Exhibit 10.1

 
UNDERWRITING AGREEMENT
 
between
 
 
CHINA EDUCATION ALLIANCE, INC.
 
and
 
RODMAN & RENSHAW, LLC
 
as Underwriter
 

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CHINA EDUCATION ALLIANCE, INC.

 
UNDERWRITING AGREEMENT
 
New York, New York
September 29, 2009
 
Rodman & Renshaw, LLC
1251 Avenue of the Americas, 20th Floor
New York, New York 10020

Ladies and Gentlemen:

 
The undersigned, CHINA EDUCATION ALLIANCE, INC., a company formed under the laws
of North Carolina (“Company”), hereby confirms its agreement with Rodman &
Renshaw, LLC (hereinafter referred to as “you” (including its correlatives) or
the “Representative”) and with the other underwriters named on Schedule 1
hereto, if any, for which the Representative is acting as representative (the
Representative and such other underwriters being collectively called the
“Underwriters” or, individually, an “Underwriter”) as follows:
 
1.           Purchase and Sale of Securities.
 
1.1.           Firm Securities.
 
1.1.1.           Nature and Purchase of Firm Securities.
 
(i)           On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell, severally and not jointly, to the several
Underwriters, an aggregate of 3,162,055 shares (“Firm Shares”) of Common Stock,
par value $.001 per share (the “Shares”).
 
(ii)           The Underwriters, severally and not jointly, agree to purchase
from the Company the number of Firm Shares set forth opposite their respective
names on Schedule 1 attached hereto and made a part hereof at a purchase price
(net of discounts and commissions) of $5.17  per Share (94% of the per Share
offering price).  The Firm Shares are to be offered initially to the public (the
“Offering”) at the offering price set forth on the cover page of the Prospectus
Supplement (as defined in Section 2.1.1 hereof).
 
1.1.2.           Shares Payment and Delivery.
 
(i)           Delivery and payment for the Firm Shares shall be made at 10:00
a.m., Eastern time, on October 5, 2009  or at such other time as shall be agreed
upon by the Representative and the Company at the offices of Richardson & Patel
LLP, counsel to the Underwriters (“RP”), or at such other place (or remotely by
facsimile or other electronic transmission) as shall be agreed upon by the
Representative and the Company.  The hour and date of delivery and payment for
the Firm Shares is called the “Closing Date.”
 
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(ii)           Payment for the Firm Shares shall be made on the Closing Date by
wire transfer in Federal (same day) funds, payable to the order of the Company
upon delivery of the certificates (in form and substance satisfactory to the
Underwriters) representing the Firm Shares (or through the facilities of the
Depository Trust Company (the “DTC”)) for the account of the Underwriters.  The
Firm Shares shall be registered in such name or names and in such authorized
denominations as the Representative may request in writing at least two (2) full
Business Days prior to the Closing Date.  The Company shall not be obligated to
sell or deliver the Firm Shares except upon tender of payment by the
Representative for all the Firm Shares.   The term “Business Day” means any day
other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions are authorized or obligated by law to close in New York City.
 
1.2.           Over-allotment Option.
 
1.2.1.           Option Shares.  For the purposes of covering any
over-allotments in connection with the distribution and sale of the Firm Shares,
the Underwriters are hereby granted, an option to purchase up to 474,308 Shares
or fifteen (15%) percent of the Firm Shares sold in the offering from the
Company (the “Over-allotment Option”).  Such additional 474,308  Shares, the net
proceeds of which will be deposited with the Company’s account, are hereinafter
referred to as “Option Shares.”  The purchase price to be paid for the Option
Shares will be the same price per Option Share as the price per Firm Shares set
forth in Section 1.1.1 hereof. The Firm Shares and the Option Shares are
hereinafter referred to collectively as the “Public Securities.”
 
1.2.2.           Exercise of Option.  The Over-allotment Option granted pursuant
to Section 1.2.1 hereof may be exercised by the Representative as to all (at any
time) or any part (from time to time) of the Option Shares within 45 days after
the Closing Date.  The Underwriters will not be under any obligation to purchase
any Option Shares prior to the exercise of the Over-allotment Option.  The
Over-allotment Option granted hereby may be exercised by the giving of oral
notice to the Company from the Representative, which must be confirmed in
writing by overnight mail or facsimile or other electronic transmission setting
forth the number of Option Shares to be purchased and the date and time for
delivery of and payment for the Option Shares (the “Option Closing Date”), which
will not be later than five (5) full Business Days after the date of the notice
or such other time as shall be agreed upon by the Company and the
Representative, at the offices of RP or at such other place (including remotely
by facsimile or other electronic transmission) as shall be agreed upon by the
Company and the Representative.  If such delivery and payment for the Option
Shares does not occur on the Closing Date, the Option Closing Date will be as
set forth in the notice.  Upon exercise of the Over-allotment Option, the
Company will become obligated to convey to the Underwriters, and, subject to the
terms and conditions set forth herein, the Underwriters will become obligated to
purchase, the number of Option Shares specified in such notice.
 
1.2.3.           Payment and Delivery.  Payment for the Option Shares will be
made on the Option Closing Date by wire transfer in Federal (same day) funds as
follows: $5.17 per Option Share, [94% of the per Option Share offering price],
payable to the order of the Company upon delivery to you of certificates (in
form and substance satisfactory to the Underwriters) representing the Option
Shares (or through the facilities of DTC) for the account of the
Underwriters.  The Option Shares shall be registered in such name or names and
in such authorized denominations as the Representative may request in writing at
least two (2) full Business Days prior to the Option Closing Date.  The Company
shall not be obligated to sell or deliver the Option Shares except upon tender
of payment by the Representative for applicable Option Shares.
 
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2.           Representations and Warranties of the Company.  The Company
represents and warrants to the Underwriters as of the Applicable Time (as
defined below) and as of the Closing Date and as of the Option Closing Date, if
any, as follows:
 
2.1.           Registration Statement.
 
2.1.1.           The Company has filed with the Securities and Exchange
Commission (the “Commission”) a registration statement on Form S-3 (Registration
File No. 333-161487) under the Securities Act of 1933, as amended (the
“Securities Act”), which became effective on September 4, 2009, for the
registration under the Securities Act of the Public Securities.  At the time of
such filing, the Company met the requirements of Form S-3 under the Securities
Act.  Such registration statement meets the requirements set forth in Rule
415(a)(1)(x) under the Securities Act and complies with said Rule.  The Company
will file with the Commission pursuant to Rule 424(b) under the Securities Act,
and the rules and regulations (the “Rules and Regulations”) of the Commission
promulgated thereunder, a supplement to the form of prospectus included in such
registration statement relating to the Offering of the Public Securities and the
plan of distribution thereof and will advise the Representative of all further
information (financial and other) with respect to the Company required to be set
forth therein.  Such registration statement, including the exhibits thereto, as
amended at the date of this Agreement, is hereinafter called the “Registration
Statement”; such prospectus in the form in which was filed on August 21, 2009 is
hereinafter called the “Base Prospectus”; and the supplemented form of
prospectus, in the form in which it will be filed with the Commission pursuant
to Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter
called the “Prospectus Supplement.” Any reference in this Agreement to the
Registration Statement, the Base Prospectus or the Prospectus Supplement shall
be deemed to refer to and include the documents incorporated by reference
therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), on or before the date of this Agreement, or the issue date of the Base
Prospectus or the Prospectus Supplement, as the case may be; and any reference
in this Agreement to the terms “amend,” “amendment” or “supplement” with respect
to the Registration Statement, the Base Prospectus or the Prospectus Supplement
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the issue date of the Base
Prospectus or the Prospectus Supplement, as the case may be, deemed to be
incorporated therein by reference.  All references in this Agreement to
financial statements and schedules and other information that is “contained,”
“included,” “described,” “referenced,” “set forth” or “stated” in the
Registration Statement, the Base Prospectus or the Prospectus Supplement (and
all other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information that is or is
deemed to be incorporated by reference in the Registration Statement, the Base
Prospectus or the Prospectus Supplement, as the case may be.  No stop order
suspending the effectiveness of the Registration Statement or the use of the
Base Prospectus or the Prospectus Supplement has been issued, and no proceeding
for any such purpose is pending or has been initiated or, to the Company’s
knowledge, is threatened by the Commission.  For purposes of this Agreement,
“free writing prospectus” has the meaning set forth in Rule 405 under the
Securities Act and the “Time of Sale Prospectus” means the preliminary
prospectus, if any, together with the free writing prospectuses, if any, used in
connection with the Offering, including any documents incorporated by reference
therein.  “Applicable Time” means 5:30 pm (New York time) on the date of this
Agreement or such other time as agreed by the Company and the Underwriter.
 
2.1.2.           The Company is eligible to use free writing prospectuses in
connection with the Offering pursuant to Rules 164 and 433 under the Securities
Act.  Any free writing prospectus that the Company is required to file pursuant
to Rule 433(d) under the Securities Act and related to the Offering has been, or
will be, filed with the Commission in accordance with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder.  Each free writing prospectus that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act and related
to the Offering or that was prepared by or behalf of or used by the Company
complies or will comply in all material respects with the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder.  The Company will not, without the prior consent of the
Representative, prepare, use or refer to, any free writing prospectus related to
the Offering.
 
