Document:

CHINA
EDUCATION ALLIANCE, INC.

    2009
INCENTIVE STOCK PLAN

    
      
        
          	
                   

                

        

      

    

    
       

    

    This China
Education Alliance, Inc. 2009
Incentive Stock Plan (the "Plan") is designed to retain
directors, executives and selected employees and consultants and reward them for
making major contributions to the success of the Company.  These
objectives are accomplished by making long-term incentive awards under the Plan
thereby providing Participants with a proprietary interest in the growth and
performance of the Company.

    

    
      	
              1.

            	
              Definitions.

            

    

    

    
      	
            	
              (a)

            	
              "Board" - The Board of
      Directors of the Company.

            

    

    

    
      	
            	
              (b)

            	
              "Code" - The Internal
      Revenue Code of 1986, as amended from time to
  time.

            

    

    

    
      	
            	
              (c)

            	
              "Committee" - The
      Compensation Committee of the Company's Board, or such other committee of
      the Board that is designated by the Board to administer the Plan, composed
      of not less than two members of the Board all of whom are disinterested
      persons, as contemplated by Rule 16b-3 ("Rule 16b-3") promulgated
      under the Securities Exchange Act of 1934, as amended (the "Exchange
      Act").

            

    

    

    
      	
            	
              (d)

            	
              "Company" – China
      Education Alliance, Inc. and its subsidiaries, including subsidiaries of
      subsidiaries.

            

    

    

    
      	
            	
              (e)

            	
              "Exchange Act" - The Securities
      Exchange Act of 1934, as amended from time to
  time.

            

    

    

    
      	
            	
              (f)

            	
              "Fair Market Value" - The
      fair market value of the Company's issued and outstanding Stock as
      determined in good faith by the Board or
  Committee.

            

    

    

    
      	
            	
              (g)

            	
              "Grant" - The grant of
      any form of stock option, stock award, or stock purchase offer, whether
      granted singly, in combination or in tandem, to a Participant pursuant to
      such terms, conditions and limitations as the Committee may establish in
      order to fulfill the objectives of the
Plan.

            

    

    

    
      	
            	
              (h)

            	
              "Grant Agreement" - An
      agreement between the Company and a Participant that sets forth the terms,
      conditions and limitations applicable to a
  Grant.

            

    

    

    
      	
            	
              (i)

            	
              "North
      Carolina Securities Rules" –
      Chapter 55 of the North Carolina General
  Statutes.

            

    

    

    
      	
            	
              (j)

            	
              "Option" - Either an
      Incentive Stock Option, in accordance with Section 422 of the Code, or a
      Nonstatutory Option, to purchase the Company's Stock that may be awarded
      to a Participant under the Plan. A Participant who receives an award of an
      Option shall be referred to as an "Optionee."

            

    

    

    
      	
            	
              (k)

            	
              "Participant" - A
      director, officer, employee or consultant of the Company to whom an Award
      has been made under the Plan.

            

    

    

    
      	
            	
              (l)

            	
              "Restricted Stock Purchase
      Offer" - A Grant of the right to purchase a specified number of
      shares of Stock pursuant to a written agreement issued under the
      Plan.

            

    

    

    
      	
            	
              (m)

            	
              "Securities Act" - The
      Securities Act of 1933, as amended from time to
  time.

            

    

    

    
      	
            	
              (n)

            	
              "Stock" - Authorized and
      issued or unissued shares of common stock of the
  Company.

            

    

    

    
      	
            	
              (o)

            	
              "Stock Award" - A Grant
      made under the Plan in stock or denominated in units of stock for which
      the Participant is not obligated to pay additional
      consideration.

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	
              2.

            	
              Administration.

            

    

    

          The
Plan shall be administered by the Board, provided however, that the Board may
delegate such administration to the Committee. Subject to the provisions of the
Plan, the Board and/or the Committee shall have authority to (a) grant, in its
discretion, Incentive Stock Options in accordance with Section 422 of the Code,
or Nonstatutory Options, Stock Awards or Restricted Stock Purchase Offers; (b)
determine in good faith the fair market value of the Stock covered by any Grant;
(c) determine which eligible persons shall receive Grants and the number of
shares, restrictions, terms and conditions to be included in such Grants; (d)
construe and interpret the Plan; (e) promulgate, amend and
rescind  rules and regulations relating to its administration, and
correct defects, omissions and inconsistencies in the Plan or any Grant; (f)
consistent with the Plan and with the consent of the Participant, as
appropriate, amend any outstanding Grant or amend the exercise date or dates
thereof; (g) determine the duration and purpose of leaves of absence which may
be granted to Participants without constituting termination of their employment
for the purpose of the Plan or any Grant; and (h) make all other determinations
necessary or advisable for the Plan's administration. The interpretation and
construction by the Board of any provisions of the Plan or selection of
Participants shall be conclusive and final. No member of the Board or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Grant made thereunder.

    

    
      	
              3.

            	
              Eligibility.

            

    

    

    
      	
            	
              (a)

            	
              General:  The
      persons who shall be eligible to receive Grants shall be directors,
      officers, employees or consultants to the Company. The term consultant
      shall mean any person, other than an employee, who is engaged by the
      Company to render services and is compensated for such services. An
      Optionee may hold more than one Option. Any issuance of a Grant to an
      officer or director of the Company subsequent to the first registration of
      any of the securities of the Company under the Exchange Act shall comply
      with the requirements of Rule
16b-3.

            

    

    

    
      	
            	
              (b)

            	
              Incentive Stock
      Options:  Incentive Stock Options may only be issued to
      employees of the Company. Incentive Stock Options may be granted to
      officers or directors, provided they are also employees of the Company.
      Payment of a director's fee shall not be sufficient to constitute
      employment by the Company.

            

    

    

          The
Company shall not grant an Incentive Stock Option under the Plan to any employee
if such Grant would result in such employee holding the right to exercise for
the first time in any one calendar year, under all Incentive Stock Options
granted under the Plan or any other plan maintained by the Company, with respect
to shares of Stock having an aggregate Fair Market Value, determined as of the
date of the Option is granted, in excess of $100,000. Should it be determined
that an Incentive Stock Option granted under the Plan exceeds such maximum for
any reason other than a failure in good faith to value the Stock subject to such
option, the excess portion of such option shall be considered a Nonstatutory
Option. To the extent the employee holds two (2) or more such Options which
become exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such Option as Incentive Stock Options under
the Federal tax laws shall be applied on the basis of the order in which such
Options are granted. If, for any reason, an entire Option does not qualify as an
Incentive Stock Option by reason of exceeding such maximum, such Option shall be
considered a Nonstatutory Option.

    

    
      	
            	
              (c)

            	
              Nonstatutory
      Option: The provisions of the foregoing Section 3(b) shall not
      apply to any Option designated as a "Nonstatutory Option" or
      which sets forth the intention of the parties that the Option be a
      Nonstatutory Option.

            

    

    

    
      	
            	
              (d)

            	
              Stock Awards and
      Restricted Stock Purchase Offers:  The provisions of this
      Section 3 shall not apply to any Stock Award or Restricted Stock Purchase
      Offer under the Plan.

            

    

    

    
      	
              4.

            	
              Stock.

            

    

    

    
      	
            	
              (a)

            	
              Authorized
      Stock: Stock subject to Grants may be either unissued or reacquired
      Stock.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    
      	
            	
              (b)

            	
              Number of
      Shares:  Subject to adjustment as provided in Section
      5(i) of the Plan, the total number of shares of Stock which may be
      purchased or granted directly by Options, Stock Awards or Restricted Stock
      Purchase Offers, or purchased indirectly through exercise of Options
      granted under the Plan shall not exceed One Million (1,000,000). If any
      Grant shall for any reason terminate or expire, any shares allocated
      thereto but remaining unpurchased upon such expiration or termination
      shall again be available for Grants with respect thereto under the Plan as
      though no Grant had previously occurred with respect to such shares. Any
      shares of Stock issued pursuant to a Grant and repurchased pursuant to the
      terms thereof shall be available for future Grants as though not
      previously covered by a Grant.

            

    

    

    
      	
            	
              (c)

            	
              Reservation of
      Shares:  The Company shall reserve and keep available at
      all times during the term of the Plan such number of shares as shall be
      sufficient to satisfy the requirements of the Plan. If, after reasonable
      efforts, which efforts shall not include the registration of the Plan or
      Grants under the Securities Act, the Company is unable to obtain authority
      from any applicable regulatory body, which authorization is deemed
      necessary by legal counsel for the Company for the lawful issuance of
      shares hereunder, the Company shall be relieved of any liability with
      respect to its failure to issue and sell the shares for which such
      requisite authority was so deemed necessary unless and until such
      authority is obtained.

            

    

    

    
      	
            	
              (d)

            	
              Application of
      Funds: The proceeds received by the Company from the sale of Stock
      pursuant to the exercise of Options or rights under Stock Purchase
      Agreements will be used for general corporate
  purposes.

            

    

    

    
      	
            	
              (e)

            	
              No Obligation to
      Exercise: The issuance of a Grant shall impose no obligation upon
      the Participant to exercise any rights under such
  Grant.

            

    

    

    
      	
              5.

            	
              Terms
      and Conditions of Options.

            

    

    

    
      	 	
                    Options
      granted hereunder shall be evidenced by agreements between the Company and
      the respective Optionees, in such form and substance as the Board or
      Committee shall from time to time approve. The form of Incentive Stock
      Option Agreement attached hereto as Exhibit A and
      the three forms of a Nonstatutory Stock Option Agreement for employees,
      for directors and for consultants, attached hereto as Exhibit B-1,
      Exhibit
      B-2 and
      Exhibit B-3, respectively, shall be deemed to be approved by the
      Board. Option agreements need not be identical, and in each case may
      include such provisions as the Board or Committee may determine, but all
      such agreements shall be subject to and limited by the following terms and
      conditions:

            

    

    

    
      	
            	
              (a)

            	
              Number of
      Shares: Each Option shall state the number of shares to which it
      pertains.

            

    

    

    
      	
            	
              (b)

            	
              Exercise Price:
      Each Option shall state the exercise price, which shall be determined as
      follows:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Any
      Incentive Stock Option granted to a person who at the time the Option is
      granted owns (or is deemed to own pursuant to Section 424(d) of the Code)
      stock possessing more than ten percent (10%) of the total combined voting
      power or value of all classes of stock of the Company ("Ten Percent Holder")
      shall have an exercise price of no less than 110% of the Fair Market Value
      of the Stock as of the date of grant;
and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Incentive
      Stock Options granted to a person who at the time the Option is granted is
      not a Ten Percent Holder shall have an exercise price of no less than 100%
      of the Fair Market Value of the Stock as of the date of
    grant.

            

    

    

          For
the purposes of this Section 5(b), the Fair Market Value shall be as determined
by the Board in good faith, which determination shall be conclusive and binding;
provided however, that if there is a public market for such Stock, the Fair
Market Value per share shall be the average of the bid and asked prices (or the
closing price if such stock is listed on the NASDAQ National Market System or
Small Cap Issue Market) on the date of grant of the Option, or if listed on a
stock exchange, the closing price on such exchange on such date of
grant.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    
      	
            	
              (c)

            	
              Medium and Time of
      Payment:  The exercise price shall become immediately due
      upon exercise of the Option and shall be paid in cash or check made
      payable to the Company. Should the Company's outstanding Stock be
      registered under Section 12(g) of the Exchange Act at the time the Option
      is exercised, then the exercise price may also be paid as
      follows:

            

    

    

    
      	
               
      

            	
              (i)

            	
              in
      shares of Stock held by the Optionee for the requisite period necessary to
      avoid a charge to the Company's earnings for financial reporting purposes
      and valued at Fair Market Value on the exercise date,
  or

            

    

    

    
      	
               
      

            	
              (ii)

            	
              through
      a special sale and remittance procedure pursuant to which the Optionee
      shall concurrently provide irrevocable written instructions (a) to a
      Company designated brokerage firm to effect the immediate sale of the
      purchased shares and remit to the Company, out of the sale proceeds
      available on the settlement date, sufficient funds to cover the aggregate
      exercise price payable for the purchased shares plus all applicable
      Federal, state and local income and employment taxes required to be
      withheld by the Company by reason of such purchase and (b) to the Company
      to deliver the certificates for the purchased shares directly to such
      brokerage firm in order to complete the sale
  transaction.

            

    

    

          At
the discretion of the Board, exercisable either at the time of Option grant or
of Option exercise, the exercise price may also be paid (i) by Optionee's
delivery of a promissory note in form and substance satisfactory to the Company
and permissible under the Securities Rules of the State of North Carolina and
bearing interest at a rate determined by the Board in its sole discretion, but
in no event less than the minimum rate of interest required to avoid the
imputation of compensation income to the Optionee under the Federal tax laws, or
(ii) in such other form of consideration permitted by the North Carolina
corporations law as may be acceptable to the Board.

    

    
      	
            	
              (d)

            	
              Term and Exercise of
      Options:

            

    

    

    
      	
            	
               
      

            	
                    Any
      Option granted to an employee, consultant or director of the Company shall
      become exercisable over a period of no longer than ten (10) years. Unless
      otherwise specified by the Board or the Committee in the resolution
      authorizing such Option, the date of grant of an Option shall be deemed to
      be the date upon which the Board or the Committee authorizes the granting
      of such Option. Each Option shall be exercisable to the nearest whole
      share, in installments or otherwise, as the respective Option agreements
      may provide. During the lifetime of an Optionee, the Option shall be
      exercisable only by the Optionee and shall not be assignable or
      transferable by the Optionee, and no other person shall acquire any rights
      therein. To the extent not exercised, installments (if more than one)
      shall accumulate, but shall be exercisable, in whole or in part, only
      during the period for exercise as stated in the Option agreement, whether
      or not other installments are then
exercisable.

            

    

    

    
      	
            	
              (e)

            	
              Termination of Status
      as Employee, Consultant or Director:  If Optionee's
      status as an employee shall terminate for any reason other than Optionee's
      disability or death, then Optionee (or if the Optionee shall die after
      such termination, but prior to exercise, Optionee's personal
      representative or the person entitled to succeed to the Option) shall have
      the right to exercise the portions of any of Optionee's Incentive Stock
      Options which were exercisable as of the date of such termination, in
      whole or in part, not less than 30 days nor more than three (3) months
      after such termination (or, in the event of "termination for good
      cause" as that term is defined in North Carolina case law related
      thereto, or by the terms of the Plan or the Option Agreement or an
      employment agreement, the Option shall automatically terminate as of the
      termination of employment as to all shares covered by the
      Option).

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

          With
respect to Nonstatutory Options granted to employees, directors or consultants,
the Board may specify such period for exercise, not less than 30 days after such
termination (except that in the case of "termination for cause" or
removal of a director, the Option shall automatically terminate as of the
termination of employment or services as to shares covered by the Option,
following termination of employment or services as the Board deems reasonable
and appropriate. The Option may be exercised only with respect to installments
that the Optionee could have exercised at the date of termination of employment
or services. Nothing contained herein or in any Option granted pursuant hereto
shall be construed to affect or restrict in any way the right of the Company to
terminate the employment or services of an Optionee with or without
cause.

    

    
      
        	
              	
                (f)

              	
                Disability of
      Optionee:  If an Optionee is disabled (within the meaning
      of Section 22(e)(3) of the Code) at the time of termination, the three (3)
      month period set forth in Section 5(e) shall be a period, as determined by
      the Board and set forth in the Option, of not less than six months nor
      more than one year after such
termination.

              

      

    

    

    
      	
            	
              (g)

            	
              Death of
      Optionee:  If an Optionee dies while employed by, engaged
      as a consultant to, or serving as a Director of the Company, the portion
      of such Optionee's Option which was exercisable at the date of death may
      be exercised, in whole or in part, by the estate of the decedent or by a
      person succeeding to the right to exercise such Option at any time within
      (i) a period, as determined by the Board and set forth in the Option, of
      not less than six (6) months nor more than one (1) year after Optionee's
      death, which period shall not be more, in the case of a Nonstatutory
      Option, than the period for exercise following termination of employment
      or services, or (ii) during the remaining term of the Option, whichever is
      the lesser. The Option may be so exercised only with respect to
      installments exercisable at the time of Optionee's death and not
      previously exercised by the
Optionee.

            

    

    

    
      	
            	
              (h)

            	
              Nontransferability of
      Option:  No Option shall be transferable by the Optionee,
      except by will or by the laws of descent and
  distribution.

            

    

    

    
      	
            	
              (i)

            	
              Recapitalization:  Subject
      to any required action of shareholders, the number of shares of Stock
      covered by each outstanding Option, and the exercise price per share
      thereof set forth in each such Option, shall be proportionately adjusted
      for any increase or decrease in the number of issued shares of Stock of
      the Company resulting from a stock split, stock dividend, combination,
      subdivision or reclassification of shares, or the payment of a stock
      dividend, or any other increase or decrease in the number of such shares
      affected without receipt of consideration by the Company; provided,
      however, the conversion of any convertible securities of the Company shall
      not be deemed to have been "effected without receipt of
      consideration" by the
Company.

            

    

    

          In
the event of a proposed dissolution or liquidation of the Company, a merger or
consolidation in which the Company is not the surviving entity, or a sale of all
or substantially all of the assets or capital stock of the Company
(collectively, a "Reorganization"), unless
otherwise provided by the Board, this Option shall terminate immediately prior
to such date as is determined by the Board, which date shall be no later than
the consummation of such Reorganization.  In such event, if the entity
which shall be the surviving entity does not tender to Optionee an offer, for
which it has no obligation to do so, to substitute for any unexercised Option a
stock option or capital stock of such surviving of such surviving entity, as
applicable, which on an equitable basis shall provide the Optionee with
substantially the same economic benefit as such unexercised Option, then the
Board may grant to such Optionee, in its sole and absolute discretion and
without obligation, the right for a period commencing thirty (30) days prior to
and ending immediately prior to the date determined by the Board pursuant hereto
for termination of the Option or during the remaining term of the Option,
whichever is the lesser, to exercise any unexpired Option or Options without
regard to the installment provisions of Paragraph 6(d) of the Plan; provided,
that any such right granted shall be granted to all Optionees not receiving an
offer to receive substitute options on a consistent basis, and provided further,
that any such exercise shall be subject to the consummation of such
Reorganization.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

          Subject
to any required action of shareholders, if the Company shall be the surviving
entity in any merger or consolidation, each outstanding Option thereafter shall
pertain to and apply to the securities to which a holder of shares of Stock
equal to the shares subject to the Option would have been entitled by reason of
such merger or consolidation.

    

          In
the event of a change in the Stock of the Company as presently constituted,
which is limited to a change of all of its authorized shares without par value
into the same number of shares with a par value, the shares resulting from any
such change shall be deemed to be the Stock within the meaning of the
Plan.

    

          To
the extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as expressly
provided in this Section 5(i), the Optionee shall have no rights by reason of
any subdivision or consolidation of shares of stock of any class or the payment
of any stock dividend or any other increase or decrease in the number of shares
of stock of any class, and the number or price of shares of Stock subject to any
Option shall not be affected by, and no adjustment shall be made by reason of,
any dissolution, liquidation, merger, consolidation or sale of assets or capital
stock, or any issue by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.

    

          The
Grant of an Option pursuant to the Plan shall not affect in any way the right or
power of the Company to make any adjustments, reclassifications, reorganizations
or changes in its capital or business structure or to merge, consolidate,
dissolve, or liquidate or to sell or transfer all or any part of its business or
assets.

    

    
      	
            	
              (j)

            	
              Rights as a
      Shareholder:  An Optionee shall have no rights as a
      shareholder with respect to any shares covered by an Option until the
      effective date of the issuance of the shares following exercise of such
      Option by Optionee. No adjustment shall be made for dividends (ordinary or
      extraordinary, whether in cash, securities or other property) or
      distributions or other rights for which the record date is prior to the
      date such stock certificate is issued, except as expressly provided in
      Section 5(i) hereof.

            

    

    

    
      	
            	
              (k)

            	
              Modification,
      Acceleration, Extension, and Renewal of Options:  Subject
      to the terms and conditions and within the limitations of the Plan, the
      Board may modify an Option, or, once an Option is exercisable, accelerate
      the rate at which it may be exercised, and may extend or renew outstanding
      Options granted under the Plan or accept the surrender of outstanding
      Options (to the extent not theretofore exercised) and authorize the
      granting of new Options in substitution for such Options, provided such
      action is permissible under Section 422 of the Code and the North Carolina
      Securities Rules. Notwithstanding the provisions of this Section 5(k),
      however, no modification of an Option shall, without the consent of the
      Optionee, alter to the Optionee's detriment or impair any rights or
      obligations under any Option theretofore granted under the
      Plan.

            

    

    

    
      	
            	
              (l)

            	
              Exercise Before
      Exercise Date:  At the discretion of the Board, the
      Option may, but need not, include a provision whereby the Optionee may
      elect to exercise all or any portion of the Option prior to the stated
      exercise date of the Option or any installment thereof. Any shares so
      purchased prior to the stated exercise date shall be subject to repurchase
      by the Company upon termination of Optionee's employment as contemplated
      by Section 5(n) hereof prior to the exercise date stated in the Option and
      such other restrictions and conditions as the Board or Committee may deem
      advisable.

            

    

    

    
      	
            	
              (m)

            	
              Other
      Provisions:  The Option agreements authorized under the
      Plan shall contain such other provisions, including, without limitation,
      restrictions upon the exercise of the Options, as the Board or the
      Committee shall deem advisable. Shares shall not be issued pursuant to the
      exercise of an Option, if the exercise of such Option or the issuance of
      shares thereunder would violate, in the opinion of legal counsel for the
      Company, the provisions of any applicable law or the rules or regulations
      of any applicable governmental or administrative agency or body, such as
      the Code, the Securities Act, the Exchange Act, the North Carolina
      Securities Rules, North Carolina corporation law, and the rules
      promulgated under the foregoing or the rules and regulations of any
      exchange upon which the shares of the Company are listed. Without limiting
      the generality of the foregoing, the exercise of each Option shall be
      subject to the condition that if at any time the Company shall determine
      that (i) the satisfaction of withholding tax or other similar liabilities,
      or (ii) the listing, registration or qualification of any shares covered
      by such exercise upon any securities exchange or under any state or
      federal law, or (iii) the consent or approval of any regulatory body, or
      (iv) the perfection of any exemption from any such withholding, listing,
      registration, qualification, consent or approval is necessary or desirable
      in connection with such exercise or the issuance of shares thereunder,
      then in any such event, such exercise shall not be effective unless such
      withholding, listing registration, qualification, consent, approval or
      exemption shall have been effected, obtained or perfected free of any
      conditions not acceptable to the
Company.

            

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    
      	
            	
              (n)

            	
              Repurchase
      Agreement:  The Board may, in its discretion, require as
      a condition to the Grant of an Option hereunder, that an Optionee execute
      an agreement with the Company, in form and substance satisfactory to the
      Board in its discretion ("Repurchase Agreement"),
      (i) restricting the Optionee's right to transfer shares purchased under
      such Option without first offering such shares to the Company or another
      shareholder of the Company upon the same terms and conditions as provided
      therein; and (ii) providing that upon termination of Optionee's employment
      with the Company, for any reason, the Company (or another shareholder of
      the Company, as provided in the Repurchase Agreement) shall have the right
      at its discretion (or the discretion of such other shareholders) to
      purchase and/or redeem all such shares owned by the Optionee on the date
      of termination of his or her employment at a price equal to: (A) the fair
      value of such shares as of such date of termination; or (B) if such
      repurchase right lapses at 20% of the number of shares per year, the
      original purchase price of such shares, and upon terms of payment
      permissible under the North Carolina Securities Rules; provided that in
      the case of Options or Stock Awards granted to officers, directors,
      consultants or affiliates of the Company, such repurchase provisions may
      be subject to additional or greater restrictions as determined by the
      Board or Committee.

            

    

    

    
      	
              6.

            	
              Stock
      Awards and Restricted Stock Purchase
Offers.

            

    

    

    
      	
            	
              (a)

            	
              Types of
      Grants.

            

    

    

    
      	
               
      

            	
              (i)

            	
              Stock
      Award.  All or part of any Stock Award under the Plan may
      be subject to conditions established by the Board or the Committee, and
      set forth in the Stock Award Agreement, which may include, but are not
      limited to, continuous service with the Company, achievement of specific
      business objectives, increases in specified indices, attaining growth
      rates and other comparable measurements of Company performance. Such
      Awards may be based on Fair Market Value or other specified valuation. All
      Stock Awards will be made pursuant to the execution of a Stock Award
      Agreement substantially in the form attached hereto as Exhibit
      C.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Restricted Stock
      Purchase Offer.  A Grant of a Restricted Stock Purchase
      Offer under the Plan shall be subject to such (i) vesting contingencies
      related to the Participant's continued association with the Company for a
      specified time and (ii) other specified conditions as the Board or
      Committee shall determine, in their sole discretion, consistent with the
      provisions of the Plan. All Restricted Stock Purchase Offers shall be made
      pursuant to a Restricted Stock Purchase Offer substantially in the form
      attached hereto as Exhibit
      D.

