Document:

YOU On Demand Holdings, Inc.: Exhibit 4.8 - Filed by newsfilecorp.com

NEITHER THIS WARRANT NOR THE SECURITIES FOR WHICH THIS
WARRANT IS EXERCISABLE (TOGETHER WITH THIS WARRANT, THE “SECURITIES”) HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF (I) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR (II) AN OPINION OF
COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT AND/OR APPLICABLE STATE SECURITIES LAWS, OR (III)
UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT. 

YOU ON DEMAND HOLDINGS, INC. 

COMMON STOCK PURCHASE WARRANT 

	Initial Holder: 
Beijing Sun Seven Stars
      Culture 
Development Limited 	Original Issue Date: December 21,
      2015 
	  	No. of Shares Subject to Warrant:
      1,818,182 
	  	Exercise Price Per Share: $2.75 
	  	Expiration Time: 5:00 p.m., New York
      City time, on 
		December 21,
2017  

YOU On Demand Holdings, Inc., a Nevada corporation (the
“Company”), hereby certifies that, for value received, the Initial Holder
shown above, or its permitted registered assigns (the “Holder”), is
entitled to purchase from the Company up to the number of shares of its common
stock, par value $0.001 per share (the “Common Stock”), shown above (each
such share, a “Warrant Share” and all such shares, the “Warrant
Shares”) at the exercise price shown above (as may be adjusted from time to
time as provided herein, the “Exercise Price”), at any time and from time
to time on or after the original issue date indicated above (the “Original
Issue Date”), and through and including the expiration time shown above (the
“Expiration Time”), and subject to the following terms and conditions:

This Warrant is being issued pursuant to that certain Amended
and Restated Securities Purchase Agreement, dated December 21, 2015 (the
“SPA”), by and between the Company and the Holder. 

1.     Definitions. In addition to
the terms defined elsewhere in this Warrant, capitalized terms that are not
otherwise defined herein have the meanings given to such terms in the SPA. 

2.     Record of Warrant Holders.
The Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in the name of the
record Holder (which shall include the Holder or, as the case may be, any
registered assignee to which this Warrant is permissibly assigned hereunder from
time to time). The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or
any distribution to the Holder, and for all other purposes, absent actual notice
to the contrary. 

 3.     Record of Assignments;
Restrictions on Assignment. The Company shall register any assignment of all
or any portion of this Warrant to an Affiliate or designee of the Holder in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment
attached hereto duly completed and signed, to the Company at its address
specified herein. Upon any such registration or assignment, a new Warrant to
purchase Common Stock, in substantially the form of this Warrant (any such new
Warrant, a “New Warrant”), evidencing the portion of this Warrant so
assigned shall be issued to the assignee and a New Warrant evidencing the
remaining portion of this Warrant not so assigned, if any, shall be issued to
the assigning Holder. The acceptance of the New Warrant by the assignee thereof
shall be deemed the acceptance by such assignee of all of the rights and
obligations in respect of the New Warrant that the Holder has in respect of this
Warrant. 

4.     Exercise and Duration of
Warrant. 

a.     Subject to Section 4(a), all or any
part of this Warrant shall be exercisable by the registered Holder in any manner
permitted by Section 4 of this Warrant at any time and from time to time on or
after the Original Issue Date and through and including the Expiration Time. At
the Expiration Time, the portion of this Warrant not exercised prior thereto
shall be and become void and of no value and this Warrant shall be terminated
and shall no longer be outstanding. 

b.     The Holder may exercise this Warrant
by delivering to the Company: (i) an exercise notice, in the form attached
hereto (the “Exercise Notice”), completed and duly signed, and (ii)
payment by wire transfer of immediately available funds to an account designated
by the Company of the Exercise Price for the number of Warrant Shares as to
which this Warrant is being exercised. The date such items are delivered to the
Company (as determined in accordance with the notice provisions hereof) is an
“Exercise Date.” The Holder shall be required to deliver the original
Warrant, or any New Warrant that may have been previously issued, in order to
effect an exercise hereunder. Execution and delivery of the Exercise Notice
shall have the same effect as cancellation of the original Warrant, or any New
Warrant that may have been previously issued, and issuance of a New Warrant
evidencing the right to purchase the remaining number of Warrant Shares. 

c.     The Company will not close its
stockholder books or records in any manner which prevents the timely exercise of
this Warrant pursuant to the terms hereof. 

d.     Notwithstanding anything contained
herein to the contrary, until receipt of the favorable vote of the holders of a
majority of the outstanding shares of Common Stock, the Company shall not effect
any exercise of this Warrant, and the Holder shall not have the right to
exercise any portion of this Warrant to the extent that after giving effect to
such issuance after exercise as set forth on the applicable notice of exercise,
the Holder (together with the Holder’s affiliates, and any other persons acting
as a group together with the Holder or any of the Holder’s affiliates), would
beneficially own in excess of 19.99% of the outstanding shares of Common Stock.
For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with
respect to which such determination is being made, but shall exclude the number
of shares of Common Stock that would be issuable upon (i) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned by the Holder
or any of its affiliates and (ii) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without
limitation, any other securities of the Company or its subsidiaries which would
entitle the holder thereof to acquire at any time shares of Common Stock)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its affiliates.
Except as set forth in the preceding sentence, for purposes of this Section
4(d), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and the rules and regulations promulgated thereunder. In addition, for purposes
of this Section 4(d), “group” has the meaning set forth in Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. To the extent
that the limitation contained in this Section 4(d) applies, the determination of
whether this Warrant is exercisable (in relation to other securities owned by
the Holder together with any affiliates) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of
a notice of exercise shall be deemed to be the Holder’s determination of whether
this Warrant is exercisable (in relation to other securities owned by the Holder
together with any affiliates) and of which portion of this Warrant is
exercisable. For purposes of this Section 4(d), in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (i) the Company’s most recent
Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the
United States Securities and Exchange Commission, as the case may be, (ii) a
more recent public announcement by the Company or (iii) a more recent notice by
the Company or the Company’s transfer agent to the Holder setting forth the
number of shares of Common Stock then outstanding. Upon the request of the
Holder, the Company shall promptly, and in any event within one trading day of
such request, confirm to the Holder the number shares of Common Stock then
outstanding. Holder shall not be entitled to vote any shares of Common Stock
acquired by it pursuant to this Warrant or the other Company Agreements in
connection with any such stockholder approval sought by the Company. 

2 

5.     Delivery of Warrant Shares.

a.     Upon exercise of this Warrant, the
Company shall promptly (but in no event later than three (3) Trading Days after
the Exercise Date) issue or cause to be issued and cause to be delivered the
Holder a certificate for the Warrant Shares issuable upon such exercise.
“Trading Day” shall mean a date on which the Company’s Common Stock
trades on its principal trading market (the “Trading Market”). The Holder
shall be deemed to have become the holder of record of such Warrant Shares as of
the Exercise Date. The Company shall, upon the written request of the Holder,
use its best efforts to deliver, or cause to be delivered, Warrant Shares
hereunder electronically through the Depository Trust and Clearing Corporation
(“DTCC”) or another established clearing corporation performing similar
functions, if available; provided, that, the Company may, but will not be
required to, change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through DTCC or another established
clearing corporation performing similar functions, if available. If as of the
time of exercise the Warrant Shares constitute restricted or control securities, the
Holder, by exercising, agrees not to resell them except in compliance with all
applicable securities laws. 

3 

b.     To the extent permitted by law, the Company’s obligations to
issue and deliver Warrant Shares in accordance with the terms hereof are
absolute and unconditional, irrespective of any action or inaction by the Holder
to enforce the same, any waiver or consent with respect to any provision hereto
the recovery of any judgment against any Person or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance that might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares. Nothing herein shall limit the Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof. 

c.     If the Company fails to cause its transfer agent to transmit
to the Holder a certificate or the certificates (or, if electronically, a
book-entry position) representing the Warrant Shares pursuant to the terms
hereof by the applicable delivery date, then the Holder will have the right to
rescind such exercise. 

6.     Charges, Taxes and Expenses. Issuance and delivery of
a certificate or the certificates (or, if electronically, a book-entry position)
representing the Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax, withholding tax, transfer agent fee or other
incidental tax or expense in respect of the issuance of such certificate or
certificates (or, if electronically, a book-entry position), all of which taxes
and expenses shall be paid by the Company; provided, however, that the Company
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the registration of any certificates for Warrant Shares or
the Warrant in a name other than that of the Holder. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise hereof. 

7.     Replacement of Warrant. If this Warrant is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation hereof: or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested. The Holder’s application for a
New Warrant under such circumstances shall also comply with such other
reasonable regulations and procedures, and the Holder shall pay such reasonable
third-party costs, as the Company may prescribe. If a New Warrant is requested
as a result of a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the Company’s
obligation to issue the New Warrant. 

8.     Reservation of Warrant
Shares. The Company covenants that it will reserve and keep available out of
the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue
Warrant Shares upon exercise of this Warrant as herein provided, the number of
Warrant Shares that are issuable and deliverable upon the exercise of this
entire Warrant, free from preemptive rights or any other contingent purchase
rights of persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). The Company covenants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof: be duly and validly
authorized, issued and fully paid and nonassessable. 

4 

9.     Certain Adjustments to Exercise
Price. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set
forth in this Section 9. 

a.     Adjustments for Stock Splits and
Combinations and Stock Dividends. If the Company shall at any time, or from
time to time after the date hereof, effect a stock split or combination of the
outstanding Common Stock or pay a stock dividend in shares of Common Stock, then
the Exercise Price shall be proportionately adjusted. Any adjustments under this
Section 9(a) shall be effective at the close of business on the date the
stock split or combination becomes effective or the date of payment of the stock
dividend, as applicable. 

b.     Merger, Sale, Reclassification,
etc. In case of any: (i) consolidation or merger (including a merger in
which the Company is the surviving entity), (ii) sale or other disposition of
all or substantially all of the Company’s assets or distribution of property to
shareholders (other than distributions payable out of earnings or retained
earnings), or reclassification, change or conversion of the outstanding
securities of the Company or of any reorganization of the Company (or any other
corporation the stock or securities of which are at the time receivable upon the
exercise of this Warrant) or any similar corporate reorganization on or after
the date hereof: then and in each such case the Holder of this Warrant, upon the
exercise hereof at any time thereafter shall be entitled to receive, in lieu of
the stock or other securities and property receivable upon the exercise hereof
prior to such consolidation, merger, sale or other disposition,
reclassification, change, conversion or reorganization, the stock or other
securities or property to which such Holder would have been entitled upon such
consummation if such Holder had exercised this Warrant immediately prior
thereto. 

