warrants that on the date of (x) this Agreement, (y) the Disbursement and (z) any Conversion Date:

(a)                                 Organization and Authority. Each of the Obligors and each of their Material Subsidiaries is a company duly incorporated and validly existing under the laws of the jurisdiction of its organization and has the corporate power and has obtained all required Authorizations to own its assets, conduct and operate its business as presently conducted and operated and to enter into, and comply with its obligations under, the Transaction Documents to which it is a party or will, in the case of any Transaction Document not executed as at the date of this Agreement, when that Transaction Document is executed, have the corporate power to enter into, and comply with its obligations under, that Transaction Document;

(b)                                 Validity. Each Transaction Document to which any Obligor is a party has been, or will be, duly authorized and executed by such Obligor and constitutes, or will, when executed constitute, a valid and legally binding obligation of such Obligor, enforceable in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, IPC’s rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification provisions may be limited by applicable law;

(c)                                  No Conflict. Neither the making of any Transaction Document to which an Obligor nor any of the relevant Material Subsidiaries is a party nor (when all the Authorizations referred to in Section 4.01(d) (Authorizations) have been obtained) the compliance with its terms will conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute a default or require any consent under, any indenture, mortgage, agreement or other instrument or arrangement to which such Person is a party or by which it is bound, or violate any of the terms or provisions of such Person’s Charter or any Authorization, judgment, decree or order or any statute, rule or regulation applicable to such Person;

(d)                                 Status of Authorizations. Each Borrower, Co-Borrower and any of their Material Subsidiaries has all necessary licenses, Authorizations, consents and approvals and has made all necessary filings required under any applicable law, regulation or rule, and has obtained all necessary licenses, Authorizations, consents and approvals from other Persons, in order to conduct its respective businesses, carry out the Transaction, to create the Lien expressed to be created by the Security Documents to which it is or will be a party and comply with its respective obligations under this Agreement and the other Transaction Documents and such Authorizations (other than Authorizations that are of a routine nature and are obtained in the ordinary course of business) are set forth in Annex B hereto; no Obligor is in violation of, or in default under, or has received written notice of any proceedings relating to revocation or modification of, any such license. Authorization, consent or approval or any federal, state, local or foreign law, regulation or rule or any decree, order or judgment applicable to any Obligor, except where such violation, default, revocation or modification could not, individually or in the aggregate, have a Material Adverse Effect;

(e)                                  No Amendment to Charters. Subject to Section 5.02 (m) (Fundamental Changes) and Section 5.02 (o) (Project Documents), none of the Charters of the Borrower, the Co-Borrowers or the Material Subsidiaries has been amended since the date of this Agreement save as may be disclosed by the Obligors and their Subsidiaries from time to time;

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(f)                                   No Immunity. None of the Obligors nor any of their Material Subsidiaries nor any of their respective properties enjoys any right of immunity from set-off, suit or execution with respect to its assets or its obligations under any Transaction Document;

(g)                                  Disclosure. All information relating to the Obligor and their respective Subsidiaries and the Transaction provided to IFC by the Obligors prior to the date of this Agreement was and continues to be true and accurate and does not contain any information which is misleading in any material respect nor does it omit any information the omission of which makes the information contained in it misleading in any material respect;

(h)                                 Financial Condition. Since December 31, 2011 none of the Obligors nor any of their respective Subsidiaries: (i) has suffered any change that has a Material Adverse Effect or incurred any substantial loss or liability; or (ii) has undertaken or agreed to undertake any substantial obligation;

(i)                                     Financial Statements. The Consolidated financial statements of the Obligors and their respective Subsidiaries for the period ending on December 31, 2011: (i) have been prepared in accordance with the Accounting Standards, and present fairly the financial condition of the relevant Obligor and its Subsidiaries as of the date as of which they were prepared and the results of the operations of the Obligors and their respective Subsidiaries during the period then ended; and (ii) disclose all liabilities (contingent or otherwise) of the Obligors and their respective Subsidiaries, and the reserves, if any, for such liabilities and all unrealized or anticipated liabilities and losses arising from commitments entered into by the Obligors or any of their respective Subsidiaries (whether or not such commitments have been disclosed in such financial statements);

(j)                                    Employee Benefit Plans. Each of the Obligors and each of their respective Subsidiaries is in compliance in all material respects with its respective obligations relating to all employee benefit plans established, maintained or contributed to by it and does not have outstanding any liabilities with respect to any such employee benefit plans;

(k)                                 Title to Assets and Liens. Each of the Obligors and each of their Material Subsidiaries has good and marketable title to all of the assets purported to be owned by it and possesses a valid leasehold interest in all assets which it purports to lease, in all cases free and clear of all Liens, other than Permitted Liens, and no contracts or arrangements, conditional or unconditional, exist for the creation by any Obligor or any of its respective Subsidiaries of any Lien, except for the IFC Security;

(l)                                     IFC Security. The provisions of the Security Documents are effective to create in accordance with Section 4.01 (c) (IFC Security), in favour of IFC, legal, valid and enforceable Liens on or in all of the assets covered by the IFC Security; and all recordings and filings have been made in all public offices, all necessary consents obtained and all other action has been taken so that the Liens created by each Security Document constitute and will constitute perfected Liens on the IFC Security with the priority specified in the Security Documents;

(m)                             Taxes. All Tax returns required to be filed by each of the Obligors and their respective Subsidiaries have been timely filed, and all Taxes, obligations, fees and other governmental charges upon the Obligors or any of their respective Subsidiaries, or their respective properties, income or assets, which are due and payable or to be withheld, have been paid or withheld, other man those presently payable without penalty or interest;