            

    

    

    
      	
            	
              (b)

            	
              Conditions and
      Restrictions.  Shares of Stock which Participants may
      receive as a Stock Award under a Stock Award Agreement or Restricted Stock
      Purchase Offer under a Restricted Stock Purchase Offer may include such
      restrictions as the Board or Committee, as applicable, shall determine,
      including restrictions on transfer, repurchase rights, right of first
      refusal, and forfeiture provisions. When transfer of Stock is so
      restricted or subject to forfeiture provisions it is referred to as "Restricted Stock".
      Further, with Board or Committee approval, Stock Awards or Restricted
      Stock Purchase Offers may be deferred, either in the form of installments
      or a future lump sum distribution. The Board or Committee may permit
      selected Participants to elect to defer distributions of Stock Awards or
      Restricted Stock Purchase Offers in accordance with procedures established
      by the Board or Committee to assure that such deferrals comply with
      applicable requirements of the Code including, at the choice of
      Participants, the capability to make further deferrals for distribution
      after retirement. Any deferred distribution, whether elected by the
      Participant or specified by the Stock Award Agreement, Restricted Stock
      Purchase Offers or by the Board or Committee, may require the payment be
      forfeited in accordance with the provisions of Section 6(c). Dividends or
      dividend equivalent rights may be extended to and made part of any Stock
      Award or Restricted Stock Purchase Offers denominated in Stock or units of
      Stock, subject to such terms, conditions and restrictions as the Board or
      Committee may establish.

            

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    
      	
            	
              (c)

            	
              Cancellation and
      Rescission of Grants.  Unless the Stock Award Agreement
      or Restricted Stock Purchase Offer specifies otherwise, the Board or
      Committee, as applicable, may cancel any unexpired, unpaid, or deferred
      Grants at any time if the Participant is not in compliance with all other
      applicable provisions of the Stock Award Agreement or Restricted Stock
      Purchase Offer, the Plan and with the following
  conditions:

            

    

    

    
      	
               
      

            	
              (i)

            	
              A
      Participant shall not render services for any organization or engage
      directly or indirectly in any business which, in the judgment of the chief
      executive officer of the Company or other senior officer designated by the
      Board or Committee, is or becomes competitive with the Company, or which
      organization or business, or the rendering of services to such
      organization or business, is or becomes otherwise prejudicial to or in
      conflict with the interests of the Company. For Participants whose
      employment has terminated, the judgment of the chief executive officer
      shall be based on the Participant's position and responsibilities while
      employed by the Company, the Participant's post-employment
      responsibilities and position with the other organization or business, the
      extent of past, current and potential competition or conflict between the
      Company and the other organization or business, the effect on the
      Company's customers, suppliers and competitors and such other
      considerations as are deemed relevant given the applicable facts and
      circumstances.  A Participant who has retired shall be free,
      however, to purchase as an investment or otherwise, stock or other
      securities of such organization or business so long as they are listed
      upon a recognized securities exchange or traded over-the-counter, and such
      investment does not represent a substantial investment to the Participant
      or a greater than ten percent (10%) equity interest in the organization or
      business.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              A
      Participant shall not, without prior written authorization from the
      Company, disclose to anyone outside the Company, or use in other than the
      Company's business, any confidential information or material, as defined
      in the Company's Proprietary Information and Invention Agreement or
      similar agreement regarding confidential information and intellectual
      property, relating to the business of the Company, acquired by the
      Participant either during or after employment with the
      Company.

            

    

    

    
      	
               
      

            	
              (iii)

            	
              A
      Participant, pursuant to the Company's Proprietary Information and
      Invention Agreement, shall disclose promptly and assign to the Company all
      right, title and interest in any invention or idea, patentable or not,
      made or conceived by the Participant during employment by the Company,
      relating in any manner to the actual or anticipated business, research or
      development work of the Company and shall do anything reasonably necessary
      to enable the Company to secure a patent where appropriate in the United
      States and in foreign countries.

            

    

    

    
      	
               
      

            	
              (iv)

            	
              Upon
      exercise, payment or delivery pursuant to a Grant, the Participant shall
      certify on a form acceptable to the Committee that he or she is in
      compliance with the terms and conditions of the Plan. Failure to comply
      with all of the provisions of this Section 6(c) prior to, or during the
      six months after, any exercise, payment or delivery pursuant to a Grant
      shall cause such exercise, payment or delivery to be rescinded. The
      Company shall notify the Participant in writing of any such rescission
      within two years after such exercise, payment or delivery. Within ten days
      after receiving such a notice from the Company, the Participant shall pay
      to the Company the amount of any gain realized or payment received as a
      result of the rescinded exercise, payment or delivery pursuant to a Grant.
      Such payment shall be made either in cash or by returning to the Company
      the number of shares of Stock that the Participant received in connection
      with the rescinded exercise, payment or
  delivery.

            

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    
      	
            	
              (d)

            	
              Nonassignability.

            

    

    

    
      	
               
      

            	
              (i)

            	
              Except
      pursuant to Section 6(e)(iii) and except as set forth in Section 6(d)(ii),
      no Grant or any other benefit under the Plan shall be assignable or
      transferable, or payable to or exercisable by, anyone other than the
      Participant to whom it was granted.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Where
      a Participant terminates employment and retains a Grant pursuant to
      Section 6(e)(ii) in order to assume a position with a governmental,
      charitable or educational institution, the Board or Committee, in its
      discretion and to the extent permitted by law, may authorize a third party
      (including but not limited to the trustee of a "blind" trust), acceptable
      to the applicable governmental or institutional authorities, the
      Participant and the Board or Committee, to act on behalf of the
      Participant with regard to such
Awards.

            

    

    

    
      	
            	
              (e)

            	
              Termination of
      Employment.  If the employment or service to the Company
      of a Participant terminates, other than pursuant to any of the following
      provisions under this Section 6(e), all unexercised, deferred and unpaid
      Stock Awards or Restricted Stock Purchase Offers shall be cancelled
      immediately, unless the Stock Award Agreement or Restricted Stock Purchase
      Offer provides otherwise:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Retirement Under a
      Company Retirement Plan.  When a Participant's employment
      terminates as a result of retirement in accordance with the terms of a
      Company retirement plan, the Board or Committee may permit Stock Awards or
      Restricted Stock Purchase Offers to continue in effect beyond the date of
      retirement in accordance with the applicable Grant Agreement and the
      exercisability and vesting of any such Grants may be
      accelerated.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Rights in the Best
      Interests of the Company.  When a Participant resigns
      from the Company and, in the judgment of the Board or Committee, the
      acceleration and/or continuation of outstanding Stock Awards or Restricted
      Stock Purchase Offers would be in the best interests of the Company, the
      Board or Committee may (i) authorize, where appropriate, the acceleration
      and/or continuation of all or any part of Grants issued prior to such
      termination and (ii) permit the exercise, vesting and payment of such
      Grants for such period as may be set forth in the applicable Grant
      Agreement, subject to earlier cancellation pursuant to Section 9 or at
      such time as the Board or Committee shall deem the continuation of all or
      any part of the Participant's Grants are not in the Company's best
      interest.

            

    

    

    
      	
               
      

            	
              (iii)

            	
              Death or Disability of
      a Participant.

            

    

    

    
      	
               
      

            	
              (1)

            	
              In
      the event of a Participant's death, the Participant's estate or
      beneficiaries shall have a period up to the expiration date specified in
      the Grant Agreement within which to receive or exercise any outstanding
      Grant held by the Participant under such terms as may be specified in the
      applicable Grant Agreement. Rights to any such outstanding Grants shall
      pass by will or the laws of descent and distribution in the following
      order: (a) to beneficiaries so designated by the Participant; if none,
      then (b) to a legal representative of the Participant; if none, then (c)
      to the persons entitled thereto as determined by a court of competent
      jurisdiction. Grants so passing shall be made at such times and in such
      manner as if the Participant were
living.

            

    

    

    
      	
               
      

            	
              (2)

            	
              In
      the event a Participant is deemed by the Board or Committee to be unable
      to perform his or her usual duties by reason of mental disorder or medical
      condition which does not result from facts which would be grounds for
      termination for cause, Grants and rights to any such Grants may be paid to
      or exercised by the Participant, if legally competent, or a committee or
      other legally designated guardian or representative if the Participant is
      legally incompetent by virtue of such
  disability.

            

    

    

    
      	
               
      

            	
              (3)

            	
              After
      the death or disability of a Participant, the Board or Committee may in
      its sole discretion at any time (1) terminate restrictions in Grant
      Agreements; (2) accelerate any or all installments and rights; and (3)
      instruct the Company to pay the total of any accelerated payments in a
      lump sum to the Participant, the Participant's estate, beneficiaries or
      representative; notwithstanding that, in the absence of such termination
      of restrictions or acceleration of payments, any or all of the payments
      due under the Grant might ultimately have become payable to other
      beneficiaries.

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (4)

            	
              In
      the event of uncertainty as to interpretation of or controversies
      concerning this Section 6, the determinations of the Board or Committee,
      as applicable, shall be binding and
conclusive.

            

    

    

    
      	
              7.

            	
              Investment
      Intent.

            

    

    

    All Grants under the Plan are intended
to be exempt from registration under the Securities Act provided by Section 4(2)
thereunder. Unless and until the granting of Options or sale and issuance of
Stock subject to the Plan are registered under the Securities Act or shall be
exempt pursuant to the rules promulgated thereunder, each Grant under the Plan
shall provide that the purchases or other acquisitions of Stock thereunder shall
be for investment purposes and not with a view to, or for resale in connection
with, any distribution thereof. Further, unless the issuance and sale of the
Stock have been registered under the Securities Act, each Grant shall provide
that no shares shall be purchased upon the exercise of the rights under such
Grant unless and until (i) all then applicable requirements of state and federal
laws and regulatory agencies shall have been fully complied with to the
satisfaction of the Company and its counsel, and (ii) if requested to do so by
the Company, the person exercising the rights under the Grant shall (i) give
written assurances as to knowledge and experience of such person (or a
representative employed by such person) in financial and business matters and
the ability of such person (or representative) to evaluate the merits and risks
of exercising the Option, and (ii) execute and deliver to the Company a letter
of investment intent and/or such other form related to applicable exemptions
from registration, all in such form and substance as the Company may require. If
shares are issued upon exercise of any rights under a Grant without registration
under the Securities Act, subsequent registration of such shares shall relieve
the purchaser thereof of any investment restrictions or representations made
upon the exercise of such rights.

    

    
      	
              8.

            	
              Amendment,
      Modification, Suspension or Discontinuance of the
  Plan.

            

    

    

    
      The Board
may, insofar as permitted by law, from time to time, with respect to any shares
at the time not subject to outstanding Grants, suspend or terminate the Plan or
revise or amend it in any respect whatsoever, except that without the approval
of the shareholders of the Company, no such revision or amendment shall (i)
increase the number of shares subject to the Plan, (ii) decrease the price at
which Grants may be granted, (iii) materially increase the benefits to
Participants, or (iv) change the class of persons eligible to receive Grants
under the Plan; provided, however, no such action shall alter or impair the
rights and obligations under any Option, or Stock Award, or Restricted Stock
Purchase Offer outstanding as of the date thereof without the written consent of
the Participant thereunder. No Grant may be issued while the Plan is suspended
or after it is terminated, but the rights and obligations under any Grant issued
while the Plan is in effect shall not be impaired by suspension or termination
of the Plan.

    

    

    In the event of any change in the
outstanding Stock by reason of a stock split, stock dividend, combination or
reclassification of shares, recapitalization, merger, or similar event, the
Board or the Committee may adjust proportionally (a) the number of shares of
Stock (i) reserved under the Plan, (ii) available for Incentive Stock Options
and Nonstatutory Options and (iii) covered by outstanding Stock Awards or
Restricted Stock Purchase Offers; (b) the Stock prices related to outstanding
Grants; and (c) the appropriate Fair Market Value and other price determinations
for such Grants. In the event of any other change affecting the Stock or any
distribution (other than normal cash dividends) to holders of Stock, such
adjustments as may be deemed equitable by the Board or the Committee, including
adjustments to avoid fractional shares, shall be made to give proper effect to
such event. In the event of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the Board or the
Committee shall be authorized to issue or assume stock options, whether or not
in a transaction to which Section 424(a) of the Code applies, and other Grants
by means of substitution of new Grant Agreements for previously issued Grants or
an assumption of previously issued Grants.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    
      	
              9.

            	
              Tax
      Withholding.

            

    

    

    The Company shall have the right to
deduct applicable taxes from any Grant payment and withhold, at the time of
delivery or exercise of Options, Stock Awards or Restricted Stock Purchase
Offers or vesting of shares under such Grants, an appropriate number of shares
for payment of taxes required by law or to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes. If Stock is used to satisfy tax withholding, such
stock shall be valued based on the Fair Market Value when the tax withholding is
required to be made.

    

    
      	
              10.

            	
              Availability
      of Information.

            

    

    

    
      	
               
      

            	
              During
      the term of the Plan and any additional period during which a Grant
      granted pursuant to the Plan shall be exercisable, the Company shall make
      available, not later than one hundred and twenty (120) days following the
      close of each of its fiscal years, such financial and other information
      regarding the Company as is required by the bylaws of the Company and
      applicable law to be furnished in an annual report to the shareholders of
      the Company.

            

    

    

    
      	
              11.

            	
              Notice.

            

    

    

    
      	
               
      

            	
              Any
      written notice to the Company required by any of the provisions of the
      Plan shall be addressed to the chief personnel officer or to the chief
      executive officer of the Company, and shall become effective when it is
      received by the office of the chief personnel officer or the chief
      executive officer.

            

    

    

    
      	
              12.

            	
              Indemnification
      of Board.

            

    

    

    In addition to such other rights or
indemnifications as they may have as directors or otherwise, and to the extent
allowed by applicable law, the members of the Board and the Committee shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees, actually and necessarily incurred in connection with the defense of any
claim, action, suit or proceeding, or in connection with any appeal thereof, to
which they or any of them may be a party by reason of any action taken, or
failure to act, under or in connection with the Plan or any Grant granted
thereunder, and against all amounts paid by them in settlement thereof (provided
such settlement is approved by independent legal counsel selected by the
Company) or paid by them in satisfaction of a judgment in any such claim,
action, suit or proceeding, except in any case in relation to matters as to
which it shall be adjudged in such claim, action, suit or proceeding that such
Board or Committee member is liable for negligence or misconduct in the
performance of his or her duties; provided that within sixty (60) days after
institution of any such action, suit or Board proceeding the member involved
shall offer the Company, in writing, the opportunity, at its own expense, to
handle and defend the same.

    

    
      	
              13.

            	
              Governing
      Law.

            

    

    

    
      	
               
      

            	
              The
      Plan and all determinations made and actions taken pursuant hereto, to the
      extent not  otherwise governed by the Code or the securities
      laws of the United States, shall be governed by the law of the State of
      North Carolina and construed
accordingly.

            

    

    

    
      	
              14.

            	
              Effective
      and Termination Dates.

            

    

    

    The Plan shall become effective on the
date it is approved by the holders of a majority of the shares of Stock then
outstanding. The Plan shall terminate ten (10) years later, subject to earlier
termination by the Board pursuant to Section 8.

    

    [SIGNATURE
PAGE TO FOLLOW]

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

          The
foregoing 2009 Incentive Stock Plan was duly adopted and approved by the Board
of Directors on June 16, 2009.

    

    
      
        
          
            
              
                	
                        CHINA
      EDUCATION ALLIANCE, INC. 

                        a
      North Carolina corporation

                      
	 
	
                        By:

                      	
                        /s/ Xiqun Yu

                      
	 
      	
                        Name:
      Xiqun Yu

                        Title:   Chief
      Executive
Officer

                      

              

            

          

        

      

    

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    CHINA
EDUCATION ALLIANCE, INC.

    INCENTIVE
STOCK OPTION AGREEMENT`

    
      
        
          	
                   

                

        

      

    

    
       

    

    This
Incentive Stock Option Agreement ("Agreement") is made and
entered into as of the date set forth below, by and between CHINA EDUCATION
ALLIANCE, INC., a North Carolina corporation (the "Company"), and the employee of
the Company named in Section 1(b). ("Optionee"):

    

    In consideration of the covenants
herein set forth, the parties hereto agree as follows:

    

    1.  Option
Information.

     

    
      
        
          
            
              
                
                  	
                          (a)

                        	
                          Date
      of Option:

                        	 
      
	 
      	 
      	 
      
	
                          (b)

                        	
                          Optionee:

                        	 
      
	 
      	 
      	 
      
	
                          (c)

                        	
                          Number
      of Shares:

                        	 
      
	 
      	 
      	 
      
	
                          (d)

                        	
                          Exercise
      Price:

                        	 
      

                

              

            

          

        

      

    

    

    2.  Acknowledgements.

    

    
      	
               
      

            	
              (a)

            	
              Optionee
      is an employee of the Company.

            

    

    

    
      (b)       
  The Board
of Directors (the "Board" which term shall
include an authorized committee of the Board of Directors) and shareholders of
the Company have heretofore adopted a 2009 Incentive Stock Plan (the "Plan"), pursuant to which this
Option is being granted.

    

    

    
      (c)          
The Board
has authorized the granting to Optionee of an incentive stock option ("Option") as defined in Section
422 of the Internal Revenue Code of 1986, as amended, (the "Code") to purchase shares of
common stock of the Company ("Stock") upon the terms and
conditions hereinafter stated and pursuant to an exemption from registration
under the Securities Act of 1933, as amended (the "Securities Act") provided by
Section 4(2) thereunder.

    

    

    3.  Shares;
Price.  The Company hereby grants to Optionee the right to
purchase, upon and subject to the terms and conditions herein stated, the number
of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or other
consideration as is authorized under the Plan and acceptable to the Board, in
their sole and absolute discretion) at the price per Share set forth in Section
1(d) above (the "Exercise
Price"), such price being not less than the fair market value per share
of the Shares covered by this Option as of the date hereof (unless Optionee is
the owner of Stock possessing ten percent or more of the total voting power or
value of all outstanding Stock of the Company, in which case the Exercise Price
shall be no less than 110% of the fair market value of such Stock).

    

    4.  Term of Option; Continuation
of Employment.  This Option shall expire, and all rights
hereunder to purchase the Shares shall terminate ____ (___) years from the date
hereof. This Option shall earlier terminate subject to Sections 7 and 8 hereof
upon, and as of the date of, the termination of Optionee's employment if such
termination occurs prior to the end of such ____ (___) year period. Nothing
contained herein shall confer upon Optionee the right to the continuation of his
or her employment by the Company or to interfere with the right of the Company
to terminate such employment or to increase or decrease the compensation of
Optionee from the rate in existence at the date hereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    5.  Vesting of Option.
Subject to the provisions of Sections 7 and 8 hereof, this Option shall become
exercisable during the term of Optionee's employment in ______ equal annual
installments of _______ percent of the Shares covered by this Option, the first
installment to be exercisable on _______ anniversary of the date of this Option
(the "Initial Vesting Date"), with an additional _____ percent of such Shares
becoming exercisable on each of the successive periods following the Initial
Vesting Date. The installments shall be cumulative (i.e., this option may be
exercised, as to any or all Shares covered by an installment, at any time or
times after an installment becomes exercisable and until expiration or
termination of this option).

    

    6.  Exercise.  This
Option shall be exercised by delivery to the Company of (a) written notice of
exercise stating the number of Shares being purchased (in whole shares only) and
such other information set forth on the form of Notice of Exercise attached
hereto as Appendix A, (b) a check or cash in the amount of the Exercise Price of
the Shares covered by the notice (or such other consideration as has been
approved by the Board of Directors consistent with the Plan) and (c) a written
investment representation as provided for in Section 13 hereof. This Option
shall not be assignable or transferable, except by will or by the laws of
descent and distribution, and shall be exercisable only by Optionee during his
or her lifetime, except as provided in Section 8 hereof.

    

    7.  Termination of
Employment.  If Optionee shall cease to be employed by the
Company for any reason, whether voluntarily or involuntarily, other than by his
or her death, Optionee (or if the Optionee shall die after such termination, but
prior to such exercise date, Optionee's personal representative or the person
entitled to succeed to the Option) shall have the right at any time within three
(3) months following such termination of employment or the remaining term of
this Option, whichever is the lesser, to exercise in whole or in part this
Option to the extent, but only to the extent, that this Option was exercisable
as of the date of termination of employment and had not previously been
exercised; provided, however: (i) if Optionee is permanently disabled (within
the meaning of Section 22(e)(3) of the Code) at the time of termination, the
foregoing three (3) month period shall be extended to six (6) months; or (ii) if
Optionee is terminated "for
cause," as that term is defined by the terms of the Plan or this Option
Agreement or by any employment agreement between the Optionee and the Company,
this Option shall automatically terminate as to all Shares covered by this
Option not exercised prior to termination. Unless earlier terminated, all rights
under this Option shall terminate in any event on the expiration date of this
Option as defined in Section 4 hereof.

    

    8.  Death of
Optionee.  If the Optionee shall die while in the employ of the
Company, Optionee's personal representative or the person entitled to Optionee's
rights hereunder may at any time within six (6) months after the date of
Optionee's death, or during the remaining term of this Option, whichever is the
lesser, exercise this Option and purchase Shares to the extent, but only to the
extent, that Optionee could have exercised this Option as of the date of
Optionee's death; provided, in any case, that this Option may be so exercised
only to the extent that this Option has not previously been exercised by
Optionee.

    

    9.  No Rights as
Shareholder.  Optionee shall have no rights as a shareholder
with respect to the Shares covered by any installment of this Option until the
effective date of issuance of Shares following exercise of this Option, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such stock certificate or certificates are issued except as
provided in Section 10 hereof.

    

    10.  Recapitalization.  Subject
to any required action by the shareholders of the Company, the number of Shares
covered by this Option, and the Exercise Price thereof, shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting
from a subdivision or consolidation of shares or the payment of a stock
dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company; provided however that
the conversion of any convertible securities of the Company shall not be deemed
having been "effected without
receipt of consideration by the Company".

    

    In the event of a proposed dissolution
or liquidation of the Company, a merger or consolidation in which the Company is
not the surviving entity, or a sale of all or substantially all of the assets or
capital stock of the Company (collectively, a "Reorganization"), unless
otherwise provided by the Board, this Option shall terminate immediately prior
to such date as is determined by the Board, which date shall be no later than
the consummation of such Reorganization. In such event, if the entity which
shall be the surviving entity does not tender to Optionee an offer, for which it
has no obligation to do so, to substitute for any unexercised Option a stock
option or capital stock of such surviving of such surviving entity, as
applicable, which on an equitable basis shall provide the Optionee with
substantially the same economic benefit as such unexercised Option, then the
Board may grant to such Optionee, in its sole and absolute discretion and
without obligation, the right for a period commencing thirty (30) days prior to
and ending immediately prior to the date determined by the Board pursuant hereto
for termination of the Option or during the remaining term of the Option,
whichever is the lesser, to exercise any unexpired Option or Options without
regard to the installment provisions of Section 5; provided, however, that such
exercise shall be subject to the consummation of such
Reorganization.

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    

    Subject to any required action by the
shareholders of the Company, if the Company shall be the surviving entity in any
merger or consolidation, this Option thereafter shall pertain to and apply to
the securities to which a holder of Shares equal to the Shares subject to this
Option would have been entitled by reason of such merger or consolidation, and
the installment provisions of Section 5 shall continue to apply.

    

    In the event of a change in the shares
of the Company as presently constituted, which is limited to a change of all of
its authorized Stock without par value into the same number of shares of Stock
with a par value, the shares resulting from any such change shall be deemed to
be the Shares within the meaning of this Option.

    

    To the extent that the foregoing
adjustments relate to shares or securities of the Company, such adjustments
shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as hereinbefore expressly provided, Optionee
shall have no rights by reason of any subdivision or consolidation of shares of
Stock of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, and the number and price
of Shares subject to this Option shall not be affected by, and no adjustments
shall be made by reason of, any dissolution, liquidation, merger, consolidation
or sale of assets or capital stock, or any issue by the Company of shares of
stock of any class or securities convertible into shares of stock of any
class.

    

    The grant of this Option shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve or liquidate or to sell or transfer
all or any part of its business or assets.

    

    11.  Additional
Consideration.  Should the Internal Revenue Service determine
that the Exercise Price established by the Board as the fair market value per
Share is less than the fair market value per Share as of the date of Option
grant, Optionee hereby agrees to tender such additional consideration, or agrees
to tender upon exercise of all or a portion of this Option, such fair market
value per Share as is determined by the Internal Revenue Service.

    

    12. Modifications, Extension and
Renewal of Options.  The Board or Committee, as described in
the Plan, may modify, extend or renew this Option or accept the surrender
thereof (to the extent not theretofore exercised) and authorize the granting of
a new option in substitution therefore (to the extent not theretofore
exercised), subject at all times to the Plan, and Section 422 of the Code.
Notwithstanding the foregoing provisions of this Section 12, no modification
shall, without the consent of the Optionee, alter to the Optionee's detriment or
impair any rights of Optionee hereunder.

    

    13.  Investment Intent;
Restrictions on Transfer.

    

    
      	
               
      

            	
              (a)
      Optionee represents and agrees that if Optionee exercises this Option in
      whole or in part, Optionee will in each case acquire the Shares upon such
      exercise for the purpose of investment and not with a view to, or for
      resale in connection with, any distribution thereof; and that upon such
      exercise of this Option in whole or in part, Optionee (or any person or
      persons entitled to exercise this Option under the provisions of Sections
      7 and 8 hereof) shall furnish to the Company a written statement to such
      effect, satisfactory to the Company in form and substance. If the Shares
      represented by this Option are registered under the Securities Act, either
      before or after the exercise of this Option in whole or in part, the
      Optionee shall be relieved of the foregoing investment representation and
      agreement and shall not be required to furnish the Company with the
      foregoing written statement.

            

    

    

    
      	
               
      

            	
              (b)
      Optionee further represents that Optionee has had access to the financial
      statements or books and records of the Company, has had the opportunity to
      ask questions of the Company concerning its business, operations and
      financial condition, and to obtain additional information reasonably
      necessary to verify the accuracy of such
  information.