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2.1.3.           The Company has delivered or made available to, or will as
promptly as practicable deliver or make available to, to the Representative
complete conformed copies of the Registration Statement and of each consent and
certificate of experts, as applicable, filed as a part thereof, and conformed
copies of the Registration Statement (without exhibits), the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement, as amended
or supplemented (collectively, the Base Prospectus, the Time of Sale Prospectus,
and the Propectus Supplement shall be referred to as the “Prospectus
Documents”), in such quantities and at such places as the Representative
reasonably requests.  Neither the Company nor any of its directors and officers
has distributed and none of them will distribute, prior to the Closing Date, any
offering material in connection with the offering and sale of the Public
Securities other than the Base Prospectus, the Time of Sale Prospectus, if any,
the Prospectus Supplement, the Registration Statement, copies of the documents
incorporated by reference therein and any other materials permitted by the
Securities Act.
 
2.1.4.           Pursuant to the Exchange Act.  The Company has filed with the
Commission a Form 8-A12B (File Number 001-34386) providing for the registration
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of
the Company’s common stock including shares of common stock issued pursuant to
this Offering.  Such Form 8-A has been declared effective by the Commission on
the date hereof.
 
2.2.           No Stop Orders, etc.  Neither the Commission nor, to the best of
the Company’s knowledge, any state regulatory authority has issued any order
preventing or suspending the use of the Prospectus or the Registration Statement
or has instituted or, to the best of the Company’s knowledge, threatened to
institute any proceedings with respect to such an order.
 
2.3.           Disclosures in Registration Statement.
 
2.3.1.           10b-5 Representation.  At the respective times the Registration
Statement, the Base Prospectus, the Time of Sale Prospectus, if any, the
Prospectus Supplement, and any post-effective amendments thereto become
effective (and at the Closing Date and the Option Closing Date, if any):
 
(i)           The Registration Statement, any post-effective amendments thereto,
the Base Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
Supplement did and will contain all material statements that are required to be
stated therein in accordance with the Securities Act and the Rules and
Regulations, and will in all material respects conform to the requirements of
the Securities Act and the Rules and Regulations;
 
(ii)           Neither the Registration Statement, the Base Prospectus, the Time
of Sale Prospectus, if any, the Prospectus Supplement, nor any amendment or
supplement thereto, on such dates, do or will contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.  The representation and warranty made in
this Section 2.3.1(ii) does not apply to statements made or statements omitted
in reliance upon and in conformity with written information furnished to the
Company with respect to the Underwriters by the Representative expressly for use
in the Registration Statement or Prospectus or any amendment thereof or
supplement thereto.  The parties acknowledge and agree that such information
provided by or on behalf of any Underwriter consists solely of the names  of the
Underwriters appearing in the “Underwriting and Plan of Distribution” section of
the Prospectus Supplement and the following additional disclosure contained in
the “Underwriting and Plan of Distribution” section of the Prospectus
Supplement: (i) the first paragraph under the heading “Pricing of Securities”,
(ii) the first paragraphs under the heading “Other Terms” and (iii) all
paragraphs under the heading “Foreign Regulatory Restrictions on Purchase of the
Common Stock” (the “Underwriters’ Information”).
 
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2.3.2.           The Registration Statement (and any further documents to be
filed with the Commission in connection with the Offering) contains, or will
contain, as applicable, all exhibits and schedules as required by the Securities
Act.  The Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act and
the applicable Rules and Regulations, and none of such documents, when they were
filed with the Commission, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein (with
respect to Incorporated Documents incorporated by reference in the Base
Prospectus or Prospectus Supplement), in light of the circumstances under which
they were made not misleading; and any further documents so filed and
incorporated by reference in the Base Prospectus, the Time of Sale Prospectus,
if any, or Prospectus Supplement, when such documents are filed with the
Commission, will conform in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, as applicable, and will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.  No post-effective amendment to the
Registration Statement reflecting any facts or events arising after the date
thereof which represent, individually or in the aggregate, a fundamental change
in the information set forth therein is required to be filed with the
Commission.  There are no documents required to be filed with the Commission in
connection with the transaction contemplated hereby that (x) have not been filed
as required pursuant to the Securities Act or (y) will not be filed within the
requisite time period.  There are no contracts or other documents required to be
described in the Base Prospectus, the Time of Sale Prospectus, if any, or
Prospectus Supplement, or to be filed as exhibits or schedules to the
Registration Statement, that have not been or will not be described or filed as
required.
 
2.3.3.           Disclosure of Agreements.  The agreements and documents
described in the Prospectus Documents and the Registration Statement (including
the Incorporated Documents) conform to the descriptions thereof contained
therein and there are no agreements or other documents required by the
Securities Act and the Rules and Regulations to be described in the Prospectus
Documents and the Registration Statement or to be filed with the Commission as
exhibits to the Registration Statement, that have not been so described or
filed.  Each agreement or other instrument (however characterized or described)
to which the Company is a party or by which it is or may be bound or affected
and (i) that is referred to in any Prospectus Document, or (ii) is material to
the Company’s business, has been duly authorized and validly executed by the
Company, is in full force and effect in all material respects and is enforceable
against the Company and, to the Company’s knowledge, the other parties thereto,
in accordance with its terms, except (x) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (y) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and
(z) that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefore may be brought.  None of such
agreements or instruments has been assigned by the Company, and neither the
Company nor, to the best of the Company’s knowledge, any other party is in
default thereunder and, to the best of the Company’s knowledge, no event has
occurred that, with the lapse of time or the giving of notice, or both, would
constitute a default thereunder.  To the best of the Company’s knowledge,
performance by the Company of the material provisions of such agreements or
instruments will not result in a violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its assets
or businesses, including, without limitation, those relating to environmental
laws and regulations.
 
2.3.4.           Prior Securities Transactions.  No securities of the Company
have been sold by the Company or by or on behalf of, or for the benefit of, any
person or persons controlling, controlled by, or under common control with the
Company, except as disclosed in the Registration Statement.
 
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2.3.5.           Regulations.  The disclosures in the Registration Statement and
Prospectus Supplement concerning the effects of Federal, State, local and all
foreign regulation on the Company’s business as currently contemplated are
correct in all material respects.
 
2.4.           Changes After Dates in Registration Statement and Prospectus
Supplement.
 
2.4.1.           No Material Adverse Change.  Since the respective dates as of
which information is given in the Prospectus Supplement, except as otherwise
specifically stated therein:  (i) there has been no material adverse change in
the condition, financial or otherwise, or business prospects of the Company;
(ii) there have been no material transactions entered into by the Company, other
than as contemplated pursuant to this Agreement; and (iii) no officer or
director of the Company has resigned from any position with the Company.
 
2.4.2.           Recent Securities Transactions, etc.  Subsequent to the
respective dates as of which information is given in the Prospectus Supplement,
and except as may otherwise be indicated or contemplated herein or disclosed in
the Prospectus Supplement, the Company has not: (i) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed money;
or (ii) declared or paid any dividend or made any other distribution on or in
respect to its capital stock.
 
2.5.           Independent Accountants.  To the knowledge of the Company, Sherb
& Co. LLP (“Sherb”), whose report is filed with the Commission as part of the
Registration Statement, are independent registered public accountants as
required by the Securities Act and the Rules and Regulations.  Sherb has not,
during the periods covered by the financial statements included in the
Prospectus Documents, provided to the Company any non-audit services, as such
term is used in Section 10A(g) of the Exchange Act.
 
2.6.           Financial Statements.  The financial statements, including the
notes thereto and supporting schedules included in the Registration Statement
and Prospectus Documents fairly present the financial position and the results
of operations of the Company at the dates and for the periods to which they
apply; and such financial statements have been prepared in conformity with
generally accepted accounting principles (“GAAP”), consistently applied
throughout the periods involved; and the supporting schedules included in the
Registration Statement and Prospectus Documents present fairly the information
required to be stated therein.  The Registration Statement discloses all
material off-balance sheet transactions, arrangements, obligations (including
contingent obligations), and other relationships of the Company with
unconsolidated entities or other persons that may have a material current or
future effect on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses.
 
2.7.           Authorized Capital; Options, etc.  The Company had, at the date
or dates indicated in the Prospectus Supplement, the duly authorized, issued and
outstanding capitalization as set forth in the Prospectus Supplement.  Based on
the assumptions stated in the Registration Statement and the Prospectus
Documents, the Company will have on the Closing Date the stock capitalization
set forth therein.  Except as set forth in, or contemplated by, the Registration
Statement and the Prospectus Documents, on the Closing Date, there will be no
options, warrants, or other rights to purchase or otherwise acquire any
authorized, but unissued Shares of the Company or any security convertible into
Shares of the Company, or any contracts or commitments to issue or sell Shares
or any such options, warrants, rights or convertible securities.
 
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2.8.           Valid Issuance of Securities, etc.
 
2.8.1.           Outstanding Securities.  All issued and outstanding securities
of the Company issued prior to the transactions contemplated by this Agreement
have been duly authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission with respect
thereto, and are not subject to personal liability by reason of being such
holders; and none of such securities were issued in violation of the preemptive
rights of any holders of any security of the Company or similar contractual
rights granted by the Company.  The securities  conform in all material respects
to all statements relating thereto contained in the Registration Statement and
the Prospectus Documents.  The offers and sales of the outstanding securities
were at all relevant times either registered under the Securities Act and the
applicable state securities or Blue Sky laws or, based in part on the
representations and warranties of the purchasers of such Shares, exempt from
such registration requirements.
 