10.     No Fractional Shares. No
fractional Warrant Shares will be issued in connection with any exercise of this
Warrant. In lieu of any fractional shares that would otherwise be issuable, the
Company shall pay cash equal to the product of such fraction multiplied by the
closing price of the Company’s Common Stock as reported by the Trading Market on
the Exercise Date. 

11.     Notices. Any and all notices
or other communications or deliveries hereunder (including, without limitation,
any Exercise Notice) shall be delivered in accordance with the procedures set
forth in Section 11.3 of the SPA. 

12.     Warrant Agent. The Company
shall serve as warrant agent under this Warrant. Upon thirty (30) calendar days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last
address as shown on the Warrant Register. 

5 

13.     Miscellaneous. 

a.     This Warrant shall be binding on and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Subject to the preceding sentence, nothing in this Warrant
shall be construed to give to any Person other than the Company and the Holder
any legal or equitable right, remedy or cause of action under this Warrant. This
Warrant may be amended only in writing signed by the Company and the Holder, or
their respective successors and permitted assigns. 

b.     Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Warrant (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 Warrant, 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 WRY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

c.     The headings herein are for
convenience only, do not constitute a part of this Warrant and shall not be
deemed to limit or affect any of the provisions hereof. 

d.     In case any one or more of the
provisions of this Warrant shall be invalid or unenforceable in any respect, the
validity and enforceability of the remaining terms and provisions of this
Warrant shall not in any way be affected or impaired thereby and the parties
will attempt in good faith to agree upon a valid and enforceable provision which
shall be a commercially reasonable substitute therefore, and upon so
agreeing, shall incorporate such substitute provision in this Warrant. 

6 

e.     Prior to exercise of this Warrant,
the Holder hereof shall not, by reason of by being a Holder, be entitled to any
rights of a stockholder of the Company with respect to the Warrant Shares. 

f.     No provision hereof, in the absence
of any affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company. 

[Signature Page Follows]

 

 

7 

IN WITNESS WHEREOF, the Company has caused this Warrant
to be duly executed by its authorized officer as of the date first indicated
above. 

	 	YOU ON DEMAND HOLDINGS, INC.
    
	 	  	  
	 	  	  
	 	By: 	   /s/ Shane McMahon 
	 	  	Name: Shane McMahon 
	 	  	Title: Chairman 

Warrant Signature Page 

YOU ON DEMAND HOLDINGS, INC. 

EXERCISE NOTICE 

Ladies and Gentlemen: 

1)     The undersigned hereby elects to
exercise its Warrant with respect to ________________ shares of Common Stock.
Capitalized terms used herein and not otherwise defined herein have the
respective meanings set forth in the Warrant. 

2)     The holder hereby tenders the sum of
$________________ to the Company in accordance with the terms of the Warrant.

3)     Pursuant to this Exercise Notice,
the Company shall deliver to the Holder the number of Warrant Shares determined
in accordance with the terms of the Warrant and, in lieu of any fractional
shares, cash. 

	Dated: 	 	 	HOLDER: 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	  	 	 	Print Name 	 
	 	 	 	 	 
	 	 	 	 	 
	  	 	 	By:
      _____________________________________________________	 
	 	 	 	 	 
	  	 	 	Title:
      ___________________________________________________	 

YOU ON DEMAND HOLDINGS, INC. 

FORM OF ASSIGNMENT 
To be completed and signed only
upon assignment of the Warrant 

FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _____________________ the right represented by the
within Warrant to purchase _____________________ shares of Common Stock to which
the within Warrant relates and appoints _____________________ attorney to
transfer said right on the books of the Company with full power of substitution
in the premises. 

	Dated: 	 	 	ASSIGNOR: 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	  	 	 	Print Name 	 
	 	 	 	 	 
	 	 	 	 	 
	  	 	 	By: 	 	 
	 	 	 	 	 	 
	  	 	 	Title: 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	  	 	 	ASSIGNEE: 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	  	 	 	Print Name 	 
	 	 	 	 	 
	 	 	 	 	 
	  	 	 	By: 	 	 
	 	 	 	 	 	 
	WITNESS: 	 	Title: 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	Address of Assignee: 	 
	Print NameYOU On Demand Holdings, Inc.: Exhibit 10.25 - Filed by newsfilecorp.com

AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT

BY AND AMONG

YOU ON DEMAND HOLDINGS, INC.,

BEIJING SUN SEVEN STARS CULTURE DEVELOPMENT LIMITED 

 

DATED AS OF DECEMBER 21, 2015 

Table of Contents 

	  	  	Page 
	 	 	 
	ARTICLE 1 	DEFINITIONS 	1 
	 	 	 
	           
             1.1 	Definitions 	1 
	 	 	 
	ARTICLE 2 	PURCHASE AND SALE OF SECURITIES
    	6 
	 	 	 
	           
             2.1 	Purchase and Sale of Securities
    	6 
	 	 	 
	           
             2.2 	Closing 	6 
	 	 	 
	           
             2.3 	Use of Proceeds 	7 
	 	 	 
	ARTICLE 3 	REPRESENTATIONS AND WARRANTIES
      OF THE COMPANY 	7 
	 	 	 
	           
             3.1 	Corporate Existence and Power
    	7 
	 	 	 
	           
             3.2 	Subsidiaries 	7 
	 	 	 
	           
             3.3 	Corporate Authorization; No
      Contravention 	7 
	 	 	 
	           
             3.4 	Governmental Authorization;
      Third Party Consents 	8 
	 	 	 
	           
             3.5 	Binding Effect 	8 
	 	 	 
	           
             3.6 	Capitalization of the Company
      and its Subsidiaries 	8 
	 	 	 
	           
             3.7 	Commission Documents;
      Sarbanes-Oxley Compliance 	8 
	 	 	 
	           
             3.8 	Absence of Certain Developments
    	9 
	 	 	 
	           
             3.9 	Indebtedness; No Undisclosed
      Liabilities 	9 
	 	 	 
	           
             3.10 	Compliance with Laws; Licenses
    	10 
	 	 	 
	           
             3.11 	Litigation 	10 
	 	 	 
	           
             3.12 	Material Contracts 	10 
	 	 	 
	           
             3.13 	Environmental 	11 
	 	 	 
	           
             3.14 	Taxes 	11 
	 	 	 
	           
             3.15 	Title to Property and Assets;
      Leases 	11 
	 	 	 
	           
             3.16 	Compliance with ERISA 	12 
	 	 	 
	           
             3.17 	Labor Relations; Employees 	12 
	 	 	 
	           
             3.18 	Certain Payments 	13 
	 	 	 
	           
             3.19 	Insurance 	13 
	 	 	 
	           
             3.20 	Intellectual Property 	13 
	 	 	 
	           
             3.21 	Affiliate Transactions 	13 
	 	 	 
	           
             3.22 	Investment Company Act 	14 
	 	 	 
	           
             3.23 	Private Offering 	14 
	 	 	 
	           
             3.24 	Board Approval; Stockholder
      Approval 	14 
	 	 	 
	           
             3.25 	Securities 	14 
	 	 	 
	           
             3.26 	No Brokers or Finders 	15 
	 	 	 
	           
             3.27 	Disclosure 	15 

-i- 

Table of Contents 
(continued) 

	  	  	Page 
	  	  	  
	       
                 3.28 	Suitability 	15 
	 	 	 
	       
                 3.29 	Off Balance Sheet
      Arrangements 	15 
	 	 	 
	ARTICLE 4 	REPRESENTATIONS AND
      WARRANTIES OF THE PURCHASER 	15 
	 	 	 
	       
                 4.1 	Existence and Power
    	15 
	 	 	 
	       
                 4.2 	Authorization; No
      Contravention 	15 
	 	 	 
	       
                 4.3 	Governmental
      Authorization; Third Party Consents 	15 
	 	 	 
	       
                 4.4 	Binding Effect 	15 
	 	 	 
	       
                 4.5 	Investment
      Representations 	15 
	 	 	 
	       
                 4.6 	Receipt of
      Information 	16 
	 	 	 
	       
                 4.7 	No Brokers or
      Finders 	16 
	 	 	 
	       
                 4.8 	Sufficient Funds 	16 
	 	 	 
	       
                 4.9 	Litigation 	16 
	 	 	 
	       
                 4.10 	No General
      Solicitation 	16 
	 	 	 
	       
                 4.11 	Prohibited
      Transactions 	16 
	 	 	 
	       
                 4.12 	Reliance on
      Exemptions 	16 
	 	 	 
	       
                 4.13 	Affiliates 	17 
	 	 	 
	ARTICLE 5 	COVENANTS 	17 
	 	 	 
	       
                 5.1 	Conduct of Business
    	17 
	 	 	 
	       
                 5.2 	Regulatory Approval;
      Litigation 	18 
	 	 	 
	       
                 5.3 	Access 	19 
	 	 	 
	       
                 5.4 	Employee Benefits
      Matters 	19 
	 	 	 
	       
                 5.5 	Legends 	19 
	 	 	 
	       
                 5.6 	Board of Directors
    	19 
	 	 	 
	       
                 5.7 	Reasonable Efforts
      to Secure Financing 	19 
	 	 	 
	ARTICLE 6 	CONDITIONS PRECEDENT
      TO THE OBLIGATION OF THE PURCHASER TO CLOSE 	20 
	 	 	 
	       
                 6.1 	Conditions to
      Closing 	20 
	 	 	 
	ARTICLE 7 	CONDITIONS PRECEDENT
      TO THE OBLIGATION OF THE COMPANY TO CLOSE 	21 
	 	 	 
	       
                 7.1 	Conditions to
      Closing 	21 
	 	 	 
	ARTICLE 8 	RIGHT OF FIRST
      OFFER; OTHER AGREEMENTS OF THE COMPANY 	21 
	 	 	 
	       
                 8.1 	Registration Rights
    	21 
	 	 	 
	       
                 8.2 	Rule 144 	22 
	 	 	 
	       
                 8.3 	Availability of
      Common Stock 	23 
	 	 	 
	       
                 8.4 	No Rights Plan 	23

-ii- 

Table of Contents 
(continued) 