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(n)                                 Financial Debt. Other than the Financial Debt listed in Annex C, none of the Obligors nor any of their respective Subsidiaries has any Financial Debt outstanding;

(o)                                 Litigation. None of the Obligors nor any of their respective Subsidiaries are engaged in nor, to the best of their knowledge, after due inquiry, threatened by, any litigation, arbitration or administrative proceedings, the outcome of which, if adversely determined, could reasonably be expected to hove a Material Adverse Effect;

(p)                                 Environmental Matters. (i) To the best of its knowledge and belief, after due inquiry, there are no material social or environmental risks or issues in respect of the Obligors or any of its Subsidiaries’ Operations other than those identified by the Environmental and Social Review Summary disclosed on the IFC website on March 14, 2012; and (ii) none of the Obligors nor any of its Subsidiaries has received nor is any Obligor or any of its Subsidiaries aware of (A) any existing or threatened complaint, order, directive, claim, citation or notice from any Authority in connection with its, any Obligors or any of their Subsidiaries’ Operations or (B) any material written communication from any Person, in either case, concerning its Operations’ failure to comply with any matter covered by the Action Plan and the Performance Standards which has, or could reasonably be expected to have, a Material Adverse Effect or any material impact on the implementation or operation of its Operations in accordance with the Action Plan and the Performance Standards;

(q)                                 Labour Matters. No labour disputes, strikes, slowdowns or work stoppages with the employees of any Obligor nor any of its respective Subsidiaries exists or, to the knowledge of the Borrower or any Co-Borrower, is imminent;

(r)                                    Use of Proceeds. The proceeds of the Loans shall be utilized solely in connection with the Project;

(s)                                   Subsidiaries. The entities listed on Annex D are the Material Subsidiaries of the Borrower and Annex D correctly sets forth, as of the date hereof and the date of the first Disbursement, (i) the percentage ownership (direct and indirect) of the Borrower in each class of capital stock of each of Its Subsidiaries, and the direct owner thereof and (ii) the percentage ownership (direct and indirect) of each holder in each class of capital stock of the Borrower, and the direct owner thereof;

(t)                                    Sanctionable Practices. None of the Obligors, their respective Subsidiaries, nor any of their respective Affiliates, nor any Person acting on its or any of their behalf, has committed or engaged in, with respect to any of their respective Operations or any transaction contemplated by this Agreement, any Sanctionable Practice;

(u)                                 Compliance with Law. (i) To the best of its knowledge and belief, after due inquiry, no Obligor nor any of its respective Subsidiaries is in violation of any statute or regulation of any Authority in connection with the conduct of its respective business or ownership of its respective property; and (ii) no judgment or order has been issued which has or may reasonably be expected to have a Material Adverse Effect;

(v)                                 Registration Statement. The Borrower satisfies all conditions to the use of a Registration Statement on Form F-3 under the Securities Act to register the Class A Ordinary Shares represented by the ADSs issuable upon conversion of the Convertible Portion of the IFC C Loan for resale in the manner contemplated by the Registration Rights Agreement;

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(w)                               ADS Registration Statement. No stop order of the SEC preventing or suspending the effectiveness of the registration Statement on Form F-6, including any amendments thereto (No. 333-129376), relating to the Borrower’s ADSs (the “F-6 Registration Statement”) has been issued and no proceedings for such purpose have been instituted or, to the Borrower’s knowledge, are contemplated by the SEC; the F-6 Registration Statement complied as of the time it became effective, complies and will comply at the time of Disbursement and at the time of conversion of the Convertible Portion of the IFC C Loan, and each amendment or supplement thereto will comply, in all material respects, with the applicable requirements of the Securities Act, and did not, as of such effective time, does not and will not, at the time of Disbursement and at the time of the conversion of the Convertible Portion of the IFC C Loan, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; it is not necessary to amend the F-6 Registration Statement in connection with the transactions contemplated by this Agreement or the Registration Rights Agreement;

(x)                                 Deposit Agreement. The Deposit Agreement is in full force and effect as of the date hereof and no amendment to the Deposit Agreement is required as a result of the execution of this Agreement or any other Transaction Document by the Borrower or the consummation of the transaction contemplated thereunder as a result of the issuance of ADSs issuable upon conversion of the IFC C Loan pursuant to this Agreement; IFC, as holder of ADSs issued upon conversion of the Convertible Portion of the IFC C Loan, shall be entitled, subject to the Deposit Agreement, to seek enforcement of its rights through the Depositary or its nominee in a direct suit, action or proceeding against the Borrower, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law); the ADSs issuable upon conversion of the Convertible Portion of the IFC C Loan will be in the form contemplated by the Deposit Agreement, and IFC, as holder thereof, will acquire valid and unencumbered title to the ADSs and be entitled to the rights and benefits specified in the ADSs and the Deposit Agreement;