2.8.2.           Securities Sold Pursuant to this Agreement.  The Public
Securities have been duly authorized for issuance and sale and, when issued and
paid for, will be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by reason of being
such holders; the Public Securities are not and will not be subject to the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company; and all corporate action required to
be taken for the authorization, issuance and sale of the Securities has been
duly and validly taken.  The Public Securities conform in all material respects
to all statements with respect thereto contained in the Registration Statement.
 
2.9.           Registration Rights of Third Parties.  Except as set forth in the
Registration Statement and Prospectus Documents, no holders of any securities of
the Company or any rights exercisable for or convertible or exchangeable into
securities of the Company have the right to require the Company to register any
such securities of the Company under the Securities Act or to include any such
securities in a registration statement to be filed by the Company.
 
2.10.           Validity and Binding Effect of Agreements.  This Agreement  has
been duly and validly authorized by the Company, and, when executed and
delivered, will constitute, the valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms,
except: (i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally; (ii) as
enforceability of any indemnification or contribution provision may be limited
under the federal and state securities laws; and (iii) that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefore may be brought.
 
2.11.           No Conflicts, etc.  The execution, delivery, and performance by
the Company of this Agreement and all ancillary documents, the consummation by
the Company of the transactions herein and therein contemplated and the
compliance by the Company with the terms hereof and thereof do not and will not,
with or without the giving of notice or the lapse of time or both: (i) result in
a material breach of, or conflict with any of the terms and provisions of, or
constitute a material default under, or result in the creation, modification,
termination or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to the terms of any agreement or instrument to
which the Company is a party; (ii) result in any violation of the provisions of
the Articles of Incorporation of the Company (as the same may be amended from
time to time, the “Articles of Incorporation”); or (iii) violate any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or
any of its properties or business constituted as of the date hereof.
 
2.12.           No Defaults; Violations.  No material default exists in the due
performance and observance of any term, covenant or condition of any material
license, contract, indenture, mortgage, deed of trust, note, loan or credit
agreement, or any other agreement or instrument evidencing an obligation for
borrowed money, or any other material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which any of the
properties or assets of the Company is subject.  The Company is not in violation
of any term or provision of its Articles of Incorporation or By-laws, or in
violation of any franchise, license, permit, applicable law, rule, regulation,
judgment or decree of any governmental agency or court, domestic or foreign,
having jurisdiction over the Company or any of its properties or businesses.
 
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2.13.           Corporate Power; Licenses; Consents.
 
2.13.1.           Conduct of Business.  Except as described in the Registration
Statement and the Prospectus Documents, the Company has all requisite corporate
power and authority, and has all necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental regulatory
officials and bodies that it needs as of the date hereof to conduct its business
purpose as described in the Registration Statement and Prospectus Documents,
except where the failure to have such requisite corporate power and authority
and all authorizations, approvals, orders, licenses, certificates and permits
would not have a material adverse effect on the assets, business or operations
of the Company.  The disclosures in the Registration Statement concerning the
effects of federal, state, local and foreign regulation on this Offering and the
Company’s business purpose as currently contemplated are correct in all material
respects.
 
2.13.2.           Transactions Contemplated Herein.  The Company has all
corporate power and authority to enter into this Agreement and to carry out the
provisions and conditions hereof, and all consents, authorizations, approvals
and orders required in connection therewith have been obtained.  No consent,
authorization or order of, and no filing with, any court, government agency or
other body is required for the valid issuance, sale and delivery of the Public
Securities and the consummation of the transactions and agreements contemplated
by this Agreement and as contemplated by the Prospectus Documents, except with
respect to applicable federal and state securities laws and regulations and the
rules and regulations of the Financial Industry Regulatory Authority, Inc.
(“FINRA”).
 
2.14.           D&O Questionnaires.  To the Company’s knowledge, all information
contained in the questionnaires (the “Questionnaires”) completed by each of the
Company’s directors and officers immediately prior to the Offering (the “Initial
Shareholders”) as well as in the Lock-Up Agreement  provided to the Underwriters
is true and correct in all respects and the Company has not become aware of any
information which would cause the information disclosed in the questionnaires
completed by each Initial Shareholder to become inaccurate and incorrect.
 
2.15.           Litigation; Governmental Proceedings.  There is no action, suit,
proceeding, inquiry, arbitration, investigation, litigation or governmental
proceeding pending or, to the Company’s knowledge, threatened against, or
involving the Company or, to the Company’s knowledge, any executive officer or
director that is required to be disclosed in the Registration Statement and the
Prospectus Documents which has not been disclosed in the Registration Statement
and the Prospectus Documents or in connection with the Company’s listing
application for the listing of the Shares and Common Stock on the NYSE Amex.
 
2.16.           Good Standing.  The Company has been duly organized and is
validly existing as a corporation and is in good standing under the laws of the
State of North Carolina as of the date hereof, and is duly qualified to do
business and is in good standing in each jurisdiction in which its ownership or
lease of property or the conduct of business requires such qualification, except
where the failure to qualify would not have a material adverse effect on the
assets, business or operations of the Company.
 
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2.17.           Stop Orders.  The Commission has not issued any order preventing
or suspending the use of any Prospectus Documents or any part thereof.
 
2.18.           Transactions Affecting Disclosure to FINRA.
 
2.18.1.           Finder’s Fees.  Except as described in the Registration
Statement and the Prospectus Documents, there are no claims, payments,
arrangements, agreements or understandings relating to the payment of a
finder’s, consulting or origination fee by the Company or any Initial
Shareholder with respect to the sale of the Public Securities hereunder or any
other arrangements, agreements or understandings of the Company or, to the
Company’s knowledge, any of its shareholders that may affect the Underwriters’
compensation, as determined by FINRA.
 
2.18.2.           Payments Within Twelve Months.  Except as described in the
Registration Statement and the Prospectus Documents, the Company has not made
any direct or indirect payments (in cash, securities or otherwise) to: (i) any
person, as a finder’s fee, consulting fee or otherwise, in consideration of such
person raising capital for the Company or introducing to the Company persons who
raised or provided capital to the Company; (ii) to any FINRA member; or (iii) to
any person or entity that has any direct or indirect affiliation or association
with any FINRA member, within the twelve months prior to the Closing Date, other
than payments to the Underwriters as provided hereunder in connection with the
Offering.
 
2.18.3.           Use of Proceeds.  None of the net proceeds of the Offering
will be paid by the Company to any participating FINRA member or its affiliates,
except as specifically authorized herein.
 
2.18.4.           FINRA Affiliation.  To the Company’s knowledge, no officer,
director or any beneficial owner of the Company’s unregistered securities has
any direct or indirect affiliation or association with any FINRA member (as
determined in accordance with the rules and regulations of FINRA) except as set
forth in the Registration Statement.  The Company will advise the Representative
and RP if it learns that any officer, director or owner of at least 5% of the
Company’s outstanding Common Stock (or securities convertible into Common Stock)
is or becomes an affiliate or associated person of a FINRA member participating
in the Offering.
 
2.19.           Foreign Corrupt Practices Act.  Neither the Company nor any of
the directors , employees or officers of the Company or any other person acting
on behalf of the Company has, directly or indirectly, given or agreed to give
any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier,
employee or agent of a customer or supplier, or official or employee of any
governmental agency or instrumentality of any government (domestic or foreign)
or any political party or candidate for office (domestic or foreign) or any
political party or candidate for office (domestic or foreign) or other person
who was, is, or may be in a position to help or hinder the business of the
Company (or assist it in connection with any actual or proposed transaction)
that (i) might subject the Company to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (ii) if not given in the
past, might have had a material adverse effect on the assets, business or
operations of the Company as reflected in any of the financial statements
contained in the Prospectus Documents or (iii) if not continued in the future,
might adversely affect the assets, business, operations or prospects of the
Company.  The Company has taken reasonable steps to ensure that its accounting
controls and procedures are sufficient to cause the Company to comply in all
material respects with the Foreign Corrupt Practices Act of 1977, as amended.
 
2.20.           Officers’ Certificate.  Any certificate pursuant to this
Agreement signed by any duly authorized officer of the Company and delivered to
you or to RP shall be deemed a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
 
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2.21.           “Ineligible Issuer.”  At the time the Registration Statement was
initially filed, the Company was not an “ineligible issuer,” as defined in Rule
405 under the Securities Act;
 
2.22.           Lock-up agreements.  Each of the Company’s officers, directors
and holders of more than 5% of the outstanding common stock of the Company (“5%
Stockholders”) (the “Lock-Up Parties”) has agreed that for a period of 6 months,
(the “Lock-Up Period”) from the Closing Date, such persons and shall not offer
for sale, sell, pledge, or otherwise dispose of (or enter into any transaction
or device that is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any of the Shares,
without the prior written consent of the Representative.  The Representative may
consent to an early release from the Lock-Up period if, in its opinion, the
market for Shares would not be adversely impacted by sales and in cases of
financial emergency of any of the Lock-Up Parties.
 