	  	  	Page 
	  	  	  
	ARTICLE 9 	INDEMNIFICATION 	23 
	 	 	 
	           
             9.1 	Indemnification 	23 
	 	 	 
	           
             9.2 	Terms of Indemnification 	23 
	 	 	 
	ARTICLE 10 	TERMINATION 	23 
	 	 	 
	           
             10.1 	Termination of Agreement 	23 
	 	 	 
	           
             10.2 	Effect of Termination 	24 
	 	 	 
	ARTICLE 11 	MISCELLANEOUS 	24 
	 	 	 
	           
             11.1 	Survival 	24 
	 	 	 
	           
             11.2 	Fees and Expenses 	24 
	 	 	 
	           
             11.3 	Notices 	24 
	 	 	 
	           
             11.4 	Successors and Assigns 	25 
	 	 	 
	           
             11.5 	Amendment and Waiver 	25 
	 	 	 
	           
             11.6 	Counterparts 	25 
	 	 	 
	           
             11.7 	Headings 	25 
	 	 	 
	           
             11.8 	Governing Law; Consent to
      Jurisdiction; Waiver of Jury Trial 	25 
	 	 	 
	           
             11.9 	Severability 	25 
	 	 	 
	           
             11.10 	Entire Agreement 	26 
	 	 	 
	           
             11.11 	Further Assurances 	26 
	 	 	 
	           
             11.12 	Public Announcements 	26 
	 	 	 
	           
             11.13 	Subsidiaries 	26 

Exhibits 

Exhibit A – Form of Warrant 
Exhibit B –Form of License
Agreement 
Exhibit C – Form of Promissory Note 

-iii- 

AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT 

AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT, dated as of
December 21, 2015 (this “Agreement”), by and among YOU On Demand Holdings, Inc.,
a Nevada corporation (the “Company”), Beijing Sun Seven Stars Culture
Development Limited, a PRC company (“SSS” or the “Purchaser”).

WHEREAS, the Purchaser and the Company entered into that
certain Securities Purchase Agreement, dated as of November 23, 2015 (the
“Original Agreement”); 

WHEREAS, following discussions between the parties hereto, the
Company and Purchaser have determined to fully amend and restate the Original
Agreement to provide for the issuance and sale to the Purchaser, and purchase by
the Purchaser (i) for an aggregate purchase price of $10,000,000, (A) an
aggregate of 4,545,454 shares of the Company’s Common Stock (the “Cash Common
Shares”); (B) a warrant (the “Warrant”) to acquire 1,818,182 shares of Common
Stock at an exercise price of $2.75 per share, containing certain restrictions
on the Purchaser’s ability to exercise the Warrant, in substantially the form
attached hereto as Exhibit A (as exercised, collectively, the “Warrant Shares”);
and (ii) the Promissory Note (as defined below), with the principal and interest
thereon convertible into an aggregate of 9,208,860 shares of Common Stock (the
“IP Common Shares”) in exchange for certain intellectual property rights valued
at $29,100,000. 

NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as
follows:

ARTICLE 1 
DEFINITIONS

1.1     Definitions.
As used in this Agreement, and unless the context requires a different meaning,
the following terms shall have the meanings set forth below:

 “7SF Share Purchase Agreement” means that certain Share
Purchase Agreement, dated as of November 23, 2015, as amended from time to time,
by and between the Company and Tianjin Enternet Network Technology Limited, a
P.R.C. company and Affiliate of the Purchaser. 

“Accredited Investor” has the meaning assigned to such term in
Section 4.5(b) .

“Acquisition Proposal” has the meaning assigned to such term in
Section 5.2.

 “Actions” means actions, causes of action, suits, claims,
complaints, demands, litigations or legal, administrative or arbitral
proceedings.

“Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person and, for purposes of Section 3.21
only, with respect to any individual, the spouse, parent, sibling, child,
step-child, grandchild, niece or nephew of such individual or the spouse thereof
and any trust for the benefit of such Stockholder or any of the foregoing. For
the purposes of this definition, “control” when used with respect to any
specified Person means the power to direct the management and policies of such
Person, whether through the ownership of Voting Securities, by contract or
otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

“Agreement” has the meaning assigned to such term in the
Preamble.

“Applicable Stock Price” means $1.924 per share. 

“Articles of Incorporation” means the articles of incorporation
of the Company, as the same may have been amended and in effect as of the
Closing Date.

“Associate” has the meaning assigned in Rule 12b-2 promulgated
by the Commission under the Exchange Act.

1 

“Beneficially own” with respect to any securities means having
“beneficial ownership” of such securities as determined pursuant to Rule 13d-3
under the Exchange Act, as in effect on the date hereof.

“Board of Directors” means either the board of directors of the
Company or any duly authorized committee thereof.

“Business Day” means any day other than (i) a Saturday or
Sunday or (ii) a day on which banking institutions in New York City are
authorized or obligated by Law or executive order to remain closed.

“Bylaws” means the bylaws of the Company, as the same may have
been amended and in effect as of the Closing Date.

“Cash Common Shares” has the meaning assigned to such term in
the Preamble. 

“Certificate of Designation” means the certificate of
designation setting forth the designation, powers and preferences of the Series
E Preferred Stock.

“Claims” means losses, claims, damages or liabilities, joint or
several, Actions or proceedings (whether commenced or threatened).

“Closing” has the meaning assigned to such term in Section
2.3.

“Closing Date” has the meaning assigned to such term in Section
2.3. 

“Closing Securities” means, collectively, the Cash Common
Shares, the Warrant and the Promissory Note. 

“Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.

“Collective Bargaining Agreement” has the meaning assigned to
such term in Section 3.17(a) .

“Commission” means the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Securities Act.

“Common Stock” means the Common Stock, par value $0.001 per
share, of the Company.

“Company” has the meaning assigned to such term in the
Preamble.

“Company Agreements” has the meaning assigned to such term in
Section 3.1.

“Company Benefit Plans” means all employee benefit plans
providing benefits to any current or former employee or director of the Company
or any of its Subsidiaries or any beneficiary or dependent thereof that are
sponsored or maintained by the Company or any of its Subsidiaries or ERISA
Affiliates or to which the Company or any of its Subsidiaries or ERISA
Affiliates contributes or is obligated to contribute, including without
limitation all employee welfare benefit plans within the meaning of Section 3(1)
of ERISA, all employee pension benefit plans within the meaning of Section 3(2)
of ERISA, and all bonus, incentive, deferred compensation, vacation, stock
purchase, stock option, restricted stock, severance, termination pay and fringe
benefit plans.

“Company Options” has the meaning assigned to such term in
Section 3.6.

“Confidentiality Agreement” means the confidentiality agreement
dated March 22, 2013, between the Original Purchaser and the Company.

“Contemplated Transactions” means the transactions contemplated
by this Agreement and the exhibits hereto, including, without limitation, the
issuance, purchase and sale of the Securities.

“Contractual Obligation” means, as to any Person, any
agreement, undertaking, contract, indenture, mortgage, deed of trust, credit
agreement, note, evidence of indebtedness or other instrument, written or
otherwise, to which such Person is a party or by which it or any of its property
is bound.

2 

“Decrees” has the meaning assigned to such term in Section
3.10(a) . 

“Employment Agreement” means a contract, offer letter or
agreement of the Company or any of its Subsidiaries with or addressed to any
individual who is rendering or has rendered services thereto as an employee or
consultant, pursuant to which the Company or any of its Subsidiaries has any
actual or contingent liability or obligation to provide compensation and/or
benefits in consideration for past, present or future services.

“Environmental Claim” means any claim, action, cause of action,
investigation of which the Company or any of its Subsidiaries has knowledge, or
written notice by any Person to the Company or any of its Subsidiaries alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (a) the presence, or release into the
environment, of any Material of Environmental Concern at any location, or (b)
circumstances forming the basis of any violation or liability, or alleged
violation or liability, of any Environmental Law.

“Environmental Laws” means all Federal, state, local, and
foreign statute, Law, regulation, ordinance, rule, common Law, judgment, order,
decree or other governmental requirement or restriction relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata and
natural resources), including, without limitation, Laws relating to emissions,
discharges, releases or threatened releases of Materials of Environmental
Concern, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Materials of
Environmental Concern; provided that Environmental Laws does not include the
Occupational Safety and Health Act or any other similar Requirement of Law
governing worker safety or workplace conditions.

“Equitable Principles” means applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar Laws affecting
creditors’ rights generally from time to time in effect and to general
principles of equity, regardless of whether in a proceeding at equity or at
Law.

“ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated thereunder
from time to time.

“ERISA Affiliate” means each entity which is a member of a
“controlled group of corporations,” under “common control” or an “affiliated
service group” with the Company or its Subsidiaries within the meaning of
Sections 414(b), (c) or (m) of the Code, or required to be aggregated with the
Company or its Subsidiaries under Section 414(o) of the Code, or is under
“common control” with the Company or its Subsidiaries, within the meaning of
Section 4001(a)(14) of ERISA.

“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder by the Commission
from time to time.

“Existing Plans” has the meaning assigned to such term in
Section 3.6.

“FINRA” means the Financial Industry Regulatory Authority.

“GAAP” means United States generally accepted accounting
principles.

“Governmental Authority” means the government of any nation,
state, city, locality or other political subdivision of any thereof, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government or any international regulatory body or
self-regulatory organization having or asserting jurisdiction over a Person, its
business or its properties.