            

    

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (c)
      Unless and until the Shares represented by this Option are registered
      under the Securities Act, all certificates representing the Shares and any
      certificates subsequently issued in substitution therefore and any
      certificate for any securities issued pursuant to any stock split, share
      reclassification, stock dividend or other similar capital event shall bear
      legends in substantially the following
form:

            

    

    

    
      	
               
      

            	
              THESE
      SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE
      SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR
      SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST
      THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
      ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
      SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
      THEREFROM.

            

    

    

    
      	
               
      

            	
              THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT
      CERTAIN INCENTIVE STOCK OPTION AGREEMENT DATED ____________ BETWEEN THE
      COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH
      ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN
      CONDITIONS.

            

    

    

    such
other legend or legends as the Company and its counsel deem necessary or
appropriate. Appropriate stop transfer instructions with respect to the Shares
have been placed with the Company's transfer agent.

    

    14.  Effects of Early
Disposition.  Optionee understands that if an Optionee disposes
of shares acquired hereunder within two (2) years after the date of this Option
or within one (1) year after the date of issuance of such shares to Optionee,
such Optionee will be treated for income tax purposes as having received
ordinary income at the time of such disposition of an amount generally measured
by the difference between the purchase price and the fair market value of such
stock on the date of exercise, subject to adjustment for any tax previously
paid, in addition to any tax on the difference between the sales price and
Optionee's adjusted cost basis in such shares. The foregoing amount may be
measured differently if Optionee is an officer, director or ten percent holder
of the Company. Optionee agrees to notify the Company within ten (10) working
days of any such disposition.

    

    15.  Stand-off
Agreement.  Optionee agrees that in connection with any
registration of the Company's securities under the Securities Act, and upon the
request of the Company or any underwriter managing an underwritten offering of
the Company's securities, Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any of the Shares (other than
Shares included in the offering) without the prior written consent of the
Company or such managing underwriter, as applicable, for a period of at least
one year following the effective date of registration of such
offering.

    

    16.  Restriction upon
Transfer.  The Shares may not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated by the Optionee
except as hereinafter provided.

    

    
      	
               
      

            	
              (a)
      Repurchase Right
      on Termination Other Than for Cause. For the purposes of this
      Section, a "Repurchase
      Event" shall mean an occurrence of one of (i) termination of
      Optionee's employment by the Company, voluntary or involuntary and with or
      without cause; (ii) retirement or death of Optionee; (iii) bankruptcy of
      Optionee, which shall be deemed to have occurred as of the date on which a
      voluntary or involuntary petition in bankruptcy is filed with a court of
      competent jurisdiction; (iv) dissolution of the marriage of Optionee, to
      the extent that any of the Shares are allocated as the sole and separate
      property of Optionee's spouse pursuant thereto (in which case this Section
      shall only apply to the Shares so affected); or (v) any attempted transfer
      by the Optionee of Shares, or any interest therein, in violation of this
      Agreement. Upon the occurrence of a Repurchase Event, the Company shall
      have the right (but not an obligation) to repurchase all or any portion of
      the Shares of Optionee at a price equal to the fair value of the Shares as
      of the date of the Repurchase
Event.

            

    

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (b)
      Repurchase Right
      on Termination for Cause.  In the event Optionee's
      employment is terminated by the Company "for cause", then the
      Company shall have the right (but not an obligation) to repurchase Shares
      of Optionee at a price equal to the Exercise Price. Such right of the
      Company to repurchase Shares shall apply to 100% of the Shares for one (1)
      year from the date of this Agreement; and shall thereafter lapse at the
      rate of twenty percent (20%) of the Shares on each anniversary of the date
      of this Agreement. In addition, the Company shall have the right, in the
      sole discretion of the Board and without obligation, to repurchase upon
      termination for cause all or any portion of the Shares of Optionee, at a
      price equal to the fair value of the Shares as of the date of termination,
      which right is not subject to the foregoing lapsing of rights. In the
      event the Company elects to repurchase the Shares, the stock certificates
      representing the same shall forthwith be returned to the Company for
      cancellation.

            

    

    

    
      	
               
      

            	
              (c)  Exercise of Repurchase
      Right.  Any Repurchase Right under Paragraphs 16(a) or
      16(b) shall be exercised by giving notice of exercise as provided herein
      to Optionee or the estate of Optionee, as applicable. Such right shall be
      exercised, and the repurchase price thereunder shall be paid, by the
      Company within a ninety (90) day period beginning on the date of notice to
      the Company of the occurrence of such Repurchase Event (except in the case
      of termination of employment or retirement, where such option period shall
      begin upon the occurrence of the Repurchase Event). Such repurchase price
      shall be payable only in the form of cash (including a check drafted on
      immediately available funds) or cancellation of purchase money
      indebtedness of the Optionee for the Shares. If the Company can not
      purchase all such Shares because it is unable to meet the financial tests
      set forth in North Carolina and/or North Carolina corporation law, the
      Company shall have the right to purchase as many Shares as it is permitted
      to purchase under such sections. Any Shares not purchased by the Company
      hereunder shall no longer be subject to the provisions of this Section
      16.

            

    

    

    
      	
               
      

            	
              (d)  Right of First
      Refusal.  In the event Optionee desires to transfer any
      Shares during his or her lifetime, Optionee shall first offer to sell such
      Shares to the Company. Optionee shall deliver to the Company written
      notice of the intended sale, such notice to specify the number of Shares
      to be sold, the proposed purchase price and terms of payment, and grant
      the Company an option for a period of thirty days following receipt of
      such notice to purchase the offered Shares upon the same terms and
      conditions. To exercise such option, the Company shall give notice of that
      fact to Optionee within the thirty (30) day notice period and agree to pay
      the purchase price in the manner provided in the notice. If the Company
      does not purchase all of the Shares so offered during foregoing option
      period, Optionee shall be under no obligation to sell any of the offered
      Shares to the Company, but may dispose of such Shares in any lawful manner
      during a period of one hundred and eighty (180) days following the end of
      such notice period, except that Optionee shall not sell any such Shares to
      any other person at a lower price or upon more favorable terms than those
      offered to the Company.

            

    

    

    
      	
               
      

            	
              (e)  Acceptance of
      Restrictions.  Acceptance of the Shares shall constitute
      the Optionee's agreement to such restrictions and the legending of his
      certificates with respect thereto. Notwithstanding such restrictions,
      however, so long as the Optionee is the holder of the Shares, or any
      portion thereof, he shall be entitled to receive all dividends declared on
      and to vote the Shares and to all other rights of a shareholder with
      respect thereto.

            

    

    

    
      	
               
      

            	
              (f)  Permitted
      Transfers.  Notwithstanding any provisions in this
      Section 16 to the contrary, the Optionee may transfer Shares subject to
      this Agreement to his or her parents, spouse, children, or grandchildren,
      or a trust for the benefit of the Optionee or any such transferee(s);
      provided, that such permitted transferee(s) shall hold the Shares subject
      to all the provisions of this Agreement (all references to the Optionee
      herein shall in such cases refer mutatis mutandis to the permitted
      transferee, except in the case of clause (iv) of Section 16(a) wherein the
      permitted transfer shall be deemed to be rescinded); and provided further,
      that notwithstanding any other provisions in this Agreement, a permitted
      transferee may not, in turn, make permitted transfers without the written
      consent of the Optionee and the
Company.

            

    

     

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

    

    17.  Notices.  Any
notice required to be given pursuant to this Option or the Plan shall be in
writing and shall be deemed to be delivered upon receipt or, in the case of
notices by the Company, five (5) days after deposit in the U.S. mail, postage
prepaid, addressed to Optionee at the address last provided to the Company by
Optionee for his or her employee records.

    

    18.  Agreement Subject to Plan;
Applicable Law.  This Option is made pursuant to the Plan and
shall be interpreted to comply therewith. A copy of such Plan is available to
Optionee, at no charge, at the principal office of the Company. Any provision of
this Option inconsistent with the Plan shall be considered void and replaced
with the applicable provision of the Plan. This Option has been granted,
executed and delivered in the State of North Carolina, and the interpretation
and enforcement shall be governed by the laws thereof and subject to the
exclusive jurisdiction of the courts therein.

    

    [SIGNATURE
PAGE TO FOLLOW]

     

    
      
         

      

      
        - 6
-

        
          

        

      

      
         

      

    

     

    In Witness
Whereof, the parties hereto have executed this Option as of the date
first above written.

    

    
      
        
          
            
              
                	
                        COMPANY:

                      	
                        CHINA
      EDUCATION ALLIANCE, INC.

                        a
      North Carolina corporation

                      
	 
      	 
      	 
      
	 
      	
                        By:

                      	 
	 
      	 
      	
                        Name:
      Xiqun Yu

                      
	 
      	 
      	
                        Title:   Chief
      Executive Officer

                      
	 
      	 
      	 
      
	
                        OPTIONEE:

                      	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	 
      	
                        (signature)

                      
	 
      	
                        Name:

                      	 
      

              

            

          

        

      

    

    

    (one of the following, as appropriate,
shall be signed)

    

    
      
        
          	
                  I
      certify that as of the date hereof I am unmarried

                	 
      	
                  By
      his or her signature, the spouse of Optionee hereby agrees to be bound by
      the provisions of the foregoing INCENTIVE STOCK OPTION
      AGREEMENT

                   

                
	 
      	 
      	 
      
	
                  Optionee

                	 
      	
                  Spouse
      of Optionee

                

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Appendix
A

    

    NOTICE OF
EXERCISE

     

    CHINA
EDUCATION ALLIANCE, INC.

     

    Re: Incentive Stock Option

    

    Notice is hereby given pursuant to
Section 6 of my Incentive Stock Option Agreement that I elect to purchase the
number of shares set forth below at the exercise price set forth in my option
agreement:

    

    Incentive Stock Option Agreement dated:
____________

    

    Number of shares being purchased:
____________

    

    Exercise Price:
$____________

    

    A check in the amount of the aggregate
price of the shares being purchased is attached.

    

    I hereby confirm that such shares are
being acquired by me for my own account for investment purposes, and not with a
view to, or for resale in connection with, any distribution thereof. I will not
sell or dispose of my Shares in violation of the Securities Act of 1933, as
amended, or any applicable federal or state securities laws. Further, I
understand that the exemption from taxable income at the time of exercise is
dependent upon my holding such stock for a period of at least one year from the
date of exercise and two years from the date of grant of the
Option.

    

    I understand that the certificate
representing the Option Shares will bear a restrictive legend within the
contemplation of the Securities Act and as required by such other state or
federal law or regulation applicable to the issuance or delivery of the Option
Shares.

    

    I agree to provide to the Company such
additional documents or information as may be required pursuant to the Company's
2009 Incentive Stock Plan.

    

    
      
        
          
            
              
                	
                        By:

                      	 
      
	 
      	
                        (signature)

                      
	
                        Name:

                      	 
      

              

            

          

        

      

    

     

    
      Appendix
A

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B-1

    

    CHINA
EDUCATION ALLIANCE, INC.

    EMPLOYEE
NONSTATUTORY STOCK OPTION AGREEMENT  

    
      
        
          	
                   

                

        

      

    

     

    This
Employee Nonstatutory Stock Option Agreement ("Agreement") is made and
entered into as of the date set forth below, by and between CHINA EDUCATION
ALLIANCE, INC., a North Carolina corporation (the "Company"), and the following
employee of the Company ("Optionee"):

    

    In consideration of the covenants
herein set forth, the parties hereto agree as follows:

    

    1.  Option
Information.

     

    
      
        
          
            
              
                
                  
                    	
                            (a)

                          	
                            Date
      of Option:

                          	 
      
	 
      	 
      	 
      
	
                            (b)

                          	
                            Optionee:

                          	 
      
	 
      	 
      	 
      
	
                            (c)

                          	
                            Number
      of Shares:

                          	 
      
	 
      	 
      	 
      
	
                            (d)

                          	
                            Exercise
      Price:

                          	 
      

                  

                

              

            

          

        

      

    

    

    2.  Acknowledgements.

    

    (a) Optionee is an employee of the
Company.

    

    
      	
               
      

            	
              (b)
      The Board of Directors (the "Board" which term shall
      include an authorized committee of the Board of Directors) and
      shareholders of the Company have heretofore adopted a 2009 Incentive Stock
      Plan (the "Plan"),
      pursuant to which this Option is being granted;
  and

            

    

    

    
      	
               
      

            	
              (c)
      The Board has authorized the granting to Optionee of a nonstatutory stock
      option ("Option")
      to purchase shares of common stock of the Company ("Stock") upon the terms
      and conditions hereinafter stated and pursuant to an exemption from
      registration under the Securities Act of 1933, as amended (the "Securities Act")
      provided by Section 4(2)
thereunder.

            

    

    

    3.  Shares;
Price.  Company hereby grants to Optionee the right to
purchase, upon and subject to the terms and conditions herein stated, the number
of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or other
consideration as is authorized under the Plan and acceptable to the Board of
Directors of the Company, in their sole and absolute discretion) at the price
per Share set forth in Section 1(d) above (the "Exercise Price"), such price
being not less than eighty-five percent (85%) of the fair market value per share
of the Shares covered by this Option as of the date hereof.

    

    4.  Term of Option; Continuation
of Service.  This Option shall expire, and all rights hereunder
to purchase the Shares shall terminate, ___ (__) years from the date hereof.
This Option shall earlier terminate subject to Sections 7 and 8 hereof upon, and
as of the date of, the termination of Optionee's employment if such termination
occurs prior to the end of such ___ (__) year period. Nothing contained herein
shall confer upon Optionee the right to the continuation of his or her
employment by the Company or to interfere with the right of the Company to
terminate such employment or to increase or decrease the compensation of
Optionee from the rate in existence at the date hereof.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    5.  Vesting of
Option.

    

    Subject to the provisions of Sections 7
and 8 hereof, this Option shall become vested and exercisable during the term of
Optionee's employment in Six (6) equal annual installments of 1,100,000 Shares
covered by this Option, the first installment to be exercisable on the first
anniversary of the date of this Option.

    

    6.  Exercise.  This
Option shall be exercised by delivery to the Company of (a) written notice of
exercise stating the number of Shares being purchased (in whole shares only) and
such other information set forth on the form of Notice of Exercise attached
hereto as Appendix
A, (b) a check or cash in the amount of the Exercise Price of the Shares
covered by the notice (or such other consideration as has been approved by the
Board of Directors consistent with the Plan) and (c) a written investment
representation as provided for in Section 13 hereof. This Option shall not be
assignable or transferable, except by will or by the laws of descent and
distribution, and shall be exercisable only by Optionee during his or her
lifetime, except as provided in Section 8 hereof.

    

    7.  Termination of
Employment.  If Optionee shall cease to be employed by the
Company for any reason, whether voluntarily or involuntarily, other than by his
or her death, Optionee (or if the Optionee shall die after such termination, but
prior to such exercise date, Optionee's personal representative or the person
entitled to succeed to the Option) shall have the right at any time within three
(3) months following such termination of employment or the remaining term of
this Option, whichever is the lesser, to exercise in whole or in part this
Option to the extent, but only to the extent, that this Option was exercisable
as of the date of termination of employment and had not previously been
exercised; provided, however: (i) if Optionee is permanently disabled (within
the meaning of Section 22(e)(3) of the Code) at the time of termination, the
foregoing three (3) month period shall be extended to six (6) months; or (ii) if
Optionee is terminated "for cause," as that term is defined by the terms of the
Plan or this Option Agreement or by any employment agreement between the
Optionee and the Company, this Option shall automatically terminate as to all
Shares covered by this Option not exercised prior to termination.

    

    Unless earlier terminated, all rights
under this Option shall terminate in any event on the expiration date of this
Option as defined in Section 4 hereof.

    

    8.  Death of
Optionee.  If the Optionee shall die while in the employ of the
Company, Optionee's personal representative or the person entitled to Optionee's
rights hereunder may at any time within six (6) months after the date of
Optionee's death, or during the remaining term of this Option, whichever is the
lesser, exercise this Option and purchase Shares to the extent, but only to the
extent, that Optionee could have exercised this Option as of the date of
Optionee's death; provided, in any case, that this Option may be so exercised
only to the extent that this Option has not previously been exercised by
Optionee.

    

    9.  No Rights as
Shareholder.  Optionee shall have no rights as a shareholder
with respect to the Shares covered by any installment of this Option until the
effective date of issuance of the Shares following exercise of this Option, and
no adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate or certificates are issued
except as provided in Section 10 hereof.

    

    10.  Recapitalization.  Subject
to any required action by the shareholders of the Company, the number of Shares
covered by this Option, and the Exercise Price thereof, shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting
from a subdivision or consolidation of shares or the payment of a stock
dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company; provided however that
the conversion of any convertible securities of the Company shall not be deemed
having been "effected without receipt of consideration by the
Company".

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    In the event of a proposed dissolution
or liquidation of the Company, a merger or consolidation in which the Company is
not the surviving entity, or a sale of all or substantially all of the assets or
capital stock of the Company (collectively, a "Reorganization"), unless
otherwise provided by the Board, this Option shall terminate immediately prior
to such date as is determined by the Board, which date shall be no later than
the consummation of such Reorganization. In such event, if the entity which
shall be the surviving entity does not tender to Optionee an offer, for which it
has no obligation to do so, to substitute for any unexercised Option a stock
option or capital stock of such surviving of such surviving entity, as
applicable, which on an equitable basis shall provide the Optionee with
substantially the same economic benefit as such unexercised Option, then the
Board may grant to such Optionee, in its sole and absolute discretion and
without obligation, the right for a period commencing thirty (30) days prior to
and ending immediately prior to the date determined by the Board pursuant hereto
for termination of the Option or during the remaining term of the Option,
whichever is the lesser, to exercise any unexpired Option or Options without
regard to the installment provisions of Section 5; provided, however, that such
exercise shall be subject to the consummation of such
Reorganization.

    

    Subject to any required action by the
shareholders of the Company, if the Company shall be the surviving entity in any
merger or consolidation, this Option thereafter shall pertain to and apply to
the securities to which a holder of Shares equal to the Shares subject to this
Option would have been entitled by reason of such merger or consolidation, and
the installment provisions of Section 5 shall continue to apply.

    

    In the event of a change in the shares
of the Company as presently constituted, which is limited to a change of all of
its authorized Stock without par value into the same number of shares of Stock
with a par value, the shares resulting from any such change shall be deemed to
be the Shares within the meaning of this Option.

    

    To the extent that the foregoing
adjustments relate to shares or securities of the Company, such adjustments
shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as hereinbefore expressly provided, Optionee
shall have no rights by reason of any subdivision or consolidation of shares of
Stock of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, and the number and price
of Shares subject to this Option shall not be affected by, and no adjustments
shall be made by reason of, any dissolution, liquidation, merger, consolidation
or sale of assets or capital stock, or any issue by the Company of shares of
stock of any class or securities convertible into shares of stock of any
class.

    

    The grant of this Option shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve or liquidate or to sell or transfer
all or any part of its business or assets.

    

    11.  Taxation upon Exercise of
Option.  Optionee understands that, upon exercise of this
Option, Optionee will recognize income, for Federal and state income tax
purposes, in an amount equal to the amount by which the fair market value of the
Shares, determined as of the date of exercise, exceeds the Exercise Price. The
acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate
with Company in establishing the amount of such income and corresponding
deduction to the Company for its income tax purposes. Withholding for federal or
state income and employment tax purposes will be made, if and as required by
law, from Optionee's then current compensation, or, if such current compensation
is insufficient to satisfy withholding tax liability, the Company may require
Optionee to make a cash payment to cover such liability as a condition of the
exercise of this Option.

    

    12.  Modification, Extension and
Renewal of Options.  The Board or Committee, as described in
the Plan, may modify, extend or renew this Option or accept the surrender
thereof (to the extent not theretofore exercised) and authorize the granting of
a new option in substitution therefore (to the extent not theretofore
exercised), subject at all times to the Plan, the Code and the North Carolina
Securities Rules. Notwithstanding the foregoing provisions of this Section 12,
no modification shall, without the consent of the Optionee, alter to the
Optionee's detriment or impair any rights of Optionee
hereunder.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    13.  Investment Intent;
Restrictions on Transfer.

    

    
      	
               
      

            	
              (a)  Optionee
      represents and agrees that if Optionee exercises this Option in whole or
      in part, Optionee will in each case acquire the Shares upon such exercise
      for the purpose of investment and not with a view to, or for resale in
      connection with, any distribution thereof; and that upon such exercise of
      this Option in whole or in part, Optionee (or any person or persons
      entitled to exercise this Option under the provisions of Sections 7 and 8
      hereof) shall furnish to the Company a written statement to such effect,
      satisfactory to the Company in form and substance. If the Shares
      represented by this Option are registered under the Securities Act, either
      before or after the exercise of this Option in whole or in part, the
      Optionee shall be relieved of the foregoing investment representation and
      agreement and shall not be required to furnish the Company with the
      foregoing written statement.

            

    

    

    
      	
               
      

            	
              (b)  Optionee
      further represents that Optionee has had access to the financial
      statements or books and records of the Company, has had the opportunity to
      ask questions of the Company concerning its business, operations and
      financial condition, and to obtain additional information reasonably
      necessary to verify the accuracy of such
  information

            

    

    

    
      	
               
      

            	
              (c)  Unless
      and until the Shares represented by this Option are registered under the
      Securities Act, all certificates representing the Shares and any
      certificates subsequently issued in substitution therefor and any
      certificate for any securities issued pursuant to any stock split, share
      reclassification, stock dividend or other similar capital event shall bear
      legends in substantially the following
form:

            

    

    

    
      	
               
      

            	
              THESE
      SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE
      SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR
      SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST
      THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
      ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
      SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
      THEREFROM.

            

    

    

    
      	
               
      

            	
              THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT
      CERTAIN NONSTATUTORY STOCK OPTION AGREEMENT DATED ____________ BETWEEN THE
      COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH
      ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN
      CONDITIONS.

            

    

    

    and/or
such other legend or legends as the Company and its counsel deem necessary or
appropriate. Appropriate stop transfer instructions with respect to the Shares
have been placed with the Company's transfer agent.

    

    14.  Stand-off
Agreement.  Optionee agrees that, in connection with any
registration of the Company's securities under the Securities Act, and upon the
request of the Company or any underwriter managing an underwritten offering of
the Company's securities, Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any of the Shares (other than
Shares included in the offering) without the prior written consent of the
Company or such managing underwriter, as applicable, for a period of at least
one year following the effective date of registration of such
offering.

    

    15.  Restriction Upon
Transfer.  The Shares may not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated by the Optionee
except as hereinafter provided.

    

    
      	
               
      

            	
              (a)
      Repurchase Right on Termination Other Than For Cause. For the purposes of
      this Section, a "Repurchase Event" shall
      mean an occurrence of one of (i) termination of Optionee's employment by
      the Company, voluntary or involuntary and with or without cause; (ii)
      retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall
      be deemed to have occurred as of the date on which a voluntary or
      involuntary petition in bankruptcy is filed with a court of competent
      jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent
      that any of the Shares are allocated as the sole and separate property of
      Optionee's spouse pursuant thereto (in which case, this Section shall only
      apply to the Shares so affected); or (v) any attempted transfer by the
      Optionee of Shares, or any interest therein, in violation of this
      Agreement. Upon the occurrence of a Repurchase Event, the Company shall
      have the right (but not an obligation) to repurchase all or any portion of
      the Shares of Optionee at a price equal to the fair value of the Shares as
      of the date of the Repurchase
Event.

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (b)
      Repurchase Right on Termination for Cause. In the event Optionee's
      employment is terminated by the Company "for cause", then the Company
      shall have the right (but not an obligation) to repurchase Shares of
      Optionee at a price equal to the Exercise Price. Such right of the Company
      to repurchase Shares shall apply to 100% of the Shares for one (1) year
      from the date of this Agreement; and shall thereafter lapse at the rate of
      twenty percent (20%) of the Shares on each anniversary of the date of this
      Agreement. In addition, the Company shall have the right, in the sole
      discretion of the Board and without obligation, to repurchase upon
      termination for cause all or any portion of the Shares of Optionee, at a
      price equal to the fair value of the Shares as of the date of termination,
      which right is not subject to the foregoing lapsing of rights. In the
      event the Company elects to repurchase the Shares, the stock certificates
      representing the same shall forthwith be returned to the Company for
      cancellation.

            

    

    

    
      	
               
      

            	
              (c)
      Exercise of Repurchase Right. Any Repurchase Right under Paragraphs 15(a)
      or 15(b) shall be exercised by giving notice of exercise as provided
      herein to Optionee or the estate of Optionee, as applicable. Such right
      shall be exercised, and the repurchase price thereunder shall be paid, by
      the Company within a ninety (90) day period beginning on the date of
      notice to the Company of the occurrence of such Repurchase Event (except
      in the case of termination of employment or retirement, where such option
      period shall begin upon the occurrence of the Repurchase Event). Such
      repurchase price shall be payable only in the form of cash (including a
      check drafted on immediately available funds) or cancellation of purchase
      money indebtedness of the Optionee for the Shares. If the Company can not
      purchase all such Shares because it is unable to meet the financial tests
      set forth in the North Carolina and/or North Carolina corporation law, the
      Company shall have the right to purchase as many Shares as it is permitted
      to purchase under such sections. Any Shares not purchased by the Company
      hereunder shall no longer be subject to the provisions of this Section
      15.