(y)                                 Reservation of Class A Ordinary Shares and ADSs. The Class A Ordinary Shares represented by the ADSs issuable upon conversion of the Convertible Portion of the IFC C Loan have been duly authorized and have been validly reserved and remain unissued for deposit into the Borrower’s ADS facility upon conversion of the Convertible Portion of the IFC C Loan; the Class A Ordinary Shares reserved for issuance and deposit upon conversion of the Convertible Portion of the IFC C Loan, and the ADSs available for issuance pursuant to the Form F-6 Registration Statement are sufficient in number to meet the Borrower’s aggregate conversion obligation pursuant to the terms of this Agreement (assuming all conditions to such conversion have been satisfied) based on the initial Conversion Rate; such Class A Ordinary Shares, when so issued upon such conversion in accordance with the terms of this Agreement, will be duly and validly issued and fully paid and non-assessable, free of statutory and contractual preemptive rights, resale rights, rights of first refusal and similar rights and free of any voting restrictions, in each case under the Borrower’s Charter or other constitutive or organizational documents, or by contract. other agreement or obligation to which the Borrower is a party or pursuant to applicable law; and such ADSs, when issued upon conversion of the Convertible Portion of the IFC C Loan, will be in due and proper form if issued in certificated form or be duly represented by book-entry notation in accordance with the Deposit Agreement, and IFC, as holder of such ADSs or the Class A Ordinary Shares represented thereby will not be subject to personal liability by reason of being such holders;

(z)                                  Foreign Private Issuer. The Borrower is a “foreign private issuer” within the meaning of Rule 405 under the Securities Act;

(aa)                          Preferred Stock. Consummation of the transactions contemplated hereby will not cause any holder of shares of capital stock, securities convertible into or exchangeable or exercisable for Ordinary Shares or options, warrants or other rights to purchase capital stock or any other securities of the Borrower to have any right to acquire any shares of preferred stock of the Borrower;

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(bb)                          Delisting Notice. The Borrower has not received any notice from the New York Stock Exchange regarding the delisting of the ADSs from the New York Stock Exchange;

(cc)                            Approval for Dividends. Other than as set forth in the Borrower’s public filings, no governmental approvals are currently required in the Cayman Islands in order for the Borrower to pay dividends or other distributions declared by the Borrower to holders of Ordinary Shares, including the Depositary, or for the conversion by the Depositary of any dividends paid in Dollars or the repatriation thereof outside of the Cayman Islands;

(dd)                          Tax on Dividends. Except as disclosed in the Borrower’s public filings, under current laws and regulations of the Cayman Islands, all dividends and other distributions declared and payable on the Ordinary Shares underlying the ADSs may be paid by the Borrower to the holder thereof, including the Depositary, in Dollars and all such payments made to holders thereof or therein who are non-residents of the Cayman Islands will not be subject to income, withholding or other Taxes under current laws and regulations of the Cayman Islands or any taxing authority thereof or therein and will otherwise be free and clear of any other Tax, duty, withholding or deduction in the Cayman Islands or any taxing authority thereof or therein, without the necessity of obtaining any governmental authorization in the Cayman Islands or any taxing authority thereof or therein;

(ee)                            UN Security Council Resolutions. None of the Obligors nor any of their Subsidiaries, nor any of their Affiliates, nor any Person acting on its or their behalf, has entered into any transaction or activity prohibited by any resolutions of the United Nations Security Council under Chapter VII of the United Nations Charter;

(ff)                              No Material Omissions. To the knowledge of the Obligors, none of the representations and warranties in this Section 3.01 omits any matter the omission of which makes any of such representations and warranties misleading;

(gg)                            Capitalization. The description of the ownership of the Borrower, the Co-Borrowers, and their respective Subsidiaries as specified in Annex K is accurate; and

(hh)                          Shareholders’ Rights. Without prejudice to the rights set forth in the Registration Rights Agreement, no other shareholder of the Borrower enjoys any special direct rights against the Borrower that are not generally available to other shareholders of the Borrower,

Section 3.02 IFC Reliance. Each Obligor acknowledges that it makes the representations and warranties in Section 3.01 (Representations and Warranties) with the intention of inducing IFC to enter into this Agreement and the other IFC Financing Documents and that IFC enters into this Agreement and the other IFC Financing Documents on the basis of, and in full reliance on, each of such representations and warranties.

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ARTICLE IV

Conditions of Disbursement

Section 4.01 Conditions of First Disbursement. The obligation of IFC to make the first Disbursement is subject to the fulfilment prior to or concurrently with the making of that first Disbursement of the following conditions:

(a)                                 Transaction Documents. Other than the creation of Equity Pledges set forth in Section 4.01 (c)(ii) (IFC Security), the Transaction Documents, each in form and substance satisfactory to IFC, have been entered into by all parties to them and have become (or, as the ease may be, remain) unconditional and fully effective in accordance with their respective terms (except for this Agreement having become unconditional and fully effective, if that is a condition of any of those agreements), and IFC has received a copy of each of those agreements to which it is not a party;

(b)                                 Certificate of Incumbency and Authority. IFC has received a Certificate of Incumbency and Authority set forth in Schedule 1 from each Obligor dated the date of the first Disbursement, together with copies of the Charter, by-laws, resolutions and powers of attorney referred to in such Certificate of Incumbency and Authority, and all of the foregoing shall be in form and substance satisfactory to IFC;

(c)                                  IFC Security. In respect of (i) the IFC C Loan, the Share Mortgages are effective to create, in favour of IFC, legal, valid and enforceable Liens; and (ii) in respect of the IFC A Loan, the Share Mortgages and the Equity Pledges are effective to create, in favour of IFC, legal, valid and enforceable Liens; and in each case all recordings and filings have been made in all public offices, all necessary consents obtained and all other action has been taken so that the Liens created by the relevant Security Document constitute perfected Liens with the priority specified therein;

(d)                                 Authorizations. Each Obligor has obtained, and provided to IFC copies of, all Authorizations listed in Annex B, and such other Authorizations that may become necessary for:

(i)                             the Loans;

(ii)                          each Obligor’s Subsidiaries Operations and the implementation of the Financial Plan;

(iii)                       the due execution, delivery, validity and enforceability of, and performance by each Obligor of its respective obligations under, this Agreement and the other Transaction Documents, and any other documents necessary or desirable to the implementation of any of those agreements or documents; and

(iv)                      the remittance to IFC or its assigns in Dollars of all monies payable with respect to the Transaction Documents;

and all those Authorizations are in full force and effect;

(e)                                  Legal Opinions. IFC has received a legal opinion in form and substance satisfactory to IFC from IFC’S counsel in each of the British Virgin Islands, the Cayman Islands, Hong Kong and the PRC and ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Borrower’s counsel in the U.S. and, if requested by IFC, concurred in by counsel for the Borrower, and covering such other matters relating to the transactions contemplated by this Agreement as IFC may reasonably request;

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(f)                                   Accounting. IFC has received evidence satisfactory to IFC confirming that, as at a date within 60 days prior to the date of first Disbursement, the relevant Obligor is in compliance with the provisions of Section 5.01(c) (Accounting and Financial Management) and containing a brief description of the systems and records in place;

(g)                                  Authorization of Auditors. IFC has received a copy of the authorization to the Auditors referred to in Section 5.01 (f) (Authorization to Auditors);

(h)                                 Insurance. IFC has received copies of all insurance policies required to be obtained pursuant to Section 5.04 (Insurance) and Annex F prior to the date of the first Disbursement, and a certification of the relevant insurers or insurance agents confirming that such policies are in full force and effect and all premiums then due and payable under those policies have been paid;

(i)                                     Fees. IFC has received the fees which Section 2.07 (Fees) requires to be paid before the date of the first Disbursement;

(j)                                    Appointment of Agent. Each Obligor has delivered to IFC evidence, substantially in the form of Schedule 4 (Form of Service of Process Letter), of appointment of an agent for service of process pursuant to Section 8.05 (Applicable Law and Jurisdiction) and pursuant to the Registration Rights Agreement;

(k)                                 Environmental Matters. Each Obligor has (i) agreed to the Action Plan containing actions with a specific timetable to address issues identified in the Environmental and Social Review Summary disclosed on the IFC website on ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) agreed with IFC on the form of Annual Monitoring Report and (iii) taken actions required by the specified time in the Action Plan;

(1)                                 Solvency. IFC has received a solvency certificate in the form of Schedule 6 (Form of Solvency Certificate) from the chief financial officer of each of the Borrower, the Co-Borrowers and their respective Material Subsidiaries;

(m)                             IFC A Loan. In the case of the IFC A Loan, the IFC C Loan has been disbursed in full;

(n)                                 Share Transfer. In respect of the IFC A Loan, Wenjian Gongying has duly executed the transfer of its 46.3% of the issued Share Capital in Ambow Dalian to Ambow Education (Hong Kong) Limited; and

(o)                                 Special Resolutions. IFC has received (i) a copy of special resolutions amending the Memorandum and Articles of Association in form and substance satisfactory to IFC from each of the HK Co-Borrowers and (ii) a copy of special resolutions amending and restating the Memorandum and Articles of Association with an amended Memorandum and Articles of Association in respect thereof in form and substance satisfactory to IFC from each of the Cayman Co-Borrowers.

Section 4.02 Conditions of All Disbursements. The obligation of IPC to make any Disbursement, including the first Disbursement, is also subject to the conditions that:

(a)                                 No Default. No Event of Default and no Potential Event of Default has occurred and is continuing;

(b)                                 Use of Proceeds. The proceeds of that Disbursement are, at the date of the relevant request;

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(i)                             to be used by the Borrower for the purposes described in the Recital to this Agreement and set forth in Section 3.01(r) (Use of Proceeds); and

(ii)                          the proceeds of that Disbursement are not to be used for expenditures in the territories of any country that is not a member of the World Bank;

(c)                                  No Material Adverse Effect. Since the date of this Agreement, nothing has occurred which has or could reasonably be expected to have a Material Adverse Effect;

(d)                                 No Material Loss or Liability. Since the date of this Agreement, none of the Obligors have incurred any material loss or liability other than pursuant to the Loans and the Transaction Documents or as otherwise permitted by this Agreement;

(e)                                  Representations and Warranties. The representations and warranties made in Article III (but in the case of Section 3.01(c) (No Conflict), without the words in parentheses) and in the other IFC Financing Documents are true and correct in all material respects on and as of the date of that Disbursement (except to the extent such representation and warranty specifically refers to an earlier date, in which case such representation and warranty shall have been true and correct and other than where a test of materiality already applies as of such earlier date) with the same effect as if those representations and warranties had been made on and as of the date of that Disbursement;

(f)                                   No Violations. After giving effect to that Disbursement, no Obligor would be in violation of;

(i)                             its Charter;

(ii)                          any provision contained in any document to which it is a party (including this Agreement) or by which it is bound; or

(iii)                       any law, rule, regulation, Authorization or agreement or other document binding on it directly or indirectly limiting or otherwise restricting its borrowing or guarantee power or authority or its ability to borrow or guarantee;

(g)                                  Environmental Matters. IFC is satisfied that any action required to be taken by the specified time as set out in the Action Plan has been duly completed;