“Indebtedness” means (a) any liabilities for borrowed money or
amounts owed in excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (b) all guaranties, endorsements and other
contingent obligations in respect of indebtedness of others, whether or not the
same are or should be reflected in the Company’s balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business, and
(c) the present value of any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance with GAAP. 

“Intellectual Property” has the meaning assigned to such term
in Section 3.20.

3 

“Investor Rights Agreement” means the Right of First Refusal
and Co-Sale Agreement, dated as of July 5, 2013, by and among the Company, the
Original Purchaser, Shane McMahon and Weicheng Liu.

“IP Common Shares” has the meaning assigned to such term in the
Preamble. 

“IRS” means the Internal Revenue Service. 

“knowledge of the Company” means the actual knowledge of the
chairman or any executive officer of the Company or any of its Subsidiaries,
after due inquiry of those persons employed by the Company or its Subsidiaries
charged with administrative or operational responsibility for such matter.

“Law” means all Federal, state, local, and foreign statute,
law, regulation, ordinance, rule, common law, judgment, order, decree or other
governmental requirement or restriction of all applicable jurisdictions.

“Leases” has the meaning assigned to such term in Section 3.15.

“License Agreement” has the meaning assigned to such term in
Section 6.1(k) .

“Licenses” has the meaning assigned to such term in Section
3.10(b) .

“Lien” means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), voting or
other restriction, preemptive right or other security interest of any kind or
nature whatsoever.

“Mandatory Effectiveness Period” shall mean the period from the
date that a Registration Statement is declared effective by the Commission until
the earlier to occur of the date when all Registrable Securities covered by a
Registration Statement (a) either have been sold pursuant to a Registration
Statement or an exemption from the registration requirements of the Securities
Act; or (b) pursuant to a written opinion of counsel reasonably acceptable to
the Company, may be sold pursuant to Rule 144(b)(1) without any limitations.

“Mandatory Registration Statement” has the meaning assigned to
such term in Section 8.1(a) .

“Material Adverse Effect” means any material adverse change in
or affecting (i) the business, properties, assets, liabilities, operations,
results of operations (financial or otherwise), condition, or prospects of the
Company and its Subsidiaries taken as a whole or (ii) the ability of the Company
or any of the Company’s Subsidiaries to consummate the Contemplated
Transactions; provided, however, that none of the following shall be deemed in
themselves, either alone or in combination, to constitute, and none of the
following shall be taken into account in determining whether there has been, a
Material Adverse Effect: (A) any change in the market price or trading volume of
the capital stock of the Company after the date hereof (B) any changes, events
or occurrences in the United States securities markets which are not specific to
the Company, (C) any changes, events, developments or effects resulting from
general economic conditions, which are not specific to the Company or its
Subsidiaries and which do not affect the Company or its Subsidiaries in a
materially disproportionate manner and (D) any changes resulting from the
execution or announcement of this Agreement and the Contemplated
Transactions.

“Material Contracts” has the meaning assigned to such term in
Section 3.12(a) .

“Materials of Environmental Concern” means chemicals,
pollutants, contaminants, industrial, toxic or hazardous wastes, substances or
constituents, petroleum and petroleum products (or any by-product or constituent
thereof), asbestos or asbestos-containing materials, lead or lead-based paints
or materials, PCBs, or radon, or any other materials that are regulated by, or
may form the basis of liability under, any Environmental Law.

“McMahon Note” has the meaning assigned to such term in Section
3.6. 

“NASDAQ” means The Nasdaq Stock Market Inc.’s National Market System.  

“NPCL” has the meaning assigned to such term in Section 3.24(a) .

“NYSE” means the New York Stock Exchange.

4 

“Person” means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint-stock
company, company, limited liability company, trust, unincorporated association,
Governmental Authority, or any other entity of whatever nature.

“Preferred Stock” has the meaning assigned to such term in
Section 3.6.

“Prospectus” means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and all other amendments and
supplements to such prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such prospectus.

“Purchase Price” has the meaning assigned to such term in
Section 2.1.

 “Purchaser” has the meaning assigned to such term in the Preamble.  

“Purchaser Indemnitee” has the meaning assigned to such term in Section 9.1.  

“Qualified Acquisition Proposal” has the meaning assigned to such term in
  Section 5.2.

“Registrable Securities” means the Cash Common Shares and,
subject to obtaining the Required Vote, the IP Common Stock and the Warrant
Shares and other securities, if any, issuable upon conversion of the Warrant and
the Promissory Note, in each case until any such security is effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering it or is distributed to the public by the holder
thereof pursuant to Rule 144.

“Registration Cap” has the meaning assigned to such term in
Section 8.1(e) .

“Registration Statement” means any registration statement of
the Company under the Securities Act that covers any of the Registrable
Securities pursuant to the provisions of this Agreement, including the related
Prospectus, all amendments and supplements to such registration statement
(including post-effective amendments), all exhibits and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.

“Restricted Period” has the meaning assigned to such term in
Section 5.1(a) .

“Required Vote” has the meaning assigned to such term in
Section 3.24(b) .

“Requirement of Law” means, as to any Person, the certificate
of incorporation and bylaws or other organizational or governing documents of
such Person, and any Law (including, without limitation, Laws related to Taxes
and Environmental Laws), treaty, rule, regulation, ordinance, qualification,
standard, license or franchise or determination of an arbitrator or a court or
other Governmental Authority, including the NYSE or NASDAQ or any national
securities exchange or automated quotation system on which the Common Stock is
listed or admitted to trading, in each case applicable to, or binding upon, such
Person or any of its property or to which such Person or any of its property is
subject or pertaining to any or all of the transactions contemplated hereby.

“Return” has the meaning assigned to such term in Section
5.1(a)(ix) .

“Rule 144” means Rule 144 promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

“SEC Reports” means each registration statement, report, proxy
statement or information statement (other than preliminary materials) or other
documents filed by the Company or any of its Subsidiaries with the Commission
pursuant to the Securities Act or the Exchange Act or the rules and regulations
thereunder since January 1, 2010, each in the form (including exhibits and any
amendments) filed with the Commission.

“Securities” means, collectively, Closing Securities and the
Warrant Shares and the IP Common Shares. 

5 

“Securities Act” means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder by the Commission from time
to time.

“Series A Preferred Stock” means the Company’s Series A
Convertible Preferred Stock. 

“Series C Preferred Stock” means the Company’s
  Series C Convertible Preferred Stock. 

“Series E Preferred Stock” has the meaning
  assigned to such term in the Recitals hereto. 

“SSS” has the meaning assigned to
  such term in the Preamble. 

“Subsidiary” of any specified Person means any other Person
more than 50% of the outstanding voting securities of which is owned or
controlled, directly or indirectly, by such specified Person or by one or more
other Subsidiaries of such specified Person, or by such specified Person and one
or more other Subsidiaries of such specified Person. For the purposes of this
definition, “voting securities” means securities which ordinarily have voting
power for the election of directors (or other Persons having similar functions),
whether at all times or only so long as no senior class of securities has such
voting power by reason of any contingency, or other ownership interests
ordinarily constituting a majority voting interest.

“Tax Claim” has the meaning assigned to such term in Section
5.1(a)(ix) .

“Tax” or “Taxes” means any taxes, assessment, duties, fees,
levies, imposts, deductions, or withholdings, including income, gross receipts,
ad valorem, value added, excise, real or personal property, asset, sales, use,
license, payroll, transaction, capital, net worth and franchise taxes, estimated
taxes, withholding, employment, social security, workers’ compensation, utility,
severance, production, unemployment compensation, occupation, premium, windfall
profits, transfer and gains taxes, or other governmental charges of any nature
whatsoever, imposed by any taxing authority of any government or country or
political subdivision of any country, and any liabilities with respect thereto,
including any penalties, additions to tax, fines or interest thereon and
includes any liability for Taxes of another Person by Contract, as a transferee
or successor, under Treasury Regulation 1.1502 -6 or analogous state, local or
foreign Requirement of Law provision or otherwise. 

“Titles Valuation Report” has the meaning assigned to such term
in Section 7.1(e) .

“Trading Affiliates” has the meaning assigned to such term in
Section 4.11.

“Voting Securities” means any class or classes of stock of the
Company pursuant to which the holders thereof have the general power under
ordinary circumstances to vote with respect to the election of the Board of
Directors, irrespective of whether or not, at the time, stock of any other class
or classes shall have, or might have, voting power by reason of the happening of
any contingency. 

“Warrant” has the meaning assigned to such term in the
Preamble. 

“Warrant Shares” has the meaning assigned to such term in the
Preamble.

ARTICLE 2 
PURCHASE AND SALE OF SECURITIES

2.1     Purchase and Sale
of Securities. Subject to the terms set forth herein and in reliance upon
the representations set forth below, at the Closing, the Company shall issue and
sell to the Purchaser (i) the Cash Common Shares and the Warrant for an
aggregate purchase price of $10,000,000 (the “Purchase Price”) and (ii) the
Promissory Note in exchange for the grant of the licenses under the License
Agreement valued at $29,100,000. 

2.2     Closing.
Subject to the last sentence of this Section 2.2, the issuance, sale and
purchase of the Closing Securities shall take place at a closing (the “Closing”)
to be held at the offices of Cooley LLP, 1114 Avenue of the Americas, New York,
New York (except that the Closing may be conducted as a “virtual closing”, with
the parties providing signature pages to each other electronically or via
facsimile), at 10:00 A.M., local time, on the Closing Date. On the first
Business Day after the conditions set forth in Sections 6.1 and 7.1 (other than
those to be satisfied on the Closing Date, which shall be satisfied or waived on
such date) have been satisfied or waived by the party entitled to waive such
conditions or such later date and time as the parties may agree in writing (the
“Closing Date”), the Purchaser shall (a)(i) deliver to the Company by wire
transfer in immediately available funds to an account or accounts designated in
writing by the Company to the Purchaser on the Closing Date, funds in an amount equal to the Purchase Price (which
funds will be used by the Company in accordance with Section 2.3), (ii) make or
cause to be made the deliveries applicable to the Purchaser set forth in Section
7.1 and (b) the Company shall (i) issue and deliver to the Purchaser the Closing
Securities and (ii) make or cause to be made the deliveries set forth in Section
6.1. In no event shall the Company, by reason of this Section 2.2, any of the
other terms of this Agreement or otherwise, be obligated to deliver to the
Purchaser any of the Cash Common Shares unless and until the Company has
received payment from the Purchaser of the full amount of the Purchase Price and
the parties to the License Agreement have executed and delivered the same. 

