Borrowing
Notice and acknowledgment


 


This Borrowing Notice and Acknowledgment
(the “Borrowing Notice”), dated as of May 18, 2012, is made in accordance with Section 5.2 of that certain Notes
and Warrants Purchase Agreement (the “Agreement”), dated as of April 10, 2012, by and among ChinaCast Education Corporation,
a Delaware corporation (the “Company”), and the Purchasers named therein. All capital terms used herein that are not
otherwise defined herein shall have the meanings ascribed to them in the Agreement.


 


Whereas, the Company is need of more funds
to pursue legal options to recover the assets that it believes have been misappropriated from the Company (as disclosed in the
Company’s recent public filings), and other corporate purposes; and


 


Whereas, in consideration for the Purchasers
making available the Subsequent Advance pursuant to this Borrowing Notice, the Company has agreed to change from $4 to $1 the exercise
price for all Warrants (as defined in the Agreement) issued in connection with both (i) the Advance made on the date of the Agreement
in accordance with Section 5.1 thereof and (ii) the Subsequent Advance provided for hereof;


 


Now, therefore, in consideration of the
premises and the agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as set forth below:


 


		1.	Subsequent Advance Request. The Company requests a Subsequent Advance from each of the Purchasers in the principal amount
stated on the Subsequent Advance Schedule of Purchasers hereof, in accordance with Section 5.2 of the Agreement.



 


		2.	Sale and Purchase. Subject to the terms and conditions of the Agreement, the Company hereby sells, transfers and assigns
to each Purchaser the aggregate principal amount of the Note set forth opposite such Purchaser’s name in the Subsequent
Advance Schedule of Purchasers hereof and each Purchaser hereby purchases from the Company the aggregate principal amount of
the Note set opposite such Purchaser’s name in the Subsequent Advance Schedule of Purchasers hereof.



 


		3.	Purchase Price. At the Subsequent Advance Closing (as hereinafter defined), each Purchaser shall pay to the Company
the U.S. dollar amount set opposite such Purchaser’s name in the Subsequent Advance Schedule of Purchasers hereof
by wire transfer of immediately available U.S. dollar funds to the bank account designated in writing by the Company to each Purchaser
prior to the Subsequent Advance Closing.



 


		4.	Subsequent Advance Closing. The closing (the “Subsequent Advance Closing”) of the purchase and sale
of the Notes purchased pursuant to Section 2 hereof shall occur concurrently with the execution and delivery of this Borrowing
Notice. The Subsequent Advance Closing shall take place remotely via the exchange of documents and signatures or at such location
as may be mutually acceptable by the parties. Concurrently with or immediately following the Subsequent Advance Closing, each of
the Company and the Purchasers shall execute and deliver the Note(s) purchased pursuant to Section 2 hereof to which it is party.
Each of the Purchasers waives the provision under Section 5.2 of the Agreement that the Company would not deliver the Borrowing
Notice until after May 25, 2012.



 






    	 



    	 	



    
 


		5.	Warrants. As soon as practicable after the date hereof, the Company shall issue to each Purchaser the number of Warrants
stated on the Subsequent Advance Schedule of Purchasers hereof. The Company agrees that, in lieu of the exercise price terms
set forth under Section 4.2 of the Agreement, each Warrant that it issues pursuant to the Schedule of Purchasers in the
Agreement and the Subsequent Advance Schedule of Purchasers hereof shall be convertible into one share of the Company’s
Common Stock at an exercise price of $1.00 per share (which exercise price shall not be subject to any adjustment mechanism).



 


		6.	Acknowledgement of Possible Additional Purchasers. Each of the Purchasers acknowledges that the Company may:



 


		a.	issue to additional purchasers notes and warrants that have substantially the same terms as the Notes and Warrants issued pursuant
to this Borrowing Notice, subject to the provisions of Section 6 of the Notes;



 


		b.	enter into notes and warrants purchase agreements with one or more of these additional purchasers on substantially the same
terms as the Agreement; and



 


		c.	enter into registration rights agreements with one or more of these additional purchasers on substantially the same terms as
the New Piggy-Back Rights Agreement to be entered into pursuant to Section 4.3 of the Agreement, which may provide such additional
purchasers with the same piggy-back rights (but not the demand rights) as provided to Fir Tree under the New Fir Tree Registration
Rights Agreement. The registration rights agreements entered into with these new additional purchasers, the New Fir Tree Registration
Rights Agreement and the New Piggy-Back Registration Rights Agreement may be contained in one and the same document.



