ZST
Digital Networks, Inc.


 


DIRECTOR
AGREEMENT


 


This
Director Agreement (the "Agreement") is made and entered into as of May 29, 2012, by and between ZST Digital
Networks, Inc., a Delaware company (the "Company"), and Li Jian Hui, an individual (the "Director").


 


 


	I.	SERVICES


 


1.1 Board
of Directors. Director has been appointed as an Independent Director of the Company's Board of Directors (the "Board"),
effective upon May 29, 2012 (the "Effective Date"), until the earlier of the date on which Director ceases
to be a member of the Board for any reason or the date of termination of this Agreement in accordance with this Section 5.2
hereof (such earlier date being the "Expiration Date"). The Board shall consist of the Director and such other
members as nominated and elected pursuant to the then current Memorandum and Articles of Association of the Company (the "Articles").


 


1.2 Director
Services. Director's services to the Company hereunder shall include service on the Board to manage the business of the Company
in accordance with applicable law and the then current Articles, and such other services mutually agreed to by Director and the
Company (the "Director Services").


 


	II.	COMPENSATION


 


2.1 Expense
Reimbursement. The Company shall reimburse Director for all reasonable travel and other out-of-pocket expenses incurred in
connection with the Director Services rendered by Director.


 


2.2 Fees
to Director. The Company agrees to pay Director the following fees for the Director Services: an annual retainer of RMB 100,000.
In the event Director ceases to serve on the Board for any reason, Director shall be entitled to the pro rata portion of the annual
fee for the number of months he has served on the Board in a given year.


 


2.3 Director
and Officer Liability Insurance. The Company's proposed director and officer liability insurance policy shall provide Director
with coverage for damages and losses incurred in connection with the Director Services.


 


	III.	DUTIES OF DIRECTOR


 


3.1 Fiduciary
Duties. In fulfilling his managerial responsibilities, Director shall be charged with a fiduciary duty to the Company and all
of its shareholders. Director shall be attentive and inform himself of all material facts regarding a decision before taking action.
In addition, Director's actions shall be motivated solely by the best interests of the Company and its shareholders.


 


3.2 Confidentiality.
During the term of this Agreement, and for a period of one (1) year after the Expiration Date, Director shall maintain in
strict confidence all information he has obtained or shall obtain from the Company which the Company has designated as "confidential"
or which is, by its nature confidential, relating to the Company's business, operations, properties, assets, services, condition
(financial or otherwise), liabilities, employee relations, customers (including customer usage statistics), suppliers, prospects,
technology, or trade secrets, except to the extent such information (i) is in the public domain through no act or omission
of the Company, (ii) is required to be disclosed by law or a valid order by a court or other governmental body, or (iii) is
independently learned by Director outside of this relationship (the "Confidential Information").


 






    	 



    	 



    
 


3.3 Nondisclosure
and Nonuse Obligations. Director will use the Confidential Information solely to perform the Director Services for the benefit
of the Company. Director will treat all Confidential Information of the Company with the same degree of care as Director treats
his own Confidential Information, and Director will use his best efforts to protect the Confidential Information. Director will
not use the Confidential Information for his own benefit or the benefit of any other person or entity, except as may be specifically
permitted in this Agreement. Director will immediately give notice to the Company of any unauthorized use or disclosure by or through
him, or of which he becomes aware, of the Confidential Information. Director agrees to assist the Company in remedying any such
unauthorized use or disclosure of the Confidential Information.


 


3.4 Return
of the Company Property. All materials furnished to Director by the Company, whether delivered to Director by the Company or
made by Director in the performance of Director Services under this Agreement (the "Company Property") are the
sole and exclusive property of the Company. Director agrees to promptly deliver the original and any copies of the Company Property
to the Company at any time upon the Company's request. Upon termination of this Agreement by either party for any reason, Director
agrees to promptly deliver to the Company or destroy, at the Company's option, the original and any copies of the Company Property.
Director agrees to certify in writing that Director has so returned or destroyed all such the Company Property.