            

    

    

    
      	
               
      

            	
              (d)
      Right of First Refusal. In the event Optionee desires to transfer any
      Shares during his or her lifetime, Optionee shall first offer to sell such
      Shares to the Company. Optionee shall deliver to the Company written
      notice of the intended sale, such notice to specify the number of Shares
      to be sold, the proposed purchase price and terms of payment, and grant
      the Company an option for a period of thirty days following receipt of
      such notice to purchase the offered Shares upon the same terms and
      conditions. To exercise such option, the Company shall give notice of that
      fact to Optionee within the thirty (30) day notice period and agree to pay
      the purchase price in the manner provided in the notice. If the Company
      does not purchase all of the Shares so offered during foregoing option
      period, Optionee shall be under no obligation to sell any of the offered
      Shares to the Company, but may dispose of such Shares in any lawful manner
      during a period of one hundred and eighty (180) days following the end of
      such notice period, except that Optionee shall not sell any such Shares to
      any other person at a lower price or upon more favorable terms than those
      offered to the Company.

            

    

    

    
      	
               
      

            	
              (e)
      Acceptance of Restrictions. Acceptance of the Shares shall constitute the
      Optionee's agreement to such restrictions and the legending of his
      certificates with respect thereto. Notwithstanding such restrictions,
      however, so long as the Optionee is the holder of the Shares, or any
      portion thereof, he shall be entitled to receive all dividends declared on
      and to vote the Shares and to all other rights of a shareholder with
      respect thereto.

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (f)
      Permitted Transfers. Notwithstanding any provisions in this Section 15 to
      the contrary, the Optionee may transfer Shares subject to this Agreement
      to his or her parents, spouse, children, or grandchildren, or a trust for
      the benefit of the Optionee or any such transferee(s); provided, that such
      permitted transferee(s) shall hold the Shares subject to all the
      provisions of this Agreement (all references to the Optionee herein shall
      in such cases refer mutatis mutandis to the permitted transferee, except
      in the case of clause (iv) of Section 15(a) wherein the permitted transfer
      shall be deemed to be rescinded); and provided further, that
      notwithstanding any other provisions in this Agreement, a permitted
      transferee may not, in turn, make permitted transfers without the written
      consent of the Optionee and the
Company.

            

    

    

    
      	
               
      

            	
              (g)
      Release of Restrictions on Shares. All other restrictions under this
      Section 15 shall terminate ____ (___) years following the date of this
      Agreement, or when the Company's securities are publicly traded, whichever
      occurs earlier.

            

    

    

    16.  Notices.  Any
notice required to be given pursuant to this Option or the Plan shall be in
writing and shall be deemed to be delivered upon receipt or, in the case of
notices by the Company, five (5) days after deposit in the U.S. mail, postage
prepaid, addressed to Optionee at the address last provided by Optionee for his
or her employee records.

    

    17.  Agreement Subject to Plan;
Applicable Law.  This Option is made pursuant to the Plan and
shall be interpreted to comply therewith. A copy of such Plan is available to
Optionee, at no charge, at the principal office of the Company. Any provision of
this Option inconsistent with the Plan shall be considered void and replaced
with the applicable provision of the Plan. This Option has been granted,
executed and delivered in the State of North Carolina, and the interpretation
and enforcement shall be governed by the laws thereof and subject to the
exclusive jurisdiction of the courts therein.

    

    [SIGNATURE
PAGE TO FOLLOW]

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    In Witness
Whereof, the parties hereto have executed this Option as of the date
first above written.

    

    
      
        
          
            
              
                
                  	
                          COMPANY:

                        	
                          CHINA
      EDUCATION ALLIANCE, INC. 

                          a
      North Carolina corporation

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	 
	 
      	 
      	
                          Name:
      Xiqun Yu

                        
	 
      	 
      	
                          Title:   Chief
      Executive Officer

                        
	 
      	 
      	 
      
	
                          OPTIONEE:

                        	
                            

                        	 
      
	 
      	
                          By:

                        	 
      
	 
      	 
      	
                          (signature)

                        
	 
      	Name:	
                                                

                        

                

              

            

          

        

      

    

    

    (one of the following, as appropriate,
shall be signed)

    

    
      	
              I
      certify that as of the date hereof I am unmarried

            	 
      	
              By
      his or her signature, the spouse of Optionee hereby agrees to be bound by
      the provisions of the foregoing INCENTIVE STOCK OPTION
      AGREEMENT

            
	 
      	 
      	 
      
	
              Optionee

            	 
      	
              Spouse
      of Optionee

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    Appendix
A

    

    NOTICE
OF EXERCISE

    

    CHINA
EDUCATION ALLIANCE, INC.

    

    Re: Nonstatutory Stock
Option

    

    Notice is hereby given pursuant to
Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the
number of shares set forth below at the exercise price set forth in my option
agreement:

    

    Nonstatutory Stock Option Agreement
dated: ____________

    

    Number of shares being purchased:
____________

    

    Exercise Price:
$____________

    

    A check in the amount of the aggregate
price of the shares being purchased is attached.

    

    I hereby confirm that such shares are
being acquired by me for my own account for investment purposes, and not with a
view to, or for resale in connection with, any distribution thereof. I will not
sell or dispose of my Shares in violation of the Securities Act of 1933, as
amended, or any applicable federal or state securities laws. Further, I
understand that the exemption from taxable income at the time of exercise is
dependent upon my holding such stock for a period of at least one year from the
date of exercise and two years from the date of grant of the
Option.

    

    I understand that the certificate
representing the Option Shares will bear a restrictive legend within the
contemplation of the Securities Act and as required by such other state or
federal law or regulation applicable to the issuance or delivery of the Option
Shares.

    

    I agree to provide to the Company such
additional documents or information as may be required pursuant to the Company's
2009 Incentive Stock Plan.

    

    
      
        
          
            
              
                	
                        By:

                      	 
	 
      	
                        (signature)

                      
	
                        Name:

                      	 
      

              

            

          

        

      

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    EXHIBIT
B-2

    

    CHINA
EDUCATION ALLIANCE, INC.

    NONSTATUTORY
STOCK OPTION AGREEMENT

    
      
        
          	
                   

                

        

      

    

    
       

    

    This
Nonstatutory Stock Option Agreement ("Agreement") is made and
entered into as of the date set forth below, by and between China Education
Alliance, Inc., a North Carolina corporation (the "Company"), and the following
Director of the Company ("Optionee"):

    

    In consideration of the covenants
herein set forth, the parties hereto agree as follows:

    

    1.  Option
Information.

     

    
      
        
          
            
              
                
                  
                    	
                            (a)

                          	
                            Date
      of Option:

                          	 
      
	 
      	 
      	 
      
	
                            (b)

                          	
                            Optionee:

                          	 
      
	 
      	 
      	 
      
	
                            (c)

                          	
                            Number
      of Shares:

                          	 
      
	 
      	 
      	 
      
	
                            (d)

                          	
                            Exercise
      Price:

                          	 
      

                  

                

              

            

          

        

      

    

    

    2.  Acknowledgements.

    

    (a)  Optionee is a member of
the Board of Directors of the Company.

    

    
      	
               
      

            	
              (b)  The
      Board of Directors (the "Board" which term shall
      include an authorized committee of the Board of Directors) and
      shareholders of the Company have heretofore adopted a 2009 Incentive Stock
      Plan (the "Plan"),
      pursuant to which this Option is being granted;
  and

            

    

    

    
      	
               
      

            	
              (c)  The
      Board has authorized the granting to Optionee of a nonstatutory stock
      option ("Option")
      to purchase shares of common stock of the Company ("Stock") upon the terms
      and conditions hereinafter stated and pursuant to an exemption from
      registration under the Securities Act of 1933, as amended (the "Securities Act")
      provided by Section 4(2)
thereunder.

            

    

    

    3.  Shares;
Price.  Company hereby grants to Optionee the right to
purchase, upon and subject to the terms and conditions herein stated, the number
of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or other
consideration as is authorized under the Plan and acceptable to the Board of
Directors of the Company, in their sole and absolute discretion) at the price
per Share set forth in Section 1(d) above (the "Exercise Price"), such price
being not less than eighty-five percent (85%) of the fair market value per share
of the Shares covered by this Option as of the date hereof.

    

    4.  Term of Option; Continuation
of Service.  This Option shall expire, and all rights hereunder
to purchase the Shares shall terminate, _____ (__) years from the date hereof.
This Option shall earlier terminate subject to Sections 7 and 8 hereof upon, and
as of the date of, the termination of Optionee's employment if such termination
occurs prior to the end of such _____ (__) year period. Nothing contained herein
shall confer upon Optionee the right to the continuation of his or her
employment by the Company or to interfere with the right of the Company to
terminate such employment or to increase or decrease the compensation of
Optionee from the rate in existence at the date hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5.  Vesting of
Option.

    

    Subject to the provisions of Sections 7
and 8 hereof, this Option shall become vested and exercisable during the term of
Optionee's employment in ___(__) equal annual installments of ____ Shares
covered by this Option, the first installment to be exercisable on the ___
anniversary of the date of this Option.

    

    6.  Exercise.  This
Option shall be exercised by delivery to the Company of (a) written notice of
exercise stating the number of Shares being purchased (in whole shares only) and
such other information set forth on the form of Notice of Exercise attached
hereto as Appendix
A, (b) a check or cash in the amount of the Exercise Price of the Shares
covered by the notice (or such other consideration as has been approved by the
Board of Directors consistent with the Plan) and (c) a written investment
representation as provided for in Section 13 hereof. This Option shall not be
assignable or transferable, except by will or by the laws of descent and
distribution, and shall be exercisable only by Optionee during his or her
lifetime, except as provided in Section 8 hereof.

    

    7.  Termination of
Service.  If Optionee shall cease to serve as a Director of the
Company for any reason, no further installments shall vest pursuant to Section
5, and the maximum number of Shares that Optionee may purchase pursuant hereto
shall be limited to the number of Shares that were vested as of the date
Optionee ceases to be a Director (to the nearest whole Share). Thereupon,
Optionee shall have the right to exercise this Option, at any time during the
remaining term hereof, to the extent, but only to the extent, that this Option
was exercisable as of the date Optionee ceases to be a Director; provided,
however, if Optionee is removed as a Director pursuant to the North Carolina
corporation law, the foregoing right to exercise shall automatically terminate
on the date Optionee ceases to be a Director as to all Shares covered by this
Option not exercised prior to termination. Unless earlier terminated, all rights
under this Option shall terminate in any event on the expiration date of this
Option as defined in Section 4 hereof.

    

    8.  Death of
Optionee.  If the Optionee shall die while in the employ of the
Company, Optionee's personal representative or the person entitled to Optionee's
rights hereunder may at any time within six (6) months after the date of
Optionee's death, or during the remaining term of this Option, whichever is the
lesser, exercise this Option and purchase Shares to the extent, but only to the
extent, that Optionee could have exercised this Option as of the date of
Optionee's death; provided, in any case, that this Option may be so exercised
only to the extent that this Option has not previously been exercised by
Optionee.

    

    9.  No Rights as
Shareholder.  Optionee shall have no rights as a shareholder
with respect to the Shares covered by any installment of this Option until the
effective date of issuance of the Shares following exercise of this Option, and
no adjustment will be made for dividends or other rights for which the record
date is prior to the date such stock certificate or certificates are issued
except as provided in Section 10 hereof.

    

    10.  Recapitalization.  Subject
to any required action by the shareholders of the Company, the number of Shares
covered by this Option, and the Exercise Price thereof, shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting
from a subdivision or consolidation of shares or the payment of a stock
dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company; provided however that
the conversion of any convertible securities of the Company shall not be deemed
having been "effected without receipt of consideration by the
Company".

    

    In the event of a proposed dissolution
or liquidation of the Company, a merger or consolidation in which the Company is
not the surviving entity, or a sale of all or substantially all of the assets or
capital stock of the Company (collectively, a "Reorganization"), unless
otherwise provided by the Board, this Option shall terminate immediately prior
to such date as is determined by the Board, which date shall be no later than
the consummation of such Reorganization. In such event, if the entity which
shall be the surviving entity does not tender to Optionee an offer, for which it
has no obligation to do so, to substitute for any unexercised Option a stock
option or capital stock of such surviving of such surviving entity, as
applicable, which on an equitable basis shall provide the Optionee with
substantially the same economic benefit as such unexercised Option, then the
Board may grant to such Optionee, in its sole and absolute discretion and
without obligation, the right for a period commencing thirty (30) days prior to
and ending immediately prior to the date determined by the Board pursuant hereto
for termination of the Option or during the remaining term of the Option,
whichever is the lesser, to exercise any unexpired Option or Options without
regard to the installment provisions of Section 5; provided, however, that such
exercise shall be subject to the consummation of such
Reorganization.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Subject to any required action by the
shareholders of the Company, if the Company shall be the surviving entity in any
merger or consolidation, this Option thereafter shall pertain to and apply to
the securities to which a holder of Shares equal to the Shares subject to this
Option would have been entitled by reason of such merger or consolidation, and
the installment provisions of Section 5 shall continue to apply.

    

    In the event of a change in the shares
of the Company as presently constituted, which is limited to a change of all of
its authorized Stock without par value into the same number of shares of Stock
with a par value, the shares resulting from any such change shall be deemed to
be the Shares within the meaning of this Option.

    

    To the extent that the foregoing
adjustments relate to shares or securities of the Company, such adjustments
shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as hereinbefore expressly provided, Optionee
shall have no rights by reason of any subdivision or consolidation of shares of
Stock of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, and the number and price
of Shares subject to this Option shall not be affected by, and no adjustments
shall be made by reason of, any dissolution, liquidation, merger, consolidation
or sale of assets or capital stock, or any issue by the Company of shares of
stock of any class or securities convertible into shares of stock of any
class.

    

    The grant of this Option shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve or liquidate or to sell or transfer
all or any part of its business or assets.

    

    11.  Taxation upon Exercise of
Option.  Optionee understands that, upon exercise of this
Option, Optionee will recognize income, for Federal and state income tax
purposes, in an amount equal to the amount by which the fair market value of the
Shares, determined as of the date of exercise, exceeds the Exercise Price. The
acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate
with Company in establishing the amount of such income and corresponding
deduction to the Company for its income tax purposes. Withholding for federal or
state income and employment tax purposes will be made, if and as required by
law, from Optionee's then current compensation, or, if such current compensation
is insufficient to satisfy withholding tax liability, the Company may require
Optionee to make a cash payment to cover such liability as a condition of the
exercise of this Option.

    

    12.  Modification, Extension and
Renewal of Options.  The Board or Committee, as described in
the Plan, may modify, extend or renew this Option or accept the surrender
thereof (to the extent not theretofore exercised) and authorize the granting of
a new option in substitution therefore (to the extent not theretofore
exercised), subject at all times to the Plan, the Code and the North Carolina
Securities Rules.  Notwithstanding the foregoing provisions of this
Section 12, no modification shall, without the consent of the Optionee, alter to
the Optionee's detriment or impair any rights of Optionee
hereunder.

    

    13.  Investment Intent;
Restrictions on Transfer.

    

    
      (a)  Optionee
represents and agrees that if Optionee exercises this Option in whole or in
part, Optionee will in each case acquire the Shares upon such exercise for the
purpose of investment and not with a view to, or for resale in connection with,
any distribution thereof; and that upon such exercise of this Option in whole or
in part, Optionee (or any person or persons entitled to exercise this Option
under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a
written statement to such effect, satisfactory to the Company in form and
substance. If the Shares represented by this Option are registered under the
Securities Act, either before or after the exercise of this Option in whole or
in part, the Optionee shall be relieved of the foregoing investment
representation and agreement and shall not be required to furnish the Company
with the foregoing written statement.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      (b)  Optionee
further represents that Optionee has had access to the financial statements or
books and records of the Company, has had the opportunity to ask questions of
the Company concerning its business, operations and financial condition, and to
obtain additional information reasonably necessary to verify the accuracy of
such information

    

    

    
      (c)
Unless and until the Shares represented by this Option are registered under the
Securities Act, all certificates representing the Shares and any certificates
subsequently issued in substitution therefor and any certificate for any
securities issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in substantially the
following form:

    

    

    
      THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES
ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF
ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS
PURSUANT TO EXEMPTIONS THEREFROM.

    

    

    
      THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN
NONSTATUTORY STOCK OPTION AGREEMENT DATED ____________ BETWEEN THE COMPANY AND
THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO
REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.

    

    

    and/or
such other legend or legends as the Company and its counsel deem necessary or
appropriate. Appropriate stop transfer instructions with respect to the Shares
have been placed with the Company's transfer agent.

    

    14.  Stand-off
Agreement.  Optionee agrees that, in connection with any
registration of the Company's securities under the Securities Act, and upon the
request of the Company or any underwriter managing an underwritten offering of
the Company's securities, Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any of the Shares (other than
Shares included in the offering) without the prior written consent of the
Company or such managing underwriter, as applicable, for a period of at least
one year following the effective date of registration of such
offering.

    

    15.  Restriction Upon
Transfer.  The Shares may not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated by the Optionee
except as hereinafter provided.

    

    
      (a)  Repurchase Right on
Termination Other Than by Removal.  For the purposes of this
Section, a "Repurchase
Event" shall mean an occurrence of one of (i) termination of Optionee's
service as a director; (ii) death of Optionee; (iii) bankruptcy of Optionee,
which shall be deemed to have occurred as of the date on which a voluntary or
involuntary petition in bankruptcy is filed with a court of competent
jurisdiction; (iv) dissolution of the marriage of Optionee, to the extent that
any of the Shares are allocated as the sole and separate property of Optionee's
spouse pursuant thereto (in which case, this Section shall only apply to the
Shares so affected); or (v) any attempted transfer by the Optionee of Shares, or
any interest therein, in violation of this Agreement. Upon the occurrence of a
Repurchase Event, and upon mutual agreement of the Company and Optionee, the
Company may repurchase all or any portion of the Shares of Optionee at a price
equal to the fair value of the Shares as of the date of the Repurchase
Event.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      (b)  Repurchase Right on
Removal.  In the event Optionee is removed as a director
pursuant to the North Carolina Business Corporation Act, or Optionee voluntarily
resigns as a director prior to the date upon which the last installment of
Shares becomes exercisable pursuant to Section 5, then the Company shall have
the right (but not an obligation) to repurchase Shares of Optionee at a price
equal to the Exercise Price. Such right of the Company to repurchase Shares
shall apply to 100% of the Shares for one (1) year from the date of this
Agreement; and shall thereafter lapse ratably in equal annual increments on each
anniversary of the date of this Agreement over the term of this Option specified
in Section 4. In addition, the Company shall have the right, in the sole
discretion of the Board and without obligation, to repurchase upon removal or
resignation all or any portion of the Shares of Optionee, at a price equal to
the fair value of the Shares as of the date of such removal or resignation,
which right is not subject to the foregoing lapsing of rights. In the event the
Company elects to repurchase the Shares, the stock certificates representing the
same shall forthwith be returned to the Company for
cancellation.

    

    

    
      (c)  Exercise of Repurchase
Right.  Any Repurchase Right under Paragraphs 15(a) or 15(b)
shall be exercised by giving notice of exercise as provided herein to Optionee
or the estate of Optionee, as applicable. Such right shall be exercised, and the
repurchase price thereunder shall be paid, by the Company within a ninety (90)
day period beginning on the date of notice to the Company of the occurrence of
such Repurchase Event (except in the case of termination or cessation of
services as director, where such option period shall begin upon the occurrence
of the Repurchase Event). Such repurchase price shall be payable only in the
form of cash (including a check drafted on immediately available funds) or
cancellation of purchase money indebtedness of the Optionee for the Shares. If
the Company can not purchase all such Shares because it is unable to meet the
financial tests set forth in the North Carolina corporation law, the Company
shall have the right to purchase as many Shares as it is permitted to purchase
under such sections. Any Shares not purchased by the Company hereunder shall no
longer be subject to the provisions of this Section 15.

    

    

    
      (d)  Right
of First Refusal. In the event Optionee desires to transfer any Shares during
his or her lifetime, Optionee shall first offer to sell such Shares to the
Company. Optionee shall deliver to the Company written notice of the intended
sale, such notice to specify the number of Shares to be sold, the proposed
purchase price and terms of payment, and grant the Company an option for a
period of thirty days following receipt of such notice to purchase the offered
Shares upon the same terms and conditions. To exercise such option, the Company
shall give notice of that fact to Optionee within the thirty (30) day notice
period and agree to pay the purchase price in the manner provided in the notice.
If the Company does not purchase all of the Shares so offered during foregoing
option period, Optionee shall be under no obligation to sell any of the offered
Shares to the Company, but may dispose of such Shares in any lawful manner
during a period of one hundred and eighty (180) days following the end of such
notice period, except that Optionee shall not sell any such Shares to any other
person at a lower price or upon more favorable terms than those offered to the
Company.

    

    

    
      (e)  Acceptance
of Restrictions. Acceptance of the Shares shall constitute the Optionee's
agreement to such restrictions and the legending of his certificates with
respect thereto. Notwithstanding such restrictions, however, so long as the
Optionee is the holder of the Shares, or any portion thereof, he shall be
entitled to receive all dividends declared on and to vote the Shares and to all
other rights of a shareholder with respect thereto.

    

    

    
      (f)  Permitted
Transfers. Notwithstanding any provisions in this Section 15 to the contrary,
the Optionee may transfer Shares subject to this Agreement to his or her
parents, spouse, children, or grandchildren, or a trust for the benefit of the
Optionee or any such transferee(s); provided, that such permitted transferee(s)
shall hold the Shares subject to all the provisions of this Agreement (all
references to the Optionee herein shall in such cases refer mutatis mutandis to
the permitted transferee, except in the case of clause (iv) of Section 15(a)
wherein the permitted transfer shall be deemed to be rescinded); and provided
further, that notwithstanding any other provisions in this Agreement, a
permitted transferee may not, in turn, make permitted transfers without the
written consent of the Optionee and the Company.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      (g)  Release
of Restrictions on Shares. All other restrictions under this Section 15 shall
terminate ____ (__) years following the date of this Agreement, or when the
Company's securities are publicly traded, whichever occurs
earlier.

    

    

    16.  Notices.  Any
notice required to be given pursuant to this Option or the Plan shall be in
writing and shall be deemed to be delivered upon receipt or, in the case of
notices by the Company, five (5) days after deposit in the U.S. mail, postage
prepaid, addressed to Optionee at the address last provided by Optionee for use
in Company records related to Optionee.

    

    17.  Agreement Subject to Plan;
Applicable Law.  This Option is made pursuant to the Plan and
shall be interpreted to comply therewith. A copy of such Plan is available to
Optionee, at no charge, at the principal office of the Company. Any provision of
this Option inconsistent with the Plan shall be considered void and replaced
with the applicable provision of the Plan. This Option has been granted,
executed and delivered in the State of North Carolina, and the interpretation
and enforcement shall be governed by the laws thereof and subject to the
exclusive jurisdiction of the courts therein.

    

    [SIGNATURE
PAGE TO FOLLOW]

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

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

    

    
      
        	
                COMPANY:

              	
                CHINA
      EDUCATION ALLIANCE, INC.

              
	 
      	
                a
      North Carolina corporation

              

      

    

    

    
      
        
          	
                  By:

                	 
	 
      	
                  Name:
      Xiqun Yu

                
	 
      	
                  Title:   Chief
      Executive Officer

                

        

      

    

     

    
      
        
          	
                  OPTIONEE:

                	 
      

        

      

      

      
        
          
            
              	

                      By:

                    	
                       

                    
	 
      	
                      (signature)

                    
	

                      Name:

                    	
                       

                    

            

          

        

      

       

      (one of the following, as appropriate,
shall be signed)

    

    

    
      
        	
                I
      certify that as of the date hereof I am unmarried

              	 
      	
                By
      his or her signature, the spouse of Optionee hereby agrees to be bound by
      the provisions of the foregoing INCENTIVE STOCK OPTION
      AGREEMENT

              
	 
      	 
      	 
      
	
                Optionee

              	 
      	
                Spouse
      of Optionee

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Appendix
A

    

    NOTICE OF
EXERCISE

    

    CHINA
EDUCATION ALLIANCE, INC.

    

                   Re:
Nonstatutory Stock Option

    

    Notice is hereby given pursuant to
Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the
number of shares set forth below at the exercise price set forth in my option
agreement:

    

    Nonstatutory Stock Option Agreement
dated: ____________

    

    Number of shares being purchased:
____________

    

    Exercise Price:
$____________

    

    A check in the amount of the aggregate
price of the shares being purchased is attached.

    

    I hereby confirm that such shares are
being acquired by me for my own account for investment purposes, and not with a
view to, or for resale in connection with, any distribution thereof. I will not
sell or dispose of my Shares in violation of the Securities Act of 1933, as
amended, or any applicable federal or state securities laws. Further, I
understand that the exemption from taxable income at the time of exercise is
dependent upon my holding such stock for a period of at least one year from the
date of exercise and two years from the date of grant of the
Option.

    

    I understand that the certificate
representing the Option Shares will bear a restrictive legend within the
contemplation of the Securities Act and as required by such other state or
federal law or regulation applicable to the issuance or delivery of the Option
Shares.

    

    I agree to provide to the Company such
additional documents or information as may be required pursuant to the Company's
2009 Incentive Stock Plan.

    

    
      
        
          
            	
                    By:

                  	 
      
	 
      	
                    (signature)

                  
	
                    Name:

                  	 
      

          

        

      

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    EXHIBIT
B-3

     

    CHINA
EDUCATION ALLIANCE, INC.