2.23.           Adequate Summary.  The statements set forth in the Prospectus
Documents under the captions “The Offering,” “Description of Capital Stock”,
insofar as they purport to constitute a summary of the terms of the Public
Securities, and under the caption “Underwriting and Plan of Distribution”,
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate summaries of such provisions in all material
respects.
 
2.24.           Subsidiaries.   Annex 1 to this Agreement sets forth the
ownership of all direct and indirect subsidiaries of the Company (each a
“Subsidiary” and together the “Subsidiaries”). All direct and indirect
subsidiaries of the Company are duly organized and in good standing under the
laws of the place of organization or incorporation, and each such subsidiary and
is in good standing in each jurisdiction in which its ownership or lease of
property or the conduct of business requires such qualification, except where
the failure to qualify would not have a material adverse effect on the assets,
business or operations of the Company taken as a whole.
 
2.25.           Related Party Transactions.  Except as disclosed in the
Registration Statement and the Prospectus Documents, there are no business
relationships or related party transactions involving the Company or any other
person required to be described in the Registration Statements and Prospectus
Documents that have not been described as required.
 
2.26.           Board of Directors.  The Board of Directors of the Company is
comprised of the persons set forth in the Incorporated Documents.  The
qualifications of the persons serving as board members and the overall
composition of the board comply with the Sarbanes-Oxley Act of 2002 and the
rules promulgated thereunder applicable to the Company and the rules of the NYSE
Amex.  At least one member of the Board of Directors of the Company qualifies as
a “financial expert” as such term is defined under the Sarbanes-Oxley Act of
2002 and the rules promulgated thereunder and the rules of the NYSE Amex. In
addition, at least a majority of the persons serving on the Board of Directors
qualify as “independent” as defined under the rules of the NYSE Amex.
 
2.27.           Sarbanes-Oxley Compliance.
 
2.27.1.           Disclosure Controls.  The Company has developed and currently
maintains disclosure controls and procedures that will comply with Rule 13a-15
or 15d-15 of the Exchange Act, and such controls and procedures are effective to
ensure that all material information concerning the Company will be made known
on a timely basis to the individuals responsible for the preparation of the
Company’s Exchange Act filings and other public disclosure documents.
 
2.27.2.           Compliance.  The Company is, or on the Closing Date will be,
in material compliance with the provisions of the Sarbanes-Oxley Act of 2002
applicable to it, and has implemented or will implement such programs and taken
reasonable steps to ensure the Company’s future compliance (not later than the
relevant statutory and regulatory deadlines therefore) with all the material
provisions of the Sarbanes-Oxley Act of 2002.
 
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3.           Covenants of the Company.  The Company covenants and agrees as
follows:
 
3.1.           Amendments to Registration Statement and Prospectus
Documents.  The Company will deliver to the Representative, prior to filing, any
amendment or supplement to the Registration Statement or Prospectus Documents
proposed to be filed after the Closing Date and not file any such amendment or
supplement to which the Representative shall reasonably object in writing,
provided that the Company may file such amendment or supplement if it would
render the Company in breach of the Securities Act, the Exchange Act and any
Rules and Regulations and the Representative has not suggested a form of
amendment or supplement which would not be objectionable.
 
3.2.           Federal Securities Laws.
 
3.2.1.           Compliance.  During the time when a Prospectus is required to
be delivered under the Securities Act, the Company will comply with all
requirements imposed upon it by the Securities Act, the Rules and Regulations
and the Exchange Act, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Public Securities in
accordance with the provisions hereof and the Prospectus Documents.  If at any
time when a Prospectus relating to the Public Securities is required to be
delivered under the Securities Act, any event shall have occurred as a result of
which, in the opinion of counsel for the Company or counsel for the
Underwriters, the Prospectus, as then amended or supplemented, includes an
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend any of the Prospectus Documents to comply with
the Securities Act, the Company will notify the Representative promptly and
prepare and file with the Commission, subject to Section 3.1 hereof, an
appropriate amendment or supplement in accordance with Section 10 of the
Securities Act.
 
3.2.2.           Intentionally Omitted.
 
3.2.3.           Exchange Act Registration.  For a period of three years from
the Effective Date, or until such earlier time upon which the Company is
required to be liquidated, the Company will maintain the registration of the
Shares under the provisions of the Exchange Act.  The Company will not
deregister the Shares under the Exchange Act without the prior written consent
of the Representative.
 
3.2.4.           Free Writing Prospectuses.  The Company represents and agrees
that it has not made and will not make any offer relating to the Public
Securities that would constitute an issuer free writing prospectus, as defined
in Rule 433 of the Securities Act, without the prior consent of the
Representative.  Any such free writing prospectus consented to by the
Representative is hereinafter referred to as a “Permitted Free Writing
Prospectus.”  The Company represents that it will treat each Permitted Free
Writing Prospectus as an “issuer free writing prospectus” as defined in Rule
433, and has complied and will comply with the applicable requirements of Rule
433 of the Securities Act, including timely Commission filing where required,
legending and record keeping.
 
3.3.           Delivery to Underwriters of Prospectuses.  The Company will
deliver to each of the several Underwriters, without charge, from time to time
during the period when the Prospectus is required to be delivered under the
Securities Act or the Exchange Act such number of copies of each Prospectus as
such Underwriters may reasonably request and, deliver to you two original
executed Registration Statements, including exhibits, and all post-effective
amendments thereto and copies of all exhibits filed therewith or incorporated
therein by reference and all original executed consents of certified experts.
 
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3.4.           Effectiveness and Events Requiring Notice to the
Representative.  The Company will use its best efforts to cause the Registration
Statement to remain effective with a current prospectus for at least nine (9)
months from the Applicable Time  and will notify the Representative immediately
and confirm the notice in writing: (i) of the effectiveness of the Registration
Statement and any amendment thereto; (ii) of the issuance by the Commission of
any stop order or of the initiation, or the threatening, of any proceeding for
that purpose; (iii) of the issuance by any state securities commission of any
proceedings for the suspension of the qualification of the Shares  for offering
or sale in any jurisdiction or of the initiation, or the threatening, of any
proceeding for that purpose; (iv) of the mailing and delivery to the Commission
for filing of any amendment or supplement to the Registration Statement or
Prospectus; (v) of the receipt of any comments or request for any additional
information from the Commission; and (vi) of the happening of any event during
the period described in this Section 3.4 hereof that, in the judgment of the
Company, makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  If the Commission or any state securities commission shall enter a
stop order or suspend such qualification at any time, the Company will make
every reasonable effort to obtain promptly the lifting of such order.
 
3.5.           Listing of Securities.  The Company shall use its best efforts to
cause the Public Securities to meet the criteria necessary for inclusion of the
Shares on the NYSE Amex and seek and use its commercially reasonable efforts to
maintain such listing for a period of at least three years after the Closing.
 
3.6.           Intentionally omitted
 
3.7.           Intentionally omitted.
 
3.8.           Financial Public Relations Firm.  The Company shall engage a
financial public relations firm reasonably acceptable to Rodman, which firm will
be experienced in assisting issuers in public offerings of securities and in
their relations with their security holders, and the Company will continue to
retain such firm or another firm reasonably acceptable to Representative for a
period of no less than two (2) years after the Closing Date.  Representative
agrees that the Company’s financial public relations firm, Redchip, is
acceptable.
 
3.9.           Reports to the Representative.
 
3.9.1.           Periodic Reports, etc.  For a period of three years from the
Closing Date, or until such earlier time upon which the Company is required to
be liquidated, the Company will furnish to the Representative copies of such
financial statements and other periodic and special reports as the Company from
time to time furnishes generally to holders of any class of its securities and
also promptly furnish to the Representative:  (i) a copy of each periodic report
the Company shall be required to file with the Commission; (ii) a copy of every
press release and every news item and article with respect to the Company or its
affairs which was released by the Company; (iii) a copy of each Form 8-K
prepared and filed by the Company; (iv) five copies of each Registration
Statement; (v) such additional documents and information with respect to the
Company and the affairs of any future subsidiaries of the Company as the
Representative may from time to time reasonably request; provided the
Representative shall sign, if requested by the Company, a Regulation FD
compliant confidentiality agreement which is reasonably acceptable to the
Representative and RP in connection with the Representative’s receipt of such
information.  Documents filed with the Commission pursuant to its EDGAR system
shall be deemed to have been delivered to the Representative pursuant to this
Section.
 
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3.9.2.           Transfer Sheets.  For a period of three years from the
Effective Date, the Company shall retain a transfer and registrar agent
acceptable to the Representative (the “Transfer Agent”) and will furnish to the
Representatives at the Company’s sole cost and expense such transfer sheets of
the Company’s securities as the Representative may reasonably request, including
the daily and monthly consolidated transfer sheets of the Transfer Agent and
DTC.  For the purposes of this Section 3.9.2, the Representative agrees that the
Company’s current transfer and registrar agent, StockTrans, Inc. is acceptable.
 
3.9.3.           Trading Reports.  During such time as the Public Securities are
listed on NYSE Amex the Company shall provide to the Representative, at its
expense, such reports published by the NYSE Amex  relating to price trading of
the Public Securities, as the Representative shall reasonably request.
 