 


	IV.	COVENANTS OF DIRECTOR


 


4.1 No
Conflict of Interest. In one year from the Effective Date, or if the term of this Agreement is longer, then during the term
of this Agreement, Director shall not be employed by, own, manage, control or participate in the ownership, management, operation
or control of any business entity that is competitive with the Company or otherwise undertake any obligation inconsistent with
the terms hereof, provided that Director may own equity of certain business entity engaging in similar business as that of the
Company subject to the prior approval by the Board, and provided further that Director may continue Director's current affiliation
or other current relationships with the entity or entities described on Exhibit A (all of which entities are referred
to collectively as "Current Affiliations"). For a period of one (1) year after the Expiration Date, Director
shall not be employed by, operate or manage any business entity that is competitive with the Company. This Agreement is subject
to the current terms and agreements governing Director's relationship with Current Affiliations, and nothing in this Agreement
is intended to be or will be construed to inhibit or limit any of Director's obligations to Current Affiliations. Director represents
that nothing in this Agreement conflicts with Director's obligations to Current Affiliations. A business entity shall be deemed
to be "competitive with the Company" for purpose of this Article IV only if and to the extent it engages in the business
substantially similar to the Company's online video and mobile video businesses.


 


4.2 Noninterference
with Business. During the term of this Agreement, and for a period of one (1) year after the Expiration Date, Director
agrees not to interfere with the business of the Company in any manner. By way of example and not of limitation, Director agrees
not to solicit or induce any employee, independent contractor, customer or supplier of the Company to terminate or breach his or
her employment, contractual or other relationship with the Company.


 


	V.	TERM AND TERMINATION


 


5.1 Term.
This Agreement is effective on the Effective Date and will continue for one year or such longer period as the parties may agree
upon.


 






    	2



    	 



    
 


5.2 Termination.
Either party may terminate this Agreement at any time upon thirty (30) days prior written notice to the other party, or such
shorter period as the parties may agree upon.


 


5.3 Survival.
The rights and obligations contained in Articles III and IV will survive any termination or expiration of this Agreement.


 


	VI.	MISCELLANEOUS


 


6.1 Assignment.
Except as expressly permitted by this Agreement, neither party shall assign, delegate, or otherwise transfer any of its rights
or obligations under this Agreement without the prior written consent of the other party. Subject to the foregoing, this Agreement
will be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors
and assigns.


 


6.2 No
Waiver. The failure of any party to insist upon the strict observance and performance of the terms of this Agreement shall
not be deemed a waiver of other obligations hereunder, nor shall it be considered a future or continuing waiver of the same terms.


 


6.3 Notices.
Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given
as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification
of receipt; (iii) by facsimile transmission upon acknowledgment of receipt of electronic transmission; or (iv) by certified
or registered mail, return receipt requested, upon verification of receipt. Notice shall be sent to the addresses set forth below
or such other address as either party may specify in writing.


 


To
the Company:


 


ITC Kung Kuan, No.
206 Tongbai Road, 3rd Floor, No.2 Building, Zhengzhou City, Henan


 




 


Attention:
Chief Executive Officer


 


To
Director:


 




 


 


6.4 Governing
Law. This Agreement shall be governed in all respects by the laws of the United States of America and by the laws of the State
of Delaware, without regard to conflicts of law principles thereof.


 


6.5 Severability.
Should any provisions of this Agreement be held by a court of law to be illegal, invalid or unenforceable, the legality, validity
and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.


 


6.6 Entire
Agreement. This Agreement constitutes the entire agreement between the parties relating to this subject matter and supersedes
all prior or contemporaneous oral or written agreements concerning such subject matter. The terms of this Agreement will govern
all Director Services undertaken by Director for the Company.


 


6.7 Amendments.
This Agreement may only be amended, modified or changed by an agreement signed by the Company and Director. The terms contained
herein may not be altered, supplemented or interpreted by any course of dealing or practices.


 


6.8 Counterparts.
This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.


 






    	3



    	 



    
 


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


 


	Company:	 	ZST Digital Networks Inc.
	 	 	 	 	 
	 	 	By:	/s/ Zhong Bo	 
	 	 	Name:	Zhong Bo	 
	 	 	Title:	Chairman & CEO	 
	 	 	 	 	 
	Independent Director:	 	 	 	 
	 	 	 	 	 
	 	 	/s/ Li Jian Hui	 
	 	 	Name:	 Li Jian Hui	 




 






    	4