YOU On Demand Holdings, Inc.: Exhibit 10.12 - Filed by newsfilecorp.com






Nanjing Tops Game Co., Ltd. 

CAPITAL INCREASE AGREEMENT 

THIS CAPITAL INCREASE AGREEMENT (this “Agreement”) is
made and entered into as of 15th of April 2016 by the following
parties: 

Party A: Nanjing Tops Game Co., Ltd. (“Target” or
“Company”) 
Address: 9F, 8# Building, No.57 Andemen Street, Yuhuatai
District, Nanjing Legal Representative: Fu Haocheng

Party B: Tianjin Sevenstarflix Network Technology Limited

Address: Suite 305-55, 3/F, Zonghe Service Building D, Nangang Industrial
Zone of Tianjin Economic Development Zone, Tianjin, PRC 
Legal
Representative: Zhu Yun

Party C: all the shareholders of Nanjing Tops Game Co., Ltd.


Party C1: Fu Haocheng 
ID Card Number: 
Domicile:

Party C2: Nanjing Chaofanrusheng Investment Partnership (LP)

Registered Address: 
Key partner (authorized representative):

Party C3: Tuodong Investment (Shenzhen) Partnership (LP)

Registered Address: 
Legal Representative:

Party C4: Jiang Zhiyuan 
ID Card Number: 
Domicile:

Party C5: Nanjing Lisuona Investment Management Co., Ltd.

Registered Address: 
Legal Representative:

WHEREAS, 

	1. 	
      Party A is a fast-growing company specialized in the
      independent development and operation of online, stand-alone and other
      games as well as the distribution of domestic and overseas games, has an
      elite team both at home and abroad and has been awarded a number of industry prizes. It is preparing to
get listed at China’s new third board. The Target hopes to introduce the Game
Adaption Right (as defined below) of movie and TV works by means of the Capital
Increase (as defined below) in order to enlarge product types and its
shareholders’ meeting has adopted an effective resolution on the Capital
Increase. 









	2. 	
      Party B is a domestic company which is dedicated to
      develop itself into a new media enterprise covering global users, focusing
      on mobile terminals and integrating media, social media and e-commerce. It
      plans to invest the Target by means of the Game Adaption Right of movie
      and TV works and participate in operation and management of the Target and
      its shareholders’ meeting has adopted a resolution on investing in the
      Target.

	 	 
	3. 	
      Party C, the original shareholders of the Target, agrees
      and confirms to waive the preemptive right to subscribe for capital
      contributions to the increased registered capital.



In accordance with the Company Law of the People’s Republic of
China (“Company Law”) and other related laws and regulations, the
Parties, after sufficient negotiations, hereby enter into the following
agreement in respect of the Capital Increase of the Target, upon and subject to
the terms and conditions as set forth below. 

Article 1 Overview of the Target 

Company name: Nanjing Tops Game Co., Ltd. 

Domicile: 9F, 8# Building, No.57 Andemen Street, Yuhuatai
District, Nanjing 

Business scope: development of network, computer and multimedia
technologies, technology transfer, technology consulting and technological
service; design and selling of computer software and hardware; design,
production, agency and release of various domestic advertisings; graphic design
and production; computer network engineering, computer network software
development, business information consulting, labor information consulting,
investment information consulting and trademark agency (subject to the approvals
from related authorities, if required by law). 

Article 2 Registered Capital and Shareholding Structure of
the Target before the Capital Increase 

Registered capital: RMB10.9768mn 




The shareholding structure of the Target before the Capital
Increase is shown below: 


	S/N 	Shareholder 	Means of 
Investment
    	Subscribed capital
      
contribution (RM10k) 	Shareholding 
ratio
    
	1
    	Fu Haocheng 	Currency 	670 	61.04% 
	2 	Tuodong Investment (Shenzhen)
      Partnership (LP) 	Currency 	100 	9.11% 
	3
    	Jiang Zhiyuan 	Currency 	30 	2.73% 
	4 	Nanjing Chaofanrusheng
      Investment Partnership (LP) 	Currency 	200 	18.22% 
	5 	Nanjing Lisuona Investment
      Management Co., Ltd. 	Currency 	97.68 	8.9% 
	 	Total 	/	1097.68	100% 



Article 3 Approvals 

The matters on the Capital Increase by Party B to the Target
have been approved by the respective power authorities of Party A and Party C.