    CONSULTANT
NONSTATUTORY STOCK OPTION AGREEMENT

    
      
        
          	
                   

                

        

      

    

     

    This
Consultant Nonstatutory Stock Option Agreement ("Agreement") is made and
entered into as of the date set forth below, by and between China Education
Alliance, Inc., a North Carolina corporation (the "Company"), and the following
consultant to the Company (herein, the "Optionee"):

    

    In consideration of the covenants
herein set forth, the parties hereto agree as follows:

    

    1.  Option
Information.

    

    
      
        
          
            
              
                
                  
                    
                      	
                              (a)

                            	
                              Date
      of Option:

                            	 
      
	 
      	 
      	 
      
	
                              (b)

                            	
                              Optionee:

                            	 
      
	 
      	 
      	 
      
	
                              (c)

                            	
                              Number
      of Shares:

                            	 
      
	 
      	 
      	 
      
	
                              (d)

                            	
                              Exercise
      Price:

                            	 
      

                    

                  

                

              

            

          

        

      

    

    

    2.  Acknowledgements.

    

    
      (a)  Optionee
is an independent consultant to the Company, not an employee;

    

    

    
      (b)  The
Board of Directors (the "Board" which term shall
include an authorized committee of the Board of Directors) and shareholders of
the Company have heretofore adopted a 2009 Incentive Stock Plan (the "Plan"), pursuant to which this
Option is being granted; and

    

    

    
      (c)  The
Board has authorized the granting to Optionee of a nonstatutory stock option
("Option") to purchase
shares of common stock of the Company ("Stock") upon the terms and
conditions hereinafter stated and pursuant to an exemption from registration
under the Securities Act of 1933, as amended (the "Securities Act") provided by
Section 4(2) thereunder.

    

    

    3.  Shares;
Price.  The Company hereby grants to Optionee the right to
purchase, upon and subject to the terms and conditions herein stated, the number
of shares of Stock set forth in Section 1(c) above (the "Shares") for cash (or other
consideration as is authorized under the Plan and acceptable to the Board, in
their sole and absolute discretion) at the price per Share set forth in Section
1(d) above (the "Exercise
Price"), such price being not less than eighty-five 85% of the fair
market value per share of the Shares covered by this Option as of the date
hereof.

    

    4.  Term of
Option.  This Option shall expire, and all rights hereunder to
purchase the Shares, shall terminate ____ (___) years from the date hereof.
Nothing contained herein shall be construed to interfere in any way with the
right of the Company to terminate Optionee as a consultant to the Company, or to
increase or decrease the compensation paid to Optionee from the rate in effect
as of the date hereof.

    

    5.  Vesting of Option.
Subject to the provisions of Sections 7 and 8 hereof, this Option shall become
exercisable during the term of Optionee's employment in ______ equal annual
installments of _______ percent of the Shares covered by this Option, the first
installment to be exercisable on _______ anniversary of the date of this Option
(the "Initial Vesting Date"), with an additional _____ percent of such Shares
becoming exercisable on each of the successive periods following the Initial
Vesting Date. The installments shall be cumulative (i.e., this option may be
exercised, as to any or all Shares covered by an installment, at any time or
times after an installment becomes exercisable and until expiration or
termination of this option).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    6.  Exercise.  This
Option shall be exercised by delivery to the Company of (a) written notice of
exercise stating the number of Shares being purchased (in whole shares only) and
such other information set forth on the form of Notice of Exercise attached
hereto as Appendix
A, (b) a check or cash in the amount of the Exercise Price of the Shares
covered by the notice (or such other consideration as has been approved by the
Board of Directors consistent with the Plan) and (c) a written investment
representation as provided for in Section 13 hereof. This Option shall not be
assignable or transferable, except by will or by the laws of descent and
distribution, and shall be exercisable only by Optionee during his or her
lifetime.

    

    7.  Termination of
Service.  If Optionee's service as a consultant to the Company
terminates for any reason, no further installments shall vest pursuant to
Section 5, and Optionee shall have the right at any time within thirty (30) days
following such termination of services or the remaining term of this Option,
whichever is the lesser, to exercise in whole or in part this Option to the
extent, but only to the extent, that this Option was exercisable as of the date
Optionee ceased to be a consultant to the Company; provided, however, if
Optionee is terminated for reasons that would justify a termination of
employment "for cause,"
as that term is defined by the terms of the Plan or this Option Agreement or by
any employment agreement between the Optionee and the Company, the foregoing
right to exercise shall automatically terminate on the date Optionee ceases to
be a consultant to the Company as to all Shares covered by this Option not
exercised prior to termination. Unless earlier terminated, all rights under this
Option shall terminate in any event on the expiration date of this Option as
defined in Section 4 hereof.

    

    8.  Death of
Optionee.  If the Optionee shall die while serving as a
consultant to the Company, Optionee's personal representative or the person
entitled to Optionee's rights hereunder may at any time within ninety (90) days
after the date of Optionee's death, or during the remaining term of this Option,
whichever is the lesser, exercise this Option and purchase Shares to the extent,
but only to the extent, that Optionee could have exercised this Option as of the
date of Optionee's death; provided, in any case, that this Option may be so
exercised only to the extent that this Option has not previously been exercised
by Optionee.

    

    9.  No Rights as
Shareholder.  Optionee shall have no rights as a shareholder
with respect to the Shares covered by any installment of this Option until the
effective date of the issuance of shares following exercise of this to Option,
and no adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock certificate or certificates are
issued except as provided in Section 10 hereof.

    

    10.  Recapitalization.  Subject
to any required action by the shareholders of the Company, the number of Shares
covered by this Option, and the Exercise Price thereof, shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting
from a subdivision or consolidation of shares or the payment of a stock
dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company; provided however that
the conversion of any convertible securities of the Company shall not be deemed
having been "effected without receipt of consideration by the
Company."

    

    In the event of a proposed dissolution
or liquidation of the Company, a merger or consolidation in which the Company is
not the surviving entity, or a sale of all or substantially all of the assets or
capital stock of the Company (collectively, a "Reorganization"), this Option
shall terminate immediately prior to the consummation of such proposed action,
unless otherwise provided by the Board; provided, however, if Optionee shall be
a consultant at the time such Reorganization is approved by the stockholders,
Optionee shall have the right to exercise this Option as to all or any part of
the Shares, without regard to the installment provisions of Section 5, for a
period beginning 30 days prior to the consummation of such Reorganization and
ending as of the Reorganization or the expiration of this Option, whichever is
earlier, subject to the consummation of the Reorganization. In any event, the
Company shall notify Optionee, at least 30 days prior to the consummation of
such Reorganization, of his exercise rights, if any, and that the Option shall
terminate upon the consummation of the Reorganization.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Subject to any required action by the
shareholders of the Company, if the Company shall be the surviving entity in any
merger or consolidation, this Option thereafter shall pertain to and apply to
the securities to which a holder of Shares equal to the Shares subject to this
Option would have been entitled by reason of such merger or consolidation, and
the installment provisions of Section 5 shall continue to apply.

    

    In the event of a change in the shares
of the Company as presently constituted, which is limited to a change of all of
its authorized Stock without par value into the same number of shares of Stock
with a par value, the shares resulting from any such change shall be deemed to
be the Shares within the meaning of this Option.

    

    To the extent that the foregoing
adjustments relate to shares or securities of the Company, such adjustments
shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as hereinbefore expressly provided, Optionee
shall have no rights by reason of any subdivision or consolidation of shares of
Stock of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, and the number and price
of Shares subject to this Option shall not be affected by, and no adjustments
shall be made by reason of, any dissolution, liquidation, merger, consolidation
or sale of assets or capital stock, or any issue by the Company of shares of
stock of any class or securities convertible into shares of stock of any
class.

    

    The grant of this Option shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve or liquidate or to sell or transfer
all or any part of its business or assets.

    

    11.  Taxation upon Exercise of
Option.  Optionee understands that, upon exercise of this
Option, Optionee will recognize income, for Federal and state income tax
purposes, in an amount equal to the amount by which the fair market value of the
Shares, determined as of the date of exercise, exceeds the Exercise Price. The
acceptance of the Shares by Optionee shall constitute an agreement by Optionee
to report such income in accordance with then applicable law and to cooperate
with Company in establishing the amount of such income and corresponding
deduction to the Company for its income tax purposes. Withholding for federal or
state income and employment tax purposes will be made, if and as required by
law, from Optionee's then current compensation, or, if such current compensation
is insufficient to satisfy withholding tax liability, the Company may require
Optionee to make a cash payment to cover such liability as a condition of the
exercise of this Option.

    

    12.  Modification, Extension and
Renewal of Options.  The Board or Committee, as described in
the Plan, may modify, extend or renew this Option or accept the surrender
thereof (to the extent not theretofore exercised) and authorize the granting of
a new option in substitution therefore (to the extent not theretofore
exercised), subject at all times to the Plan, the Code. Notwithstanding the
foregoing provisions of this Section 12, no modification shall, without the
consent of the Optionee, alter to the Optionee's detriment or impair any rights
of Optionee hereunder.

    

    13.  Investment Intent;
Restrictions on Transfer.

    

    
      (a)  Optionee
represents and agrees that if Optionee exercises this Option in whole or in
part, Optionee will in each case acquire the Shares upon such exercise for the
purpose of investment and not with a view to, or for resale in connection with,
any distribution thereof; and that upon such exercise of this Option in whole or
in part, Optionee (or any person or persons entitled to exercise this Option
under the provisions of Sections 7 and 8 hereof) shall furnish to the Company a
written statement to such effect, satisfactory to the Company in form and
substance. If the Shares represented by this Option are registered under the
Securities Act, either before or after the exercise of this Option in whole or
in part, the Optionee shall be relieved of the foregoing investment
representation and agreement and shall not be required to furnish the Company
with the foregoing written statement.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    
      (b)  Optionee
further represents that Optionee has had access to the financial statements or
books and records of the Company, has had the opportunity to ask questions of
the Company concerning its business, operations and financial condition, and to
obtain additional information reasonably necessary to verify the accuracy of
such information.

    

    

    
      (c)  Unless
and until the Shares represented by this Option are registered under the
Securities Act, all certificates representing the Shares and any certificates
subsequently issued in substitution therefor and any certificate for any
securities issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in substantially the
following form:

    

    

    
      THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE SECURITIES
ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR SECURITIES LAWS OF
ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
UNDER THE SECURITIES ACT OR ANY APPLICABLE SECURITIES LAWS OF ANY STATE, UNLESS
PURSUANT TO EXEMPTIONS THEREFROM.

    

    

    
      THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT CERTAIN
NONSTATUTORY STOCK OPTION AGREEMENT DATED ___________ BETWEEN THE COMPANY AND
THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT TO
REPURCHASE BY THE COMPANY UNDER CERTAIN CONDITIONS.

    

    

    and/or
such other legend or legends as the Company and its counsel deem necessary or
appropriate. Appropriate stop transfer instructions with respect to the Shares
have been placed with the Company's transfer agent.

    

    14.  Stand-off
Agreement.  Optionee agrees that, in connection with any
registration of the Company's securities under the Securities Act, and upon the
request of the Company or any underwriter managing an underwritten offering of
the Company's securities, Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any of the Shares (other than
Shares included in the offering) without the prior written consent of the
Company or such managing underwriter, as applicable, for a period of up to one
year following the effective date of registration of such offering.

    

    15.  Restriction Upon
Transfer.  The Shares may not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated by the Optionee
except as hereinafter provided.

    

    
      (a)  Repurchase Right on
Termination Other Than for Cause.  For the purposes of this
Section, a "Repurchase
Event" shall mean an occurrence of one of (i) termination of Optionee's
service as a consultant, voluntary or involuntary and with or without cause;
(ii) retirement or death of Optionee; (iii) bankruptcy of Optionee, which shall
be deemed to have occurred as of the date on which a voluntary or involuntary
petition in bankruptcy is filed with a court of competent jurisdiction; (iv)
dissolution of the marriage of Optionee, to the extent that any of the Shares
are allocated as the sole and separate property of Optionee's spouse pursuant
thereto (in which case, this Section shall only apply to the Shares so
affected); or (v) any attempted transfer by the Optionee of Shares, or any
interest therein, in violation of this Agreement. Upon the occurrence of a
Repurchase Event, the Company shall have the right (but not an obligation) to
repurchase all or any portion of the Shares of Optionee at a price equal to the
fair value of the Shares as of the date of the Repurchase
Event.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    
      (b)  Repurchase Right on
Termination for Cause.  In the event Optionee's service as a
consultant is terminated by the Company "for cause" (as contemplated by Section
7), then the Company shall have the right (but not an obligation) to repurchase
Shares of Optionee at a price equal to the Exercise Price. Such right of the
Company to repurchase Shares shall apply to 100% of the Shares for one (1) year
from the date of this Agreement; and shall thereafter lapse ratably in equal
annual increments on each anniversary of the date of this Agreement over the
term of this Option specified in Section 4. In addition, the Company shall have
the right, in the sole discretion of the Board and without obligation, to
repurchase upon any such termination of service for cause all or any portion of
the Shares of Optionee, at a price equal to the fair value of the Shares as of
the date of termination, which right is not subject to the foregoing lapsing of
rights. In the event the Company elects to repurchase the Shares, the stock
certificates representing the same shall forthwith be returned to the Company
for cancellation.

    

    

    
      (c)  Exercise of Repurchase
Right.  Any repurchase right under Paragraphs 15(a) or 15(b)
shall be exercised by giving notice of exercise as provided herein to Optionee
or the estate of Optionee, as applicable. Such right shall be exercised, and the
repurchase price thereunder shall be paid, by the Company within a ninety (90)
day period beginning on the date of notice to the Company of the occurrence of
such Repurchase Event (except in the case of termination of employment or
retirement, where such option period shall begin upon the occurrence of the
Repurchase Event). Such repurchase price shall be payable only in the form of
cash (including a check drafted on immediately available funds) or cancellation
of purchase money indebtedness of the Optionee for the Shares. If the Company
can not purchase all such Shares because it is unable to meet the financial
tests set forth in the North Carolina and/or North Carolina corporation law, the
Company shall have the right to purchase as many Shares as it is permitted to
purchase under such sections. Any Shares not purchased by the Company hereunder
shall no longer be subject to the provisions of this Section
15.

    

    

    
      (d)  Right of First
Refusal.  In the event Optionee desires to transfer any Shares
during his or her lifetime, Optionee shall first offer to sell such Shares to
the Company. Optionee shall deliver to the Company written notice of the
intended sale, such notice to specify the number of Shares to be sold, the
proposed purchase price and terms of payment, and grant the Company an option
for a period of thirty days following receipt of such notice to purchase the
offered Shares upon the same terms and conditions. To exercise such option, the
Company shall give notice of that fact to Optionee within the thirty (30) day
notice period and agree to pay the purchase price in the manner provided in the
notice. If the Company does not purchase all of the Shares so offered during
foregoing option period, Optionee shall be under no obligation to sell any of
the offered Shares to the Company, but may dispose of such Shares in any lawful
manner during a period of one hundred and eighty (180) days following the end of
such notice period, except that Optionee shall not sell any such Shares to any
other person at a lower price or upon more favorable terms than those offered to
the Company.

    

    

    
      (e)  Acceptance of
Restrictions.  Acceptance of the Shares shall constitute the
Optionee's agreement to such restrictions and the legending of his certificates
with respect thereto. Notwithstanding such restrictions, however, so long as the
Optionee is the holder of the Shares, or any portion thereof, he shall be
entitled to receive all dividends declared on and to vote the Shares and to all
other rights of a shareholder with respect thereto.

    

    

    
      (f)  Permitted
Transfers.  Notwithstanding any provisions in this Section 15
to the contrary, the Optionee may transfer Shares subject to this Agreement to
his or her parents, spouse, children, or grandchildren, or a trust for the
benefit of the Optionee or any such transferee(s); provided, that such permitted
transferee(s) shall hold the Shares subject to all the provisions of this
Agreement (all references to the Optionee herein shall in such cases refer
mutatis mutandis to the permitted transferee, except in the case of clause (iv)
of Section 15(a) wherein the permitted transfer shall be deemed to be
rescinded); and provided further, that notwithstanding any other provisions in
this Agreement, a permitted transferee may not, in turn, make permitted
transfers without the written consent of the Optionee and the
Company.

    

    

    
      (g)  Release of Restrictions on
Shares.  All rights and restrictions under this Section 15
shall terminate ___(_) years following the date of this Agreement, or when the
Company's securities are publicly traded, whichever occurs
earlier.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    16.  Notices.  Any
notice required to be given pursuant to this Option or the Plan shall be in
writing and shall be deemed to be delivered upon receipt or, in the case of
notices by the Company, five (5) days after deposit in the U.S. mail, postage
prepaid, addressed to Optionee at the address last provided by Optionee for use
in Company records related to Optionee.

    

    17.  Agreement Subject to Plan;
Applicable Law.  This Option is made pursuant to the Plan and
shall be interpreted to comply therewith. A copy of such Plan is available to
Optionee, at no charge, at the principal office of the Company. Any provision of
this Option inconsistent with the Plan shall be considered void and replaced
with the applicable provision of the Plan. This Option has been granted,
executed and delivered in the State of North Carolina, and the interpretation
and enforcement shall be governed by the laws thereof and subject to the
exclusive jurisdiction of the courts therein.

    

    [SIGNATURE
PAGE TO FOLLOW]

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    In Witness
Whereof, the parties hereto have executed this Option as of the date
first above written.

    

    
      
        	
                COMPANY:

              	
                CHINA
      EDUCATION ALLIANCE, INC.

              
	 
      	
                a
      North Carolina corporation

              

      

    

    

    
      
        
          	
                  By:

                	 
      
	 
      	
                  Name:
      Xiqun Yu

                
	 
      	
                  Title:   Chief
      Executive Officer

                

        

      

    

    

    
      
        	
                OPTIONEE:

              	 
      

      

    

    

    
      
        
          
            	By:	
                     

                  
	 
      	
                    (signature)

                  
	 Name:	
                     

                  

          

        

      

    

     

    (one of the following, as appropriate,
shall be signed)

    

    
      
        	
                I
      certify that as of the date hereof I am unmarried

              	 
      	
                By
      his or her signature, the spouse of Optionee hereby agrees to be bound by
      the provisions of the foregoing INCENTIVE STOCK OPTION
      AGREEMENT

              
	 
      	 
      	 
      
	
                Optionee

              	 
      	
                Spouse
      of Optionee

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Appendix
A

    

    NOTICE OF
EXERCISE

    

    CHINA
EDUCATION ALLIANCE, INC.

    

    

    Re:  Nonstatutory Stock
Option

    

    Notice is hereby given pursuant to
Section 6 of my Nonstatutory Stock Option Agreement that I elect to purchase the
number of shares set forth below at the exercise price set forth in my option
agreement:

    

    Nonstatutory Stock Option Agreement
dated: ____________

    

    Number of shares being purchased:
____________

    

    Exercise Price:
$____________

    

    A check in the amount of the aggregate
price of the shares being purchased is attached.

    

    I hereby confirm that such shares are
being acquired by me for my own account for investment purposes, and not with a
view to, or for resale in connection with, any distribution thereof. I will not
sell or dispose of my Shares in violation of the Securities Act of 1933, as
amended, or any applicable federal or state securities laws. Further, I
understand that the exemption from taxable income at the time of exercise is
dependent upon my holding such stock for a period of at least one year from the
date of exercise and two years from the date of grant of the
Option.

    

    I understand that the certificate
representing the Option Shares will bear a restrictive legend within the
contemplation of the Securities Act and as required by such other state or
federal law or regulation applicable to the issuance or delivery of the Option
Shares.

    

    I agree to provide to the Company such
additional documents or information as may be required pursuant to the Company's
2009 Incentive Stock Plan.

    

    
      
        
          
            	
                    By:

                  	 
      
	 
      	
                    (signature)

                  
	
                    Name:

                  	 
      

          

        

      

    

     

    Appendix A

    
      
         

      

      
         

        
          

        

      

      
         

      

    

EXHIBIT
C

    

    CHINA
EDUCATION ALLIANCE, INC.

    STOCK
AWARD AGREEMENT

    
       

    

    This Stock
Award Agreement ("Agreement") is made and
entered into as of the date set forth below, by and between CHINA EDUCATION
ALLIANCE, INC., a North Carolina corporation (the "Company"), and the employee,
director or consultant of the Company named in Section 1(b). ("Grantee"):

    

    In consideration of the covenants
herein set forth, the parties hereto agree as follows:

    

    1.  Stock Award
Information.

    

    
      
        
          
            
              
                
                  
                    
                      	
                              (a)

                            	
                              Date
      of Award:

                            	 
      	 
      
	 
      	 
      	 
      	 
      
	
                              (b)

                            	
                              Grantee:

                            	 
      	 
      
	 
      	 
      	 
      	 
      
	
                              (c)

                            	
                              Number
      of Shares:

                            	 
      	 
      
	 
      	 
      	 
      	 
      
	
                              (d)

                            	
                              Original
      Value:

                            	 
      	 
      

                    

                  

                

              

            

          

        

      

    

    

    
      2.
Acknowledgements.

    

    

    
      (a)
Grantee
is an employee/director/consultant
of the Company.

    

    

    
      (b)  The
Company has adopted a 2009 Incentive Stock Plan (the "Plan") under which the
Company's common stock ("Stock") may be offered to
directors, officers, employees and consultants pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the "Securities Act") provided by
Section 4(2) thereunder.

    

    

    3.  Shares;
Value.  The Company hereby grants to Grantee, upon and subject
to the terms and conditions herein stated, the number of shares of Stock set
forth in Section 1(c) (the "Shares"), which Shares have a
fair value per share ("Original
Value") equal to the amount set forth in Section 1(d). For the purpose of
this Agreement, the terms "Share" or "Shares" shall include the
original Shares plus any shares derived therefrom, regardless of the fact that
the number, attributes or par value of such Shares may have been altered by
reason of any recapitalization, subdivision, consolidation, stock dividend or
amendment of the corporate charter of the Company. The number of Shares covered
by this Agreement and the Original Value thereof shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting
from a recapitalization, subdivision or consolidation of shares or the payment
of a stock dividend, or any other increase or decrease in the number of such
shares effected without receipt of consideration by the Company.

    

    4.  Investment
Intent.  Grantee represents and agrees that Grantee is
accepting the Shares for the purpose of investment and not with a view to, or
for resale in connection with, any distribution thereof; and that, if requested,
Grantee shall furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. If the Shares are registered
under the Securities Act, Grantee shall be relieved of the foregoing investment
representation and agreement and shall not be required to furnish the Company
with the foregoing written statement.

    

    5.  Restriction upon
Transfer.  The Shares may not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated by the Grantee
except as hereinafter provided.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (a)  Repurchase Right on
      Termination Other Than for Cause.  For the purposes of
      this Section, a "Repurchase Event" shall
      mean an occurrence of one of (i) termination of Grantee's employment or service as a
      director/consultant by the Company, voluntary or involuntary and
      with or without cause; (ii) retirement or death of Grantee; (iii)
      bankruptcy of Grantee, which shall be deemed to have occurred as of the
      date on which a voluntary or involuntary petition in bankruptcy is filed
      with a court of competent jurisdiction; (iv) dissolution of the marriage
      of Grantee, to the extent that any of the Shares are allocated as the sole
      and separate property of Grantee's spouse pursuant thereto (in which case,
      this Section shall only apply to the Shares so affected); or (v) any
      attempted transfer by the Grantee of Shares, or any interest therein, in
      violation of this Agreement. Upon the occurrence of a Repurchase Event,
      the Company shall have the right (but not an
      obligation) to purchase all or any portion of the Shares of Grantee, at a
      price equal to the fair value of the Shares as of the date of the
      Repurchase Event.

            

    

    

    
      	
               
      

            	
              (b)  Repurchase Right on
      Termination for Cause. In the event Grantee's employment or service as a
      director/consultant is terminated by the Company "for cause" (as defined
      below), then the Company shall have the right (but not an obligation) to
      purchase Shares of Grantee at a price equal to the Original Value. Such
      right of the Company to purchase Shares shall apply to 100% of the Shares
      for one (1) year from the date of this Agreement; and shall thereafter
      lapse at the rate of twenty percent (20%) of the Shares on each
      anniversary of the date of this Agreement. In addition, the Company shall
      have the right, in the sole discretion of the Board and without
      obligation, to repurchase upon termination for cause all or any portion of
      the Shares of Grantee, at a price equal to the fair value of the Shares as
      of the date of termination, which right is not subject to the foregoing
      lapsing of rights. Termination of employment or service as a
      director/consultant "for cause" means (i) as
      to employees or consultants, termination for cause as defined in the Plan,
      this Agreement or in any employment or consulting agreement
      between the Company and Grantee, or (ii) as to directors, removal pursuant
      to the North Carolina corporation law. In the event the Company elects to
      purchase the Shares, the stock certificates representing the same shall
      forthwith be returned to the Company for
  cancellation.

            

    

    

    
      	
               
      

            	
              (c)  Exercise of Repurchase
      Right.  Any Repurchase Right under Paragraphs 4(a) or
      4(b) shall be exercised by giving notice of exercise as provided herein to
      Grantee or the estate of Grantee, as applicable. Such right shall be
      exercised, and the repurchase price thereunder shall be paid, by the
      Company within a ninety (90) day period beginning on the date of notice to
      the Company of the occurrence of such Repurchase Event (except in the case
      of termination or cessation of services as director, where such option
      period shall begin upon the occurrence of the Repurchase Event). Such
      repurchase price shall be payable only in the form of cash (including a
      check drafted on immediately available funds) or cancellation of purchase
      money indebtedness of the Grantee for the Shares. If the Company can not
      purchase all such Shares because it is unable to meet the financial tests
      set forth in the North Carolina corporation law, the Company shall have
      the right to purchase as many Shares as it is permitted to purchase under
      such sections. Any Shares not purchased by the Company hereunder shall no
      longer be subject to the provisions of this Section
  5.