3.10.           Payment of Expenses.
 
3.10.1.           General Expenses Related to the Offering.  The Company hereby
agrees to pay on each of the Closing Date and the Option Closing Date, if any,
to the extent not paid at the Closing Date, all expenses incident to the
performance of the obligations of the Company under this Agreement, including,
but not limited to: (a) all filing fees and communication expenses relating to
the registration of the Shares to be sold in the Offering (including the
Over-allotment Shares) with the Commission; (b) all COBRADesk filing fees
associated with the review of the Offering by FINRA; all fees and expenses
relating to the listing of such Shares on the Nasdaq Capital Market, the Nasdaq
National Market or the NYSE Amex and on such other stock exchanges as the
Company and Representative together determine; (c) all fees, expenses and
disbursements relating to background checks of the Company’s officers and
directors in an amount not to exceed $5,000 per individual; (d) all fees,
expenses and disbursements relating to the registration or qualification of such
Shares under the “blue sky” securities laws of such states and other
jurisdictions as Rodman may reasonably designate (including, without limitation,
all filing and registration fees); (e) all fees, expenses and disbursements
relating to the registration, qualification or exemption of such Shares under
the securities laws of such foreign jurisdictions as Representative may
reasonably designate; (f) the costs of all mailing and printing of the
underwriting documents (including, without limitation, the Underwriting
Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among
Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power
of Attorney), Registration Statements, Prospectuses and all amendments,
supplements and exhibits thereto and as many preliminary and final Prospectuses
as Rodman may reasonably deem necessary; (g) the costs of preparing, printing
and delivering certificates representing the Shares; (h) fees and expenses of
the transfer agent for the Shares; (i) stock transfer and/or stamp taxes, if
any, payable upon the transfer of securities from the Company to Rodman;  (j)
the fees and expenses of the Company’s accountants; (k) the fees and expenses of
the Company’s legal counsel and other agents and representatives; and (l) the
$16,000 cost associated with the use of i-Deal’s book building, prospectus
tracking and compliance software for the offering.  The Representative may
deduct from the net proceeds of the Offering payable to the Company on the
Closing Date, or the Option Closing Date, if any, the expenses set forth herein
to be paid by the Company to the Representative.  In the event of Company’s
termination prior to Closing Date, pursuant to Section 8.2 below, the Company
shall be obligated to pay the Underwriters their actual and accountable out of
pocket expenses related to the transactions contemplated herein then due and
payable subject to a maximum of $100,000.
 
3.11.           Application of Net Proceeds.  The Company will apply the net
proceeds from the Offering received by it in a manner consistent with the
application described under the caption “Use Of Proceeds” in the Prospectus
Supplement.
 
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3.12.           Delivery of Earnings Statements to Security Holders.  The
Company will make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth full calendar
month following the Effective Date, an earnings statement (which need not be
certified by independent public or independent certified public accountants
unless required by the Securities Act or the Rules and Regulations, but which
shall satisfy the provisions of Rule 158(a) under Section 11(a) of the
Securities Act) covering a period of at least twelve consecutive months
beginning after the Effective Date.
 
3.13.           Stabilization.  Neither the Company, nor, to its knowledge, any
of its employees, directors or shareholders (without the consent of the
Representative) has taken or will take, directly or indirectly, any action
designed to or that has constituted or that might reasonably be expected to
cause or result in, under the Exchange Act, or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
 
3.14.           Internal Controls.  The Company will maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that:  (i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary in order to
permit preparation of financial statements in accordance with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
 
3.15.           Accountants.  As of the Closing Date, the Company shall retain
an independent certified public accounting firm reasonably acceptable to
Representative, which will have responsibility for the preparation of the
financial statements and the financial exhibits, if any, to be included in the
Registration Statement, and the Company shall continue to retain an independent
certified public accounting firm reasonably acceptable to Representative for a
period of at least three years after the Closing.
 
3.16.           FINRA.  The Company shall advise the Representative (who shall
make an appropriate filing with FINRA) if it is aware that any 5% or greater
shareholder of the Company becomes an affiliate or associated person of an FINRA
member participating in the distribution of the Company’s Public Securities.
 
3.17.           No Fiduciary Duties.  The Company acknowledges and agrees that
the Underwriters’ responsibility to the Company is solely contractual in nature
and that none of the Underwriters or their affiliates or any selling agent shall
be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary
duty to the Company or any of its affiliates in connection with the Offering and
the other transactions contemplated by this Agreement.
 
4.           Conditions of Underwriters’ Obligations.  The obligations of the
several Underwriters to purchase and pay for the Shares, as provided herein,
shall be subject to the continuing accuracy of the representations and
warranties of the Company as of the date hereof and as of each of the Closing
Date and the Option Closing Date, if any, to the accuracy of the statements of
officers of the Company made pursuant to the provisions hereof and to the
performance by the Company of its obligations hereunder and to the following
conditions:
 
4.1.           Regulatory Matters.
 
4.1.1.           Effectiveness of Registration Statement.  The Prospectus shall
have been filed with the Commission pursuant to Rule 424(b) under the Securities
Act within the applicable time period prescribed for such filing by the rules
and regulations under the Securities Act; all material required to be filed by
the Company pursuant to Rule 433(d) under the Securities Act shall have been
filed with the Commission within the applicable time period prescribed for such
filing by Rule 433; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and no stop order suspending or preventing the use of any Prospectus
Document shall have been initiated or threatened by the Commission and all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of Representative’s counsel.
 
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4.1.2.           FINRA Clearance.  By the Closing Date, the Representative shall
have received clearance from FINRA as to the amount of compensation allowable or
payable to the Underwriters as described in the Registration Statement.
 
4.1.3.           NYSE Amex Clearance.  On and after the Closing Date, as
applicable, the Public Securities  shall have been duly listed for quotation on
the NYSE Amex and the Company shall have complied with all obligations of the
NYSE Amex relating to the sale of the Public Securities;
 
4.1.4.           Free Writing Prospectuses.  The Representative covenants with
the Company that the Underwriters will not use, authorize the use of, refer to,
or participate in the planning for the use of a “free writing prospectus” as
defined in Rule 405 under the Securities Act, which term includes use of any
written information furnished by the Commission to the Company and not
incorporated by reference into the Registration Statement, without the prior
written consent of the Company.  Any such free writing prospectus consented to
by the Company is hereinafter referred to as an “Underwriter Free Writing
Prospectus.”
 
4.2.           Company Counsel Matters.
 
4.2.1.           Closing Date Opinion of Counsel.  On the Closing Date, the
Representative shall have received the favorable opinion of Sichenzia Ross
Friedman Ference LLP, counsel to the Company (“SRFF”), dated the Closing Date,
addressed to the Representative, substantially as follows:
 
(i)           Based solely on a certificate of good standing dated within 5 days
of the Closing Date, the Company has been duly organized and is validly existing
as a corporation and is in good standing under the laws of the State of North
Carolina.
 
(ii)           Based solely as to factual matters on representations and
warranties by the Company, all issued and outstanding securities of the Company
have been duly authorized and validly issued and, to our knowledge, are fully
paid and non-assessable; the holders thereof are not subject to personal
liability by reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any stockholder of the Company
arising by operation of law or under the Articles of Incorporation.  The offers
and sales of the outstanding securities were at all relevant times either
registered under the Securities Act or exempt from such registration
requirements.  The authorized, and to the extent of SRFF’s knowledge,
outstanding capital stock of the Company is as set forth in the Prospectus.
 
(iii)           The Public Securities have been duly authorized and, when issued
and paid for, will be validly issued, to our knowledge, fully paid and
non-assessable; the holders thereof are not and will not be subject to personal
liability solely by reason of being such holders.  The Public Securities are not
and will not be subject to the preemptive rights of any holders of any security
of the Company arising by operation of law or under the Articles of
Incorporation.
 
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(iv)           This Agreement has been duly and validly authorized and, when
executed and delivered by the Company, constitutes, the valid and binding
obligations of the Company, enforceable against the Company in accordance with
its respective terms, except (a) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (b) as enforceability of any indemnification or contribution
provisions may be limited under the Federal and state securities laws, and (c)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefore may be brought.
 
(v)           The execution, delivery and performance of this Agreement and the
Lock-up Agreements by the Company  and compliance by the Company with the terms
and provisions thereof and the consummation of the transactions contemplated
thereby, and the issuance and sale of the Public Securities, do not and will
not, with or without the giving of notice or the lapse of time, or both, (a) to
such counsel’s knowledge, based on representations of the Company made to such
counsel and contained in a certificate provided by an executive officer of the
Company, conflict with, or result in a breach of, any of the terms or provisions
of, or constitute a default under, or result in the creation or modification of
any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company pursuant to the terms of, any mortgage, deed of trust,
note, indenture, loan, contract, commitment or other agreement or instrument
filed as an exhibit to the Registration Statement, (b) result in any violation
of the provisions of the Articles of Incorporation, or (c) to such counsel’s
knowledge, violate any statute or any judgment, order or decree, rule or
regulation applicable to the Company of any court, domestic or foreign, or of
any federal, state or other regulatory authority or other governmental body
having jurisdiction over the Company, its properties or assets.
 
(vi)           The Public Securities conform in all material respects to the
description thereof contained in the Registration Statement and the Prospectus
Documents.  To its knowledge, no United States or state statute or regulation
required to be described in the Prospectus Documents is not described as
required (except as to the Blue Sky laws of the various states, as to which such
counsel expresses no opinions), nor are any contracts or documents of a
character required to be described in the Registration Statement or the
Prospectus Documents or to be filed as exhibits to the Registration Statement
not so described or filed as required (except for the contracts and documents
described in the “Underwriting and Plan of Distribution” section of the
Prospectus Supplement, as to which such counsel expresses no opinion).
 