(h)                                 Financial Ratios. (Without limiting the generality of Section 4.02(f) (No Violation)), after taking into account the amount of that Disbursement and any other Long-term Debt incurred by the Borrower and of any amounts of Tangible Net Worth paid into the Borrower after the date of the latest financial statements of the Borrower delivered to IFC pursuant to Section 5.03(a) (Reporting Requirements), the Borrower, the Co-Borrowers and their respective Subsidiaries shall be in compliance with their obligations under Section 5.01(t) (Financial Ratios);

(i)                                     Legal Fees and Expenses. IFC has received the reimbursement of all invoiced fees and expenses of IFC’s counsel as provided in Section 2.15(b) (Expenses) or confirmation that those fees and expenses have been paid directly to that counsel; and

(j)                                    Legal Opinions. IFC has received a legal opinion in form and substance satisfactory to IFC from IFC’s counsel in each of the British Virgin Islands, the Cayman Islands, Hong Kong, PRC and ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Borrower’s counsel in the U.S., and any other relevant jurisdiction and, if requested by IFC, concurred in by counsel for each of the Obligors and covering such customary matters relating to the transactions contemplated by this Agreement as IFC may reasonably request.

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Section 4.03 Borrower’s Certification. The Borrower shall deliver to IFC with respect to each request for Disbursement:

(a)                                 certifications, in the form included in Schedule 2 (Form of Request for Disbursement (Loan)) relating to the conditions specified in Section 4.01 (Conditions of First Disbursement) (for each Loan, in respect of the first Disbursement only) and Section 4.02 (Conditions of All Disbursements) (in respect of all Disbursements); and

(b)                                 such evidence as IFC may reasonably request of the proposed utilization of the proceeds of that Disbursement or the utilization of the proceeds of any prior Disbursement.

Section 4.04 Conditions for IFC Benefit. The conditions in Section 4.01 (Conditions of First Disbursement) and Section 4.02 (Conditions of All Disbursements) are for the benefit of IFC and may be waived only by IFC in its sole discretion.

ARTICLE V

Particular Covenants

Section 5.01 Affirmative Covenants. Unless IFC otherwise agrees in writing, each Obligor shall and shall cause their respective Subsidiaries to:

(a)                                 Corporate Existence: Conduct of Business. Do all things necessary to maintain its existence and keep in full force and effect its material rights, franchises, licenses, permits, copyrights, trademarks and patents, comply with its charter, conduct its Operations with due diligence and efficiency and in accordance with sound industry, financial and business practices;

(b)                                 Use of Proceeds: Compliance with Law. Apply the proceeds of the Loans exclusively as set forth in Section 3.01(r) (Use of Proceeds), comply in all material respects (or in the case of Applicable S&E Law, in all respects) with all applicable law, statutes, regulations and orders of, and all applicable restrictions imposed by, all Authorities in respect of its Operations and the ownership of its property (including applicable law, statutes, regulations, orders and restrictions relating to environmental standards and controls);

(c)                                  Accounting and Financial Management. Maintain an accounting and control system, management information system and books of account and other records, which together adequately reflect truly and fairly the financial condition of the Borrower, each Co-Borrower and their respective Subsidiaries and the results of their respective operations in conformity with the Accounting Principles;

(d)                                 Taxes. Pay and discharge, all Taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or upon any properties belonging to it; provided that none of the Borrower or Co-Borrowers nor any of their respective Subsidiaries shall be required to pay any such Tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with the Accounting Principles;

(e)                                  Auditors. Maintain at all times a firm of internationally recognized independent public accountants acceptable to IFC as auditors of the Obligors and their respective Subsidiaries;

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(f)                                   Authorization to Auditors. Irrevocably authorize, in the form of Schedule 7 (Authorization to Auditors), the Auditors (whose fees and expenses shall be for the account of the Borrower) to communicate directly with IFC at any time regarding the Obligors’ or any of their respective Subsidiaries’ accounts and operations, and provide to IFC a copy of that authorization, and, no later than 30 days after any change in Auditors, issue a similar authorization to the new Auditors and provide a copy thereof to IFC;

(g)                                  Access. Upon IFC’S request and with reasonable prior notice to the Obligors, permit representatives of IFC and the CAO, during normal office hours, to;

(i)                             visit any of the sites and premises where the business of the Borrower, the Co-Borrowers or any of their respective Subsidiaries is conducted;

(ii)                          inspect any sites, facilities, plants and equipment of the Borrower, the Co-Borrowers and any of their respective Subsidiaries;

(iii)                       have access to the books of account and all records of the Borrower, the Co-Borrowers and any of their respective Subsidiaries; and

(iv)                      have access to those employees, agents, contractors and subcontractors of the Borrower, the Co-Borrowers and any of their respective Subsidiaries who have or may have knowledge of matters with respect to which IFC seeks information;

provided that (A) no such reasonable prior notice shall be necessary if an Event of Default or Potential Event of Default is continuing or if special circumstances so require, (B) in the case of the CAO, such access shall be for the purpose of carrying out the CAO’s role and (C) no such access or inspection rights provided to either IFC or the CAO shall be permitted with respect to any non-public ADS price sensitive information;

(h)                                 Environmental Matters. Undertake its respective Operations in compliance with (i) the Action Plan and (ii) the Performance Standards;

(i)                                     Review of Annual Monitoring Report. Periodically review the form of the Annual Monitoring Report and advise IFC as to Whether revision of the form is necessary or appropriate in light of changes to the Borrower’s, Co-Borrowers’ or their respective Subsidiaries’ Operations, or in light of environmental or social risks identified by the Borrower; and revise the form as agreed with IFC;

(j)                                    Authorizations. (i) obtain and maintain in force (and where appropriate, renew in a timely manner) all Authorizations, including without limitation the Authorizations specified in Annex B, which are necessary for the implementation of the Transaction, the carrying out of the business and Operations of each the Obligors and their respective Subsidiaries generally and the compliance by the Obligors and their respective Subsidiaries with all their respective obligations under the Transaction Documents; and (ii) comply with all the conditions and restrictions contained in, or imposed on any Obligor or any of its respective Subsidiaries by, those Authorizations;

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(k)                                 Ownership.