6 

2.3     Use of
Proceeds. The Purchase Price shall be used by the Company for general
working capital purposes as approved by the Board, and the Company shall not,
without the prior written consent of the Purchaser, use such monies for other
purposes. The Purchase Price shall not be used by the Company for purposes of
paying off Shane McMahone’s three million dollar note through the end of 2017.

ARTICLE 3 
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY

The Company hereby represents and
warrants to the Purchaser as follows: 

3.1     Corporate
Existence and Power. The Company (a) is a corporation duly incorporated,
validly existing and in good standing under the Laws of the State of Nevada; (b)
has all requisite corporate power and authority to own and operate its
properties, to lease the properties it operates as lessee and to carry on its
business as currently conducted and currently contemplated to be conducted; and
(c) has (or will have, as applicable) all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the Promissory Note (collectively, the “Company Agreements”). The Company is
duly qualified to do business as a foreign corporation in, and is in good
standing under the Laws of, each jurisdiction in which the conduct of its
business or the nature of the property owned requires such qualification except
where the failure to be so qualified or in good standing, individually or in the
aggregate would not be materially adverse to the Company.

3.2     Subsidiaries.
Except as set forth on Schedule 3.2, the Company has no Subsidiaries and no
interest or investments in any corporation, partnership, limited liability
company, trust or other entity or organization. Each Subsidiary listed on
Schedule 3.2 has been duly organized, is validly existing and in good standing
under the Laws of the jurisdiction of its organization, has all requisite
corporate (or, in the case of an entity other than a corporation, other) power
and authority to own and operate its properties, to lease the properties it
operates as lessee and to carry on its business as currently conducted and
currently contemplated to be conducted, and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or the nature of its properties requires such qualification except
where the failure to be so qualified or in good standing, individually or in the
aggregate, has not had and would not be materially adverse to the Company.
Except as set forth on Schedule 3.2, all of the issued and outstanding stock (or
equivalent interests) of each Subsidiary set forth on Schedule 3.2 has been duly
authorized and validly issued, is fully paid and non-assessable and is owned by
the Company free and clear of any Liens and there are no rights, options or
warrants outstanding or other agreements to acquire shares of stock (or
equivalent interests) of such Subsidiary. Schedule 3.2 sets forth the
capitalization of each of the Subsidiaries, including the amount and kind of
equity interests held by the Company in the Subsidiary and the percentage
interest represented thereby.

3.3     Corporate
Authorization; No Contravention. The execution, delivery and performance by
the Company of each Company Agreement and the consummation of the transactions
contemplated thereby, (a) subject to the satisfaction of the matters described
in Section 3.24(b), have been duly authorized by all necessary corporate action
of the Company; (b) do not contravene the terms of the Articles of Incorporation
or Bylaws or the organizational documents of its Subsidiaries; (c) do not
entitle any Person to exercise any statutory or contractual preemptive rights to
purchase shares of capital stock or any equity interest in the Company, other
than pursuant to the Investor Rights Agreement and (d) subject to receipt or
satisfaction of the approvals, consents, exemptions, authorizations or other
actions, notices or filings set forth on Schedule 3.4, and do not violate or
result in any breach or contravention of, a default under, or an acceleration of
any obligation under or the creation (with or without notice, lapse of time or
both) of any Lien under, result in the termination or loss of any right or the
imposition of any penalty under any Contractual Obligation of the Company or its
Subsidiaries or by which their respective assets or properties are bound or any
Requirement of Law applicable to the Company or its Subsidiaries or by which
their respective assets or properties are bound. No event has occurred and no
condition exists which (upon notice or the passage of time or both) would
constitute, or give rise to: (i) any breach, violation, default, change of
control or right to cause the Company to repurchase or redeem under, (ii) any
Lien on the assets of the Company or any of its Subsidiaries under, (iii) any
termination right of any party, or any loss of any right or imposition of any
penalty, under or (iv) any change or acceleration in the rights or obligations
of any party under, any material Contractual Obligation of the Company or its
Subsidiaries (or by which their respective assets or properties are bound) or the Articles of Incorporation or
Bylaws or the organizational documents of the Company’s Subsidiaries except for
any of the foregoing that, individually or in the aggregate, would not be
material to the Company or its Subsidiaries.

7 

3.4     Governmental
Authorization; Third Party Consents. Except as set forth on Schedule 3.4, no
approval, consent, qualification, order, exemption, authorization or other
action by, or notice to, or filing with, any Governmental Authority, or any
other Person in respect of any Requirement of Law, Contractual Obligation or
otherwise, and no lapse of a waiting period under a Requirement of Law, is
necessary or required in connection with the execution, delivery or performance
(including, without limitation, the issuance, sale and delivery of the
Securities by the Company, or enforcement against the Company, of the Company
Agreements or the consummation of the Contemplated Transactions except for any
of the foregoing that, individually or in the aggregate, would not be material
to the Company or its Subsidiaries.

3.5     Binding
Effect. Each of the Company Agreements has been (or will, as of the Closing,
be, as applicable) duly authorized, executed and delivered by the Company and,
subject to Equitable Principles, constitutes (or will, as of the Closing,
constitute, as applicable) the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.

3.6     Capitalization of
the Company and its Subsidiaries. The authorized stock of the Company
consists of 1,500,000,000 shares of Common Stock and 50,000,000 shares of
preferred stock, par value $0.001, of the Company (the “Preferred Stock”). As of
the date hereof, (a) 7,000,000 shares of Series A Preferred Stock are issued and
outstanding, 7,254,997 shares of Series E Preferred Stock are issued and
outstanding and have no voting rights, (b) 24,027,924 shares of Common Stock are
issued and outstanding, (c) 12,468,025 shares of Common Stock are reserved for
or subject to issuance. Schedule 3.6 sets forth a true and correct list of all
outstanding rights, options or warrants to purchase shares of any class or
series of stock of the Company (collectively, the “Company Options”) and a true
and correct list of each of the Company’s stock option, incentive, purchase or
other plans pursuant to which options or warrants to purchase stock of the
Company may be issued (collectively, the “Existing Plans”). Except as set out on
Schedule 3.6 and for (i) shares of Common Stock issuable pursuant to the
exercise of outstanding Company Options, (ii) shares of Common Stock issuable
upon conversion of the Series A Preferred Stock, or the Series E Preferred
Stock, (iii) securities issuable upon conversion of the Convertible Promissory
Note, dated May 10, 2012, (the “McMahon Note”), there are no shares of Common
Stock or any other equity security of the Company issuable upon conversion or
exchange of any security of the Company or any of its Subsidiaries nor any
rights, options or warrants outstanding or other agreements to acquire shares of
stock of the Company or any of its Subsidiaries. Neither the Company nor any of
its Subsidiaries is contractually obligated to issue any shares of stock or to
purchase, redeem or otherwise acquire any of its outstanding shares of stock.
Neither the Company nor any of its Subsidiaries has created any “phantom stock,”
stock appreciation rights or other similar rights the value of which is related
to or based upon the price or value of the Common Stock. Neither the Company nor
any of its Subsidiaries has outstanding debt or debt instruments providing for
voting rights with respect to the Company or such Subsidiary to the holders
thereof. Other than pursuant to the Investor Rights Agreement, no stockholder of
the Company or any of its Subsidiaries or other Person is entitled to any
preemptive or similar rights to subscribe for shares of stock of the Company or
any of its Subsidiaries. All of the issued and outstanding shares of Common
Stock and Preferred Stock are duly authorized, validly issued, fully paid, and
nonassessable. Other than pursuant to the Employment Agreements between the
Company and McMahon and Song, respectively, neither the Company nor any of its
Subsidiaries has granted to any Person the right to demand or request that the
Company or such Subsidiary effect a registration under the Securities Act of any
securities held by such Person or to include any securities of such Person in
any such registration by the Company or such Subsidiary.

3.7     Commission
Documents; Sarbanes-Oxley Compliance.

(a)      Since December
31, 2011, the Company has filed with or furnished to the Commission all forms,
reports, statements, schedules, certificates and other documents that have been
required to be filed or furnished by it under applicable Laws on a timely basis
or received a valid extension of such time of filing and filed any such SEC
Reports prior to the expiration of any such extension. The Company has made
available to Purchaser true, complete and unredacted copies of (i) SEC Reports
filed or furnished prior to the date of this Agreement, in each case to the
extent not publicly filed in unredacted form and (ii) all correspondence between
the Company (or on its behalf) and the Commission. As of its filing date (or, if
amended or superseded by a filing prior to the date of this Agreement, on the
date of such amended or superseded filing), (A) each SEC Report complied as to
form in all material respects with the applicable requirements of the Securities
Act or the Exchange Act, as the case may be, each as in effect on the date such
Company SEC Report was filed, and (B) each SEC Report did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. None of the Company’s Subsidiaries
is required to file any forms, reports or other documents under the Exchange
Act. No executive officer of the Company has failed to make the certifications required of him
or her under Section 302 or 906 of the Sarbanes-Oxley Act with respect to any
SEC Report, except as disclosed in certifications filed with the SEC Reports.
Neither the Company nor any of its executive officers has received notice from
any Governmental Authority challenging or questioning the accuracy,
completeness, form or manner of filing of such certifications. The Company and
each of its officers is in compliance in all material respects with (x) the
applicable provisions of the Sarbanes-Oxley Act and the rules and regulations
promulgated thereunder, and (y) the applicable listing and corporate governance
rules and regulations of NASDAQ. 