(vii)           Based solely on a notice of effectiveness received from the
Commission, the Registration Statement is effective under the Securities
Act.  To such counsel’s knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or threatened under the Securities Act or
applicable state securities laws.
 
(viii)           The Company is not and, after giving effect to the Offering and
sale of the Public Securities and the application of the proceeds thereof as
described in the Registration Statement and the Prospectus Documents, will not
be, an “investment company” as defined in the Investment Company Act of 1940, as
amended.
 
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(ix)           The opinion of SRFF shall further include a statement to the
effect that such counsel has participated in conferences with officers and other
representatives of the Company, the Underwriters and the independent registered
public accounting firm of the Company, at which conferences the contents of the
Registration Statement and the Prospectus Documents contained therein and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus Documents contained therein, solely on the basis of the foregoing
without independent check and verification, no facts have come to the attention
of such counsel which lead them to believe that the Registration Statement or
any amendment thereto, at the time the Registration Statement or amendment
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or the Prospectus Documents or any amendment
or supplement thereto, at the time they were filed pursuant to Rule 424(b) or at
the date of such counsel’s opinion, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statement therein, in light of the circumstances under
which they were made, not misleading (except that such counsel need express no
view and shall not be deemed to have rendered an opinion with respect to the
financial information, statistical data and information and matters regarding
non-United States laws, rules and regulations included in the Registration
Statement or the Prospectus Documents).  The Registration Statement and the
Prospectus Documents and any post-effective amendments or supplements thereto
(other than the financial statements including notes and schedules, financial
data, statistical data and non-United States laws, rules and regulations
included in the Registration Statement or the Prospectus Documents, included
therein, as to which no opinion need be rendered) each as of their respective
dates complied as to form in all material respects with the requirements of the
Securities Act and Rules and Regulations.
 
4.2.2           On the Closing Date, the Representative shall have received the
favorable opinion of Heilongjiang Min Qiang Law Firm, counsel to the Company,
reasonably acceptable to the Representative,  related to, among other things,
the descriptions of laws of the People’s Republic of China and the organization
of the Company’s PRC affiliates and ownership structure, dated the Closing Date
and addressed to the Representative.
 
4.2.3           Intentionally Omitted.
 
4.2.4           On the Closing Date, the Representative shall have received the
favorable opinion of Aird & Berlis LLP counsel to the Company, reasonably
acceptable to the Representative,  related to, among other things, the
organization of the Company’s Canadian affiliate and ownership structure, dated
the Closing Date and addressed to the Representative.
 
4.2.5.           Option Closing Date Opinions of Counsel.  On the Option Closing
Date, if any, the Representative shall have received the favorable opinion of
each counsel listed in Sections 4.2.1 through 4.2.4, dated the Option Closing
Date, addressed to the Representative and in form and substance reasonably
satisfactory to the Representative, confirming as of the Option Closing Date,
the statements made by such counsels in their respective opinions delivered on
the Closing Date.
 
4.2.6.           Reliance.  In rendering such opinions, such counsel may
rely:  (i) as to matters involving the application of laws other than the laws
of the United States and jurisdictions in which they are admitted, to the extent
such counsel deems proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (in form and substance reasonably satisfactory
to the Representative) of other counsel reasonably acceptable to the
Representative, familiar with the applicable laws; and (ii) as to matters of
fact, to the extent they deem proper, on certificates or other written
statements of officers of the Company and officers of departments of various
jurisdiction having custody of documents respecting the corporate existence or
good standing of the Company, provided that copies of any such statements or
certificates shall be delivered to RP if requested.  The opinion of SRFF and any
opinion relied upon by SRFF shall include a statement to the effect that it may
be relied upon by counsel for the Underwriters in its opinion delivered to the
Underwriters.
 
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4.3.           Cold Comfort Letter.  At the time this Agreement is executed, and
at each of the Closing Date and the Option Closing Date, if any, you shall have
received a letter, addressed to the Representative and in form and substance
satisfactory in all respects (including the non-material nature of the changes
or decreases, if any, referred to in clause (iii) below) to you and to RP from
Sherb dated, respectively, as of the date of this Agreement and as of the
Closing Date and the Option Closing Date, if any:
 
(i)           Confirming that they are independent public accountants with
respect to the Company within the meaning of the Securities Act and the
applicable Rules and Regulations and that they have not, during the periods
covered by the financial statements included in the Prospectus, provided to the
Company any non-audit services, as such term is used in Section 10A(g) of the
Exchange Act;
 
(ii)           Stating that in their opinion the financial statements of the
Company included in the Registration Statement and Prospectus Documents comply
as to form in all material respects with the applicable accounting requirements
of the Securities Act and the published Rules and Regulations thereunder;
 
(iii)           Stating that, on the basis of a limited review which included a
reading of the latest available unaudited interim financial statements of the
Company (with an indication of the date of the latest available unaudited
interim financial statements), a reading of the latest available minutes of the
shareholders and board of directors and the various committees of the board of
directors, consultations with officers and other employees of the Company
responsible for financial and accounting matters and other specified procedures
and inquiries, nothing has come to their attention which would lead them to
believe that:  (a) the unaudited financial statements of the Company included in
the Registration Statement and Prospectus Documents do not comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act and the Rules and Regulations or are not fairly presented in
conformity with GAAP applied on a basis substantially consistent with that of
the audited financial statements of the Company included in the Registration
Statement; (b) at a date not later than five days prior to the Closing Date or
Option Closing Date, as the case may be, there was any change in the capital
stock or long-term debt of the Company, or any decrease in the shareholders’
equity of the Company as compared with amounts shown in the December 31, 2008
balance sheet included in the Registration Statement, other than as set forth in
or contemplated by the Registration Statement, or, if there was any decrease,
setting forth the amount of such decrease, and (c) during the period from
December 31, 2008 to a specified date not later than five days prior to the
Closing Date or Option Closing Date, as the case may be, there was any decrease
in revenues, net earnings or net earnings per  share, in each case as compared
with the corresponding period in the preceding year and as compared with the
corresponding period in the preceding quarter, other than as set forth in or
contemplated by the Registration Statement, or, if there was any such decrease,
setting forth the amount of such decrease;
 
(iv)           Setting forth, at a date not later than five days prior to the
Closing Date, the amount of liabilities of the Company (including a breakdown of
commercial paper and notes payable to banks and related parties);
 
(v)           Stating that they have compared specific dollar amounts, numbers
of shares, percentages of revenues and earnings, statements and other financial
information pertaining to the Company set forth in the Prospectus in each case
to the extent that such amounts, numbers, percentages, statements and
information may be derived from the general accounting records, including work
sheets, of the Company and excluding any questions requiring an interpretation
by legal counsel, with the results obtained from the application of specified
readings, inquiries and other appropriate procedures (which procedures do not
constitute an examination in accordance with generally accepted auditing
standards) set forth in the letter and found them to be in agreement;
 
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(vi)           Stating that they have not since the Company’s formation brought
to the attention of the Company’s management any reportable condition related to
internal structure, design or operation as defined in the Statement on Auditing
Standards No. 60 “Communication of Internal Control Structure Related Matters
Noted in an Audit,” in the Company’s internal controls; and
 
(vii)           Statements as to such other matters incident to the transaction
contemplated hereby as you may reasonably request.
 
4.4.           Officers’ Certificates.
 
4.4.1.           Officers’ Certificate.  At each of the Closing Date and the
Option Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Chairman of the Board and Chief
Executive Officer of the  Company, dated the Closing Date or the Option Closing
Date, as the case may be, respectively, to the effect that the Company has
performed all covenants and complied with all conditions required by this
Agreement to be performed or complied with by the Company prior to and as of the
Closing Date, or the Option Closing Date, as the case may be, and that the
conditions set forth in Section 4.5 hereof have been satisfied as of such date
and that, as of the Closing Date and the Option Closing Date, as the case may
be, the representations and warranties of the Company set forth in Section 2
hereof are true and correct.  In addition, the Representative will have received
such other and further certificates of officers of the Company as the
Representative may reasonably request.
 
4.4.2.           Secretary’s Certificate.  At each of the Closing Date and the
Option Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Secretary or Assistant Secretary of the
Company, dated the Closing Date or the Option Date, as the case may be,
respectively, certifying: (i) that the Articles of Incorporation are true and
complete, have not been modified and are in full force and effect; (ii) that the
resolutions of the Company’s Board of Directors relating to the public offering
contemplated by this Agreement are in full force and effect and have not been
modified; (iii) all correspondence between the Company or its counsel and the
Commission; and (iv) as to the incumbency of the officers of the Company.  The
documents referred to in such certificate shall be attached to such certificate.
 