(i)                                     The Borrower shall undertake to maintain, directly or indirectly, (A) 100% of the issued Share Capital, clear of any Liens, in each of the Co-Borrowers and (B) 5% of the issued Share Capital, clear of any Liens in Wenjian Gongying;

(ii)                                  Each of the Co-Borrowers shall undertake to maintain, directly or indirectly, (A) 100% of the issued Share Capital, clear of all Liens, in Beijing Ambow, (B) 53.7% of the issued Share Capital, clear of all Liens, in Ambow Dalian except the fulfilment of condition set forth in Section 4.01 (n) (Share Transfer) or 100% of the issued Share Capital, clear of all Liens, in Ambow Dalian upon the fulfilment of condition set forth in Section 4.01 (n) (Share Transfer), as the case may be, (C) 94.3% of the issued Share Capital, clear of any Liens in Wenjian Gongying. (D) 100% of the issued Share Capital, clear of all Liens, in Ambow Shengying and (E) 87.23% of the Issued Share Capital, clear of all Liens, in Ambow Yubua.

(iii)                               The Borrower and each of the Co-Borrowers shall procure (A) Suzhou Wenjian to maintain, directly or indirectly, 0.7% of the issued Share Capital, clear of all Liens in Wenjian Gongying and (B) Wenjian Gongying to maintain, directly or indirectly, 46.3% of the issued Share Capital, clear of all Liens, in Ambow Dalian except the fulfilment of condition set forth in Section 4.01 (n) (Share Transfer); and

(iv)                              Ambow Education Management Ltd. shall undertake to maintain, directly or indirectly, (A) 100% of the issued Share Capital, clear of all Liens, in Ambow Training Management Limited and (B) 100% of the issued Share Capital, clear of all Liens, in Ambow College Management Limited

(l)                                     Security; Further Assurances. From time to time, execute, acknowledge and deliver or cause to be executed, acknowledged and delivered such further instruments as may reasonably be requested by IFC for perfecting or maintaining in full force and effect the IFC Security or for re-registering the IFC Security or otherwise and, if necessary, create and perfect additional Security, to enable the Borrower, the Co-Borrowers and their respective Subsidiaries to comply with their respective obligations under the IFC Financing Documents;

(m)                             Insurance. With respect to the Obligors and their respective Subsidiaries, maintain insurance coverages for their respective business and assets, as specified in Annex F;

(n)                                 Maintenance of Registration Statement. Maintain the effectiveness of any Registration Statement required by the Registration Rights Agreement as provided in the Registration Rights Agreement;

(o)                                 Public Listing. Maintain the listing of the ADSs, including ADSs issuable upon conversion of the Convertible Portion of the IFC C Loan, on the New York Stock Exchange;

(p)                                 Registrar; Transfer Agent. Maintain a transfer agent and, If necessary under the jurisdiction of incorporation of the Borrower, a registrar for the ADS;

(q)                                 Sufficient ADSs. At all times when the IFC C Loan is outstanding, reserve and keep available, free of preemptive rights, Class A Ordinary Shares in an amount sufficient to satisfy the Borrower’s obligations to issue ADSs upon conversion of the Convertible Portion of the IFC C Loan;

(r)                                    Pension Plans. Comply with all requirements relating to pension or employee benefit plans;

(s)                                   Compliance with Deposit Agreement. Comply with the terms of the Deposit Agreement, including without limitation, the covenants set forth in the Deposit Agreement;

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(t)                                    Financial Ratios.

With respect to the Obligors and their respective Subsidiaries, maintain at all times on a Consolidated Basis:

(i)                              during 2012 and 2013:

(A)                               a Current Ratio of at least 1.0;

(B)                               a Liabilities to Tangible Net Worth Ratio of not more than 1.8;

(C)                               a Prospective Debt Service Coverage Ratio of not less than 1.2;

(D)                               a Peak Debt Service Coverage Ratio of not less than 1.0;

(E)                                a Financial Debt to EBITDA Ratio of not more than 3.0; and

(F)                                 a minimum Tangible Net Worth of $150,000,000;

(ii)                          from January 1,2014 and thereafter:

(A)                               a Current Ratio of at least 1.0;

(B)                               a Liabilities to Tangible Net Worth Ratio of not more than 1.5;

(C)                               a Prospective Debt Service Coverage Ratio of not less than 1.5;

(D)                               a Peak Debt Service Coverage Ratio of not less than 1.3;

(E)                                a Financial Debt to EBITDA Ratio of not more than 2.5; and

(F)                                 a minimum Tangible Net Worth of $180,000,000;

(u)                                 S&E Management System. Use all reasonable efforts to ensure the continuing implementation and operation of the S&E Management System to assess and manage the social and environmental performance of the Transaction and the Borrower’s, each of the Co-Borrower’s and their respective Subsidiaries’ Operations in compliance with the Performance Standards;