            

    

    

    
      	
               
      

            	
              (d)  Right of First
      Refusal.  In the event Grantee desires to transfer any
      Shares during his or her lifetime, Grantee shall first offer to sell such
      Shares to the Company. Grantee shall deliver to the Company written notice
      of the intended sale, such notice to specify the number of Shares to be
      sold, the proposed purchase price and terms of payment, and grant the
      Company an option for a period of thirty days following receipt of such
      notice to purchase the offered Shares upon the same terms and conditions.
      To exercise such option, the Company shall give notice of that fact to
      Grantee within the thirty (30) day notice period and agree to pay the
      purchase price in the manner provided in the notice. If the Company does
      not purchase all of the Shares so offered during foregoing option period,
      Grantee shall be under no obligation to sell any of the offered Shares to
      the Company, but may dispose of such Shares in any lawful manner during a
      period of one hundred and eighty (180) days following the end of such
      notice period, except that Grantee shall not sell any such Shares to any
      other person at a lower price or upon more favorable terms than those
      offered to the Company.

            

    

    

    
      	
               
      

            	
              (e)  Acceptance of
      Restrictions.  Acceptance of the Shares shall constitute
      the Grantee's agreement to such restrictions and the legending of his
      certificates with respect thereto. Notwithstanding such restrictions,
      however, so long as the Grantee is the holder of the Shares, or any
      portion thereof, he shall be entitled to receive all dividends declared on
      and to vote the Shares and to all other rights of a shareholder with
      respect thereto.

            

    

     

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

       

    

    
      	
               
      

            	
              (f)  Permitted
      Transfers.  Notwithstanding any provisions in this
      Section 5 to the contrary, the Grantee may transfer Shares subject to this
      Agreement to his or her parents, spouse, children, or grandchildren, or a
      trust for the benefit of the Grantee or any such transferee(s); provided,
      that such permitted transferee(s) shall hold the Shares subject to all the
      provisions of this Agreement (all references to the Grantee herein shall
      in such cases refer mutatis mutandis to the permitted transferee, except
      in the case of clause (iv) of Section 5(a) wherein the permitted transfer
      shall be deemed to be rescinded); and provided further, that
      notwithstanding any other provisions in this Agreement, a permitted
      transferee may not, in turn, make permitted transfers without the written
      consent of the Grantee and the
Company.

            

    

    

    6.  Representations and
Warranties of the Grantee.  This Agreement and the issuance and
grant of the Shares hereunder is made by the Company in reliance upon the
express representations and warranties of the Grantee, which by acceptance
hereof the Grantee confirms that:

    

    
      	
               
      

            	
              (a)  The
      Shares granted to him pursuant to this Agreement are being acquired by him
      for his own account, for investment purposes, and not with a view to, or
      for sale in connection with, any distribution of the Shares. It is
      understood that the Shares have not been registered under the Act by
      reason of a specific exemption from the registration provisions of the Act
      which depends, among other things, upon the bona fide nature of his
      representations as expressed
herein;

            

    

    

    
      	
               
      

            	
              (b)  The
      Shares must be held by him indefinitely unless they are subsequently
      registered under the Act and any applicable state securities laws, or an
      exemption from such registration is available. The Company is under no
      obligation to register the Shares or to make available any such exemption;
      and

            

    

    

    
      	
               
      

            	
              (c)  Grantee
      further represents that Grantee has had access to the financial statements
      or books and records of the Company, has had the opportunity to ask
      questions of the Company concerning its business, operations and financial
      condition and to obtain additional information reasonably necessary to
      verify the accuracy of such
information,

            

    

    

    
      	
               
      

            	
              (d)  Unless
      and until the Shares represented by this Grant are registered under the
      Securities Act, all certificates representing the Shares and any
      certificates subsequently issued in substitution therefore and any
      certificate for any securities issued pursuant to any stock split, share
      reclassification, stock dividend or other similar capital event shall bear
      legends in substantially the following
form:

            

    

    

    
      	
               
      

            	
              THESE
      SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE
      SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR
      SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST
      THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
      ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
      SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
      THEREFROM.

            

    

    

    
      	
               
      

            	
              THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT
      CERTAIN STOCK AWARD AGREEMENT DATED ____________ BETWEEN THE COMPANY AND
      THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH ARE SUBJECT
      TO REPURCHASE BY THE COMPANY UNDER CERTAIN
  CONDITIONS.

            

    

    

    
      	
               
      

            	
              and/or
      such other legend or legends as the Company and its counsel deem necessary
      or appropriate. Appropriate stop transfer instructions with respect to the
      Shares have been placed with the Company's transfer
  agent.

            

    

    

    
      	
               
      

            	
              (e)  Grantee
      understands that he or she will recognize income, for Federal and state
      income tax purposes, in an amount equal to the amount by which the fair
      market value of the Shares, as of the date of grant, exceeds the price
      paid by Grantee, if any. The acceptance of the Shares by Grantee shall
      constitute an agreement by Grantee to report such income in accordance
      with then applicable law. Withholding for federal or state income and
      employment tax purposes will be made, if and as required by law, from
      Grantee's then current compensation, or, if such current compensation is
      insufficient to satisfy withholding tax liability, the Company may require
      Grantee to make a cash payment to cover such
  liability.

            

    

     

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

     

    7.  Stand-off
Agreement.  Grantee agrees that, in connection with any
registration of the Company's securities under the Securities Act, and upon the
request of the Company or any underwriter managing an underwritten offering of
the Company's securities, Grantee shall not sell, short any sale of, loan, grant
an option for, or otherwise dispose of any of the Shares (other than Shares
included in the offering) without the prior written consent of the Company or
such managing underwriter, as applicable, for a period of at least one year
following the effective date of registration of such offering. This Section 8
shall survive any termination of this Agreement.

    

    8.  Termination of
Agreement.  This Agreement shall terminate on the occurrence of
any one of the following events: (a) written agreement of all parties to that
effect; (b) a proposed dissolution or liquidation of the Company, a merger or
consolidation in which the Company is not the surviving entity, or a sale of all
or substantially all of the assets of the Company; (c) the closing of any public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act; or (d) dissolution, bankruptcy, or
insolvency of the Company.

    

    9.  Agreement Subject to Plan;
Applicable Law.  This Grant is made pursuant to the Plan and
shall be interpreted to comply therewith. A copy of such Plan is available to
Grantee, at no charge, at the principal office of the Company. Any provision of
this Agreement inconsistent with the Plan shall be considered void and replaced
with the applicable provision of the Plan. This Grant shall be governed by the
laws of the State of North Carolina and subject to the exclusive jurisdiction of
the courts therein.

    

    10.  Miscellaneous.

    

    
      	
               
      

            	
              (a)  Notices.  Any
      notice required to be given pursuant to this Agreement or the Plan shall
      be in writing and shall be deemed to have been duly delivered upon receipt
      or, in the case of notices by the Company, five (5) days after deposit in
      the U.S. mail, postage prepaid, addressed to Grantee at the last address
      provided by Grantee for use in the Company's
  records.

            

    

    

    
      	
               
      

            	
              (b)  Entire
      Agreement.  This instrument constitutes the sole
      agreement of the parties hereto with respect to the Shares. Any prior
      agreements, promises or representations concerning the Shares not included
      or reference herein shall be of no force or effect. This Agreement shall
      be binding on, and shall inure to the benefit of, the Parties hereto and
      their respective transferees, heirs, legal representatives, successors,
      and assigns.

            

    

    

    
      	
               
      

            	
              (c)  Enforcement.  This
      Agreement shall be construed in accordance with, and governed by, the laws
      of the State of North Carolina and subject to the exclusive jurisdiction
      of the courts located in Raleigh, State of North Carolina. If Grantee
      attempts to transfer any of the Shares subject to this Agreement, or any
      interest in them in violation of the terms of this Agreement, the Company
      may apply to any court for an injunctive order prohibiting such proposed
      transaction, and the Company may institute and maintain proceedings
      against Grantee to compel specific performance of this Agreement without
      the necessity of proving the existence or extent of any damages to the
      Company. Any such attempted transaction shares in violation of this
      Agreement shall be null and void.

            

    

    

    
      	
               
      

            	
              (d)  Validity of
      Agreement.  The provisions of this Agreement may be
      waived, altered, amended, or repealed, in whole or in part, only on the
      written consent of all parties hereto. It is intended that each Section of
      this Agreement shall be viewed as separate and divisible, and in the event
      that any Section shall be held to be invalid, the remaining Sections shall
      continue to be in full force and
effect.

            

    

    

    [SIGNATURE
PAGE TO FOLLOW]

     

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

     

    In Witness
Whereof, the parties have executed this Agreement as of the date first
above written.

     

    
      
        
          
            
              	
                      COMPANY:

                    	 
      	
                      CHINA
      EDUCATION ALLIANCE, INC.

                    
	 
      	 
      	
                      a
      North Carolina corporation

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:
      Xiqun Yu

                    
	 
      	 
      	
                      Title:
      Chief Executive Officer

                    
	 
      	 
      	 
      
	
                      GRANTEE:

                    	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      (signature)

                    
	 
      	
                      Name:

                    	 
      

            

          

        

      

    

    

    (one of the following, as appropriate,
shall be signed)

    

    
      
        
          	
                  I
      certify that as of the date hereof I am unmarried

                	 
      	
                  By
      his or her signature, the spouse of Grantee hereby agrees to be bound by
      the provisions of the foregoing STOCK AWARD AGREEMENT

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                  Grantee

                	 
      	
                  Spouse
      of Grantee

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
D

    

    CHINA
EDUCATION ALLIANCE, INC.

    RESTRICTED
STOCK PURCHASE AGREEMENT

    
       

    

    This
Restricted Stock Purchase Agreement ("Agreement") is made and
entered into as of the date set forth below, by and between CHINA EDUCATION
ALLIANCE, INC., a North Carolina corporation (the "Company"), and the employee,
director or consultant of the Company named in Section 1(b). ("Grantee"):

    

    In consideration of the covenants
herein set forth, the parties hereto agree as follows:

    

    1.  Stock Purchase
Information.

     

    
      	
              (a)

            	
                    
                Date
      of Agreement:

              

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              (b)

            	
              Grantee:

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              (c)

            	
              Number
      of Shares:

            	 
      	 
      
	 
      	 
      	 
      	 
      
	
              (d)

            	
                    
                Purchase
      Price:

              

            	 
      	 
      

    

     

    2.  Acknowledgements.

    

    
      	
               
      

            	
              (a)  Grantee
      is an employee/director/consultant
      of the Company.

            

    

    

    
      (b)  The
Company has adopted a 2009 Incentive Stock Plan (the "Plan") under which the
Company's common stock ("Stock") may be offered to
officers, employees, directors and consultants pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the "Securities Act") provided by
Section 4(2) thereunder.

    

    

    
      (c)  The
Grantee desires to purchase shares of the Company's common stock on the terms
and conditions set forth herein.

    

    

    3.  Purchase of Shares.
The Company hereby agrees to sell and Grantee hereby agrees to purchase, upon
and subject to the terms and conditions herein stated, the number of shares of
Stock set forth in Section 1(c) (the "Shares"), at the price per
Share set forth in Section 1(d) (the "Price"). For the purpose of
this Agreement, the terms "Share" or "Shares" shall include the
original Shares plus any shares derived therefrom, regardless of the fact that
the number, attributes or par value of such Shares may have been altered by
reason of any recapitalization, subdivision, consolidation, stock dividend or
amendment of the corporate charter of the Company.  The number of
Shares covered by this Agreement shall be proportionately adjusted for any
increase or decrease in the number of issued shares resulting from a
recapitalization, subdivision or consolidation of shares or the payment of a
stock dividend, or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company.

    

    4.  Investment Intent.
Grantee represents and agrees that Grantee is accepting the Shares for the
purpose of investment and not with a view to, or for resale in connection with,
any distribution thereof; and that, if requested, Grantee shall furnish to the
Company a written statement to such effect, satisfactory to the Company in form
and substance. If the Shares are registered under the Securities Act, Grantee
shall be relieved of the foregoing investment representation and agreement and
shall not be required to furnish the Company with the foregoing written
statement.

    

    5.  Restriction upon
Transfer.  The Shares may not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated by the Grantee
except as hereinafter provided.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
               
      

            	
              (a)  Repurchase
      Right on Termination Other Than for Cause. For the purposes of this
      Section, a "Repurchase
      Event" shall mean an occurrence of one of (i) termination of
      Grantee's employment or
      service as a director/consultant by the Company, voluntary or
      involuntary and with or without cause; (ii) retirement or death of
      Grantee; (iii) bankruptcy of Grantee, which shall be deemed to have
      occurred as of the date on which a voluntary or involuntary petition in
      bankruptcy is filed with a court of competent jurisdiction; (iv)
      dissolution of the marriage of Grantee, to the extent that any of the
      Shares are allocated as the sole and separate property of Grantee's spouse
      pursuant thereto (in which case, this Section shall only apply to the
      Shares so affected); or (v) any attempted transfer by the Grantee of
      Shares, or any interest therein, in violation of this Agreement. Upon the
      occurrence of a Repurchase Event, the Company shall have the right (but
      not an obligation) to repurchase all or any portion of the Shares of
      Grantee at a price equal to the fair value of the Shares as of the date of
      the Repurchase Event.

            

    

    

    
      	
               
      

            	
              (b)
      Repurchase Right on Termination for Cause. In the event Grantee's
      employment or service as
      a director/consultant is terminated by the Company "for cause" (as defined
      below), then the Company shall have the right (but not an obligation) to
      repurchase Shares of Grantee at a price equal to the Price. Such right of
      the Company to repurchase Shares shall apply to 100% of the Shares for one
      (1) year from the date of this Agreement; and shall thereafter lapse at
      the rate of twenty percent (20%) of the Shares on each anniversary of the
      date of this Agreement. In addition, the Company shall have the right, in
      the sole discretion of the Board and without obligation, to repurchase
      upon termination for cause all or any portion of the Shares of Grantee, at
      a price equal to the fair value of the Shares as of the date of
      termination, which right is not subject to the foregoing lapsing of
      rights. Termination of employment or service as a
      director/consultant "for cause" means (i) as
      to employees and consultants, termination for cause as defined in the
      Plan, this Agreement or in any employment or consulting agreement
      between the Company and Grantee, or (ii) as to directors, removal pursuant
      to the North Carolina corporation law.  In the event the Company
      elects to repurchase the Shares, the stock certificates representing the
      same shall forthwith be returned to the Company for
      cancellation.

            

    

    

    
      	
               
      

            	
              (c)
      Exercise of
      Repurchase Right.  Any Repurchase Right under Paragraphs
      4(a) or 4(b) shall be exercised by giving notice of exercise as provided
      herein to Grantee or the estate of Grantee, as applicable. Such right
      shall be exercised, and the repurchase price thereunder shall be paid, by
      the Company within a ninety (90) day period beginning on the date of
      notice to the Company of the occurrence of such Repurchase Event (except
      in the case of termination of employment or retirement, where such option
      period shall begin upon the occurrence of the Repurchase Event). Such
      repurchase price shall be payable only in the form of cash (including a
      check drafted on immediately available funds) or cancellation of purchase
      money indebtedness of the Grantee for the Shares. If the Company can not
      purchase all such Shares because it is unable to meet the financial tests
      set forth in the North Carolina corporation law, the Company shall have
      the right to purchase as many Shares as it is permitted to purchase under
      such sections. Any Shares not purchased by the Company hereunder shall no
      longer be subject to the provisions of this Section
  5.

            

    

    

    
      	
               
      

            	
              (d)  Right of First
      Refusal. In the event Grantee desires to transfer any Shares during
      his or her lifetime, Grantee shall first offer to sell such Shares to the
      Company. Grantee shall deliver to the Company written notice of the
      intended sale, such notice to specify the number of Shares to be sold, the
      proposed purchase price and terms of payment, and grant the Company an
      option for a period of thirty days following receipt of such notice to
      purchase the offered Shares upon the same terms and conditions. To
      exercise such option, the Company shall give notice of that fact to
      Grantee within the thirty (30) day notice period and agree to pay the
      purchase price in the manner provided in the notice. If the Company does
      not purchase all of the Shares so offered during foregoing option period,
      Grantee shall be under no obligation to sell any of the offered Shares to
      the Company, but may dispose of such Shares in any lawful manner during a
      period of one hundred and eighty (180) days following the end of such
      notice period, except that Grantee shall not sell any such Shares to any
      other person at a lower price or upon more favorable terms than those
      offered to the Company.

            

    

    

    
      	
               
      

            	
              (e)  Acceptance of
      Restrictions. Acceptance of the Shares shall constitute the
      Grantee's agreement to such restrictions and the legending of his
      certificates with respect thereto. Notwithstanding such restrictions,
      however, so long as the Grantee is the holder of the Shares, or any
      portion thereof, he shall be entitled to receive all dividends declared on
      and to vote the Shares and to all other rights of a shareholder with
      respect thereto.

            

    

     

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (f)  Permitted
      Transfers. Notwithstanding any provisions in this Section 5 to the
      contrary, the Grantee may transfer Shares subject to this Agreement to his
      or her parents, spouse, children, or grandchildren, or a trust for the
      benefit of the Grantee or any such transferee(s); provided, that such
      permitted transferee(s) shall hold the Shares subject to all the
      provisions of this Agreement (all references to the Grantee herein shall
      in such cases refer mutatis mutandis to the permitted transferee, except
      in the case of clause (iv) of Section 5(a) wherein the permitted transfer
      shall be deemed to be rescinded); and provided further, that
      notwithstanding any other provisions in this Agreement, a permitted
      transferee may not, in turn, make permitted transfers without the written
      consent of the Grantee and the
Company.

            

    

    

    
      	
               
      

            	
              (g)  Release of
      Restrictions on Shares. All rights and restrictions under this
      Section 5 shall terminate ___ (_) years following the date upon which the
      Company receives the full Price as set forth in Section 3, or when the
      Company's securities are publicly traded, whichever occurs
      earlier.

            

    

    

    5.  Representations and
Warranties of the Grantee. This Agreement and the issuance and grant of
the Shares hereunder is made by the Company in reliance upon the express
representations and warranties of the Grantee, which by acceptance hereof the
Grantee confirms that:

    

    
      	
               
      

            	
              (a)  The
      Shares granted to him pursuant to this Agreement are being acquired by him
      for his own account, for investment purposes, and not with a view to, or
      for sale in connection with, any distribution of the Shares. It is
      understood that the Shares have not been registered under the Act by
      reason of a specific exemption from the registration provisions of the Act
      which depends, among other things, upon the bona fide nature of his
      representations as expressed
herein;

            

    

    

    
      	
               
      

            	
              (b)  The
      Shares must be held by him indefinitely unless they are subsequently
      registered under the Act and any applicable state securities laws, or an
      exemption from such registration is available. The Company is under no
      obligation to register the Shares or to make available any such exemption;
      and

            

    

    

    
      	
               
      

            	
              (c)  Grantee
      further represents that Grantee has had access to the financial statements
      or books and records of the Company, has had the opportunity to ask
      questions of the Company concerning its business, operations and financial
      condition and to obtain additional information reasonably necessary to
      verify the accuracy of such
information;

            

    

    

    
      	
               
      

            	
              (d)  Unless
      and until the Shares represented by this Grant are registered under the
      Securities Act, all certificates representing the Shares and any
      certificates subsequently issued in substitution therefor and any
      certificate for any securities issued pursuant to any stock split, share
      reclassification, stock dividend or other similar capital event shall bear
      legends in substantially the following
form:

            

    

    

    
      	
               
      

            	
              THESE
      SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER THE
      SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE OR
      SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST
      THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE
      ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
      SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
      THEREFROM.

            

    

    

    
      	
               
      

            	
              THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THAT
      CERTAIN RESTRICTED STOCK PURCHASE AGREEMENT DATED ____________ BETWEEN THE
      COMPANY AND THE ISSUEE WHICH RESTRICTS THE TRANSFER OF THESE SHARES WHICH
      ARE SUBJECT TO REPURCHASE BY THE COMPANY UNDER CERTAIN
      CONDITIONS.

            

    

    

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

       

    

    
      	
               
      

            	
              and/or
      such other legend or legends as the Company and its counsel deem necessary
      or appropriate. Appropriate stop transfer instructions with respect to the
      Shares have been placed with the Company's transfer
  agent.

            

    

    

    
      	
               
      

            	
              (e)  Grantee
      understands that he or she will recognize income, for Federal and state
      income tax purposes, in an amount equal to the amount by which the fair
      market value of the Shares, as of the date of Grant, exceeds the price
      paid by Grantee. The acceptance of the Shares by Grantee shall constitute
      an agreement by Grantee to report such income in accordance with then
      applicable law. Withholding for federal or state income and employment tax
      purposes will be made, if and as required by law, from Grantee's then
      current compensation, or, if such current compensation is insufficient to
      satisfy withholding tax liability, the Company may require Grantee to make
      a cash payment to cover such
liability.

            

    

    

    7.  Stand-off Agreement.
Grantee agrees that, in connection with any registration of the Company's
securities under the Securities Act, and upon the request of the Company or any
underwriter managing an underwritten offering of the Company's securities,
Grantee shall not sell, short any sale of, loan, grant an option for, or
otherwise dispose of any of the Shares (other than Shares included in the
offering) without the prior written consent of the Company or such managing
underwriter, as applicable, for a period of at least one year following the
effective date of registration of such offering. This Section 8 shall survive
any termination of this Agreement.

    

    8.  Termination of
Agreement. This Agreement shall terminate on the occurrence of any one of
the following events: (a) written agreement of all parties to that effect; (b) a
proposed dissolution or liquidation of the Company, a merger or consolidation in
which the Company is not the surviving entity, or a sale of all or substantially
all of the assets of the Company; (c) the closing of any public offering of
common stock of the Company pursuant to an effective registration statement
under the Act; or (d) dissolution, bankruptcy, or insolvency of the
Company.

    

    9.  Agreement Subject to Plan;
Applicable Law. This Grant is made pursuant to the Plan and shall be
interpreted to comply therewith. A copy of such Plan is available to Grantee, at
no charge, at the principal office of the Company. Any provision of this
Agreement inconsistent with the Plan shall be considered void and replaced with
the applicable provision of the Plan.  This Grant shall be governed by
the laws of the State of North Carolina and subject to the exclusive
jurisdiction of the courts therein.

    

    10.  Miscellaneous.

    

    
      	
               
      

            	
              (a)  Notices.  Any
      notice required to be given pursuant to this Agreement or the Plan shall
      be in writing and shall be deemed to have been duly delivered upon receipt
      or, in the case of notices by the Company, five (5) days after deposit in
      the U.S. mail, postage prepaid, addressed to Grantee at the last address
      provided by Grantee for use in the Company's
  records.

            

    

    

    
      	
               
      

            	
              (b)  Entire
      Agreement.  This instrument constitutes the sole
      agreement of the parties hereto with respect to the Shares. Any prior
      agreements, promises or representations concerning the Shares not included
      or reference herein shall be of no force or effect. This Agreement shall
      be binding on, and shall inure to the benefit of, the Parties hereto and
      their respective transferees, heirs, legal representatives, successors,
      and assigns.

            

    

    

    
      	
               
      

            	
              (c)  Enforcement.  This
      Agreement shall be construed in accordance with, and governed by, the laws
      of the State of North Carolina and subject to the exclusive jurisdiction
      of the courts located in Raleigh, State of North Carolina. If Grantee
      attempts to transfer any of the Shares subject to this Agreement, or any
      interest in them in violation of the terms of this Agreement, the Company
      may apply to any court for an injunctive order prohibiting such proposed
      transaction, and the Company may institute and maintain proceedings
      against Grantee to compel specific performance of this Agreement without
      the necessity of proving the existence or extent of any damages to the
      Company. Any such attempted transaction shares in violation of this
      Agreement shall be null and void.

            

    

    

    
      	
               
      

            	
              (d)  Validity of
      Agreement. The provisions of this Agreement may be waived, altered,
      amended, or repealed, in whole or in part, only on the written consent of
      all parties hereto. It is intended that each Section of this Agreement
      shall be viewed as separate and divisible, and in the event that any
      Section shall be held to be invalid, the remaining Sections shall continue
      to be in full force and effect.

            

    

    

    [SIGNATURE
PAGE TO FOLLOW]

     

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

       

    

    In Witness
Whereof,  the parties have executed this Agreement as of the
date first above written.

    

    
      
        
          
            
              
                
                  
                    	
                            COMPANY:

                          	 
      	
                            CHINA
      EDUCATION ALLIANCE, INC.

                          
	 
      	 
      	
                            a
      North Carolina corporation

                          
	 
      	 
      	 
      
	 
      	
                            By:  

                          	 
      
	 
      	 
      	
                            Name:
      Xiqun Yu

                          
	 
      	 
      	
                            Title:
      Chief Executive Officer

                          
	 
      	 
      	 
      
	
                            GRANTEE:

                          	 
      	 
      
	 
      	
                            By:

                          	 
      
	 
      	 
      	
                            (signature)

                          
	 
      	
                            Name:THROUGHOUT
THIS AGREEMENT, WHERE INFORMATION HAS BEEN REPLACED BY AN ASTERISK (*), THAT
INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE OMITTED
INFORMATION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

     

    KATHY HILTON LICENSE
AGREEMENT

    

    This
LICENSE AGREEMENT ("Agreement") is made and effective as of the 13 th day of
October, 2006 (“Effective Date”), by and between KRH Licensing Company, LLC. ,
a newly formed California corporation with an office and place of business at
250 North Canon Drive, 2 nd Floor,
Beverly Hills, California 90210 (collectively, "Licensor"), and OmniReliant Corp. , a Florida
corporation with an office and principal place of business at 4902 Eisenhower
Blvd., Suite 185 Tampa, Florida 33634 ("Licensee") (together the
"Parties").

