EMPLOYMENT
AGREEMENT


 


THIS AGREEMENT is dated as of August 9,
2012, by and between China Education Alliance, Inc., a North Carolina corporation with its principal
office at 58 Heng Shan Road, Kun Lun Shopping Mall, Harbin, People’s Republic of China (the “Company”), and Xiqun
Yu, residing at Jiankang Road, Dongli District, Harbin (“Executive”).


 


WITNESSETH:


 


WHEREAS, the Company
is desirous of engaging Xiqun Yu as its Chief Executive Officer and he is agreeable to being so appointed on the terms and conditions
hereinafter set forth.


 


NOW, THEREFORE, in
consideration of the mutual promises set forth in this Agreement, the parties agree as follows:


 


1.    Employment
and Duties.


 


(a)  Subject
to the terms and conditions hereinafter set forth, the Company hereby employs Xiqun Yu as its Chief Executive Officer, and he shall
have the duties and responsibilities associated with a Chief Executive officer of a public corporation. During the Term, as hereinafter
defined, Executive shall report to the Company’s board of directors. Executive shall also perform such other duties and responsibilities
as may be determined by the Company’s board of directors as long as such duties and responsibilities are consistent with
those of the Company’s Chief Executive Officer.


 


(b)  Executive
shall also serve in such executive capacity or capacities with respect to any affiliate of the Company to which he may be elected
or appointed, provided that such duties are consistent with those of the Company’s Chief Executive Officer. During the Term,
Executive shall receive no additional compensation for services rendered pursuant to this Section 1(b). For purposes of this Agreement,
the term “affiliate” shall mean an entity that is controlled by the Company.


 


(c)  Unless
terminated earlier as provided in Section 5 of this Agreement, this Agreement shall have a term commencing as of the date of this
Agreement and expiring on August 8, 2017 (the “Term”).


 


2.    Performance.
Executive hereby accepts the employment contemplated by this Agreement. During the Term, he shall devote substantially all of his
business time to the performance of his duties under this Agreement, and shall perform such duties diligently, in good faith and
in a manner consistent with the best interests of the Company.


 


3.    Compensation
and Other Benefits.


 


(a)  (i)   For
his services to the Company during the Term, the Company shall pay Executive a monthly salary (“Salary”) at the rate
of RMB 18,000. All Salary payments shall be payable in such installments as the Company regularly pays
its employees in accordance with normal payroll practices.


 


(b)  During
the Term, Executive shall be eligible for such bonuses, payments and increases in Salary as shall be determined by the Compensation
Committee in its sole discretion.


 


4.    Reimbursement
of Expenses. The Company shall reimburse Executive, upon presentation of proper expense statements, for all authorized, ordinary
and necessary out-of-pocket expenses reasonably incurred by Executive during the Term in connection with the performance of his
services pursuant to this Agreement hereunder in accordance with the Company’s expense reimbursement policy.


 




    	 



    	 



    

  


5.    Termination
of Employment.


 


(a)  This
Agreement and Executive’s employment hereunder shall terminate immediately upon his death.


 


(b)  This
Agreement and Executive’s employment pursuant to this Agreement, may be terminated by him or the Company on not less than
thirty (30) days’ written notice in the event of Executive’s Disability. The term “Disability” shall mean
any illness, disability or incapacity of Executive which prevents him from substantially performing his regular duties for a period
of three (3) consecutive months or four (4) months, even though not consecutive, in any twelve (12) month period. However, if Executive
is covered by long-term disability insurance, the Company may not terminate this Agreement pursuant to this Section 5(b) unless
he is eligible for disability payments under his long-term disability insurance.


 


(c)  The
Company may terminate this Agreement and Executive’s employment pursuant to this Agreement for cause with no notice. The
term “cause” shall mean:


 


(i)          Repeated
failure to perform material instructions from the Company’s board of directors, provided that such instructions are reasonable
and consistent with his duties as set forth in Section 1 of this Agreement or any other failure or refusal by Executive to perform
his duties required by said Section 1; provided, however, that Executive shall have received notice from the board of directors
specifying the nature of such failure in reasonable detail and he shall have failed to cure the failure within ten (10) business
days after receipt of such notice:


 


(ii)         a
breach of Section 6, 7 or 8 of this Agreement;


 


(iii)        a
breach of trust whereby Executive obtains personal gain or benefit at the expense of or to the detriment of the Company;


 


(iv)       
his use of illegal substances;


 


(v)        
his abuse of alcohol continuing after written notice from the board of directors or ;


 


(vi)        any
fraudulent or dishonest conduct by Executive or any other conduct by him, which damages the Company or any of its affiliates or
their property, business or reputation;


 


(vii)       a
conviction of or plea of nolo contendere by Executive of (A) any felony or (B) any other crime involving fraud, theft, embezzlement
or use or possession of illegal substances; or


 


(viii)      the
admission by Executive of any matters set forth in Section 5(c)(vii) of this Agreement.


 


(ix)         failure
to ensure that the Company’s filings with the Securities and Exchange Commission are on time;


 


(x)          failure
to ensure the accuracy of Company’s filings with the Securities and Exchange Commission.