(v)                                 New Share Issuance. To the extent permitted by laws or regulations or any competent Authority, give IFC notice of any board resolution or other Authorization approving the issuance of any new Ordinary Share as soon as possible and in any event no less than 15 days prior to the convening of any relevant shareholders meeting to consider the new Ordinary Share issue;

(w)                               Change of Control Notification. Except with respect to sub-paragraphs (ii) and (v) in the definition of “Change of Control”, notify IFC, at least 30 days prior to the occurrence of a Change of Control event and provide IFC with all relevant documentation relating to such Change of Control event, at least 15 days prior to the occurrence of such event;

(x)                                 Business. All future businesses in the PRC or Operations shall be conducted exclusively by the Co-Borrowers and/or their respective Subsidiaries;

(y)                                 Annual General Meetings. To use its best endeavours, procure that the shareholders’ resolutions passed in each of its general meetings of shareholders shall: (i) to the extent permitted by laws or regulations or the competent Authorities, increase or, as the case may be, maintain the Share Capital of the Borrower such that at least 3% of the Share Capital of the Borrower shall always be reserved for the purpose of a conversion of the IFC C Loan into ADSs; and (ii) not approve any amendments to the Charter of the Borrower that might have any material and adverse impact on the terms and conditions of this Agreement and any other IFC Financing Documents;

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(z)                                  Career Enhancement Campuses. The construction and operation of the career enhancement campuses in Beijing and Guangzhou, Guangdong Province shall be carried out exclusively by Ambow Shenying;

(aa)                          Land Use Right Certificates. Obtain land use right certificates and all other necessary Authorizations in respect thereof for all the lands and buildings owned by the Obligors and their respective Subsidiaries in the PRC within 4 months after the first Disbursement of the IFC C Loan; and

(bb)                          Registration Statement. Any and all Registration Statements referred to in Section 3.01 (w) (ADS Registration Statement) pursuant to the Registrations Rights Agreement shall have been duly filed with the SEC the earlier of (i) the first date of the IFC A Loan Disbursement or (ii) 11 June 2013.

Section 5.02 Negative Covenants. Unless IFC otherwise agrees in writing, the Obligors shall not and shall cause each of their respective Subsidiaries not to:

(a)                                 Restricted Payments. Declare or pay any Restricted Payment, except for any of the following:

(i)                                     any Subsidiary of any Obligor may declare and pay cash Restricted Payments to that Obligor or to any wholly-owned Subsidiary of that Obligor;

(ii)                                  any partially-owned Subsidiary of an Obligor may declare and pay cash Restricted Payments to its stockholders, provided that the relevant Obligor must receive at least their proportionate share of any cash Restricted Payments paid by such Subsidiary;

(iii)                               the Obligors or any of their respective Subsidiaries may declare and pay cash dividends required to be paid under applicable law; and

(iv)                              the Borrower may declare and pay cash Restricted Payments if, at the time of and after giving effect to such Restricted Payment (x) no Potential Event of Default or Event of Default shall occur or be continuing or would result therefrom, (y) the Borrower is in compliance with all financial covenants set forth in Section 5.01(t) (Financial Ratios) on a Pro Forma Basis and (z) such cash Restricted Payment is made out of retained earnings;

(b)                                 Capital Expenditures. Incur expenditures or commitments for expenditures for fixed or other non-current assets, other than (x) those required for carrying out the Transaction; and (y) expenditures or commitments incurred by the Obligors and their respective Subsidiaries that do not exceed 7.5% of the Net Revenue of the Obligors and their respective Subsidiaries on a Consolidated Basis for the period up to May 15, 2015 and do not exceed 5% on a Consolidated Basis thereafter provided that, after giving effect thereto, (i) no Event of Default or Potential Event of Default shall have occurred and be continuing or result therefrom and (ii) the Obligors are in compliance with all financial covenants set forth in Section 5.01(t) (Financial Ratios) on a Pro Forma Basis;

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(c)                                          Permitted Financial Debt. Incur, assume or permit to exist any Financial Debt except for any of the following:

(i)                                     existing Financial Debt;

(ii)                                  intercompany Financial Debt between or among the Borrower, the Co-Borrowers and any of their respective Subsidiaries and the VIEs; provided, however, that if the Borrower and Co-Borrowers are the obligors on such Financial Debt, such Financial Debt;

(A)                               must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Loans in payment and liquidation on terms acceptable to IFC;

(B)                               must be pledged or assigned to IFC as part of the IFC Security; and

(C)                               shall be subject to other limitations and requirements as requested by IFC and agreed to by the Borrower,

in each case on terms and pursuant to documentation satisfactory to IFC; and

(iii)                               Financial Debt of the Obligors and their respective Subsidiaries if, after giving effect to the incurrence of such Financial Debt: (x) no Event of Default or Potential Event of Default shall have occurred and be continuing or would result therefrom; and (y) the Borrower, on a Consolidated Basis, would be in compliance with all financial covenants set forth in Section 5.01(t) (Financial Ratios) on a Pro Forma Basis;

(d)                                 Leases. Enter into any agreement or arrangement to lease any property or equipment of any kind (other than Financial Leases), except with respect to which the aggregate lease payments on a Consolidated Basis among the Obligors and their respective Subsidiaries in a Financial Year do not exceed the equivalent of $25,000,000;

(e)                                  Derivative Transactions. Enter into any Derivative Transaction or assume the obligations of any party to any Derivative Transaction;

(f)                                   Guarantees and Other Obligations. Enter into any agreement or arrangement to guarantee or, in any way or under any condition, assume or become obligated for all or any part of any financial or other obligation of another Person, except for any wholly-owned Subsidiary;