    

    WITNESSETH
:

    

     WHEREAS , Richard Hilton is
the worldwide owner of the KATHY HILTON trademark and all variations and
combinations thereof, including various U.S. Trademark Registrations therefore,
including Reg. No. 2,884,868 in International Class 24 for bed linens, et. seq.;
Reg. No. 2,882,681 in International Class 20 for furniture; and, Reg. No.
3,018,255 in International Class 14 for jewelry (collectively, the “Licensed
Mark” or “Licensed Marks”); and,

    

     WHEREAS , pursuant to a master
license agreement, Richard Hilton has granted all worldwide rights to the
Licensed Marks to the Licensor herein; and,

    

    WHEREAS , Licensee is a newly
incorporated Florida corporation specifically formed to develop the Licensed
Marks with the intent of manufacturing, promoting and selling Licensed Products
(as hereinafter defined) , and Licensor further desires to obtain the personal
services of Ms. Kathy Hilton pursuant to the terms of this Agreement in
connection with the formulation and manufacture as well as the promotion and
sale of the Licensed Products; and

    

    WHEREAS, Licensor is willing
to grant the license contained in this Agreement and (the “License”)  
Licensee desires to obtain from Licensor, the exclusive right and license to use
the Licensed Marks in the Territory (as hereinafter defined) in connection with
the manufacture, promotion, distribution and sale of Licensed
Products.

    

    NOW, THEREFORE , in
consideration of the premises and mutual agreements contained herein, the
parties hereto covenant and agree as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
1

    

    Definitions: The following
definitions shall apply:

    

    A.  
Territory . All
countries of the world and all duty-free-shops, ships, airplanes, military bases
and dip lomatic missions of every country of the world , including , but not
limited to, retail, wholesale, the world-wide web, radio, multi-level marketing,
newspapers, magazines, direct respons e, infomercials,   television
shopping networks and any other channel of distribution and sale approved in
writing by Licensor, which approval shall not be unreasonably withheld,
conditioned or delayed.

    

    B.  
Licensed Products . All
products comprising goods within the scope of the description of International
Class 3 as defined in the records of the United States Patent and Trademark
Office, namely: Men's and Women's skincare products, fragrances, cosmetics and
related personal care products such as body lotion, body cream, body mist, hand
cream, bath and shower gel, massage oil, dusting powder, after shave, after
shave balm or gel, deodorant stick and bath soap, and home/environmental
products such as candles, potpourri and incense bearing the Licensed Marks.
Notwithstanding the foregoing, in the event that Licensee does not develop and
begin the marketing of a fragrance under the Licensed Marks with 18 months of
the Effective Date, Licensee shall forfeit the rights for fragrance (deleting
such category from this definition of Licensed Products) and Licensor shall be
free to develop itself or license a third-party to use the Licensed Marks for a
fragrance.

    

    C.  
Licensed Mark or Licensed Marks . The trademark
KATHY HILTON and such other trademarks as are, from time to time, agreed to by
Licensor. At   Licensor’s cost, Licensor has or will file to register the
Licensed Mark in the United States Patent and Trademark Office in International
Class 3 for :   Men's and Women's skincare products, fragrances, cosmetics
and related personal care products such as body lotion, body cream, body mist,
hand cream, bath and shower gel, massage oil, dusting powder, after shave, after
shave balm or gel, deodorant stick and bath soap, and home/environmental
products such as candles, potpourri and incense.

     

    D.  
Net Sales . The
arms-length sales price at which Licensee or any Subsidiary or Affiliate (as
hereinafter defined) bills its Non-Subsidiary or Affiliate customers for
Licensed Products (or ultimate consumers in the case of infomercial sales) less:
(i) all returns of damaged, defective or other merchandise, actual trade and
cash discounts and allowances provided to customers, and taxes directly
applicable to the sale of Licensed Products to s uch customers (such as sales,
use, excise, value added or similar taxes) ; (ii) as actually incurred and
reserved for; (ii) actual charges and reserves for all freight and shipping and
handling charges , credit card fees, refunds, credits , insurance costs, duties
and other governmental charges paid by the Licensee in connection with such
sales to customers to the extent such expenses are stated separately on any
invoice; (iii) all receipts from the sale of Licensed Products sold to bone fide customers at a cost
below Licensee’s landed duty paid cost (or the equivalent of such pricing) for
such Licensed Products (“Below Cost Sales”) but   only to the extent that
the aggregate gross sales of Below Cost Sales in any Annual Period (as
hereinafter defined) do not exceed fifteen percent (15%) of total gross sales
for such Annual Period ; and, (iv) all of Licensee’s actual out-of-pocket
expenses for samples, displays, brochures, gift-with-purchase goods and
promotional materials and packaging supplies actually supplied to Licensee’s
customers (but not including Licensee’s expenditures for any advertising of
Licensed Products). Notwithstanding the terms of sub-section (iii) above,
Licensee shall not be excused from paying royalties on sales of Licensed
Products above the 15% level and on sales that are not Below Cost
Sales.

     

    The
reserve for shipping and handling charges, credit card fees, refunds, credits or
other actual trade and cash discounts and uncollectibles shall initially be 10%
of Net Sales and shall be adjusted (and liquidated, if applicable) periodically
based on actual experience.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    E.  
Subsidiary . Any
corporation or other entity which is 100% directly or indirectly owned by
Licensee.

     

    F.  
Affiliate . Any
corporation or other entity which is at least 50% owned by
Licensee.

    

    G.  
Annual Period. A 12
month period of time from January 1 st of a
given year through December 31 st of the
same year, except the first Annual Period herein shall run from the Effective
Date through December 31, 2007.

     

    ARTICLE
2

    Grant of License
Rights

    

    Upon the
terms and conditions of this Agreement, Licensor hereby grants to Licensee,
during the term of this Agreement, the sole and exclusive right and license to
use the Licensed Mark in the Territory as a trademark in connection with the
development, manufacture, promotion, advertising, distribution and sale of
Licensed Products and on all brand identification materials, such as product
packing, containers, promotional and sale materials, publicity materials, and in
all advertising media, such as newspapers, magazines, radio, televisio n,
infomercials, live television shopping, the world-wide web, cinema and similar
media both presently existing or developed in the future. Sales of Licensed
Products shall only be through any or all the channels of trade described in
Article 1, paragraph A , but shall not include mass marketing stores such as
Target, Walmart, K-Mart, Sam’s Club, Costco and Dollar General. Except as
specified in Section 1(B) above, during the term of this Agreement and any
extensions thereof, Licensor shall not grant any rights to any third party in
connection with the Licensed Products for the Licensed Marks or any derivative
thereof without Licensee ’s appr oval.

    

    ARTICLE
3

    Exclusivity of
License

    

    Licensee
shall have exclusive rights to all of the licensed products described in Article
1, paragraph B, above. All rights not specifically granted to Licensee herein
shall be reserved for Licensor , such that Licensor may use or grant others the
right to use the Licensed Marks on or in connection with goods of all other
types and descriptions in the Territory other than Licensed Products. Licensor
further acknowledges and consents to Licensee obtaining other additional
licenses for the manufacture and/or distribution of products similar to the
Licensed Products during the term of this Agreement. Licensee, will not, during
the term of this Agreement and thereafter, attack either Licensor's title in and
to the Licensed Marks or the validity of this License.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
4

    

    Term of
Agreement

    

    Subject
to the rights of termination set forth in this Agreement, the initial term of
this Agreement shall commence on the Effective Date and terminate on December
31, 2011 (the "Initial Term"). Licensee shall have the option to renew this
Agreement for an additional five-year period (through December 31, 2016) as long
as the Minimum Royalties (as hereinafter defined) for the Initial Term have been
fully paid. Licensee shall notify Licensor of its intent to either renew or not
renew no later than December 31, 2010. Following the expiration of the first
renewal term on December 31, 2016, the Agreement shall renew pursuant to the
provisions of Article 8 below. The Initial Term and all permitted extensions
thereof shall be collectively defined as the “Term”.

    

    ARTICLE
5

    

    Confidentiality

    

    The
Parties acknowledge that all information relating to the business and operations
of Licensor and Licensee which they learn or have learned during or prior to the
Term of this Agreement is confidential. The Parties acknowledge the need to
preserve the confidentiality and secrecy of such information and agree that,
both during the Term of this Agreement and after the expiration or termination
hereof, they shall not use or disclose same, and shall take all necessary steps
to preserve in all respects such confidentiality and secrecy. The provisions of
this Section shall not apply with respect to any information which has entered
the public domain through no fault of the Parties. The provisions of this
Section shall survive the expiration or termination of this
Agreement.

    

    ARTICLE
6

    

    Duties of
Licensee

    

    A.  
  Commercially
Reasonable Efforts . During the
Term of this Agreement, Licensee will use its commercially reasonable efforts to
exploit the rights granted herein throughout the Territory and to sell the
maximum quantity of Licensed Products therein consistent with the   standards
and prestige represented by the Licensed Mark.

    

    B.  
Design and Sample
making . Licensor shall not be responsible for the production, design or
sample making of the Licensed Products and Licensee shall bear all costs related
thereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
7

    

    Quality
Standards

     

    
      
        	
                A.

              	
                Manufacture
      of Licensed Products; Quality Control
  .

              

      

      

      
        	
              	
                (i)

              	
                The contents and workmanship of
      Licensed Products shall be at all times of the quality consistent with the
      reputation, image and prestige of the Licensed Marks and Licensed Products
      shall be distributed and sold with packaging and sales promotional
      materials appropriate for such quality products. The parties agree that
      the Licensed Products shall be of the quality, prestige and price similar
      to those of La prairie & Estee Lauder for skincare, Clarins & L’
      Oreal for cosmetics , and Calvin Klein & Ralph Lauren for fragrances
      as those products are positioned in the marke tplace as of the Effective
      Date.

              

      

       

      
        	
              	
                (ii)

              	
                Licensor, at its sole discretion,
      may from time-to-time determine the re-positioning of the Licensed
      Mark.

              

      

       

      
        	
              	
                (iii)

              	
                All Licensed Products shall be
      manufactured, labeled, sold, distributed and advertised in accordance with
      all applicable national, state and local laws and
      regulations.

              

      

       

      
        	
              	
                (iv)

              	
                Licensee shall submit to Licensor
      for prior written approval two preproduction samples of proposed Licensed
      Products, along with their proposed packaging and any other accompanying
      sales materials (the "Approval Package") for Licensor's review, which
      approval shall not be unreasonably withheld. In the event that Licensor
      does not respond to Licensee within 15 days of the receipt of any and all
      items within the scope of the Approval Package, any such item shall be
      deemed approved.

              

      

       

      
        	
              	
                (v)

              	
                During the Term of this
      Agreement, upon Licensor's request, Licensee shall submit, free of charge
      to Licensor, the then current production samples of each Licensed Product
      marketed. Production samples submitted by Licensee for this purpose may be
      retained by Licensor. Further, Licensee shall provide Licensor with 100
      samples of the various Licensed Products being distributed each year for
      Licensor to use for public relations and promotional purposes. All
      Licensed Products to be sold hereunder shall be at least equal in quality
      to the samples presented to the Licensor in the Approval Package. Licensor
      and its duly authorized representatives shall have the right, upon
      reasonable advance notice and during normal business hours, at Licensor's
      expense, to examine Licensed Products in the process of being manufactured
      and to inspect all facilities utilized by Licensee in connection
      therewith.

              

      

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    B.  
Required
Markings. Licensee shall cause to appear on all packaging of Licensed
Products, (i) "the trademark, KATHY HILTON is licensed to OmniReliant Corp.";
and such additional legends, markings and notices complying with the
requirements of any law or regulation in the Territory and; (ii) such other
legends, markings and notices as Licensor, from time-to-time, may reasonably
request.

    

    C.  
Distribution .
In order to maintain the reputation, image and prestige of the Licensed Marks,
Licensee's normal distribution patterns shall consist of those means of
distribution described in Article 2 of this Agreement.

    

    D.  
Sales Force .
During the term of this Agreement, Licensee shall maintain a non-exclusive sales
force suitable to carry out the purpose of this Agreement.

    

    ARTICLE
8

    

    Guaranteed Minimum Royalties
& Right of Licensor to Terminate for Failure to Obtain Minimum Annual Sales
Following the Second Extended Term

    

    A.  
Guaranteed Minimum
Royalties. In consideration of both the license granted herein and the
services to be performed by Ms. Kathy Hilton here under including, but not
limited to, appearances on television shopping networks, in infomercials, and
other personal appearances , Licensee shall pay to Licensor an annual guaranteed
minimum royalty (the “Guaranteed Minimum Royalty” or “Guaranteed Minimum
Royalties”) as follows:

    

     
ANNUAL PERIOD GUARANTEED
MINIMUM ROYALTIES

     

    
      
        
          
            	
                    Annual
      Period

                  	 
      	
                    Dates

                  	 
      	
                    Minimum
      Royalty

                  
	
                    1

                  	 
      	
                    Effective
      Date to 12/31/07

                  	 
      	
                    *

                  
	
                    2

                  	 
      	
                    1/1/07
      to 12/31/08

                  	 
      	
                    *

                  
	
                    3

                  	 
      	
                    1/1/08
      to 12/31/09

                  	 
      	
                    *

                  
	
                    4

                  	 
      	
                    1/1/09
      to 12/31/10

                  	 
      	
                    *

                  
	
                    5

                  	 
      	
                    1/1/10
      to 12/31/11

                  	 
      	
                    *

                  

          

        

      

    

    

      In
the event that the Initial Term of this Agreement is extended for an additional
five-year term (January 1 st , 2012
- December 31 st , 2016
(the “First Extended Term”), the Guaranteed Minimum Royalty for each Annual
Period of the First Extended Term shall be *. Subject to Licensor’s right to
terminate in Sub Section (B) below for Licensee’s failure to reach the specified
minimum annual sales, Licensee shall have the right to extend the Term of this
Agreement for continuing subsequent five-year extensions by paying an increased
Guaranteed Minimum Royalty of $* per Annual Period for each subsequent five-year
period. In other words, the Guaranteed Minimum Royalty for each Annual Period
from 1/1/17 through 12/31/21 (the “Second Extended Term”) will be $* and the
Guaranteed Minimum Royalty for each Annual Period from 1/1/22 through 12/31/26
(the “Third Extended Term”) will be $* and so forth.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Notwithstanding
the foregoing, if Licensee fails to pay the Guaranteed Minimum Payment for any
Annual Period, that failure to make the Guaranteed Minimum Payment will not be
deemed to constitute a breach of this Agreement, or to generate a claim for
monetary relief, but shall merely give Licenser the right to terminate this
Agreement upon 60 days’ written notice to Licensee . Upon such event, the
parties agree that Licensee shall pay Licensor a termination fee of * within 60
days of the termination date, at which point Licensor shall be free to exploit
itself or license a third-party to exploit the Licensed Products bearing the
Licensed Marks.

    

    The
Guaranteed Minimum Royalty payable for each Annual Period shall be paid to
Licensor semi-annually in advance on the first day of the month of each half
year starting with the payment of the Guaranteed Minimum Royalty for the 2 nd Annual
Period, such that each half of the Guaranteed Minimum Royalty Payments shall be
paid on January 1 st and
July 1 st of each
Annual Period. Notwithstanding the foregoing, the Guaranteed Minimum Royalty for
the first Annual Period shall be paid   thirty (30) days following the
Effective Date . In the event that such payment is not timely made, Licensor
shall have the right to cancel this Agreement, making it void ab initio, upon 5-days
written notice to cure.

     

    B.  
Right to Terminate for
Failure to Reach Minimum Annual Sales after the First Extension Term.
Notwithstanding Licensee’s willingness to continue paying the specified
Guaranteed Minimum Royalties specified above, Licensor shall have the right to
terminate this Agreement and all rights granted hereunder in the event that
Licensee does not reach the Minimum Annual Sales of Licensed Products in the
Annual Periods specified below:

    

    
      
        
          	
                  Minimum
      Sales of Licensed Products

                  To
      Obtain Right to Extend Term for an

                  Additional
      Period of Five Years

                	 
      	
                  Dates
      of Term Extension if Required Minimum Sales are

                  Achieved

                
	
                  $*
      in the Annual Period 1/1/2015 through 12/31/2015

                	 
      	
                  1/1/2017
      through 12/21/2021

                
	
                  $*
      in the Annual Period 1/1/2020 through 12/31/2020

                	 
      	
                  1/1/2022
      through 12/21/2026

                
	
                  $*
      in the Annual Period 1/1/2025 through 12/31/2025

                	 
      	
                  1/1/2027
      through 12/21/2031

                
	
                  $*
      in the Annual Period 1/1/2030 through 12/31/2030

                	 
      	
                  1/1/2032
      through 12/21/2036

                

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
9

    

    Sales Royalty; Stock in
OmniReliant; Withholding Taxes

    

    A.  
Licensee shall pay to Licensor a sales royalty (the “Sales Royalty” or “Sales
Royalties”) of *%) on each Annual Period's Net Sales on sales made in all venue
s other than   infomercials. The Sales Royalty payable hereunder shall be
accounted for and paid on a quarterly basis within forty-five (45) days after
the close of the prior quarter's sales. In other words, the actual Sales Royalty
will be paid 45-days in arrears computed on the basis of Net Sales during the
quarter ending 45 days before the period upon which royalties are being paid,
with a credit for any Guaranteed Minimum Royalties and Sales Royalty payments
previously made to Licensor.

     

    B.  
Licensee shall pay Licensor a Sales Royalty payment of a minimum of *%) of Net
Sales, on all revenues generated from the sale of the Licensed Products through
infomercials sold in connection the Licensed Products. The Sales Royalties shall
be paid quarterly, along with sufficient reports justifying the calculation of
the Sales Royalty payments within forty-five (45) days after the close of the
prior quarter’s sales. Should the infomercial’s performance exceed a *) media
ratio, meaning the revenues generated by the infomercial exceeds three times the
expenditures on the media, the Sales Royalty shall be increased to *%) of the
Adjusted Gross Collected Revenues. The Sales Royalty on sales made through
direct response infomercials will not exceed *%) of the Net Sales in
infomercials. The Sales Royalty on all up-sells of Licensed Products shall be
*%) greater than the applicable royalty rate based on the sliding scale stated
in this Sub Section (B) attributable to the sale otherwise occurring during such
up-sell. “Expenditures on the media” as that phrase is used herein shall be
defined as the actual out-of-pocket expenses attributable to purchasing
television air time and shall not include any and all costs associated with the
production of the show content for such infomercial.

    

    C.  
If applicable, on behalf of Licensor, Licensee shall compute any payment of
required taxes (other than United States Federal, state or local income taxes)
which any governmental authority in the Territory may impose on trademark
royalties being paid from such country. The amount of such taxes and the
reasonable costs incurred by Licensee in determining those taxes, including, but
not limited to, the cost of professional advisors, shall be deducted from the
payments of royalties, provided that Licensor is entitled under applicable law
to credit the amount of such taxes against its United States Federal Income Tax
obligations. Licensee shall furnish Licensor with an official receipt (together
with a translation thereof if not in English) promptly after each such payment
of taxes. In the event such taxes are not paid when due, all resulting penalties
and interest shall be borne by Licensee.

    

    D .
  The payment of Sales Royalties for any Annual Period in excess of the
payments of the Guaranteed Minimum Royalty for the same Annual Period shall be
credited against the Guaranteed Minimum Royalty due to Licensor for any other
Annual Period.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    E .
  In addition to the Sales Royalties and Guaranteed Minimum Royalties being
paid to Licensor herein, Licensor shall be further compensated by the receipt of
*%) of the total outstanding shares of stock of OmniReliant Corp. as of the
Effective Date. The parties acknowledge and agree that as of the Effective Date,
the total outstanding shares of stock is * and thus Licensor shall receive *
shares of stock of OmniReliant Corp. upon execution hereof. Licensee anticipates
that it will bring in future equity investors into OmniReliant Corp. that will
be issued shares of stock which will dilute Licensor’s ownership percentage and
thereafter OmniReliant Corp. will become a wholly-owned subsidiary of a public
company, at which point Licensor’s stock will be exchanged for stock in the
public compan y, which is currently anticipated to be approximately equivalent
to *% initial ownership in the public company on a fully diluted basis (a
calculation which includes all outstanding warrants and options being exercised)
..

     

    F .
  The addresses for all Royalty Payments, including the Guaranteed Minimum
Royalty shall be as follows:

     

    
      
        	
              	
                (1)

              	
                *% of the initial Guaranteed
      Minimum Royalty payable upon execution hereof together with a stock
      certificate representing *% of the total outstanding shares of OmniReliant
      and *% of all other royalties payable hereunder
  to:

              

      

    

     

    KHR
Licensing Company, Inc.

    250 North
Canon Drive,

    2nd
Floor,

    Beverly
Hills, CA 90210

     

    
      
        	
              	
                (2)

              	
                *% of the initial Guaranteed
      Minimum Royalty (which does not include any remuneration that Licensor is
      receiving from Licensee in stock benefits) payable upon execution hereof
      and *% of all other royalties
to:

              

      

    

     

    GLMAC

    2875 NE
191 st
Street

    Suite
501

    Aventura,
Fl. 33180

    Attn :
Mr. Lucien Lallouz  

    

    ARTICLE
10

    

    Advertising

    

    Licensee
agrees to spend in the United States for "consumer advertising" (as defined
below) *% of Net Sales during each Annual Period.

    

    For the
other markets in the Territory, Licensee or its distributors will jointly spend
not less than *% of Net Sales in such markets during each Annual Period. For
purposes of television shopping networks, one-half (1/2) of the wholesale sales
to television shopping networks shall be attributable to consumer
advertising.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    "Consumer
Advertising" shall be understood to includ e , but not be limited to,
newspapers, magazines, television, live television shopping, infomercials,
radio, billboards (including related artwork and production charges fo r these
five categories), retailer demonstration charges, retailer's catalogues,
gifts-with-purchase including the gift aspect of value sets, direct mail,
remittance envelopes, blow-ins, billing inserts (both scented and unscented),
product samples, free goods (including those to Licensor for events and other
public relation activities), window and counter displays (including testers,
dummies, counter cards and other visual aids), special events, contests,
publicity and promotions and cooperative advertising.

    

    Licensor
  understands the critical importance of live appearances on television
shopping networks and infomercial production sessions. Therefore, Licensor
undertakes at Licensee's request to make Ms. Kathy Hilton ("KH") available
during each year of the term of this Agreement at reasonable intervals and for
reasonable periods (which shall involve a maximum of eight (8) appearances of
three (3) days each, exclusive of travel, for television shopping appearances,
two (2) appearances of two (2) days each for infomercial production and two (2)
appearances of one (1) day each for other personal appearances . Licensee shall
also be entitled to the use of KH's likeness for advertising and promotional
purposes upon Licensor's prior written approval first being obtained in each
instance, which approval shall not be unreasonably withheld or delayed. Licensor
shall make every reasonable effort, in light of KH's busy schedule, at the
request of the Licensee, to arrange for KH's cooperation for publicity launch
parties, personal appearances and radio and TV interviews (which shall be
included in KH's obligations of   eight (8), two (2 ) and two ( 2 )
appearances discussed above). Licensee shall reimburse Licensor for the
reasonable costs involved in providing KH plus one other individual, selected by
Licensor, if they wish to attend, with first-class travel, lodging, food and
other related expenses, which shall include the cost of hair, makeup and
security personnel, mutually agreed upon in advance of each appearance attended
by KH at Licensee's request. If KH fails to appear for a scheduled Licensor
approved event, Licensee will have the right to deduct up to $* of its
non-refundable out of pocket expenses incurred in connection with such specific
event from the Sales Royalty. The failure to appear at a scheduled event could
have a material adverse effect on the Licensee's ability to market the Licensed
Products.

    

    ARTICLE
11

    

    Sales Statement; Books and
Records; Audits

    

    A.  
Sales Statement
.. Licensee shall deliver to Licensor at the time each Sales Royalty payment is
due, a reasonably detailed report signed by a duly authorized officer of
Licensee indicating by quarter the Net Sales and a computation of the amount of
Sales. Such statement shall be furnished to Licensor whether or not any
Royalties are payable hereunder for said period or whether any Licensed Products
have been sold during the period of which such statement is due. Licensee shall
deliver to Licensor, not later than ninety (90) days after the close of each
Annual Period during the Term (or portion thereof in the event of prior
termination for any reason), a statement signed by a duly authorized officer
relating to said entire Annual Period, setting forth the same information
required to be submitted by Licensee in accordance with the first Section of
this Article and also setting forth the information concerning expenditures for
the advertising and promotion of Licensed Products during such Annual Period
required by Article 10 hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    B.  
Books and Records;
Audits . Licensee shall prepare and maintain, in such manner as will
allow its accountants to audit same in accordance with generally accepted
accounting principles, complete and accurate books of account and records
(specifically including without limitation the originals or copies of documents
supporting entries in the books of account) in which accurate entries will be
made covering all transactions, including advertising expenditures, arising out
of or relating to this Agreement. Licensee shall keep separate general ledger
accounts for such matters that do not include matters or sales related to this
Agreement. Licensor and its duly authorized representatives shall have the
right, for the duration of this Agreement and for one (1) year thereafter,
during regular business hours and upon seven (7) business days advance notice
(unless a shorter period is appropriate in the circumstances), to audit said
books of account and records and examine all other documents and material in the
possession or under the control of Licensee with respect to the subject matter
and the terms of this Agreement, including, without limitation, invoices,
credits and shipping documents, and to make copies of any and all of the above.
All such books of account, records, documents and materials shall be kept
available by Licensee for at least two (2) years after the end of the Annual
Period to which they relate. If, as a result of any audit of Licensee's books
and records, it is shown that Licensee's payments were less than the amount
which should have been paid by an amount equal to *% or more of the payments
actually made with respect to sales occurring during the period in question,
Licensee shall reimburse Licensor for the cost of such audit and shall make all
payments required to be made (along with accrued interest at the rate of *%)) to
eliminate any discrepancy revealed by said audit within ten (10) days after
Licensor's demand therefore.