Article 4 Capital Increase of the Target 

Party C agrees to waive the preemptive right and accept the
investment of RMB18mn by Party B as a new shareholder to the Target by means of
the Game Adaption Right of movie and TV works. 

As used herein, the term “Game Adaption Right” means all the
rights to develop and produce the full-style and full-type Chinese games and
video games on the basis of Party B’s movie and TV works, including, but not
limited to, card video games, mobile phone and online games, role playing games
(RPG), action RPG and large multi-user online role playing games. 

As used herein, the term “Capital Increase” means that new
shareholder investors other than the existing shareholders of the Target are
admitted to invest in the Target in order to increase its registered capital.





Party B agrees to invest RMB18mn (in words: eighteen million
yuan, hereafter the “Investment”) in the Target in the form of the Game
Adaption Right, in which RMB1.6402mn is included in the registered capital and
the remaining is included in the capital reserve of the Target. 

Party B’s property (the “Assets”) to be used for the
Capital Increase includes: 

	
      • 
	
      The Game Adaption Rights of the animation movies Titanic
      Code, Special Forces Heroine (also known as Eastern Angels), 108 Heroes 1
      (also known as Water Margin or Outlaws of the Marsh), 108 Heroes 2 (also
      known as Water Margin or Outlaws of the Marsh), Knights in Paradise (also
      known as Peak Time) and The Dog’s Way Home (Party B has the right to
      modify and adjust the titles of the said Assets according to business
      needs and market conditions upon notice to Party A. If any such change
      results in value reduction, Party B shall make up the deficit.)
  



Party B shall, within one (1) month following the completion of
the production of the said animation movies, deliver to Party A the video files
of such animation movies as well as related roles, figures, images, music, text,
plots, etc. Party A has the right to make use of all the elements related to
such animation movies for game adaption, unless otherwise agreed by Party A and
Party B. Party B’s delay of delivery, if any, is subject to the negotiations
between Party A and Party B. 

Article 5 Representations, Warranties and Undertakings


Each Party hereby makes the following representations,
warranties and undertakings and executes this Agreement by relying on them: 

	1. 	
      It is a business entity organized and validly existing
      under laws or a natural person with the capacity for civil conduct and has
      obtained all the authorizations and permissions required for the Capital
      Increase.

	 	 
	2. 	
      It has the capacity of right and capacity of conduct to
      execute this Agreement and once executed, this Agreement shall be legally
      binding on it.

	 	 
	3. 	
      Its obligations hereunder are legal and valid and its
      performance thereof is neither in violation of any other agreement to
      which it is a party nor breaches any laws.

	 	 
	4. 	
      It agrees to amend the Articles of Association of the
      Target according to this Agreement.

	 	 
	5. 	
      It agrees to sign and submit the required documents for
      the AIC change registration related to the Capital Increase of the Target
      as soon as possible following the execution of this Agreement. Party A and
      Party C agree to complete the AIC and tax registration procedures related
      to the Capital Increase within 20 days following the execution of this
      Agreement. Party B shall cooperate with Party A to complete the assessment
      of the Game Adaption Right required hereunder on
time.







Article 6 Special Representations, Warranties and
Undertakings of Party B 

Party B represents and warrants to Party A that Party B is the
exclusive right owner of the Assets under this Agreement; and Party B has not
assigned, granted nor in any manner encumbered, diminished or impaired the
rights that will adversely affect Party A’s rights under this Agreement. 

Party B represents and warrants that no attempt will be made to
encumber, diminish or impair any of the rights herein granted and that all
appropriate protections of such rights will continue to be maintained. 

Party B undertakes and warrants to complete production,
distribution and marketing of animation movies Titanic Code, Special Forces
Heroine (also known as Eastern Angels), 108 Heroes 1 (also known as Water Margin
or Outlaws of the Marsh), 108 Heroes 2 (also known as Water Margin or Outlaws of
the Marsh), Knights in Paradise (also known as Peak Time) and The Dog’s Way
Home. 

