SUBJECT: Suqian College’s dishonest actions and failure to honor contractual
agreements

Letter dated January 16th, 2007:

To Whom It May Concern,

Salary owed to Kaleb Smith for the work performed during the period of the 21th of December through
the 20th of January has not yet been received. Failure of Suqian College to provide this salary, in the sum
of 4500.00 RMB by January 20th, as stated in Appendix IV of Employment Contract No. 200707, shall be
interpreted as a breach of Party A’s obligations, as stipulated in Appendix VII, Statement 4 of that contract
and shall result in a breach penalty against Suqian College of $2,000 US dollars.

In addition to this breach penalty, Suqian College shall, at that time, be expected to reimburse Kaleb
Smith air fare costs, for both his arrival from and return to the United States, amounting to $1,400 US
dollars.

Failure of Suqian College to pay these sums, as required by the contract held with Kaleb Smith, shall
result in the filing of 3 separate administrative charges against the institution:

1. A formal complaint will be filed to the arbitration board of the State Administration of Foreign Ex-
perts A?airs (SAFEA) on the 21st of January.

2. A secondary foreign employment complaint shall be filed with the US Consulate General through the
Shanghai EEB o?ce on the 22nd of January.

3. A breach of administrative license complaint shall be filed with the Foreign Experts Bureau of the
Ministry of Education in Beijing. Upon filing this final complaint, the foreigner certification rights of Suqian
College will be called into question.

In addition to these formal administrative charges, a description of the the Suqian College’s inability to
adhere to their Foreign Expert Contract and general lack of respect for national policy concerning the em-
ployment of foreigners shall be made through the Overseas Organization Evaluation System and TEFL
School Review Board, which will reflect negatively on Suqian College through all subscribing international
personnel agencies.

A recruitment warning describing Suqian College’s dishonest actions and failure to honor the contractual
agreement held with their American employee, Kaleb Smith, will also be posted through the recruitment
exchange of ITC International.

I am confident that Suqian College will honor the requirements of their contract and that none of these
formal reactions will be necessary.