8 

(b)     The management of the
Company has (i) designed disclosure controls and procedures to ensure that
material information relating to the Company, including its consolidated
Subsidiaries, is made known to the management of the Company by others within
those entities, and (ii) has disclosed, based on its most recent evaluation, to
the Company’s outside auditors and the audit committee of the Board of Directors
(A) any significant deficiencies in the design or operation of internal controls
which could adversely affect the Company’s ability to record, process, summarize
and report financial data and have identified for the Company’s outside auditors
any material weaknesses in internal controls and (B) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal controls. A summary of any of those disclosures
made by management to the Company’s auditors and audit committee has been
furnished to Purchaser. The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with management’s
general or specific authorizations, (2) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (3) access to assets is permitted only in
accordance with management’s general or specific authorization and (4) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(c)     Since December 31,
2011, neither the Company nor any of its Subsidiaries nor, to the knowledge of
the Company, any director, officer, employee, auditor, accountant or
representative of the Company or any of its Subsidiaries has received or
otherwise had or obtained knowledge of any complaint, allegation, assertion or
claim, whether written or oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of the Company or any of its Subsidiaries
or their respective internal accounting controls, including any complaint,
allegation, assertion or claim that the Company or any of its Subsidiaries has
engaged in questionable accounting or auditing practices. No attorney
representing the Company or any of its Subsidiaries, whether or not employed by
the Company or any of its Subsidiaries, has reported evidence of a material
violation of securities Laws, breach of fiduciary duty or similar violation by
the Company or any of its officers, directors, employees or agents to the Board
of Directors or any committee thereof or to any director or officer of the
Company.

(d)     To the knowledge of
the Company, no employee of the Company or any of its Subsidiaries has provided
or is providing information to any law enforcement agency regarding the
commission or possible commission of any crime or the violation or possible
violation of any Law, rule, regulation, order, decree or injunction. Neither the
Company nor any of its Subsidiaries nor, to the knowledge of the Company, any
contractor, subcontractor or agent of the Company or any such Subsidiary of the
Company has discharged, demoted, suspended, threatened, harassed or in any other
manner discriminated against an employee of the Company or any of its
Subsidiaries in the terms and conditions of employment because of any act of
such employee described in 18 U.S.C. ss.1514A(a).

3.8     Absence of Certain
Developments. Since December 31, 2011, and except as described in the SEC
Reports filed with the Commission prior to the date hereof (a) each of the
Company and its Subsidiaries has operated in the ordinary course, (b) there has
been no occurrence or event of the type set forth in Section 5.1(a), and there
has occurred no fact, event, circumstance or development that, individually or
in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.

3.9     Indebtedness; No
Undisclosed Liabilities. Schedule 3.9 sets forth the Indebtedness of the
Company. Neither the Company nor any of its Subsidiaries has any material
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, except (a) liabilities or obligations disclosed or reserved against
in the SEC Reports filed with the Commission prior to the date hereof, (b)
liabilities or obligations which arose after the last date of any such SEC
Report, in the ordinary course of business consistent with past practice that,
individually or in the aggregate, do not exceed $1,000,000, (c) as set forth on
Schedule 3.9, and (d) liabilities incurred in connection with the Contemplated
Transactions that are not in breach of this Agreement.

3.10     Compliance with
Laws; Licenses.

(a)     Except as set forth
in the SEC Reports filed with the Commission prior to the date hereof, neither
the Company nor any of its Subsidiaries in the conduct of its business, is, or
since December 31, 2011, has been, in violation of any Requirement of Law, or any judgments, orders, rulings,
injunctions or decrees of a Governmental Authority (collectively, “Decrees”),
applicable thereto or to the employees conducting such business, except for
violations that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect.

9 

(b)     The Company and its
Subsidiaries as applicable, have obtained or made, as the case may be, all
permits, licenses, authorizations, orders and approvals, and all filings,
applications and registrations with, all Governmental Authorities (“Licenses”),
that are required to conduct the businesses of the Company and its Subsidiaries
in the manner and to the full extent as currently conducted or currently
contemplated to be conducted except where such failure to obtain or make,
individually or in the aggregate, would not be materially adverse to the
Company. None of such Licenses is subject to any restriction or condition that
limits or would reasonably be expected to limit in any material way the full
operation of the Company or its Subsidiaries as currently conducted or currently
contemplated to be conducted. Each of the Licenses has been duly obtained, is
valid and in full force and effect, and is not subject to any pending or
threatened proceeding to limit, condition, suspend, cancel, suspend, or declare
such License invalid. Neither the Company nor any of its Subsidiaries is in
default in any material respect with respect to any of the Licenses, and to the
knowledge of the Company no event has occurred which constitutes, or with due
notice or lapse of time or both may constitute, a default by the Company or any
such Subsidiary under any License.

3.11     Litigation.
There is no legal action, suit, arbitration, proceeding or, to the knowledge of
the Company, other legal, administrative or other governmental investigation or
inquiry pending or claims asserted (or, to the knowledge of the Company, any
threat thereof) against the Company or any of its Subsidiaries or relating to
any of the Company Agreements or the Contemplated Transactions or against any
officer, director or employee of the Company in connection with such Person’s
relationship with or actions taken on behalf of the Company. The Company is not
subject to any Decree that, individually or in the aggregate, has had or would
reasonably be expected to be material to the Company.

3.12     Material
Contracts.

(a)     Schedule 3.12(a) sets
forth a true, correct and complete list of the following Contractual Obligations
(including every written amendment, modification or supplement to the foregoing
or other material amendment, modification or supplement to the foregoing that is
binding on the Company or any of its Subsidiaries) to which the Company or any
of its Subsidiaries is a party: (i) any Contractual Obligation that is a
“material contract” (as such term is defined in Item 601(b)(10) of Regulation
S-K of the Commission), (ii) Contractual Obligations that collectively represent
the top 5 agreements (based on cost) with content licensors for the Company and
its Subsidiaries during the Company’s last fiscal year, (iii) Contractual
Obligations that collectively represent the top 5 agreements (based on revenue)
for distribution services and cooperation agreements of the Company and its
Subsidiaries during the Company’s last fiscal year, (iv) any Contractual
Obligation (other than a Contractual Obligation described in one of the other
provisions of this Section 3.12(a) without regard to any threshold contained
therein) that involves annual expenditures during the Company’s last fiscal year
by the Company or any Company Subsidiary in excess of $200,000 and is not
otherwise cancelable by the Company or any of its Subsidiaries without any
financial or other penalty on 90-days’ or less notice, (v) any Lease for real
property or (vi) any other Contractual Obligation that is material to the
Company or its Subsidiaries (each Contractual Obligation referenced above in
clauses (i) through (vi) individually, a “Material Contract” and collectively,
“Material Contracts”); provided that, with respect to Company Material Contracts
described above, such list shall identify the date of such contract and any
communications (written or, to the knowledge of the Company, oral) received by
the Company or its Subsidiaries from any party to such contract or on behalf of
any such party that such party intends to cancel, terminate, seek re-bidding of
or fail to renew such contract. Except as set forth on Schedule 3.12(a), the
Company has delivered or made available true, correct and complete copies of all
such Contractual Obligations to counsel to Purchaser.

(b)     All of the Material
Contracts are valid, binding and in full force and effect in all material
respects and enforceable by the Company in accordance with their respective
terms in all material respects, subject to Equitable Principles. The Company is
not in material default or breach under any of its Contractual Obligations or
organizational documents and, to the knowledge of the Company, no other party to
any of its Contractual Obligations is in material default or breach thereunder
(and no event has occurred which with the passage of time or the giving of
notice or both would result in a material default or breach by the Company or,
to the knowledge of the Company, by any other party thereunder). Except as set
forth on Schedule 3.12(b), neither the Company nor any of its Subsidiaries is a
party to any non-competition agreement or any other agreement or obligation that
materially limits or will materially limit the Company or any of its
Subsidiaries from engaging in any line of business in any territory.

3.13    
Environmental. The Company and its Subsidiaries are, and have been,
in compliance with all Environmental Laws, except where such non-compliance,
individually or in the aggregate, has not had and would not reasonably be
expected to be materially adverse to the Company. Neither the Company
nor any of its Subsidiaries has received any written notice that alleges that
the Company or its Subsidiaries is not in compliance with any Environmental
Laws, and to the knowledge of the Company, there are no circumstances that could
reasonably be expected to prevent or interfere with such compliance in the
future. There is no Environmental Claim pending, or to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries with respect
to the operations or business of the Company or its Subsidiaries, or against any
Person whose liability for any Environmental Claim the Company or its
Subsidiaries has retained or assumed either contractually or by operation of
Law. There has been no release at any time of any Materials of Environmental
Concern at, on, about, under or within any real property currently, or to the
knowledge of the Company, formerly owned, leased, operated or controlled by the
Company or any of its Subsidiaries or any of their predecessors.

