May , 2007
Exhibit
99.3
May
,
2007
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention
of Xxxxx X. Xxxxxxxx P.C.
Gentlemen:
This
agreement will set forth the terms pursuant to which (a) China Education
Alliance, Inc., a North Carolina corporation (the “Company”) will deposit into
escrow with you (the “Escrow Agent”) 2,833,333 shares (the “Company Shares”) of
Common Stock, and (b) Xiquin Yu (“Yu”) will deposit into escrow with the Escrow
Agent 2,833,333 shares (the “Common Shares”) of the Company’s common stock, par
value $.001 per share (“Common Stock”), pursuant to a securities purchase
agreement (the “Purchase Agreement”) dated May 8, 2007 and amended by an
amendment dated as of May 23, 2007. At such time as the Company has authorized
the creation of the Series A Convertible Preferred Stock, par value $.001 per
share (“Series A Preferred Stock”), the Company shall issued to the Escrow Agent
2,833,333 shares of Series A Preferred Stock (the “Preferred Shares”), and the
Escrow Agent shall return to the Company the Company Shares. The Company Shares
or the Preferred Shares and the Common Shares, together with the stock power
referred to in Section 2 of this Agreement, are collectively referred to as
the
“Escrow Property.”
1. The
Escrow Agent agrees to hold the Escrow Property on and subject to the terms
of
this Agreement. The parties acknowledge that the Escrow Agent is not and will
not be a party to the Purchase Agreement. The Escrow Agent has and will have
no
obligations under the Purchase Agreement, and the Escrow Agent’s only
obligations are those expressly set forth in this Escrow Agreement.
2. The
Common Shares will remain in the name of Yu, and shall be accompanied by stock
powers endorsed in blank, signed by Yu with his signature medallion guaranteed
unless the Company’s transfer agent does not require the signature guarantee.
The Company Shares and Preferred Shares will issued in the name of Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP, as escrow agent. In any meeting at which approval
of
the holders of the Common Stock or the Series A Preferred Stock is required
or
requested, the Escrow Agent shall vote the Company Shares or the Preferred
Shares, as the case may be, in the same proportion that other holders of Series
A Preferred Stock vote on such matter. The Escrow Agent shall execute a written
consent of holders of the Series A Preferred Stock if the holders of record
of
at least 80% of the outstanding shares of Series A Preferred Stock shall have
executed such a consent. If no shares of Series A Preferred Stock shall have
been issued, the Escrow Agent shall not vote the Company Shares.
3. Section
6.15 of the Purchase Agreement provides for the transfer of some or all of
the
Common Shares to the Company and some or all of the Preferred Shares (or Company
Shares if the Preferred Shares shall not have been issued) to the Investors
named in the Purchase Agreement. If the Escrow Agent receives the joint written
notice from Xxxxxx Partners LP (“Xxxxxx”), the Company and Yu (collectively, the
“Interested Parties”) as to the disposition of any or all of the Escrow
Property, the Escrow Agent shall distribute the Escrow Property in accordance
with the joint written instructions.
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
May
,
2007
Page
2
4. If
the
Escrow Agent receives written instructions signed by some but not all of the
Interested Parties, the Escrow Agent shall, within five (5) business days from
its receipt of such instructions, send a copy of such instructions to the other
Interested Parties by overnight courier service which provides evidence of
delivery. If the Escrow Agent shall not have received notice from any of the
other Interested Parties by the close of business on the fifteenth
(15th)
business day after delivery of the instructions disputing the instruction,
the
Escrow Agent shall distribute the Escrow Property in accordance with the
instructions.
5. If
the
Escrow Agent shall have received notice from any of the other Interested Parties
by the close of business on the fifteenth (15th)
business day after delivery of the instructions disputing or conflicting with
the instruction, the Escrow Agent shall retain the Escrow Property until it
shall have received either (a) joint written instructions from all of the
Interested Parties or (b) a court order, final beyond right of review, as to
the
disposition of the Escrow Property, in which event the Escrow Agent shall
distribution the Escrow Property in accordance with such instructions or court
order.
6. In
the
event that the Escrow Agent shall be uncertain as to its obligations with
respect to the Escrow Property, or shall receive instructions, claims or demands
which, in the Escrow Agent’s opinion, are in conflict with each other or with
any of the provisions of this Agreement, the Escrow Agent shall refrain from
taking any action other than to keep safely all Escrow Property until the Escrow
Agent shall have written instructions from all Interested Parties as to the
disposition of Escrow Property or until the Escrow Agent is directed by a final
judgment of a court of competent jurisdiction final beyond right of review.
In
addition, in such circumstances, the Escrow Agent may deposit the Escrow
Property into court, there to abide a decision of the court. In this connection,
each of the parties consents to the exclusive jurisdiction of the federal and
state courts located in the City, County and State of New York.
7. This
Agreement shall terminate upon a distribution of all of the Escrow Property
pursuant to Section 3, 4, 5 or 6 of this Agreement.
8. The
Interested Parties shall jointly and severally (i) reimburse the Escrow Agent
for all reasonable expenses incurred by the Escrow Agent in connection with
its
duties hereunder and (ii) indemnify
and hold harmless the Escrow Agent against any and all losses, claims,
liabilities, costs, payments and expenses, including
reasonable legal fees for counsel who may be selected by the Escrow Agent,
which
may be imposed upon or incurred by the Escrow Agent hereunder, except as a
result of the gross negligence or willful misconduct of the Escrow
Agent.
9. The
Escrow Agent shall have no duties or responsibilities except those expressly
set
forth in this Agreement. The Escrow Agent shall have no liability under, or
duty
to inquire into the terms and provisions of, any agreement between the parties,
including the Purchase Agreement. No person, firm or corporation will be
recognized by the Escrow Agent as a successor or assignee of any party until
there shall be presented to the Escrow Agent evidence satisfactory to it of
such
succession or assignment. The Escrow Agent may rely upon any instrument in
writing believed in good faith by it to be genuine and sufficient and properly
presented and shall not be liable or responsible for any action taken or omitted
in accordance with the provisions thereof. The Escrow Agent shall not be liable
or responsible for any act it may do or omit to do in connection with the
performance of its duties as Escrow Agent, except for its gross negligence
or
willful misconduct. The Escrow Agent may consult with counsel, including
partners or associates of and attorneys who are of counsel to the Escrow Agent,
and shall be fully protected with respect to any action taken or omitted by
it
in good faith on written advice of counsel.
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
May
,
2007
Page
3
10. The
Escrow Agent may at any time resign hereunder by giving written notice of its
resignation to the other parties hereto, at their addresses set forth below,
at
least twenty (20) business days prior to the date specified for such resignation
to take effect. If the Escrow Agent shall resign, and upon the effective date
of
the resignation of the Escrow Agent, all property then held by the Escrow Agent
pursuant to this Agreement shall be delivered by the Escrow Agent to such person
as may be designated in writing by the joint instructions of the Interested
Parties, whereupon all such Escrow Agent’s obligations hereunder shall cease and
terminate. If no such person shall have been designated by such date, all of
the
Escrow Agent’s obligations hereunder shall, nevertheless, cease and terminate.
The Escrow Agent’s sole responsibility thereafter shall be to keep safely all
Escrow Property then held by the Escrow Agent and to deliver the same to a
person jointly designated as provided in this Agreement or, if the parties
shall
have failed to designate a successor escrow agent, the Escrow Agent may deposit
the Escrow Property into a court of competent jurisdiction as provided in
Section 6 of this Agreement.
11. Any
notice, request, demand and other communication hereunder shall be in writing
and shall be deemed to have been duly given if delivered by facsimile or e-mail
(if receipt is confirmed by the recipient) or sent by messenger or overnight
courier service which provides evidence of delivery or by certified or
registered mail, return receipt requested, postage
prepaid, and shall be deemed given when delivered, if to the Company or Xxxxxx
Partners at their addresses set forth on the signature page of this Agreement.
If any party refuses to accept delivery (other than notice given by telecopier),
notice shall be deemed to have been given on the date of attempted delivery.
Any
party may, by like notice, change the person, address or telecopier number
to
which notice should be sent.
12. This
Agreement shall in all respects be construed and interpreted in accordance
with,
and the rights of the parties shall be governed by, the laws of the State of
New
York applicable to contracts executed and to be performed wholly within such
State. Each party hereby (a) consents to the exclusive jurisdiction of the
United States district court for the Southern District of New York and Supreme
Court of the State of New York in the County of New York in any action relating
to or arising out of this Agreement, (b) agrees that any process in any action
commenced in such court under this Agreement may be served upon either (i)
by
certified or registered mail, return receipt requested, or by messenger or
courier service which obtains evidence of delivery, with the same full force
and
effect as if personally served upon him in New York City or (ii) by any other
method of service permitted by law and (c) waives any claim that the
jurisdiction of any such tribunal is not a convenient forum for any such action
and any defense or lack of in personam jurisdiction with respect
thereto.
13. Section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
14. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, personal representatives, successors
and
assigns; provided, that any assignment of this Agreement or their rights
hereunder by any party hereto without the written consent of the other parties
shall be void. Nothing in this Agreement is intended to confer upon any other
person any rights or remedies under or by reason of this Agreement.
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
May
,
2007
Page
4
15. This
Agreement may be executed and delivered in counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
16. No
modification, waiver or discharge of any provisions of this Agreement shall
bind
any party unless it is in writing, specifically refers to this Agreement and
is
signed by or on behalf of the party to be bound or affected
thereby.
17. Xxxxxx
and Yu acknowledges that the Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP is also acting
as counsel for the Company in connection with the Purchase Agreement, and such
firm shall have the right to represent the Company in any action relating to
or
arising out of the Purchase Agreement any other agreement between the Company,
on the one hand, and Xxxxxx or Yu, on the other hand.
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Very
truly yours,
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Address
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Signature
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c/x
Xxxxxx Capital Advisors LLC
Managing
Partner
Attn:
Xxxxxx Xxxxxx Xxxxxx
000
Xxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx XX 00000
fax:
(000) 000-0000
e-mail:
xxx@xxxxxxxxxxxxxx.xxx
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XXXXXX
PARTNERS, L.P.
By:
XXXXXX CAPITAL ADVISORS LLC
Managing
Partner
By:
/s/
Xxxxxx Xxxxxx Xxxxxx
Xxxxxx
Xxxxxx Xxxxxx, CEO
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0000
Xxxxxxxx Xx.
Xxx
Xxxxx, XX 00000
e-mail:
xxxxxxx@xxxxxxxxxx.xxx
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EOS
HOLDINGS
By:
/s/
Xxx X. Xxxxxx
Xxx
X. Xxxxxx, President
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000
Xxxx Xxxxxx, 0xx
xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
e-mail: xxxxxx@xx.xxxxxx.xxx
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HUA-MEI
21ST
CENTURY PARTNERS, LP
By:
/s/
Xxxxx Xxxxx
Xxxxx
Xxxxx, CEO
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80
Xxxx Xxxx Road, Kun Lun Shopping Mall
Harbin,
CHINA 150090
e-mail:
xxx0000@000.xxx
and xxxxxxxxxxx.xx@xxxxx.xxx
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CHINA
EDUCATION ALLIANCE, INC.
By:
/s/
Xiqun Yu
Xiqun
Yu,
Chief Executive Officer
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Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
May
,
2007
Page
5
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80
Xxxx Xxxx Road, Kun Lun Shopping Mall
Harbin,
CHINA 150090
e-mail:
xxx0000@000.xxx
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/s/
Xiqun Yu
Xiqun
Yu
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00
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxxx X. Xxxxxxxx P.C.
fax:
(000) 000-0000
e-mail:
xxxxxxxxx@xxxx.xxx
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AGREED
TO AND ACCEPTED:
SICHENZIA
XXXX XXXXXXXX XXXXXXX LLP
By:
/s/
Xxxxx X. Xxxxxxxx P.C.
Xxxxx
X. Xxxxxxxx P.C., of counsel
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