Party B shall compensate Party A for any and all economic
losses incurred by Party A as a result of any breach by Party B of the above
representations or warranties. 

Article 7 Registered Capital and Shareholding Structure of
the Target after the Capital Increase 

The registered capital of the Target will increase from
RMB10.9768mn to RMB12.617mn after the Capital Increase. 

The shareholding structure of the Target after the Capital
Increase is shown below: 


	S/N 	Shareholder 	Means of 
Investment
    	Subscribed capital
      
contribution (RM10k) 	Shareholding 
ratio
    
	1
    	Fu Haocheng 	Currency 	670 	53.10% 
	2 	Tuodong Investment (Shenzhen)
      Partnership (LP) 	Currency 	100 	7.93% 
	3
    	Jiang Yuanzhi 	Currency 	30 	2.38% 
	4 5 	Nanjing Chaofanrusheng
      Investment Partnership (LP) Nanjing Lisuona Investment Management Co.,
      Ltd. 	Currency Currency 	200 97.68 	15.85% 7.74% 
	6
    	Tianjin 	Intangible 	164.02 	13% 
	 	Sevenstarflix Network
      Technology Limited 	Asset 		
	 	Total 	/ 	1261.7 	100% 







Article 8 Taxes 

The expenses arising from evaluation and AIC registration of
the Target (if any) in connection with the Capital Increase shall be undertaken
by the Target. 

Other taxes occurring in the Capital Increase shall be paid by
the Parties respectively in accordance with the related national laws,
regulation and rules. 

Article 9 Basic Rights of New Shareholders 

	1. 	
      Equal legal status with original shareholders;

	 	 
	2. 	
      All rights of shareholders prescribed by law, including,
      but not limited to, rights of benefiting from assets, making major
      decisions and selecting the management.



Article 10 Obligations and Responsibilities of New
Shareholders 

	1. 	
      Perform movie & TV production and distribution,
      submit the right related materials in a timely manner and actively assist
      in protection of rights in accordance with the provisions of this
      Agreement;

	 	 
	2. 	
      Bear the other obligations as shareholders of the
      Company.



Article 11 Termination of Agreement 

Upon the occurrence of any of the following circumstances, this
Agreement may be terminated with the mutual consent of the Parties: 

This Agreement becomes inconsistent with the new laws and
regulations that are enacted during the period between the execution of this
Agreement and the completion of shareholder registration change, and the Parties
have failed to reach consensus on amending or modifying this Agreement pursuant
to such new laws and regulations. 

Article 12 Confidentiality 

	1. 	
      Each Party agrees to respect and keep strictly
      confidential all confidential financial, proprietary and business
      information as well as information of any other nature belonging to the
      other Parties for which it may have knowledge during the negotiation and
      performance of this Agreement. Each Party shall not use such information
      for any purposes other than performance of this
Agreement and shall only disclose such information to its employees on a
strict need-to-know basis. Such employees shall keep such information strictly
confidential as well. Otherwise, the disclosing Party shall compensate all
losses resulting from divulging the business secrets of the other Parties.
Confidential information includes, but is not limited to the following: 









	 	(1) 	
      The terms of this Agreement;

	 	 	 
	 	(2) 	
      The negotiations relating to this Agreement;

	 	 	 
	 	(3) 	
      The subject matter of this Agreement; and

	 	 	 
	 	(4) 	
      The business secrets of each
Party.



Notwithstanding the above, any such
information may be disclosed if it applies to Paragraph 2 below. 

	2. 	
      Each Party hereto may disclose the information specified
      in Paragraph 1 in any of the following
circumstances:




	 	(1) 	
      Disclosure required by law;

	 	 	 
	 	(2) 	
      Disclosure required by any competent government
      authorities or supervision organizations;

	 	 	 
	 	(3) 	
      Disclosure to its professional advisers or lawyers (if
      any);

	 	 	 
	 	(4) 	
      Availability to the public domain not through its fault;
      or

	 	 	 
	 	(5) 	
      Disclosure with prior written consent of the
    Parties.




	3. 	
      This article shall survive the termination of this
      Agreement, without a time limit.



Article 13 Force Majeure 

	1. 	
      No Party failing to fully or partially perform this
      Agreement due to any event of force majeure and without any fault on its
      part shall be deemed as having breached this Agreement, but such Party
      shall take all necessary remedial measures to minimize the losses caused
      by such event of force majeure if the conditions permit.