10 

3.14     Taxes. All
Returns required to be filed by the Company and each of its Subsidiaries have
been timely filed (after giving effect to any valid extensions of time in which
to make such filings) and all such Returns are true, complete, and correct in
all material respects. All Taxes that are due or claimed to be due from the
Company and each of its Subsidiaries have been timely paid, other than those (i)
currently payable without penalty or interest or (ii) being contested in good
faith and by appropriate proceedings and for which, in the case of both clauses
(i) and (ii), adequate reserves have been established on the books and records
of the Company and its Subsidiaries in accordance with GAAP. There are no
proposed, asserted, ongoing or to the knowledge of the Company, threatened,
assessments, examinations, claims, deficiencies, Liens or other litigation with
regard to any Taxes or Returns of the Company or any of its Subsidiaries. To the
knowledge of the Company, the accruals and reserves on the books and records of
the Company and its Subsidiaries in respect of any Tax liability for any taxable
period not finally determined are adequate to meet any assessments of Tax for
any such period. The Company is not a United States real property holding
corporation as defined in Section 897(c)(2) of the Code. The Company and each of
its Subsidiaries are not currently the beneficiary of any extension of time
within which to file any Tax Return. All material amounts required to be
collected or withheld by the Company or any of its Subsidiaries have been
collected or withheld and any such amounts that are required to be remitted to
any taxing authority have been duly and timely remitted. Neither the Company nor
any of its Subsidiaries has waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency. No taxing authority in a jurisdiction where the Company or its
Subsidiaries do not file Tax Returns has made a written claim or assertion that
the Company or its Subsidiaries are or may be subject to taxation by such
jurisdiction. The Company and each of its Subsidiaries is not a party to or
bound by any Tax sharing or Tax allocation or similar Contractual Obligation.
True and complete copies of all income Tax Returns that have been filed by the
Company or any of its Subsidiaries for Tax periods after December 31, 2008 have
been delivered or made available to the Purchaser. The Company and each of its
Subsidiaries (A) has not been a member of an affiliated group filing a
consolidated federal income Tax Return (other than a group of which the Company
was the common parent) or (B) does not have any liability for the Taxes of any
Person (other than the Company) under Treasury Regulation ss. 1.1502 -6 (or any
similar provision of state, local, or foreign Requirement of Law), as a
transferee or successor, by contract, or otherwise. The Company and each of its
Subsidiaries has not agreed, and is not required to include in income any
adjustment pursuant to Section 481(a) of the Code (or analogous provision of
foreign, state, or local Requirement of Law) by reason of a change in accounting
method or otherwise, and the Company and each of its Subsidiaries does not have
knowledge that the Internal Revenue Service (or other taxing authority) has
proposed or is considering any such change in accounting. The Company and each
of its Subsidiaries will not be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any: (A) “closing
agreement” as described in Code ss. 7121 (or any corresponding or similar
provision of state, local or foreign income Tax Requirement of Law) executed on
or prior to the Closing Date; (B) installment sale or open transaction
disposition made on or prior to the Closing Date; or (C) prepaid amount received
on or prior to the Closing Date.

3.15     Title to Property
and Assets; Leases. Except as set forth on Schedule 3.15, each of the
Company and its Subsidiaries has good and marketable title, free and clear of
all Liens to all of its assets, including all real property and interests in
real property owned in fee simple by the Company and its Subsidiaries and all
real property leased, subleased or otherwise occupied by the Company and its
Subsidiaries and any assets and properties which it purports to own, except (i)
Liens for taxes not yet due and payable and (ii) Liens that do not interfere
with the use, utility or value of such assets in any material respect. All
leases to which the Company or any of its Subsidiaries is a party (collectively,
the “Leases”) are valid and binding and in full force and effect in accordance
with their respective terms on the Company and its Subsidiaries and, to the
knowledge of the Company, with respect to each other party to any such Leases,
except, in each case, subject to Equitable Principles. No material default (or
event which, with the giving of notice or passage of time, or both, would
constitute a material default) by the Company or any of its Subsidiaries, or to
the knowledge of the Company by any other party thereto, has occurred and is
continuing under the Leases. The Company and its Subsidiaries enjoy a peaceful
and undisturbed possession under all such Leases to which any of them is a party
as lessee. With respect to each Lease, to the knowledge of the Company, either
(a) such Lease is not subject or subordinate to any mortgage, deed of trust or
other lien which has priority over such Lease, or (b) the holder of any such
lien has entered into a valid, binding and enforceable nondisturbance agreement
in favor of the lessee pursuant to which the Lease cannot be extinguished or
terminated by reason of any foreclosure or other acquisition of title by such holder if the lessee thereunder is not in default under
the Lease as of the date of acquisition of title. As used herein, the term
“Lease” shall also include subleases or other occupancy agreements (and any
amendments thereto) and the term “lessee” shall also include any sublessee or
other occupant. Neither the Company nor any of its Subsidiaries own any real
property.

11 

3.16     Compliance with
ERISA. Except as set forth on Schedule 3.16, the Company has made available
to the Purchaser true and complete copies of each Employment Agreement and each
material Company Benefit Plan, as well as certain related documents, including,
but not limited to, (a) the actuarial report for such Company Benefit Plan (if
applicable) for each of the last two years, (b) the most recent determination
letter from the IRS (if applicable) for such Company Benefit Plan, (c) the two
most recent annual reports (Series 5500 and related schedules) required under
ERISA (if any), (d) the most recent summary plan descriptions (with all material
modifications) and (e) all material communications to any current or former
employees of the Company relating to any material Company Benefit Plan or
Employment Agreement. Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect: (A) each of the
Company Benefit Plans has been operated and administered in all material
respects in compliance with its terms and all applicable Laws; (B) each of the
Company Benefit Plans intended to be “qualified” within the meaning of Section
401(a) of the Code is so qualified; and (C) there are no pending, or to the
knowledge of Company, threatened claims (other than routine claims for benefits)
by, on behalf of or against any of the Company Benefit Plans or any trusts
related thereto or pursuant to any Employment Agreement. Neither the Company nor
any ERISA Affiliate currently sponsors, maintains or contributes to, and is not
required to contribute to, nor has ever sponsored, maintained or contributed to,
and been required to contribute to, or incurred any liability with respect to
any “employee benefit plan” (within the meaning of Section 3(3) of ERISA) that
is subject to Section 302 of the Code or Title IV of ERISA. No non-exempt
“prohibited transaction,” within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any Company Benefit Plan
which could, individually or in the aggregate, reasonably be expected to result
in a material liability to the Company. No material liability under any Company
Benefit Plan has been funded nor has any such obligation been satisfied with the
purchase of a contract from an insurance company as to which the Company has
received notice that such insurance company is insolvent or is in rehabilitation
or any similar proceeding. No Company Benefit Plan is under audit or, to the
knowledge of the Company, investigation by, or is the subject of a proceeding
with respect to, the IRS, the Department of Labor or the Pension Benefit
Guaranty Corporation, and, to the knowledge of the Company, no such audit,
investigation or proceeding is threatened. Except as set forth on Schedule 3.16,
with respect to each Company Benefit Plan which provides medical benefits,
short-term disability benefits or long-term disability benefits (other than any
“pension plan” within the meaning of Section 3(2) of ERISA), all claims incurred
by the Company under such Company Benefit Plan are either insured pursuant to a
contract of insurance whereby the insurance company bears any risk of loss with
respect to such claims or covered under a contract with a health maintenance
organization pursuant to which such health maintenance organization bears the
liability for such claims. Except as set forth on Schedule 3.16 hereto or
disclosed in the SEC Reports filed with the Commission prior to the date hereof,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (either alone or in conjunction with any
other event such as termination of employment) (i) result in, or cause any
increase, acceleration or vesting of, any payment, benefit or award under any
Company Benefit Plan or Employment Agreement to any director or employee of
Company or any of its Subsidiaries, (ii) give rise to any obligation to fund for
any such payments, awards or benefits, (iii) give rise to any limitation on the
ability of the Company or any of its Subsidiaries to amend or terminate any
Company Benefit Plan, or (iv) result in any payment or benefit that will or may
be made by the Company or any of its Subsidiaries or affiliates that will be
characterized as an “excess parachute payment,” within the meaning of Section
280G of the Code. Except as set forth on Schedule 3.16, neither the Company nor
any of its Subsidiaries or ERISA Affiliates has any liability to provide any
post-retirement or post-termination life, health, medical or other welfare
benefits to any current or former employees or beneficiaries or dependents
thereof which, individually or in the aggregate, is material, except for health
continuation coverage as required by Section 4980B of the Code or Part 6 of
Title I of ERISA or applicable sta te healthcare continuation coverage Laws
which, individually or in the aggregate, is at no material expense to the
Company and its Subsidiaries. With respect to each Company Benefit Plan, there
are no understandings, agreements or undertakings that would prevent the Company
from amending or terminating such Company Benefit Plan at any time without
incurring material liability thereunder other than in respect of accrued
obligations and medical or welfare claims incurred prior to such amendment or
termination.

3.17     Labor Relations;
Employees.

(a)     (i) Neither the
Company nor any of its Subsidiaries is a party to any collective bargaining
agreement, labor union contract, or trade union agreement (each a “Collective
Bargaining Agreement”), (ii) to the knowledge of the Company, there are no
activities or proceedings of any labor or trade union to organize any employees
of the Company or any of its Subsidiaries; (iii) no Collective Bargaining
Agreement is being negotiated by the Company or any of its Subsidiaries, (iv)
there is no strike, lockout, slowdown, or work stoppage against the Company or
any of its Subsidiaries pending or, to the knowledge of the Company, threatened
that may interfere with the respective business activities of the Company or any
of its Subsidiary.

12 

(b)     The Company and its
Subsidiaries have complied in all material respects with applicable Laws with
respect to employment (including but not limited to applicable Laws regarding
wage and hour requirements, correct classification of independent contractors
and of employees as exempt and non-exempt, immigration status, discrimination in
employment, employee health and safety, and collective bargaining).

(c)     The Company and each
of its Subsidiaries have withheld all amounts required by applicable Law to be
withheld from the wages, salaries, and other payments to employees, and are not,
to the knowledge of the Company, liable for any arrears of wages or any taxes or
any penalty for failure to comply with any of the foregoing. Neither the Company
nor any of its Subsidiaries is liable for any material payment to any trust or
other fund or to any Governmental Authority, with respect to unemployment
compensation benefits, social security or other benefits for employees (other
than routine payments to be made in the ordinary course of business consistent
with past practice).

3.18     Certain
Payments. Neither the Company nor any Subsidiary nor, to the knowledge of
the Company, any director, officer, agent, employee, or other Person associated
with or acting on behalf of any of them, has directly or indirectly (a) made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any Person, private or public, regardless of form, whether in money,
property, or services (i) to obtain favorable treatment in securing business,
(ii) to pay for favorable treatment for business secured, (iii) to obtain
special concessions or for special concessions already obtained, for or in
respect of the Company or any Subsidiary or any Affiliate of the Company or any
Subsidiary, or (iv) in violation of any Requirement of Law, or (b) established
or maintained any fund or asset that has not been recorded in the books and
records of the Company.

3.19     Insurance.
The Company and its Subsidiaries maintain, with financially sound and reputable
insurers, insurance in such amounts, including deductible arrangements, and of
such a character as is, in the judgment of the Board of Directors, reasonable in
light of the risks faced by the Company in the conduct of its business. All
policies of title, fire, liability, casualty, business interruption, workers’
compensation and other forms of insurance including, but not limited to,
directors and officers insurance, held by the Company and its Subsidiaries, are
in full force and effect in accordance with their terms. Neither the Company nor
any of its Subsidiaries is in default in any material respect under any
provisions of any such policy of insurance that has not been remedied and no
such Person has received notice of cancellation of any such insurance.