 




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(d)        Executive’s
resignation prior to the expiration of the Term, other than for Good Reason shall be treated in the same manner as a termination
for cause. The term “Good Reason” shall mean:


 


		(i)	Any material breach by the Company of its obligations
under this Agreement which are not cured within ten (10) business days after notice from Executive which sets forth in reasonable
detail the nature of the breach.



 


		(ii)	Any change in Executive’s duties such that Executive
is no longer the Company’s Chief Financial Officer, unless such change was made with his consent.



 


(iii)        Any
action on the part of the Company which impairs Executive’s ability to exercise his duties as the Company’s Chief Executive
Officer.


  


6.    Trade
Secrets and Proprietary Information. Executive recognizes and acknowledges that the Company, through the expenditure of considerable
time and money, has developed and will continue to develop in the future information concerning customers, clients, marketing,
products, services, business, research and development activities and operational methods of the Company and its customers or clients,
contracts, financial or other data, technical data or any other confidential or proprietary information possessed, owned or used
by the Company, the disclosure of which could or does have a material adverse effect on the Company, its business, any business
it proposes to engage in, its operations, financial condition or prospects and that the same are confidential and proprietary and
considered “confidential information” of the Company for the purposes of this Agreement. In consideration of his employment
and engagement as Chief Executive Officer, Executive agrees that he will not, during or after the Term, without the consent of
the Company’s board of directors, make any disclosure of confidential information now or hereafter possessed by the
Company, to any person, partnership, corporation or entity either during or after the Term here of, except that nothing in this
Agreement shall be construed to prohibit him from using or disclosing such information (a) if such disclosure is necessary in the
normal course of the Company’s business in accordance with Company policies or instructions or authorization from the board
of directors or executive committee, (b) such information shall become public knowledge other than by or as a result of disclosure
by a person not having a right to make such disclosure, (c) complying with legal process; provided, that in the event he is required
to make disclosure pursuant to legal process, he shall give the Company prompt notice thereof and the opportunity to object to
the disclosure, or (d) subsequent to the Term, if such information shall have either (i) been developed by his independent of any
of the Company’s confidential or proprietary information or (ii) been disclosed to him by a person not subject to a confidentiality
agreement with or other obligation of confidentiality to the Company. For the purposes of Sections 6, 7 and 8 of this Agreement,
the term “Company” shall include the Company, its parent, its subsidiaries and its affiliates.


 


7.    Covenant
Not To Solicit or Compete.


 


(a)  During
the period from the date of this Agreement until one (1) year following the date on which Executive’s employment is terminated,
he will not, directly or indirectly:


 


(i)          Persuade
or attempt to persuade any person or entity which is or was a customer, client or supplier of the Company to cease doing business
with the Company, or to reduce the amount of business it does with the Company (the terms “customer” and “client”
as used in this Section 7 to include any potential customer or client to whom the Company submitted bids or proposals, or with
whom the Company conducted negotiations, during the term of Executive’s employment hereunder or during the twelve (12) months
preceding the termination of his employment);


 




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(ii)         solicit
for himself or any other person or entity other than the Company the business of any person or entity which is a customer or client
of the Company, or was a customer or client of the Company within one (1) year prior to the termination of his employment; or


 


(iii)        persuade
or attempt to persuade any employee of the Company, or any individual who was an employee of the Company during the one (1) year
period prior to the lawful and proper termination of this Agreement, to leave the Company’s employ, or to become employed
by any person or entity other than the Company.


 


(b)          Executive
acknowledges that the restrictive covenants (the “Restrictive Covenants”) contained in Sections 6 and 7 of this Agreement
are a condition of his employment and are reasonable and valid in geographical and temporal scope and in all other respects. If
any court determines that any of the Restrictive Covenants, or any part of any of the Restrictive Covenants, is invalid or unenforceable,
the remainder of the Restrictive Covenants and parts thereof shall not thereby be affected and shall remain in full force and effect,
without regard to the invalid portion. If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid
or unenforceable because of the geographic or temporal scope of such provision, such court shall have the power to reduce the geographic
or temporal scope of such provision, as the case may be, and, in its reduced form, such provision shall then be enforceable.


 


8.    Inventions
and Discoveries. Executive agrees promptly to disclose in writing to the Company any invention or discovery made by him during
the period of time that this Agreement remains in full force and effect, whether during or after working hours, in any business
in which the Company is then engaged or which otherwise relates to any product or service dealt in by the Company and such inventions
and discoveries shall be the Company’s sole property. Executive acknowledges that any such invention or discovery developed
by him and any intellectual property rights relating thereto shall be considered as “work performed for hire.” In the
event that any such intellectual property rights are not, for any reason, deemed work performed for hire, Executive hereby assigns
to the Company any and all of his right, title and interest therein to the Company. Upon the Company’s request, Executive
shall execute and assign to the Company all applications for copyrights and patents of the United States and such foreign countries
as the Company may designate, and Executive shall execute and deliver to the Company such other instruments as the Company deems
necessary to confirm the Company’s sole ownership of all rights, title and interest in and to such inventions and discoveries,
as well as all copyrights and/or patents. If services in connection with applications for copyrights and/or patents are performed
by Executive at the Company’s request after the termination of his employment hereunder, the Company shall pay him reasonable
compensation for such services rendered after termination of this Agreement.