4.5.           No Material Changes.  Prior to and on each of the Closing Date
and the Option Closing Date, if any:  (i) there shall have been no material
adverse change or development involving a prospective material adverse change in
the condition or prospects or the business activities, financial or otherwise,
of the Company from the latest dates as of which such condition is set forth in
the Registration Statement and Prospectus Documents; (ii) no action suit or
proceeding, at law or in equity, shall have been pending or threatened against
the Company or any Initial Shareholder before or by any court or federal or
state commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the business,
operations, prospects or financial condition or income of the Company, except as
set forth in the Registration Statement and Prospectus  Documents; (iii) no stop
order shall have been issued under the Securities Act and no proceedings
therefore shall have been initiated or threatened by the Commission; and
(iv) the Registration Statement and the Prospectus Documents and any amendments
or supplements thereto shall contain all material statements which are required
to be stated therein in accordance with the Securities Act and the Rules and
Regulations and shall conform in all material respects to the requirements of
the Securities Act and the Rules and Regulations, and neither the Registration
Statement nor the Prospectus Documents nor any amendment or supplement thereto
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
 
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4.6.           Delivery of Agreements.
 
4.6.1.           Execution Date Deliveries.  On the date of this Agreement, the
Company shall have delivered to the Representative executed copies of this
Agreement and the Lock-Up Agreements.
 
4.6.2.           Closing Date Deliveries.  On the Closing Date, the Company
shall have delivered to the Representative the Shares.
 
5.           Indemnification.
 
5.1.           Indemnification of Underwriters.
 
5.1.1           General. Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless each of the Underwriters, and each dealer
selected by the Representative that participates in the offer and sale of the
Public  Securities (each a "Selected Dealer") and each of their respective
directors, officers and employees and each person, if any, who controls any such
Underwriter ("Controlling Person") within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any and all loss,
liability, claim, damage and expense whatsoever (including but not limited to
any and all legal or other expenses reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, whether arising out of any action between any of the
Underwriters and the Company or between any of the Underwriters and any third
party or otherwise, as incurred) to which they or any of them may become subject
under the Securities Act, the Exchange Act or any other statute or at common law
or otherwise or under the laws of foreign countries, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in (i) the Registration Statement and the Prospectus Documents (as
from time to time each may be amended and supplemented); (ii) any materials or
information provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Public Securities,
including any "road show" or investor presentations made to investors by the
Company (whether in person or electronically); or (iii) any application or other
document or written communication (in this Section 5, collectively called
"application") executed by the Company or based upon written information
furnished by the Company in any jurisdiction in order to qualify the Public
Securities under the securities laws thereof or filed with the Commission, any
state securities commission or agency, NYSE Amex or any securities exchange; or
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless such statement
or omission was made in reliance upon and in conformity with written information
furnished to the Company with respect to an Underwriter by or on behalf of such
Underwriter expressly for use in any Prospectus Document, the Registration
Statement, or any amendment or supplement thereof, or in any application, as the
case may be. With respect to any untrue statement or omission or alleged untrue
statement or omission made in the Preliminary Prospectus, the indemnity
agreement contained in this paragraph shall not inure to the benefit of any
Underwriter to the extent that any loss, liability, claim, damage or expense of
such Underwriter results from the fact that a copy of the Prospectus was not
given or sent to the person asserting any such loss, liability, claim or damage
at or prior to the written confirmation of sale of the Public Securities to such
person as required by the Securities Act and the Rules and Regulations, and if
the untrue statement or omission has been corrected in the Prospectus, unless
such failure to deliver the Prospectus was a result of non-compliance by the
Company with its obligations under Section 3.3 hereof. The Company agrees
promptly to notify the Representative of the commencement of any litigation or
proceedings against the Company or any of its officers, directors or controlling
persons in connection with the issue and sale of the Public Securities or in
connection with the Registration Statement or Prospectus.
 
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5.1.2.           Procedure. If any action is brought against an Underwriter, a
Selected Dealer or a Controlling Person in respect of which indemnity may be
sought against the Company pursuant to Section 5.1.1, such Underwriter, Selected
Dealer or Controlling Person shall promptly notify the Company in writing of the
institution of such action and the Company shall assume the defense of such
action, including the employment and fees of counsel (subject to the reasonable
approval of such Underwriter or such Selected Dealer, as the case may be) and
payment of actual expenses. Such Underwriter, such Selected Dealer or
Controlling Person shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter, such Selected Dealer or Controlling Person unless (i) the
employment of such counsel at the expense of the Company shall have been
authorized in writing by the Company in connection with the defense of such
action, or (ii) the Company shall not have employed counsel to have charge of
the defense of such action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the Company (in
which case the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
the reasonable fees and expenses of not more than one additional firm of
attorneys selected by the Underwriter, Selected Dealer and/or Controlling Person
shall be borne by the Company, in addition to local counsel. Notwithstanding
anything to the contrary contained herein, if any Underwriter, Selected Dealer
or Controlling Person shall assume the defense of such action as provided above,
the Company shall have the right to approve the terms of any settlement of such
action which approval shall not be unreasonably withheld.

5.2.           Indemnification of the Company. Each Underwriter, severally and
not jointly, agrees to indemnify and hold harmless the Company, its directors,
officers and employees and agents who control the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
and all loss, liability, claim, damage and expense described in the foregoing
indemnity from the Company to the several Underwriters, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions made in any Preliminary Prospectus, the Registration Statement or
Prospectus or any amendment or supplement thereto or in any application, in
reliance upon, and in strict conformity with, written information furnished to
the Company with respect to such Underwriter by or on behalf of the Underwriter
expressly for use in such Preliminary Prospectus, the Registration Statement or
Prospectus or any amendment or supplement thereto or in any such application. In
case any action shall be brought against the Company or any other person so
indemnified based on any Preliminary Prospectus, the Registration Statement or
Prospectus or any amendment or supplement thereto or any application, and in
respect of which indemnity may be sought against any Underwriter, such
Underwriter shall have the rights and duties given to the Company, and the
Company and each other person so indemnified shall have the rights and duties
given to the several Underwriters by the provisions of Section 5.1.2.

5.3           Contribution.

5.3.1.           Contribution Rights. In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) any person
entitled to indemnification under this Section 5 makes claim for indemnification
pursuant hereto but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 5 provides for indemnification in such case, or (ii) contribution
under the Securities Act, the Exchange Act or otherwise may be required on the
part of any such person in circumstances for which indemnification is provided
under this Section 5, then, and in each such case, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the initial offering price appearing thereon and the Company
is responsible for the balance; provided, that, no person guilty of a fraudulent
misrepresentation (within the meaning of Section ll (f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding the provisions of this Section
5.3.1, no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Public Securities underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
in respect of such losses, liabilities, claims, damages and expenses. For
purposes of this Section, each director, officer and employee of an Underwriter
or the Company, as applicable, and each person, if any, who controls an
Underwriter or the Company, as applicable, within the meaning of Section 15 of
the Securities Act shall have the same rights to contribution as such
Underwriter or the Company, as applicable.
 
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5.3.2.           Contribution Procedure. Within fifteen days after receipt by
any party to this Agreement (or its representative) of notice of the
commencement of any action, suit or proceeding, such party will, if a claim for
contribution in respect thereof is to be made against another party
("contributing party”), notify the contributing party of the commencement
thereof, but the omission to so notify the contributing party will not relieve
it from any liability which it may have to any other party other than for
contribution hereunder. In case any such action, suit or proceeding is brought
against any party, and such party notifies a contributing party or its
representative of the commencement thereof within the aforesaid fifteen days,
the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified. Any such
contributing party shall not be liable to any party seeking contribution on
account of any settlement of any claim, action or proceeding affected by such
party seeking contribution on account of any settlement of any claim, action or
proceeding affected by such party seeking contribution without the written
consent of such contributing party. The contribution provisions contained in
this Section are intended to supersede, to the extent permitted by law, any
right to contribution under the Securities Act, the Exchange Act or otherwise
available. Each Underwriter's obligations to contribute pursuant to this Section
5.3 are several and not joint.

6.           Default by an Underwriter.
 
6.1.           Default Not Exceeding 10% of Firm Shares or Option Shares.  If
any Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Shares or the Option Shares, if the Over-allotment Option is
exercised, hereunder, and if the number of the Firm Shares or Option Shares with
respect to which such default relates does not exceed in the aggregate 10% of
the number of Firm Shares or Option Shares that all Underwriters have agreed to
purchase hereunder, then such Firm Shares or Option Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
their respective commitments hereunder.
 
6.2.           Default Exceeding 10% of Firm Shares or Option Shares.  In the
event that the default addressed in Section 6.1 relates to more than 10% of the
Firm Shares or Option Shares, you may in your discretion arrange for yourself or
for another party or parties to purchase such Firm Shares or Option Shares to
which such default relates on the terms contained herein.  If, within one (1)
Business Day after such default relating to more than 10% of the Firm Shares or
Option Shares, you do not arrange for the purchase of such Firm Shares or Option
Shares, then the Company shall be entitled to a further period of one (1)
Business Day within which to procure another party or parties satisfactory to
you to purchase said Firm Shares or Option Shares on such terms.  In the event
that neither you nor the Company arrange for the purchase of the Firm Shares or
Option Shares to which a default relates as provided in this Section 6, this
Agreement will automatically be terminated by you or the Company without
liability on the part of the Company (except as provided in Sections 3.10 and 5
hereof) or the several Underwriters (except as provided in Section 5 hereof);
provided, however, that if such default occurs with respect to the Option
Shares, this Agreement will not terminate as to the Firm Shares; and provided
further that nothing herein shall relieve a defaulting Underwriter of its
liability, if any, to the other Underwriters and to the Company for damages
occasioned by its default hereunder.
 