	 	 
	2. 	
      Any Party claiming the occurrence of an event of force
      majeure shall promptly notify the other Parties in writing, and within
      fifteen (15) days thereafter, provide the other Parties with a report
      explaining the reasons for its failure to fully or partially perform this
      Agreement or its delay in performing this Agreement.

	 	 
	3. 	
      Force majeure refers to any event that is unforeseeable,
      unavoidable and insurmountable, including, but not limited to the
      following events that have a direct impact on the Capital
  Increase:




	 	(1) 	
      Declared or undeclared war, war condition, blockade,
      embargo or government decrees or general mobilization;

	 	 	 
	 	(2) 	
      Domestic chaos;

	 	 	 
	 	(3) 	
      Fire, flood, typhoon, hurricane, tsunami, landslide,
      earthquake, explosion, plague, epidemic and other natural disasters or
      events;








	 	(4) 	
      Other events of force majeure agreed by the
    Parties.



Article 14 Notices 

Any notice required to be made or given hereunder shall be
deemed duly given when delivered by person, mail, fax or email to the postal
address, fax number or email address of the recipient as indicated in this
Agreement. 

Article 15 Defaulting Liability 

If any Party violates the relevant provisions of this
Agreement, thus rendering the purpose of this Agreement impossible to realize,
then the defaulting Party shall pay [10]% of the investment to all
non-defaulting Parties as a penalty. In case the penalty becomes insufficient to
cover losses of the non-defaulting Parties, the defaulting Party shall
compensate the non-defaulting Parties for further losses, if any. 

Article 16 Dispute Resolution 

This Agreement shall be governed by and construed in accordance
with the laws of the People’s Republic of China. 

Any dispute or claim arising out of or in relation to this
Agreement or its validity, construction or performance or breach shall be
resolved by the Nanjing Arbitration Commission by arbitration in accordance with
its rules and procedures if efforts to negotiate have failed. 

Article 17 Interpretation of Agreement 

The interpretation of this Agreement shall rest with the
Parties hereto. 

Article 18 Miscellaneous 

This Agreement sets forth the basic principles and contents as
confirmed by the Parties in respect of the Capital Increase. The Parties may
sign a supplemental agreement in respect of any specific matter or in case of
any matter not covered herein, subject to the provisions hereof. Any such
supplemental agreement shall have the same legal binding force as this
Agreement. 

No modification of this Agreement shall be valid or binding,
unless reduced to writing and duly executed by the Parties. No waiver under this
Agreement shall be effective, unless it is confirmed by the waiving Party in
writing. 

This Agreement shall come into force upon stamping by the
Parties, signing by their respective legal representative, or signing by their authorized
representatives. 





This Agreement shall be made in nine (9) counterparts, being
equally authentic. Each Party holds one (1) copy and the remaining copies are
used for the Target’s AIC (administration for industry and commerce) change
registration or submitted to the other competent authorities (if necessary). 

(Remainder of this page is intentionally left blank) 




(SIGNATURE PAGE) 

Party A: Nanjing Tops Game Co., Ltd. 
/s/ Nanjing Tops
Game Co., Ltd. (company chop)

Party B: Tianjin Sevenstarflix Network Technology Limited

/s/ Tianjin Sevenstarflix Network Technology Limited (company
chop)

Party C: all the shareholders of Nanjing Tops Game Co., Ltd.


Party C1: /s/Fu Haocheng

Party C2: Nanjing Chaofanrusheng Investment Partnership (LP)

/s/ Nanjing Chaofanrusheng Investment Partnership (LP) (company
chop)

Party C3: Tuodong Investment (Shenzhen) Partnership (LP)

/s/ Tuodong Investment (Shenzhen) Partnership (LP) (company chop)

Party C4: /s/Jiang Zhiyuan 

Party C5: Nanjing Lisuona Investment Management Co., Ltd.

/s/ Nanjing Lisuona Investment Management Co., Ltd. (company
chop)

Date of signing: 15th April 2016 
Place of signing:
Jiangsu Province, Nanjing City