 


		7.	Representations and Warranties. The Company represents and warrants that as of the date of this Borrowing Notice,



 


		a.	no Default (as defined under the Notes) has occurred and is continuing; and



 


		b.	each of the representations and warranties contained in Section 5 of the Notes is true and correct.



 






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		8.	Notice. Henceforth, any notice to be provided to the Company in accordance with Section 6.2(b) of the Agreement should
be delivered to the following address:



 


ChinaCast Education Corporation


Room 701A, Building A, Golden Eagle Mansion


80 Hanxiao Road, Pudong


Shanghai 200437 China


Attention: Doug Woodrum


Fax: +(86) 21 6105 3354*8004


 


		9.	Miscellaneous. This Borrowing Notice is governed by the laws of the State of New York. This Borrowing Notice and the
various rights and obligations arising hereunder shall inure to the benefit of and be binding upon the parties hereto and their
successors and assigns. This Borrowing Notice may be executed in multiple counterparts, and on separate counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Any counterpart or other
signature hereupon delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery
of this Borrowing Notice by such party.



 


[Signature pages next]


 






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	 	Executed and agreed to on the date first written above by:
	 	 
	 	ChinaCast Education Corporation
	 	 
	 	 
	 	By:  /s/ Doug Woodrum                                                             
	 	Name: Doug Woodrum
	 	Title: Chief Financial Officer




 


 


 


Acknowledged and agreed to by the Purchasers
on the date first written above by:


 


Fir Tree Value Master Fund, L.P.


 


By: /s/ Brian Meyer                                              


Name: Brian Meyer                                               


Title: General Counsel                                          


 


Fir Tree Capital Opportunity Master Fund, L.P.


 


By: /s/ Brian Meyer                                              


Name: Brian Meyer                                               


Title: General Counsel                                          


 


Lake Union Capital Fund, LP


 


By: /s/ Michael Self                                              


Name: Michael Self                                               


Title: Managing Member of the General Partner


 


Lake Union Capital TE Fund, LP


 


By: /s/ Michael Self


Name: Michael Self


Title: Managing Member of the General Partner


 






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MRMP Managers LLC


 


By: /s/ Ned L. Sherwood                                     


Name: Ned L. Sherwood                                      


Title: Investment Manager                                  


 


Harkness Trust


 


By: /s/ Theodore H. Ashford                              


Name: Theodore H. Ashford                              


Title: Trustee                                                         


 


Ashford Capital Management, Inc. w/ discretion f.b.o.
Ashford Capital Partners, L.P.


 


By: /s/ Theodore H. Ashford III                         


Name: Theodore H. Ashford III                          


Title: C.E.O, President
& CIO, Ashford Capital Management, Inc. 


 


Ashford Capital Management, Inc. w/ discretion f.b.o.
Anvil Investment Associates, L.P.


 


By: /s/ Theodore H. Ashford III                         


Name: Theodore H. Ashford III                          


Title: C.E.O, President
& CIO, Ashford Capital Management, Inc. 


 


Columbia Pacific Opportunity Fund, L.P.


 


By: /s/ Alex Washburn                                        


Name: Alex Washburn                                         


Title: Managing Partner                                       


 






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subsequent
advance SCHEDULE OF PURCHASERS


 


	Purchaser	 	 	Principal

Amount of Note	 	 	 	Purchase Price	 	 	 	Number of Warrants	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fir Tree Value Master Fund, L.P.	 	$	406,668.00	 	 	$	406,668.00	 	 	 	203,334	 
	Fir Tree Capital Opportunity Master Fund, L.P.	 	$	77,263.50	 	 	$	77,263.50	 	 	 	38,632	 
	Lake Union Capital Fund, LP	 	$	141,026.00	 	 	$	141,026.00	 	 	 	70,513	 
	Lake Union Capital TE Fund, LP	 	$	8,974.00	 	 	$	8,974.00	 	 	 	4,487	 
	MRMP Managers LLC	 	$	60,000.00	 	 	$	60,000.00	 	 	 	30,000	 
	Harkness Trust	 	$	8,750.00	 	 	$	8,750.00	 	 	 	4,375	 
	Ashford Capital Partners, L.P.	 	$	188,500.00	 	 	$	188,500.00	 	 	 	94,250	 
	Anvil Investment Associates, L.P.	 	$	80,000.00	 	 	$	80,000.00	 	 	 	40,000	 
	Columbia Pacific Opportunity Fund, L.P.	 	$	125,000.00	 	 	$	125,000.00	 	 	 	62,500	 
	Total:	 	$	1,096,181.50	 	 	$	1,096,181.50	 	 	 	548,091	 



 






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