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6.3.           Postponement of Closing Date.  In the event that the Firm Shares
or Option Shares to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or parties
as aforesaid, you or the Company shall have the right to postpone the Closing
Date or Option Closing Date for a reasonable period, but not in any event
exceeding five (5) Business Days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus
Documents or in any other documents and arrangements, and the Company agrees to
file promptly any amendment to the Registration Statement or the Prospectus
Documents that in the opinion of counsel for the Underwriter may thereby be made
necessary.  The term “Underwriter” as used in this Agreement shall include any
party substituted under this Section 6 with like effect as if it had originally
been a party to this Agreement with respect to such Public Securities.
 
7.           Additional Covenants.
 
7.1.           Board Composition and Board Designations.  The Company shall
ensure that: (i) the qualifications of the persons serving as board members and
the overall composition of the board comply with the Sarbanes-Oxley Act of 2002
and the rules promulgated thereunder and with the listing requirements of the
NYSE Amex, NASDAQ or any other national securities exchange or national
securities association, as the case may be, in the event the Company seeks to
have its Public Securities listed on another exchange or quoted on an automated
quotation system, and (ii) if applicable, at least one member of the board of
directors qualifies as a “financial expert” as such term is defined under the
Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.
 
7.2.           Right of First Refusal.  The Company agrees that if the Firm
Shares are sold in accordance with the terms of this Underwriting Agreement, the
Representative shall have an irrevocable preferential right for a period of
twelve (12) months from the date the Offering is completed to purchase for its
account or to sell for the account of the Company, or any subsidiary of or
successor to the Company any securities (whether debt or equity or any
combination thereof) of the Company or any such subsidiary or successor which
the Company or any such subsidiary or successor may seek to sell whether with or
without or through an underwriter, Representative or broker-dealer and whether
pursuant to registration under the Securities Act or otherwise. The Company and
any such subsidiary or successor will consult the Representative with regard to
any such proposed financing and will offer the Representative the opportunity to
purchase or sell any such securities on terms not more favorable to the Company
or any such subsidiary or successor, as the case may be, than it or they can
secure elsewhere. If the Representative fails to accept such offer within 10
business days after the mailing of a notice containing the material terms of the
proposed financing proposal by registered mail or overnight courier service
addressed to the Representative, then the Representative shall have no further
claim or right with respect to the financing proposal contained in such notice.
If, however, the terms of such financing proposal are subsequently modified in
any material respect, the preferential right referred to herein shall apply to
such modified proposal as if the original proposal had not been made. The
Representative's failure to exercise its preferential right with respect to any
particular proposal shall not affect its preferential rights relative to future
proposals. The Company shall have the right, at its option, to designate the
Representative as lead underwriter or co-manager of any underwriting group or
co-Representative of any proposed financing in satisfaction of its obligations
hereunder, and the Representative shall be entitled to receive as its
compensation 50% of the compensation payable to the underwriting or
Representative group when serving as co-manager or co-Representative and 33% of
the compensation payable to the underwriting or Representative group when
serving as co-manager or co-Representative with respect to a proposed financing
in which there are three co-managing or lead underwriters or co-Representatives.
The right of first refusal, as described herein, will be terminated in the event
the deal is terminated pursuant to Section 8.2 below.
 
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7.3.           Prohibition on Press Releases and Public Announcements.  The
Company will not issue press releases or engage in any other publicity, without
the Representative's prior written consent, for a period ending at 5:00 p.m.
Eastern time on the first business day following the 40th day following the
Closing Date, other than normal and customary releases issued in the ordinary
course of the Company’s business.
 
8.           Effective Date of this Agreement and Termination Thereof.
 
8.1.           Effective Date.  This Agreement shall become effective when both
the Company and the Representative have executed the same and delivered
counterparts of such signatures to the other party.
 
8.2.           Termination.  You shall have the right to terminate this
Agreement at any time prior to any Closing Date, (i) if any domestic or
international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, general securities
markets in the United States; or (ii) if trading on the New York Stock Exchange,
the NYSE Amex, the NASDAQ Global Market or the NASDAQ Capital Market shall have
been suspended or materially limited, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required by FINRA or by order of the Commission or any other government
authority having jurisdiction, or (iii) if the United States shall have become
involved in a new war or an increase in major hostilities, or (iv) if a banking
moratorium has been declared by a New York State or federal authority, or (v) if
a moratorium on foreign exchange trading has been declared which materially
adversely impacts the United States securities markets, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether or
not such loss shall have been insured, will, in your opinion, make it
inadvisable to proceed with the delivery of the Firm Shares or Option Shares, or
(vii) if the Company is in material breach of any of its representations,
warranties or covenants hereunder, or (viii) if the Representative shall have
become aware after the date hereof of such a material adverse change in the
conditions or prospects of the Company, or such adverse material change in
general market conditions as in the Representative’s judgment would make it
impracticable to proceed with the offering, sale and/or delivery of the
securities or to enforce contracts made by the Underwriters for the sale of the
securities.
 
8.3.           Expenses.  Except in the case of a default by the Underwriters,
pursuant to Section 6.2 above, in the event that this Agreement shall not be
carried out for any reason whatsoever, within the time specified herein or any
extensions thereof pursuant to the terms herein, the Company shall be obligated
to reimburse  the Underwriters for their out-of-pocket expenses of up to
$100,000 as set forth in Section 3.10.1.
 
8.4.           Indemnification.  Notwithstanding any contrary provision
contained in this Agreement, any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Section 5 shall not be in any way effected by, such election or
termination or failure to carry out the terms of this Agreement or any part
hereof.
 
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9.           Miscellaneous.
 
9.1.           Notices.  All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and shall be mailed
(registered or certified mail, return receipt requested), personally delivered
or sent by facsimile transmission and confirmed and shall be deemed given when
so delivered or faxed and confirmed or if mailed, two days after such mailing or
five days in the case of an international mailing.
 
If to the Representative:
 
Rodman & Renshaw, LLC
1251 Avenue of Americas, 20th Floor
New York, New York 10020
Attn:  General Counsel
Fax No.: 646.841.1640

Copy to:
 
Richardson and Patel
10900 Wilshire Boulevard, Suite 500
Los Angeles, California 90024
Attn: Erick E. Richardson, Esq.
Fax: 310.208.1154

If to the Company:

China Education Alliance, Inc.
58 Heng Shan Road
Kun Lun Shopping Mall
Harbin, People’s Republic of China
Attn: Mr. Xiqun Yu, Chief Executive Officer
Fax: 86-10-51216900

Copy to:

Sichenzia Ross Friedman Ference LLP
61 Broadway, 32nd Floor
New York, New York  10006
Attn: Greg Sichenzia, Esq./ Benjamin Tan, Esq.
Fax: 212.930.9725

9.2.           Headings.  The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
 
9.3.           Amendment.  This Agreement may only be amended by a written
instrument executed by each of the parties hereto.
 
9.4.           Entire Agreement.  This Agreement (together with the other
agreements and documents being delivered pursuant to or in connection with this
Agreement) constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof, and supersedes all prior agreements
and understandings of the parties, oral and written, with respect to the subject
matter hereof.
 
9.5.           Binding Effect.  This Agreement shall inure solely to the benefit
of and shall be binding upon the Representative, the Underwriters, the Company
and the controlling persons, directors and officers referred to in Section 5
hereof, and their respective successors, legal representatives and assigns, and
no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provisions herein contained.  The term “successors and assigns” shall not
include a purchaser, in its capacity as such, of securities from any of the
Underwriters.
 
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9.6.           Governing Law.  This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
giving effect to conflict of laws.  The Company hereby agrees that any action,
proceeding or claim against it arising out of, or relating in any way to this
Agreement shall be brought and enforced in the courts of the State of New York
of the United States of America for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive.  The Company hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum.  Any such
process or summons to be served upon the Company may be served by transmitting a
copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 11 hereof.  Such
mailing shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim.  The Company agrees that the
prevailing party(ies) in any such action shall be entitled to recover from the
other party(ies) all of its reasonable attorneys’ fees and expenses relating to
such action or proceeding and/or incurred in connection with the preparation
therefor.
 
9.7.           Execution in Counterparts.  This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.  Delivery of a signed
counterpart of this Agreement by facsimile or email/pdf transmission shall
constitute valid and sufficient delivery thereof.
 
9.8.           Waiver, etc.  The failure of any of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way effect the
validity of this Agreement or any provision hereof or the right of any of the
parties hereto to thereafter enforce each and every provision of this
Agreement.  No waiver of any breach, non-compliance or non-fulfillment of any of
the provisions of this Agreement shall be effective unless set forth in a
written instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
 
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If the foregoing correctly sets forth the understanding between the Underwriters
and the Company, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
 
 

  Very truly yours,             CHINA EDUCATION ALLIANCE, INC.          
 
By:
/s/ Xiqun Yu     Name: Xiqun Yu     Title:  Chairman and Chief Executive Officer
         

 
Accepted on the date first above written.

 
RODMAN & RENSHAW, LLC

By:  /s/ John Borer     Name: John Borer     Title:  Sr. Managing Director  

 
 
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ANNEX 1
 
 
[chart1.jpg]
 
 
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Schedule 1
 
Rodman & Renshaw LLC
 
 
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