 


9.    Injunctive
Relief. Executive agrees that his violation or threatened violation of any of the provisions of Sections 6, 7 or 8 of this
Agreement shall cause immediate and irreparable harm to the Company. In the event of any breach or threatened breach of any of
said provisions, Executive consents to the entry of preliminary and permanent injunctions by a court of competent jurisdiction
prohibiting him from any violation or threatened violation of such provisions and compelling him to comply with such provisions.
In the event an injunction is issued against any such violation by Executive, the period referred to in Section 7 of this Agreement
shall continue until the later of the expiration of the period set forth therein or one (1) month from the date a final judgment
enforcing such provisions is entered and the time for appeal has lapsed. The provisions of Sections 6, 7, 8 and 9 of this Agreement
shall survive any termination of this Agreement and Executive’s employment pursuant to this Agreement.


 



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10.  Miscellaneous.


  


(a)  Executive
represents, warrants, covenants and agrees that he has a right to enter into this Agreement, that he is not a party to any agreement
or understanding, oral or written, which would prohibit performance of his obligations under this Agreement, and that he will not
use in the performance of his obligations hereunder any proprietary information of any other party which he is legally prohibited
from using.


 


(b)  If
requested by the Company, Executive will cooperate with the Company in connection with the Company’s application to obtain
key-man life insurance on his life, on which the Company will be the beneficiary. Such cooperation shall include the execution
of any applications or other documents requiring his signature and submission of insurance applications and submission to a physical.


 


(c)  Any
notice, consent or communication required under the provisions of this Agreement shall be given in writing and sent or delivered
by hand, overnight courier or messenger service, against a signed receipt or acknowledgment of receipt, or by registered or certified
mail, return receipt requested, or telecopier or similar means of communication if receipt is acknowledged or if transmission is
confirmed by mail as provided in this Section 10(c), to the parties at their respective addresses set forth at the beginning of
this Agreement or by telecopier to the Company at (86) 451-82335794 or to Executive at ___________,
with notice to the Company being sent to the attention of the individual who executed this Agreement on behalf of the Company.
Either party may, by like notice, change the person, address or telecopier number to which notice is to be sent. If no telecopier
number is provided for Executive, notice to him shall not be sent by telecopier.


 


(d)  This
Agreement shall in all respects be construed and interpreted in accordance with, and the rights of the parties shall be governed
by, the laws of the State of New York applicable to contracts executed and to be performed wholly within such State, without regard
to principles of conflicts of laws. The parties hereto agree to submit to the exclusive jurisdiction of the state and federal courts
of New York, New York.


 


(e)  If
any term, covenant or condition of this Agreement or the application thereof to any party or circumstance shall, to any extent,
be determined to be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition
to parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law, and any
court having jurisdiction may reduce the scope of any provision of this Agreement, including the geographic and temporal restrictions
set forth in Section 7(a) of this Agreement, so that it complies with applicable law.


 


(f)   This
Agreement constitutes the entire agreement of the Company and Executive as to the subject matter hereof, superseding all prior
or contemporaneous written or oral understandings or agreements, including any and all previous employment agreements or understandings,
all of which are hereby terminated, with respect to the subject matter covered in this Agreement. This Agreement may not be modified
or amended, nor may any right be waived, except by a writing which expressly refers to this Agreement, states that it is intended
to be a modification, amendment or waiver and is signed by both parties in the case of a modification or amendment or by the party
granting the waiver. No course of conduct or dealing between the parties and no custom or trade usage shall be relied upon to vary
the terms of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement.


 




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(g)  Neither
party hereto shall have the right to assign or transfer any of its or his rights hereunder except in connection with a merger or
consolidation of the Company or a sale by the Company of all or substantially all of its business and assets.


 


(h)  This
Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, executors,
administrators and permitted assigns.


 


(i)   The
headings in this Agreement are for convenience of reference only and shall not affect in any way the construction or interpretation
of this Agreement.


 


(j)   No
delay or omission to exercise any right, power or remedy accruing to either party hereto shall impair any such right, power or
remedy or shall be construed to be a waiver of or an acquiescence to any breach hereof. No waiver of any breach hereof shall be
deemed to be a waiver of any other breach hereof theretofore or thereafter occurring. Any waiver of any provision hereof shall
be effective only to the extent specifically set forth in an applicable writing. All remedies afforded to either party under this
Agreement, by law or otherwise, shall be cumulative and not alternative and shall not preclude assertion by such party of any other
rights or the seeking of any other rights or remedies against any other party.


 


IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first above written.


 





	 	CHINA EDUCATION ALLIANCE, INC.
	 	 	 
	 	By:	/s/Xiqun Yu
	 	 	Xiqun Yu
	 	 	Chairman and Chief Executive Officer
	 	 	 
	 	Executive:
	 	 	 
	 	/s/ Xiqun Yu
	 	Xiqun Yu




 




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