(g)                                  Permitted Liens. Create or permit to exist any Lien on any property, revenues or other assets, present or future, of the Borrower, any Co-Borrower or any of their respective Subsidiaries, except for any Permitted Liens;

(h)                                 Arm’s Length Transactions. Enter into any transaction except in the ordinary course of business and on the basis of arm’s length arrangements;

(i)                                     Purchasing or Sales Agency. Establish any sole and exclusive purchasing or sales agency for a material portion of its purchases or sales other than in the ordinary course of business and on the basis of arm’s length arrangements;

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(j)                                    Profit Sharing Arrangements. Save for any joint venture partnership agreements existing at the date of this Agreement and other than in the ordinary course of business and on the basis of an arm’s length arrangement, enter into any partnership, profit-sharing or royalty agreement or other similar arrangement whereby the income or profits of the Obligors or any of their respective Subsidiaries are, or might be, shared with any other Person;

(k)                                 Management Contracts. Enter into any management contract or similar arrangement whereby its business or operations are managed by any other Person other than in the ordinary course of business and on an arm’s length basis;

(l)                                     Permitted Investments. Make or permit to exist loans or advances to, or deposits (except commercial bank deposits in the ordinary course of business) with, other Persons or acquire stock or other securities or make contributions to or investments in any Person or enterprise (each of the foregoing are “Investment” and, collectively, “Investments”) other than any of the following:

(i)                                     intercompany Financial Debt extended to any Subsidiary of the Borrower or to any VIE to the extent permitted under the IFC Financing Documents;

(ii)                                  accounts receivable held by the Borrower, the Co-Borrowers, and any of their respective Subsidiaries created in the ordinary course of business and payable in accordance with customary trade terms;

(iii)                               existing investments of the Borrower, the Co-Borrowers and their respective Subsidiaries;

(iv)                              cash or cash equivalents;

(v)                                 investments acquired in connection with the bankruptcy of suppliers and customers and in the good faith settlement of delinquent obligations in the ordinary course of business;

(vi)                              to officers and employees in the ordinary course of business for moving, relocation, travel and similar expenditures;

(vii)                           Derivative Transactions only to the extent otherwise permitted under the IFC Financing Documents;

(viii)                        non-cash consideration acquired in connection with any asset sale to the extent permitted under Section 5.02 (t) (Asset Sales) below;

(ix)                              prepayment of expenses to suppliers in the ordinary course of business;

(x)                                 the Borrower, the Co-Borrowers and any of their respective Subsidiaries may make capital contributions to any Subsidiary of the Borrower, provided that no Event of Default or Potential Event of Default has occurred and is continuing, any security interest granted to IFC in any assets shall be maintained, and such Subsidiary remains a Subsidiary; and

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(xi)                              Permitted Acquisitions so long as:

(A)                               no Event of Default or Potential Event of Default shall have occurred at the time of, or after giving effect to, such Permitted Acquisition;

(B)                               calculations made by the Borrower, on a Consolidated Basis, with respect to all financial covenants set forth in Section 5.01(t) (Financial Ratios) for the respective Calculation Period on a Pro Forma Basis show that all financial covenants would have been complied with;

(C)                               all representations and warranties contained in the IFC Financing Documents are true and correct; and

(D)                               the Borrower shall have given 10 days’ prior written notice of such Permitted Acquisition, together with a certificate from its chief financial officer containing the relevant calculations and certifying compliance with the foregoing;

(m)                             Fundamental Changes. Change: (i) its Charter in any manner which would be inconsistent with the provisions of any Transaction Document; or (ii) change its Financial Year;

(n)                                 Amendments, Waivers, Etc. of Transaction Documents. Terminate, amend or grant any waiver (or permit the termination, amendment or waiver) with respect to any provision of any Transaction Document or any documents evidencing any Financial Debt, other than the Project Documents;

(o)                                 Project Documents. Amend or grant any waiver with respect to any Project Documents, in any material respect;

(p)                                 Engage in Business. Engage directly or indirectly in any business other than the business engaged in by the Obligors and their respective Subsidiaries as of the date hereof or any other business related to the education industry, or engage directly or indirectly in any business related to any Prohibited Activity as specified in Annex I;

(q)                                 UN Security Council Regulations. Enter into or engage in any activity prohibited by any resolution of the United Nations Security Council under Chapter VII of the United Nations Charter;

(r)                                    Prepayment of Financial Debt. Make any voluntary, optional or mandatory prepayment of or repurchase or reacquire for value any Financial Debt (other than the Loans) pursuant to any provision of any agreement or note with respect to that Financial Debt unless: (i) after such repayment the Borrower would be in compliance with all financial covenants set forth in Section 5.01(t) (Financial Ratios) on a Pro Forma Basis; and (ii) if IFC so requires, the Borrower contemporaneously prepays a proportion of the IFC A Loan equivalent to the proportion of the part of the Financial Debt being prepaid, such prepayment to be made in accordance with the provisions of Section 2.06 (Prepayment) except that there shall be no minimum amount or advance notice period for that prepayment;

(s)                                   Winding Up, Liquidation, Merger or Consolidation. Wind up, liquidate or dissolve its affairs or enter into any partnership, joint venture or transaction of merger or consolidation, except that any Subsidiary of the Borrower may merge or Consolidate with and into, or be dissolved or liquidated into, the Borrower or any wholly-owned Subsidiary of the Borrower, so long as: