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EXHIBIT 10.2
 
REGISTRATION RIGHTS AGREEMENT
 
This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated August 30, 2012, is
between YOU On Demand Holdings, Inc., a Nevada corporation (the “Company”), and
each purchaser identified on Schedule A hereto (each, including their respective
successors and assigns, an “Investor” and collectively, the “Investors”).
 
WHEREAS, in connection with the Securities Purchase Agreement by and among the
parties hereto of even date herewith (the “Securities Purchase Agreement”), the
Company has agreed, upon the terms and subject to the conditions set forth in
the Securities Purchase Agreement, to issue and sell to the Investors, at their
option, either (i) Class A Units (each, a “Class A Unit”), with each Class A
Unit Consisting of (a) one (1) share (collectively, the “Class AShares”) of the
Company’s common stock, par value US$0.001 per share (the “Common Stock”) and
(b) a warrant (the “Warrants”), which will be exercisable to purchase one (1)
share of Common Stock (as exercised collectively, the “Warrant Shares”), or (ii)
Class B Units (each, a “Class B Unit”), with each Class B Unit consisting of (x)
one share (collectively, the “Class B Shares”, and together with the Class A
Shares, the “Shares”) of the Company’s Series C Preferred Stock, par value
US$0.001 per share (the “Series C Preferred Stock”; and (y) a Warrant; and
 
WHEREAS, in accordance with the terms of the Securities Purchase Agreement, the
Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any
similar successor statute (collectively, the “Securities Act”), and applicable
state securities laws.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the
Investors hereby agree as follows:
 
1.             Definitions.
 
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.  As used in
this Agreement, the following terms shall have the following meanings:
 
(a)           “Additional Effectiveness Date” means the date the Additional
Registration Statement is declared effective by the SEC.
 
(b)           “Additional Effectiveness Deadline” means the date which is sixty
(60) calendar days after the Additional Filing Date or, in the event that the
Registration Statement is subject to a review by the SEC, one hundred twenty
(120) calendar days after the Additional Filing Date.
 
(c)           “Additional Filing Date” means the date on which the Additional
Registration Statement is filed with the SEC.
 
 
 

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(d)           “Additional Filing Deadline” means if Cutback Shares are required
to be included in the Additional Registration Statement, one hundred eighty
(180) days from the Initial Effectiveness Date or the last Additional
Effectiveness Date, as applicable.
 
(e)           “Additional Registrable Securities” means, (i) any Cutback Shares
not previously included on a Registration Statement and (ii) any shares of
Common Stock of the Company issued or issuable with respect to the Shares, the
Common Stock underlying the Series C Preferred Shares, the Warrants or the
Warrant Shares, as applicable, as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on exercises of the Warrants.
 
(f)           “Additional Registration Statement” means a registration statement
or registration statements of the Company filed under the Securities Act
covering any Additional Registrable Securities.
 
(g)           “Additional Required Registration Amount” means any Cutback Shares
not previously included on a Registration Statement, all subject to adjustment
as provided in Section 2(f), without regard to any limitations on exercises of
the Warrants, if any.
 
(h)           “Business Day” means any day (i) other than (A) Saturday, (B)
Sunday or (C) any day on which commercial banks in New York City are authorized
or required by law to remain closed and (ii) that the SEC is open for business.
 
(i)            “Closing Date” shall have the meaning set forth in the Securities
Purchase Agreement.
 
(j)            “Cutback Shares” means any of the Initial Required Registration
Amount of Registrable Securities not included in all Registration Statements
previously declared effective hereunder as a result of a limitation on the
maximum number of shares of Common Stock of the Company permitted to be
registered by the staff of the SEC pursuant to Rule 415.
 
(k)           “Effectiveness Date” means the Initial Effectiveness Date and the
Additional Effectiveness Date, as applicable.
 
(l)            “Effectiveness Deadline” means the Initial Effectiveness Deadline
and the Additional Effectiveness Deadline, as applicable.
 
(m)          “Exchange Act” means the Securities and Exchange Act of 1934, as
amended, and the rules and regulations thereunder, or any similar successor
statute.
 
(n)           “Filing Deadline” means the Initial Filing Deadline and the
Additional Filing Deadline, as applicable.
 
(o)           “Initial Effectiveness Date” means the date that the Initial
Registration Statement has been declared effective by the SEC.
 
 
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(p)           “Initial Effectiveness Deadline” means the date that is ninety
(90) days following the final Closing Date; provided, however, in the event the
SEC informs the Company (i) that the SEC will not review such Registration
Statement or (ii) that the Company may request the acceleration of the
effectiveness of such Registration Statement and the Company makes such request,
the Initial Effectiveness Deadline shall mean the date that is within five (5)
Business Days the Company is so informed pursuant to either clause (i) or (ii)
hereof; provided, further, that if the Initial Effectiveness Date falls on a day
other than a Business Day, the Initial Effectiveness Deadline shall be the
following Business Day.
 
(q)           “Initial Filing Deadline” means the date that is thirty (30)
calendar days after the final Closing Date.
 
(r)           “Initial Registrable Securities” means (i) the shares of Common
Stock, (ii) the Warrant Shares, (iii) the shares of Common Stock underlying the
Series C Preferred Stock and (iii) any capital stock of the Company issued or
issuable, with respect to the Series C Preferred Shares, the Warrant Shares or
the Warrants as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitations on
exercises of the Warrants.
 
(s)           “Initial Required Registration Amount” means (i) the sum of (A)
the number of Shares issued as of the Trading Day immediately preceding the
applicable date of determination, and (B) the number of Warrant Shares issued
and issuable pursuant to the Warrants as of the Trading Day immediately
preceding the applicable date of determination, all subject to adjustment as
provided in Section 2(f), without regard to any limitations on exercises of the
Warrants, if any or (ii) such other amount as may be required by the staff of
the SEC pursuant to Rule 415.
 
(t)            “Initial Registration Statement” means the registration statement
of the Company initially filed under the Securities Act covering the Initial
Registrable Securities.
 
(u)           “Investor” means an Investor or any transferee or assignee thereof
to whom a Investor assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 9
and any transferee or assignee thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 9.
 
(v)           “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
 
(w)          “register,” “registered,” and “registration” refer to a
registration effected by preparing and filing one or more Registration
Statements in compliance with the Securities Act and pursuant to Rule 415 and
the declaration or ordering of effectiveness of such Registration Statement(s)
by the SEC.
 
(x)           “Registrable Securities” means the Initial Registrable Securities
and the Additional Registrable Securities.
 
 
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(y)           “Registration Statement” means a registration statement or
registration statements, including the Initial Registration Statement and any
Additional Registration Statements, of the Company filed under the Securities
Act covering the Registrable Securities.
 
(z)           “Required Holders” means the holders of at least a majority of the
Registrable Securities or the Investor Representative acting on behalf of such
requisite number of holders.
 
(aa)         “Required Registration Amount” means either the Initial Required
Registration Amount or the Additional Required Registration Amount, as
applicable.
 
(bb)         “Rule 415” means Rule 415 under the Securities Act or any successor
rule providing for offering securities on a continuous or delayed basis.
 
(cc)          “SEC” means the United States Securities and Exchange Commission.
 
2.             Registration.
 
(a)         Mandatory Registration.  The Company shall prepare, and file with
the SEC, on or before the Initial Filing Deadline, the Registration Statement on
Form S-3 (or Form S-1 or any other applicable form, if Form S-3 is not available
to the Company) covering the resale of all of the Registrable Securities.  The
Registration Statement prepared pursuant hereto shall register for resale at
least the number of shares of Common Stock equal to the Required Registration
Amount determined as of the date the Registration Statement is initially filed
with the SEC.  The Registration Statement shall contain customary “Selling
Stockholders” and “Plan of Distribution” sections.  The Company shall use its
commercially reasonable efforts to have the Registration Statement declared
effective as soon as reasonably practicable after the final Closing Date, but in
no event later than the Initial Effectiveness Deadline.  By 9:30 a.m. New York
City time on the Business Day following the Effective Date, the Company shall
file with the SEC in accordance with Rule 424 under the Securities Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement.
 
(b)         Additional Mandatory Registrations.  The Company shall prepare, and,
as soon as practicable but in no event later than the Additional Filing
Deadline, file with the SEC an Additional Registration Statement on Form S-3 (or
Form S-1 or any other applicable form, if Form S-3 is not available to the
Company) covering the resale of all of the Additional Registrable Securities not
previously registered on an Additional Registration Statement hereunder.  To the
extent the staff of the SEC does not permit the Additional Required Registration
Amount to be registered on an Additional Registration Statement, the Company
shall file Additional Registration Statements successively trying to register on
each such Additional Registration Statement the maximum number of remaining
Additional Registrable Securities until the Additional Required Registration
Amount has been registered with the SEC.  Each Additional Registration Statement
prepared pursuant hereto shall register for resale at least that number of
shares of Common Stock equal to the Additional Required Registration Amount as
of date the Registration Statement is initially filed with the SEC.  Each
Additional Registration Statement shall contain customary “Selling Stockholders”
and “Plan of Distribution” sections.  The Company shall use its commercially
reasonable efforts to have each Additional Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than the
Additional Effectiveness Deadline.  By 9:30 a.m. New York time on the date
following the Additional Effective Date, the Company shall file with the SEC in
accordance with Rule 424 under the Securities Act the final prospectus to be
used in connection with sales pursuant to such Registration Statement.
 
 
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(c)          Allocation of Registrable Securities.  The initial number of
Registrable Securities included in any Registration Statement and any increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors based on the number of Registrable Securities held by
each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC.  In the event that an Investor sells or otherwise transfers any of such
Investor’s Registrable Securities, each transferee shall be allocated a pro rata
portion of the then remaining number of Registrable Securities included in such
Registration Statement for such transferor.  Any shares of Common Stock included
in a Registration Statement and which remain allocated to any Person which
ceases to hold any Registrable Securities covered by such Registration Statement
shall be allocated to the remaining Investors, pro rata based on the number of
Registrable Securities then held by such Investors which are covered by such
Registration Statement.  In no event shall the Company include any securities
other than Registrable Securities on any Registration Statement without the
prior written consent of the Required Holders or the Investor Representative. If
the SEC requires that the Company register less than the amount of Registrable
Securities originally included on any Registration Statement at the time it was
filed, the Registrable Securities on such Registration Statement shall be
decreased on a pro rata basis and, unless otherwise requested by an Investor
with respect to its Shares and Warrant Shares, the Warrant Shares included on
such Registration Statement shall be decreased first.
 
(d)         Sufficient Number of Shares Registered.  In the event the number of
shares available under a Registration Statement filed pursuant to Section 2(a)
is insufficient to cover all of the Registrable Securities required to be
covered by such Registration Statement or an Investor’s allocated portion of the
Registrable Securities pursuant to Section 2(c), the Company shall amend the
applicable Registration Statement, or file a new Registration Statement on Form
S-3 (or Form S-1 or any other applicable form, if Form S-3 is not available to
the Company), or both, so as to cover at least the Required Registration Amount
as of the Trading Day immediately preceding the date of the filing of such
amendment or new Registration Statement, in each case, as soon as practicable,
but in any event not later than fifteen (15) Business Days after the necessity
therefor arises.  The Company shall use its commercially reasonable efforts to
cause such amendment and/or new Registration Statement to become effective as
soon as practicable following the filing thereof.  For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed “insufficient to cover all of the Registrable Securities” if at any
time the number of shares of Common Stock available for resale under the
Registration Statement is less than the product determined by multiplying (i)
the Required Registration Amount as of such time by (ii) 0.90.
 
 
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(e)         Effect of Failure to Obtain Effectiveness of Registration
Statement.  If: (i) a Registration Statement covering the Initial Required
Registration Amount of the Registrable Securities is not declared effective by
the SEC on or before the Effectiveness Deadline (the “Effectiveness Failure”),
then, as liquidated damages (and in complete satisfaction and to the exclusion
of any claims or remedies inuring to any holder of Registrable Securities) to
any holder of Registrable Securities by reason of such delay in its ability to
sell the underlying shares of Common Stock, the Company shall pay to each holder
of Registrable Securities their pro rata portion (based on the amount of
Registrable Securities held) of an amount in cash equal to 0.5% of the aggregate
Purchase Price (as such term is defined in the Securities Purchase Agreement)
paid by the applicable Investor for the Registrable Securities included in such
Registration Statement on each of the following dates: (i) twenty (20) days
following the date of the Effectiveness Failure, and (ii) on every thirtieth
(30th) day after the day of the Effectiveness Failure thereafter (pro rated for
periods totaling less than thirty days) until the Effectiveness Failure is
cured.  The payments to which a holder of Registrable Securities shall be
entitled pursuant to this Section 2(e) are referred to herein as “Registration
Delay Payments.”  Notwithstanding anything herein or in the Securities Purchase
Agreement to the contrary, in no event shall the aggregate amount of
Registration Delay Payments exceed, in the aggregate, five percent (5%) of the
aggregate Purchase Price paid by all Investors pursuant to the Securities
Purchase Agreement.
 
3.            Related Obligations.  At such time as the Company is obligated to
file a Registration Statement with the SEC pursuant to Section 2(a) or 2(d)
hereof, the Company will use its commercially reasonable efforts to effect the
registration of the Registrable Securities in accordance with the intended
method of disposition thereof and, pursuant thereto, the Company shall have the
following obligations:
 
(a)         The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the Registrable Securities and use its
commercially reasonable efforts to cause such Registration Statement relating to
the Registrable Securities to become effective as soon as practicable after such
filing (but in no event later than the Effectiveness Deadline).  The Company
shall keep each Registration Statement effective pursuant to Rule 415 at all
times until the earlier of: (i) the date as of which the Investors may sell all
of the Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144 (or any successor thereto) promulgated under
the Securities Act (“Rule 144”) or (ii) the date on which the Investors shall
have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration Period”).  The Company shall ensure that each
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein (in the case of prospectuses, in the
light of the circumstances in which they were made) not misleading.
 
(b)         The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the Securities Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement.
 
 
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(c)         The Company shall use its commercially reasonable efforts to: (i)
register and qualify, unless an exemption from registration and qualification
applies, the resale by Investors of the Registrable Securities covered by a
Registration Statement under such other securities or “blue sky” laws of all
applicable jurisdictions in the United States, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(c), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction.  The Company shall promptly notify
the Investor Representative of  the receipt by the Company of any notification
with respect to the suspension of the registration or qualification of any of
the Registrable Securities for sale under the securities or “blue sky” laws of
any jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.
 
(d)         The Company shall notify the Investor Representative in writing of
the happening of any event, as promptly as practicable after becoming aware of
such event, as a result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading or a statement or omission that renders the prospectus
defective under applicable laws (provided that in no event shall such notice
contain any material, nonpublic information), and, subject to Section 3(m),
promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission.  The Company shall also promptly
notify the Investor Representative in writing when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective.
 
(e)         The Company shall use its commercially reasonable efforts to prevent
the issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify the Investor Representative of the
issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose.
 
(f)           If any Investor is required under applicable securities laws to be
described in the Registration Statement as an underwriter, at the reasonable
request of such Investor, the Company shall furnish to such Investor, on the
date of the effectiveness of the Registration Statement and thereafter from time
to time on such dates as an Investor may reasonably request: (i) a letter, dated
such date, from the Company’s independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
Investors; and (ii) an opinion, dated as of such date, of counsel representing
the Company for purposes of such Registration Statement, in form, scope and
substance reasonably acceptable to such counsel and as is customarily given in
an underwritten public offering, addressed to the Investors.
 
 
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(g)         The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless: (i)
disclosure of such information is necessary to comply with federal or state
securities laws; (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement; (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction; or (iv) such information has been made available to the public
other than by disclosure in violation of this Agreement or any other Transaction
Document.  The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
 
(h)         The Company shall use its commercially reasonable efforts either to:
(i) cause all of the Registrable Securities covered by a Registration Statement
to be listed on each national securities exchange on which securities of the
same class or series issued by the Company are then listed, if any, if the
listing of such Registrable Securities is then permitted under the rules of such
exchange.  The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(h).
 
(i)          The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Investors may reasonably request and registered in
such names as the Investors may request.
 
(j)           If requested by an Investor, the Company shall as soon as
practicable: (i) incorporate in a prospectus supplement or post-effective
amendment such information as an Investor reasonably requests to be included
therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of
Registrable Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering; (ii) make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) supplement or make amendments to any Registration Statement if reasonably
requested by an Investor holding any Registrable Securities.
 
(k)         The Company shall use its commercially reasonable efforts to cause
the Registrable Securities covered by a Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.
 
 
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(l)         The Company shall otherwise comply with all applicable rules and
regulations of the SEC in connection with any registration hereunder.
 
4.             Obligations of the Investors.
 
(a)         At least five (5) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify the Investor
Representative in writing of the information the Company requires from each
Investor if such Investor elects to have any of such Investor’s Registrable
Securities included in such Registration Statement.  It shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall, within five (5) Business Days of
the Company’s request, furnish to the Company such information regarding itself,
the Registrable Securities held by it and the intended method of disposition of
the Registrable Securities held by it, as shall be reasonably required to effect
and maintain the effectiveness of the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.
 
(b)         Each Investor, by such Investor’s acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor’s election to exclude all of such Investor’s Registrable
Securities from such Registration Statement.
 
(c)         Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(d) or
3(e), such Investor will immediately discontinue disposition of Registrable
Securities pursuant to any Registration Statement(s) covering such Registrable
Securities until such Investor’s receipt of the copies of the supplemented or
amended prospectus or receipt of notice that no supplement or amendment is
required.
 
5.             Expenses of Registration.  All reasonable expenses incurred in
connection with registrations, filings or qualifications pursuant to Sections 2
and 3 hereof, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company shall be paid by the Company.
 
6.             Indemnification.  In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
 
 
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(a)         To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Investor, the directors,
officers, members, partners, employees, agents, representatives of, and each
Person, if any, who controls any Investor within the meaning of the Securities
Act or the Exchange Act (each, an “Indemnified Person”), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or
several, (collectively, “Claims”) incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon:  (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other “blue sky” laws of any jurisdiction
in which Registrable Securities are offered (“Blue Sky Filing”), or the omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, “Violations”).  Subject to
Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as
such expenses are incurred and are due and payable, for any reasonable legal
fees and reasonable expenses incurred by them in connection with investigating
or defending any such Claim.  Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a) shall not
apply to a Claim by an Indemnified Person arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Indemnified Person for such
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto, if
such prospectus was timely made available by the Company pursuant to Section
3(d)and (ii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed.  Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9 or the termination
or lapse of this agreement.
 
 
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(b)         Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person or
the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for all such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding.  In the case of an
Indemnified Person, legal counsel referred to in the immediately preceding
sentence shall be selected by the Investors holding at least a majority in
interest of the Registrable Securities included in the Registration Statement to
which the Claim relates.  The Indemnified Party or Indemnified Person shall
cooperate reasonably with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party or Indemnified Person which relates to such action or
Claim.  The indemnifying party shall keep the Indemnified Party or Indemnified
Person fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto.  Following indemnification as
provided for hereunder, the indemnifying party shall be subrogated to all rights
of the Indemnified Party or Indemnified Person with respect to all third
parties, firms or corporations relating to the matter for which indemnification
has been made.  The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action.
 
(c)         The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.
 
(d)         The indemnity agreements contained herein shall be in addition to:
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
 
7.             Contribution.  To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that: (i) no Person involved in the sale of Registrable
Securities which Person is guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) in connection with such sale
shall be entitled to contribution from any Person involved in such sale of
Registrable Securities who was not guilty of fraudulent misrepresentation; and
(ii) contribution by any seller of Registrable Securities shall be limited in
amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities pursuant to such Registration Statement.
 
8.             Reports Under the Exchange Act.  With a view to making available
to the Investors the benefits of Rule 144 or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration, the Company
agrees, for so long as Registrable Securities are outstanding, to:
 
(a)         make and keep public information available, as those terms are
understood and defined in Rule 144;
 
 
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(b)         file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act so long as
the Company remains subject to such requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and
 
(c)         furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, such information as may be reasonably and
customarily requested to permit the Investors to sell such securities pursuant
to Rule 144 without registration.
 
9.            Assignment of Registration Rights.  The rights under this
Agreement shall be automatically assignable by the Investors to any permitted
transferee of all or any portion of such Investor’s Registrable Securities if:
(i) the Investor agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to the Company within
five (5) Business Days after such assignment; (ii) the Company is, within five
(5) Business Days after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee, and (b) the
securities with respect to which such registration rights are being transferred
or assigned; (iii) immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act or applicable state securities laws; (iv) at or before the
time the Company receives the written notice contemplated by clause (ii) of this
sentence the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein; and (v) such transfer shall
have been made in accordance with the applicable requirements of the Securities
Purchase Agreement.
 
10.           Amendment of Registration Rights. Provisions of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investor Representative who shall have
obtained the consent of the Required Holders.  Any amendment or waiver effected
in accordance with this Section 10 shall be binding upon each Investor and the
Company.  No such amendment shall be effective to the extent that it applies to
less than all of the holders of the Registrable Securities.  No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of this Agreement unless the same consideration
also is offered to all of the parties to this Agreement.
 
11.           Miscellaneous.
 
(a)         A Person is deemed to be a holder of Registrable Securities whenever
such Person owns or is deemed to own of record such Registrable Securities.  If
the Company receives conflicting instructions, notices or elections from two or
more Persons with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from such record
owner of such Registrable Securities.
 
(b)         Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered if delivered in accordance with Section
10.2 of the Securities Purchase Agreement.
 
 
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(c)         Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
 
(d)         All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof.
 
(e)         Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Note (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New
York.  Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
New York for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of this Note, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is improper.  Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Note and agrees that such service shall
constitute good and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  EACH PARTY HERETO (INCLUDING ITS AFFILIATES,
AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
 
(f)          This Agreement, the other Transaction Documents (as defined in the
Securities Purchase Agreement) and the instruments referenced herein and therein
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  This Agreement, the other Transaction Documents and the instruments
referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.
 
(g)         Subject to the requirements of Section 9, this Agreement shall inure
to the benefit of and be binding upon the permitted successors and assigns of
each of the parties hereto.
 
(h)         The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
 
(i)          This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement.  This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
 
 
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(j)          Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
 
(k)         All consents and other determinations required to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by the Investor Representative.
 
(l)          The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
 
(m)        This Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person.
 
(n)         The obligations of each Investor hereunder are several and not joint
with the obligations of any other Investor, and no provision of this Agreement
is intended to confer any obligations on any Investor vis-à-vis any other
Investor.  Nothing contained herein, and no action taken by any Investor
pursuant hereto, shall be deemed to constitute the Investors as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated herein.
 
(o)         The Lead Placement Agent and any co-placement agent are intended
third party beneficiaries of this Agreement and have all of the rights of an
“Investor” under this Agreement and the shares of Common Stock issuable upon the
exercise of the Warrants issued to the Lead Placement Agent and any co-placement
agent, except for the Warrants issued pursuant to Section 10.1(c) of the
Securities Purchase Agreement, (and any capital stock of the Company issued or
issuable, with respect to the warrants issued to the Lead Placement Agent or any
co-placement agent as a result of any stock split, stock dividend,
recapitalization, exchange, anti-dilution adjustment or similar event or
otherwise, without regard to any limitations on exercises of the warrants, if
any) constitute Registrable Securities for all purposes of this
Agreement.  Notwithstanding the foregoing, neither the Lead Placement Agent nor
the co-placement agent are entitled to any Registration Delay
Payments.  Notwithstanding the foregoing, neither the Lead Placement Agent nor
any co-placement agent are entitled to any Registration Delay Payments.
 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 

 
COMPANY:
     
YOU ON DEMAND HOLDINGS, INC.
     
By:
       
Name:
   
Title:
     
INVESTORS:
     
The Investors executing the Signature Page in the form attached hereto as Annex
A and delivering the same to the Company or its agents shall be deemed to have
executed this Agreement and agreed to the terms hereof.
     
LEAD PLACEMENT AGENT:
     
CHARDAN CAPITAL MARKETS, LLC
     
By:
       
Name:
   
Title:

 
Signature Page

Registration Rights Agreement
 
 
 

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Annex A

Registration Rights Agreement
Investor Counterpart Signature Page

The undersigned, desiring to: (i) enter into this Registration Rights Agreement,
dated as of _________________, 2012 (the “Agreement”), between the undersigned,
YOU On Demand Holdings, Inc., a Nevada corporation (the “Company”), and the
other parties thereto, in or substantially in the form furnished to the
undersigned and (ii) purchase the securities of the Company appearing below,
hereby agrees to purchase such securities from the Company as of the Closing and
further agrees to join the Agreement as a party thereto, with all the rights and
privileges appertaining thereto, and to be bound in all respects by the terms
and conditions thereof.  Capitalized terms used herein but not otherwise defined
shall have the meaning as set forth in the Agreement.

IN WITNESS WHEREOF, the undersigned has executed the Agreement as of
_____________________, 2012.
 

 
Name and Address, Fax No. and Social Security No./EIN of Investor:
                 
Fax No.:
           Soc. Sec. No./EIN:  

 

 
If a partnership, corporation, trust or other business entity:
     
By:
     
Name:
   
Title:
     
If an individual:
     
Signature

 
 
 

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Schedule A

SCHEDULE OF INVESTORS

Investor
 
Shares of Common
Stock
   
Shares of Common
Stock underlying
Series C Preferred
Stock
   
Warrants
 
FIL Investment Management (Hong Kong) Limited
    175,000       -       175,000  
Chardan SPAC Asset Management LLC*
    -       162,500       162,500  
Poliakine Horowitz Ltd.
    125,000       -       125,000  
Robert Wolf
    125,000       -       125,000  
Greg Tagaris
    100,000       -       100,000  
Steven Oliveira 1998 Charitable Remainder
    -       87,500       87,500  
Neil & Irene Danics
    50,000       -       50,000  
Harry & Charlotte Katz
    25,000       -       25,000  
Dan Foley
    18,750       -       18,750  
Ron Josef Ben-Zakai
    12,500       -       12,500  
Shai Gerson
    6,250       -       6,250  
Kerry Propper
    6,250       -       6,250  
George Kaufman
    2,500       -       2,500  
TOTAL:
    646,250       250,000       896,250  

 
 

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