    

    ARTICLE
12

    

    Indemnification and
Insurance

    

    A.  
Indemnification of
Licensor . Licensee of hereby agrees to save and hold Licensor, Kathy
Hilton and its agents harmless of and from and to indemnify them against any and
all claims, suits, injuries, losses, liability, demands, damages and expenses
(including, subject to sub paragraph D below, Licensor's reasonable attorneys'
fees and expenses) which Licensor or Kathy Hilton may incur or be obligated to
pay, or for which either may become liable or be compelled to pay in any action,
claim or proceeding against it, for or by reason of any acts, whether of
omission or commission, that may be committed or suffered by Licensee or any of
its servants, agents or employees in connection with Licensee's performance of
this Agreement, including but not limited to those arising out of: (i) the
alleged defect in any Licensed Product produced by Licensee under this
Agreement; (ii) the manufacture, labeling, sale, distribution or advertisement
of any Licensed Product by Licensee in violation of any national, state or local
law or regulation or the breach of Article 5 hereof; (iii) any allegations of
any nature and kind with regard to the advertisement, distribution and sale of
Licensed Products.. The provisions of this Section and Licensee's obligations
hereunder shall survive the expiration or termination of this
Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    B.  
Insurance
Policy . Licensee shall procure and maintain at its own expense in full
force and effect at all times during which Licensed Products are being sold,
with a responsible insurance carrier acceptable to Licensor, a public liability
insurance policy including products liability coverage with respect to Licensed
Products with a limit of liability not less than Two Million Dollars
($2,000,000). The liability coverage shall increase to a maximum amount of Three
Million Dollars ($3,000,000) when sales of Licensed Products equal or exceed
$10,000,000 annually. It shall be acceptable if such coverage is provided by a
product liability policy and an additional umbrella policy. Such insurance
policies shall be written for the benefit of Licensee and Licensor and shall
provide for at least thirty (30) days prior written notice to the Parties of the
cancellation or substantial modification thereof. Licensor and Ms. Kathy Hilt on
shall be named as additional insured parties on each such policy. Such insurance
may be obtained by Licensee in conjunction with a policy which covers products
other than Licensed Products.

    

    C.  
Evidence of
Insurance . Licensee shall, from time to time upon reasonable request by
Licensor, promptly furnish or cause to be furnished to Licensor evidence in the
form and substance reasonably satisfactory to Licensor of the maintenance of the
insurance required by subsection   B above, including, but not limited to,
copies of policies, certificates of insurance (with applicable riders and
endorsements) and proof of premium payments. Nothing contained in this Section
shall be deemed to limit in any way the indemnification provisions of the sub
Section A above.

    

    D.  
Notice .
Licensor will give Licensee notice of any action, claim, suit or proceeding in
respect of which indemnification may be sought and Licensee shall defend such
action, claim, suit or proceeding on behalf of Licensor. In the event
appropriate action is not taken by Licensee within thirty (30) days after its
receipt of notice from Licensor, then Licensor shall have the right, but not the
obligation, to defend such action, claim, suit or proceeding. Licensor may,
subject to Licensee's indemnity obligation under sub Section A above, be
represented by its own counsel in any such action, claim, suit or proceeding. In
any case, the Licensor and the Licensee shall keep each other fully advised of
all developments and shall cooperate fully with each other in all respects in
connection with any such defense as is made. Nothing contained in this sub
Section shall be deemed to limit in any way the indemnification provisions of
the sub Section A above except that in the event appropriate action is being
taken by Licensee, by counsel reasonably acceptable to Licensor, with respect to
any not-trademark or intellectual property action, claim, suit or proceeding,
Licensor shall not be permitted to seek indemnification from Licensee for
attorneys' fees and expenses incurred without the consent of Licensee. In
connection with the aforesaid actions, claims and proceedings, the parties
shall, where no conflict of interest exists, seek to be represented by common
reasonably acceptable counsel. In connection with actions, claims or proceedings
involving trademark or other intellectual property matters which are subject to
indemnification hereunder, Licensor shall at all times be entitled to be
represented by its own counsel, for whose reasonable fees and disbursements it
shall be entitled to indemnification hereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
13

    

    The Licensed
Marks

    

    A.  
Licensee shall not join any name or names with the Licensed Marks so as to form
a new mark without the prior written consent of Licensor , which shall not be
unreasonably withheld . Licensee acknowledges the validity of t he Licensed
Marks, the secondary meaning associated with the Licensed Marks and the rights
of Licensor with respect to the Licensed Marks in the Territory in any form or
embodiment thereof and the goodwill attached or which shall become attached to
the Licensed Marks in connection with the business and goods in relation to
which the same has been, is or shall be used. Sales by Licensee shall be deemed
to have been made by Licensor for purposes of trademark registration and all
uses of the Licensed Marks by Licensee shall inure to the benefit of Licensor.
Licensee shall not, at any time, do or suffer to be done, any act or thing which
may in any way adversely affect any rights of Licensor in and to the Licensed
Marks or any registrations thereof or which, directly or indirectly, may reduce
the value of the Licensed Marks or detract fro m their reputation. Licensee will
use its best efforts to distribute Licensed Products in the proper channels
comparable to those of the brands outlined in Article 7 A (i)
herein.

    

    B.  
At Licensor's request, Licensee shall execute any documents, including
Registered User Agreements, reasonably required by Licensor to confirm the
respective rights of Licensor in and to the Licensed Marks in each jurisdiction
in the Territory and the respective rights of Licensor and Licensee pursuant to
this Agreement. Licensee shall cooperate with Licensor, in connection with the
filing and the prosecution by Licensor of applications to register or renew the
Licensed Marks in International Class 3 for Licensed Products sold hereunder in
each jurisdiction in the Territory where Licensee has reasonably requested the
same. Such filings and prosecution outside the U.S. shall be in the name of Mr.
Richard Hilton or Licensor, as Licensor shall so decide, the expense of which
will be fully paid by   Licensor . Nothing contained herein shall obligate
Licensor to prosecute any trademark application outside the U.S. which is
opposed or rejected in any country after the application is filed, provided,
however, that any such prosecution shall go forward if (a) Licensee requests
same; (b) License e and Licensor share the costs   for same directly; and
(c) such prosecution is in Licensor's name and directed by Licensor. Licensor
shall cooperate fully with any such prosecution.

    

    C.  
Licensee shall use the Licensed Marks in each jurisdiction in the Territory
strictly in compliance with the legal requirements obtained therein and shall
use such markings in connection therewith as may be required by applicable legal
provisions. Licensee shall cause to appear on all Licensed Products and on all
materials on or in connection with which the Licensed Marks are used, such
legends, markings and notices as may be reasonably necessary in order to give
appropriate notice of any trademark, trade name or other rights therein or
pertaining thereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    D.  
Licensee shall never challenge the validity of the Licensed Marks or any
application for registration or registration thereof or any rights of Licensor
therein. The foregoing shall not be deemed to prevent Licensee from asserting,
as a defense to a claim of breach of contract brought against Licensee by
Licensor for failure to perform its obligations hereunder, that its ceasing
performance under this Agreement was based upon Licensor's failure to own the
Licensed Marks in the United States of America, provided that it is established
in a court of law that Licensor does not own the Licensed Marks, that the
Licensed Marks are owned by a third party so as to preclude the grant of the
license provided herein.

    

    E.  
In the event that Licensee learns of any infringement or imitation of the
Licensed Marks or of any use by any person of a trademark similar to the
Licensed Marks, it promptly shall notify Licensor thereof. In no event, however,
shall Licensor be required to take any action if it deems it inadvisable to do
so.

    

    F.  
Licensor shall be required to protect, indemnify and   hold Licensee
harmless against, or be liable to Licensee for, any liabilities, losses,
expenses or damages which may be suffered or incurred by Licensee as a result of
any infringement or allegation thereof by any other person, firm or corporation,
other than by reason of Licensor's breach of the representations made and
obligations assumed herein. Licensor and Ms. Kathy Hilton make no warranties or
representations as to the registrability of the Licensed Marks in the various
worldwide trademark offices in the Territory, except that Licensor warrants and
represents that a trademark application will be filed for the Licensed Mark in
the United States Patent and Trademark Office in International Class 3. Licensor
and Ms. Kathy Hilton warrant and represent that they are not aware of any
registrations or pending applications in International Class 3, or otherwise,
that would preclude or restrict Licensee from selling the Licensed Products
anywhere in the Territory.

     

    ARTICLE
14

    

    Defaults;
Termination

    

    A.  
The following conditions and occurrences shall constitute "Events of Default" by
Licensee:

     

    
      
        	
              	
                1.

              	
                the
      failure to pay Licensor the full amount due it under any of the provisions
      of this Agreement by the prescribed date for such
  payment;

              

      

      

      
        	
              	
                2.

              	
                the
      failure to deliver full and accurate reports pursuant to any of the
      provisions of this Agreement by the prescribed due date
      therefore;

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          	
                	
                  3.

                	
                  the
      making or furnishing of a knowingly false statement in connection with or
      as part of any material aspect of a report, notice or request rendered
      pursuant to this Agreement;

                
	 	 	 

        

      

      
        
          	
                	
                  4.

                	
                  the
      failure to maintain the insurance required by Article
  12;

                
	 	 	 

        

      

      
        
          	
                	
                  5.

                	
                  use
      of the Licensed Marks in an unauthorized or unapproved
    manner;

                
	 	 	 

        

      

      
        
          	
                	
                  6.

                	
                  Licensee's
      use of other trademarks in association with the Licensed Products, without
      prior written consent of Licensor;

                
	 	 	 

        

      

      
        
          	
                	
                  7.

                	
                  the
      commencement against Licensee of any proceeding in bankruptcy, or similar
      law, seeking reorganization, liquidation, dissolution, arrangement,
      readjustment, discharge of debt, or seeking the appointment of a receiver,
      trustee or custodian of all or any substantial part of Licensee's
      property, not dismissed within sixty (60) days, or Licensee's making of an
      assignment for the benefit of creditors, filing of a bankruptcy petition,
      its acknowledgment of its insolvency or inability to pay debts, or taking
      advantage of any other provision of the bankruptcy
laws;

                
	 	 	 

        

      

      
        	
              	
                8.

              	
                the
      material breach of any other material promise or agreement made
      herein.

              

      

    

     

    B.  
In the event Licensee fails to cure (i) an Event of Default within thirty (30)
days after written notice of default is transmitted to Licensee under Article
14A.3, A.5, A.6, or A.7; or (ii) Licensee fails to cure any other Event of
Default within sixty (60) days after written notice of default is transmitted to
Licensee or within such further period as Licensor may allow, this Agreement
shall, at Licensor's option, be terminated, on notice to Licensee, without
prejudice to Licensor's right to receive other payments due or owing to Licensor
under this Agreement or to any other right of Licensor, including the right to
damages and/or equitable relief , except with respect to a failure to make all
of the payments due under paragraph A of this Article 14, which shall only give
rise to a right of termination and the payment of a termination fee of $100,000
by Licensor and not a right to recover Guaranteed Minimum Royalties
..

    

    C.  
Upon the termination of this Agreement; or, in the event this Agreement is not
renewed as provided in Article 4 above; or, in the event of the termination or
expiration of a renewal term of this Agreement, Licensee, except as specified
below, will immediately discontinue use of the Licensed Marks, will not resume
the use thereof or adopt any colorable imitation of the Licensed Marks or any of
part thereof, will promptly deliver and convey to Licensor (free of all liens
and encumbrances) (i) all plates, engravings, silk-screens, or the like used to
make or reproduce the Licensed Marks, and (ii) all items affixed with likeness
or reproductions of the Licensed Mark, whether Licensed Products, labels, bags,
hangers, tags or otherwise, and, upon request by Licensor, will assign to
Licensor such rights as Licensee may have acquired in the Licensed Marks. In the
event that this Agreement expires or is terminated by Licensor due to Licensee's
default, Licensor shall have an option, but not an obligation, to purchase any
bottle molds and tooling for the Licensed Products, free of all liens and other
encumbrances, at a price equal to Licensee's cost for same established by
submission of bill(s) from supplier and satisfactory proof of payment for same.
Licensor shall pay such cost as follows: 50% at closing and the balance paid by
six (6) equal monthly payments. Licensor shall, at the time it exercises its
purchase option, enter into a security agreement with Licensee with respect to
the molds, which shall entitle Licensee to foreclose on its security interest in
the molds in the event Licensor fails to make any installment payments due
within fifteen (15) days after receiving notice of default. Licensor shall
exercise its aforesaid option within thirty (30) days after Licensee's
submission of documents establishing the cost thereof. Notwithstanding the
foregoing, if Licensor has terminated this Agreement due to Licensee's default,
Licensor, at its option, shall be entitled, in exercising its purchase option,
to deduct from the cost price an amount equal to the sales and guaranteed
minimum royalties Licensor is entitled to recover, for which deduction Licensee
shall receive a credit. In the event Licensor exercises its aforesaid option,
Licensee shall be precluded forever from using the bottle molds or tools and
from selling or otherwise transferring or licensing any rights whatsoever in the
molds or tools to any third party. In the event that Licensor does not exercise
its aforesaid option, Licensee shall not use the bottle molds or tools or sell
or otherwise transfer or license any rights whatsoever in the bottle mold or
tools to any third party for a period of two (2) years after the date of
termination of the Agreement. In the event of any permitted use of the bottle
mold and/or tools by Licensee, Licensee shall not use in connection therewith
the Licensed Mark, any trademark confusingly similar thereto, any trade dress
associated with the Licensed Products, any advertising or promotional materials
used in connection with the Licensed Products or any other markings or materials
which would cause a reasonable consumer to believe that any new items sold using
the bottle mold and tools are authorized by Licensor or in some way associated
with the Licensed Marks. Any permitted sale or license of the bottle molds
and/or tools by Licensee shall prohibit in writing the purchaser or licensee
from using the Licensed Marks, and any confusingly similar trademarks and any
such trade dress, advertising, promotional materials, markings or other
materials and shall expressly make Licensor a third party beneficiary of such
provision.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
15

    

    Rights on Expiration or
Termination

    

    A.  
If this Agreement expires or is terminated, Licensee shall cease to manufacture
Licensed Products (except for work in process or to balance component inventory)
but shall be entitled, for an additional period of twelve (12) months only, on a
non-exclusive basis, to sell and dispose of its inventory subject, however, to
the provisions of Article 9. Such sales shall be made subject to all of the
provisions of this Agreement and to an accounting for and the payment of Sales
Royalties thereon but not to the payment of Guaranteed Minimum Royalties. Such
accounting and payment shall be made monthly.

     

    B.  
In the event of termination in accordance with Article 14 above, Licensee shall
pay to Licensor, the Sales Royalty then owed to it pursuant to this Agreement or
otherwise.

    

    C.  
Notwithstanding any termination in accordance with Article 14 above, Licensor
shall have and hereby reserve all rights and remedies which it has, or which are
granted to it by operation of law, to enjoin the unlawful or unauthorized use of
the Licensed Mark, and to collect royalties payable by Licensee pursuant to this
Agreement and to be compensated for damages for the breach of this
Agreement.

    

    D.  
Upon the expiration or termination of this Agreement, Licensee shall deliver to
Licensor a complete and accurate schedule of Licensee's inventory of Licensed
Products and of related work in process then on hand (including any such items
held by Subsidiaries, Affiliates or others on behalf of Licensee) (hereinafter
referred to as "Inventory”). Such schedule shall be prepared as of the close of
business on the date of such expiration or termination and shall reflect
Licensee's cost of each such item. Notwithstanding anything contained to the
contrary in this Agreement, Licensor thereupon shall have the option,
exercisable by notice in writing delivered to Licensee within thirty (30) days
after its receipt of the complete Inventory schedule, to purchase any or the
entire Inventory, free of all liens and other encumbrances, for an amount equal
to Licensee's cost plus *%. In the event such notice is sent by Licensor,
Licensee shall deliver to Licensor or its designee all of the Inventory referred
to therein within thirty (30) days after Licensor's said notice and, in respect
of any Inventory so purchased, assign to Licensor all then outstanding orders
from Licensee to its suppliers and to Licensee from its customers. Licensor
shall pay Licensee for such Inventory within twenty (20) days after the delivery
of such Inventory to Licensor. No Sales Royalty shall be payable to Licensor
with respect to the Inventory purchased by Licensor.

     

    ARTICLE
16

    

    Sublicensing and
Distribution

    

    A.  
The performance of Licensee hereunder is of a personal nature. Therefore,
neither this Agreement nor the License or other rights granted hereunder may be
assigned, sublicensed or transferred by Licensee, whether to a Subsidiary,
Affiliate or unrelated third-party except by prior written approval of Licensor,
which approval will not be unreasonably withheld. However, any assignment of
this Agreement or the rights granted hereunder must be to an entity with equal
or superior financial strength to Licensee , unless Licensor agrees otherwise
..

    

    B.  
Notwithstanding anything contained to the contrary in this Agreement, this
Agreement shall not terminate if Licensee is merged or otherwise consolidated
into another entity which is the surviving entity of equal or superior financial
strength.

    

    C.  
Licensee shall be entitled to use distributors in connection with its sale of
Licensed Products under this Agreement without approval of Licensor. No such
distributor, however, shall be entitled to exercise any of Licensee's rights
hereunder except for the manufacture and sale of Licensed Products which have
been approved by Licensor hereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
17

     

    Miscellaneous

    

    A.  
Representations
.. The parties respectively represent and warrant that they have full right,
power and authority to enter into this Agreement and perform all of their
obligations hereunder and that they are under no legal impediment which would
prevent their signing this Agreement or consummating the same. Licensor
represents and warrants that it has the right to license the Licensed Mark and
that Licensor has not granted any other existing license to use the Licensed
Mark on products covered hereunder in the Territory and that no such license
will be granted during the Term of this Agreement except in accordance with the
provisions hereof.

    

    B.  
Licensor's
Rights. Not withstanding anything to the contrary contained in this
Agreement, Licensor shall not have the right to negotiate or enter into
agreements with third parties pursuant to which it may grant a license to use
the Licensed Marks in connection with the manufacture, distribution and/or sale
of products covered hereunder in the Territory or provide consultation and
design services with respect to such products in the Territory prior to the
termination or expiration of this Agreement.

    

    C.  
Governing Law; Entire
Agreement . T his Agreement shall be construed and interpreted in
accordance with the laws of the State of the defendant, either California or
Florida, applicable to agreements made and to be performed in said State,
contains the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof, supersedes all prior oral or written
understandings and agreements relating thereto and may not be modified,
discharged or terminated, nor may any of the provisions hereof be waived,
orally. Any legal action must be brought in the State of the defendant, either
California for Licensor or Florida for Licensee.

    

    D.  
No Agency.
Nothing herein contained shall be construed to constitute the parties hereto as
partners or as joint venturers, or either as agent of the other, and Licensee
shall have no power to obligate or bind Licensor in any manner
whatsoever.

    

    E.  
No Waiver. No
waiver by either party, whether express or implied, of any provision of this
Agreement, or of any breach or default thereof, shall constitute a continuing
waiver of such provision or of any other provision of this Agreement. Acceptance
of payments by Licensor shall not be deemed a waiver by Licensor of any
violation of or default under any of the provisions of this Agreement by
Licensee.

    

    F.  
Void
Provisions. If any provision or any portion of any provision of this
Agreement shall be held to be void or unenforceable, the remaining provisions of
this Agreement and the remaining portion of any provision held void or
unenforceable in part shall continue in full force and effect.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    G.  
Construction.
This Agreement shall be construed without regard to any presumption or other
rule requiring construction against the party causing this Agreement to be
drafted. If any words or phrases in this Agreement shall have been stricken out
or otherwise eliminated, whether or not any other words or phrases have been
added, this Agreement shall be construed as if those words or phrases were never
included in this Agreement, and no implication or inference shall be drawn from
the fact that the words or phrases were so stricken out or otherwise
eliminated.

    

    H.  
Force Majeure.
Neither party hereto shall be liable to the other for delay in any performance
or for the failure to render any performance under the Agreement (other than
payment to any accrued obligation for the payment of money) when such delay or
failure is by reason of lockouts, strikes, riots, fires, explosions, blockade,
civil commotion, epidemic, insurrection, war or warlike conditions, the
elements, embargoes, act of God or the public enemy, compliance with any law,
regulation or other governmental order, whether or not valid, or other similar
causes beyond the control of the party effected. The party claiming to be so
affected shall give notice to the other party promptly after it learns of the
occurrence of said event and of the adverse results thereof. Such notice shall
set forth the nature and extent of the event. The delay or failure shall not be
excused unless such notice is so given. Notwithstanding any other provision of
this Agreement, either party may terminate this Agreement if the other party is
unable to perform any or all of its obligations hereunder for a period of six
(6) months by reason of said event as if the date of termination were the date
set forth herein as the expiration date hereof. If either party elects to
terminate this Agreement under this paragraph, Licensee shall have no further
obligations for the Guaranteed Minimum Royalties beyond the date of termination
(which shall be prorated if less than an Annual Period is involved) and shall be
obligated to pay any Sales Royalty which is then due or becomes
due.

    

    I.  
Binding Effect.
This Agreement shall inure to the benefit of and shall be binding upon the
parties, their respective successors, Licensor's transferees and assigns and
Licensee's permitted transferees and assigns.

    

    J.  
Resolution of
Disputes. Any controversy or claim arising out of, in connection with, or
relating to this Agreement, shall be determined by arbitration by a three person
arbitration panel at the office of the American Arbitration Association. Both
Parties shall share equally the cost of such arbitration (except each shall bear
its own attorney's fees). Any decision rendered by the arbitrators shall be
final and binding, and judgment may be entered in any court having
jurisdiction.

    

    K.  
Consolidation.
Notwithstanding anything contained to the contrary in this Agreement (i) this
Agreement shall not terminate if Licensor is merged or otherwise consolidated
into another entity which is the surviving entity; and, (ii) Licensor shall be
entitled to assign this Agreement to any Corporation to which the Trademark is
assigned.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    L.  
Survival. The
provisions of Licensed Products in Sections 11, 12A, 12D, 13, 15, 16, and 17
shall survive any expiration or termination of this Agreement.

    

    M.  
Paragraph
Headings. The paragraph headings in this Agreement are for convenience of
reference only and shall be given no substantive effect.

     

    ARTICLE
18

     

    Notices

    

    Any
notice or other communications required or permitted by this Agreement to be
given to a party will be in writing and will be considered to be duly given when
sent by any recognized overnight courier service to the party concerned to the
following persons at their stated addresses (or to such other persons or
addresses as a party may specify by notice to the other):

     

    
      	
               
      To Licensor:

            	 
      	
              Richard
      & Kathy Hilton

              250
      North Canon Dr. 2nd Floor,

              Beverly
      Hills, CA 90210

              Hilt4321@aol.com

            
	 
      	 
      	 
      
	
               
      With a copy to:

            	 
      	
              Robert
      L. Tucker, Esq.,

              Tucker
      & Latifi, LLP

              160
      East 84th Street, New York, NY 10028

               
      Tel: 212-472-6262; Fax: 212-744-6509.

               
      RTucker@TuckerLatifi.com

            
	 
      	 
      	 
      
	
               
      and:

            	 
      	
              GLMAC

              2875
      NE 191 st
      Street

              Suite
      501

              Aventura,
      Fl. 33180

              Attn:
      Mr. Lucien Lallouz

              lallouz@glmac.com

            
	 
      	 
      	 
      
	
               
      To Licensee:

            	 
      	
              OmniReliant
      Corp.

              4902
      Eisenhower Blvd.,

              Suite
      185

              Tampa,
      Florida 33634

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      With a copy to:  

            	 
      	
              Steven
      Holtzman, Esq.  

              Ruden
      McClosky

              401
      E. Jackson Street

              Suite
      2700

              Tampa,
      Florida 33602

              Tel:
      813-222-6616 Fax: 813-314-6916

              Steve.Holzman@ruden.com

            

    

     
 

    Notice of
the change of any such address shall be duly given by either party to the other
in the manner herein provided.

    

     EXECUTED on the day and year
first written above:

     

    
      
        	 
      	 
      	 
      
	 
      	
                OMNIRELIANT
      CORP.

              
	 
      	 
      	 
      
	 
      	
                By:  

              	 
      
	 
      	
                
                  Chris
      D. Phillips,   Pr esident

                

              

      

    

    

    
      
        	 
      	 
      	 
      
	 
      	
                KRH
      LICENSING COMPANY, LLC

              
	 
      	 
      	 
      
	 
      	
                By:  

              	 
      
	 
      	
                
                  Richard
      Hilton, President

                

              

      

    

     

    Ms. Kathy
Hilton warrants and represents that should there be a successor entity to the
rights to the KATHY HILTON trademark, such successor shall assume the
obligations and succeed to the rights of the Licensor and the rights of Licensee
shall continue unaffected.

    

    ACKNOWLEDGE and APPROVED
:

     

    
      

    

    Kathy
Hilton

    

    Dated:
October ___, 2006

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}]]