3.20     Intellectual
Property. The Company and its Subsidiaries own the entire and unencumbered
right, title and interest in and to, or possess adequate licenses or other
rights to use, all intellectual property, including but not limited to, patents,
trademarks, service marks, trade names, trade secrets, copyrights, domain names,
computer software (including but not limited to code, data, databases and
documentation) and know-how used in, or necessary to, the business as currently
conducted or currently contemplated to be conducted by the Company or any of its
Subsidiaries (the “Intellectual Property”) except where such failure to so own
or possess, individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect. All Intellectual
Property which is a material patent, trademark, service mark, trade name,
copyright or domain name is set forth on Schedule 3.20. The Company and each of
its Subsidiaries have performed all commercially reasonable acts to protect and
maintain its material Intellectual Property, including but not limited to paying
all required fees and Taxes to maintain all registrations and applications of
such Intellectual Property in full force and effect. Except as set forth on
Schedule 3.20, none of the Company or any of its Subsidiaries has received any
written notice of infringement of or conflict with (or knows of such
infringement of or conflict with) asserted rights of others with respect to the
use of Intellectual Property. To the knowledge of the Company, the Company and
its Subsidiaries do not in the conduct of their business infringe or conflict
with any right of any third party. Except as set forth on Schedule 3.20, neither
the Company nor any of its Subsidiaries have asserted within two years of the
date hereof, any claim against any third party that such party has violated,
infringed, misappropriated or misused, in any material respect, any Intellectual
Property. The Company and its Subsidiaries have taken commercially reasonable
precautions to preserve and protect the availability, confidentiality, security
and integrity of data held or transmitted by or through the Company and its
Subsidiaries’ computer networks, software, hardware, and other systems.

3.21     Affiliate
Transactions.

(a)     Except for
transactions described on Schedule 3.21(a) and the Contemplated Transactions,
(i)(w) no current officer, director or employee of the Company or any of its
Subsidiaries, (x) to the knowledge of the Company, no former officer, director
or employee of the Company or any of its Subsidiaries, (y) to the knowledge of
the Company, no Affiliate or associate of any current officer, director or
employee of the Company or any of its Subsidiaries and (z) to the knowledge of
the Company, no Affiliate or associate of any former officer, director or
employee of the Company or any of its Subsidiaries has, directly or indirectly,
any interest in any contract, arrangement or property (real or personal,
tangible or intangible) used by the Company or any such Subsidiary or in their
respective businesses, or in any supplier, distributor or customer of the
Company or any such Subsidiary (other than indirectly through such Person’s
ownership of the securities of a corporation whose stock is traded on a national securities exchange or in the
over-the-counter market and less than one percent (1%) of the stock of such
corporation is beneficially owned by such Person) and (ii) neither the Company
nor any of its Subsidiaries shares any assets, rights or services with any
entity that is controlled by any current officer, director or employee of the
Company or any of its Subsidiaries or, to the knowledge of the Company, by any
former officer, director or employee of the Company or any of its
Subsidiaries.

13 

(b)     Except as set forth
on Schedule 3.21(b), each ongoing intercompany transaction set forth on Schedule
3.21(a) is on terms that are (i) consistent with the past practice of the
Company and (ii) at least as favorable in the aggregate for such transaction to
the Company as would be available with independent third parties dealing at
arms’ length.

3.22     Investment
Company Act. Neither the Company nor any of its Subsidiaries is, and, after
giving effect to consummation of the transactions contemplated hereby and by the
other Company Agreements, will be, an “investment company” or an entity
“controlled by” an “investment company” (as such terms are defined in the
Investment Company Act of 1940, as amended).

3.23     Private
Offering. No form of general solicitation or general advertising was used by
the Company or its representatives in connection with the offer or sale of the
Securities. No registration of the Securities pursuant to the provisions of the
Securities Act will be required by the offer, sale, or issuance of the
Securities pursuant to this Agreement and no registration of the Warrant Shares
upon conversion of the Warrant will be required, assuming the accuracy of the
Purchaser representations contained in Section 4.5.

3.24     Board Approval;
Stockholder Approval.

(a)     The Board of
Directors at a meeting duly called and held has unanimously determined the
Contemplated Transactions to be advisable and in the best interests of the
Company and its stockholders and has approved the Contemplated Transactions. The
Board of Directors has taken all action required in order to (i) exempt the
Purchaser, in respect to its purchase of the Securities and conversion of the
Promissory Note and Warrant and any other securities of the Company acquired
pursuant to the Contemplated Transactions, from “interested stockholder” status
as defined under Section 78.411 et seq of the Nevada Private Corporations Law
(the “NPCL”) and (ii) exempt the Contemplated Transactions from the requirements
of, and from triggering any provisions under, any “moratorium,” “control share,”
“fair price,” “interested stockholder,” “affiliate transaction,” “business
combination” or other anti-takeover Laws and regulations of any Governmental
Authority.

(b)     The affirmative vote
of (i) the holders of a majority of the total votes cast in person or by proxy
at a meeting of the Company’s shareholders or (ii) the holders of a majority of
the outstanding voting securities of the Company entitled to vote on the
relevant matters, if such action is taken by written consent, is required under
the rules of NASDAQ to approve the sale and issuance of the Warrant Shares and
the IP Common Shares (collectively, the “Required Vote”). Except for the
Required Vote, no approval by the holders of any shares of stock of the Company
is required in connection with the execution or delivery of the Company
Agreements or the consummation of the Contemplated Transactions, and there are
no rules and regulations prohibiting the Company Agreements and the Contemplated
Transactions, whether pursuant to the NPCL, the Articles of Incorporation or
Bylaws, the rules and regulations of the FINRA, NASDAQ or otherwise.

3.25    
Securities.

(a)     Subject to obtaining
the Required Vote with respect to the Warrant Shares and the IP Common Shares,
all Securities, when issued and delivered in accordance with the terms of this
Agreement and the other Company Agreements, will be duly and validly issued and
outstanding, fully paid and nonassessable and free and clear of any Liens (other
than any Liens granted by any Purchaser), not subject to preemptive or other
similar rights, and constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms. 

(b)     Subject to obtaining
the Required Vote with respect to the IP Common Shares and the Warrant Shares,
all shares of the Common Stock issued and delivered upon conversion of the
Warrant and the Promissory Note, will, when so issued and delivered, be duly and
validly issued and outstanding, fully paid and nonassessable and free and clear
of any Liens (other than any Liens granted by any Purchaser) and, except as set
forth on Schedule 3.25, will not subject to preemptive or other similar
rights.

14 

3.26     No Brokers or
Finders. No agent, broker, finder, or investment or commercial banker or
other Person (if any) engaged by or acting on behalf of the Company or any
Subsidiary or Affiliate is or will be entitled to any brokerage or finder’s or
similar fee or other commission as a result of the Company Agreements or the
Contemplated Transactions.

3.27     Disclosure.
Neither this Agreement nor any certificate, instrument or written statement
furnished or made to any Purchaser by or on behalf of the Company in connection
with the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein in light of the
circumstances under which they were made not misleading.

3.28     Suitability.
Neither the Company nor any of its directors, officers, Subsidiaries or, to the
knowledge of the Company, other Affiliates (a) has ever been convicted of or, to
the knowledge of the Company since December 31, 2002, indicted for any felony or
any crime involving fraud, misrepresentation or moral turpitude, (b) is subject
to any Decree barring, suspending or otherwise limiting the right of the Company
or such Person to engage in any activity or (c) has ever been denied any License
affecting the Company’s or such Person’s ability to conduct any activity
currently conducted or currently contemplated to be conducted by the Company,
nor, to the knowledge of the Company, is there any basis upon which such License
may be denied.

3.29     Off Balance Sheet
Arrangements. Except as disclosed in Management’s Discussion and Analysis of
Financial Conditions and Results of Operations in the Company’s Form 10-K for
the fiscal year ending December 31, 2012, neither the Company nor any of its
Subsidiaries has or is subject to any “Off-Balance Sheet Arrangement” (as
defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Exchange
Act).

ARTICLE 4 
REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER

Each Purchaser hereby represents and
warrants to the Company as follows with respect that Purchaser:

4.1     Existence and
Power. The Purchaser (a) is duly organized and validly existing under the
Laws of the jurisdiction of its formation and (b) has all requisite power and
authority to execute, deliver and perform its obligations under this
Agreement.

4.2     Authorization; No
Contravention. The execution, delivery and performance by the Purchaser of
each Company Agreement to which it is a party and the Contemplated Transactions
(a) have been duly authorized by all necessary corporate or other action, (b) do
not contravene the terms of the Purchaser’s organizational documents, and (c) do
not violate, conflict with or result in any breach or contravention of, or the
creation of any Lien under, any Contractual Obligation of the Purchaser or any
Requirement of Law applicable to the Purchaser, except for such violations,
conflicts, breaches or Liens which, individually or in the aggregate, have not
had and would not reasonably be expected to have a material adverse effect on
the Purchaser’s ability to consummate the Contemplated Transactions.

4.3     Governmental
Authorization; Third Party Consents. Except as listed in Schedule 4.3 or,
individually or in the aggregate, as has not had and would not reasonably be
expected to have a material adverse effect on the Purchaser’s legal power or
ability to purchase or own the Securities and exercise the rights incident
thereto, no approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person in
respect of any Requirement of Law, and no lapse of a waiting period under a
Requirement of Law, is necessary or required in connection with the execution,
delivery or performance by the Purchaser, or enforcement against the Purchaser,
of this Agreement or the consummation of the Contemplated Transactions.

4.4     Binding
Effect. This Agreement has been duly executed and delivered by the Purchaser
and, subject to Equitable Principles, constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against it in accordance with its
terms.

4.5     Investment
Representations. 

(a)     Purchase for Own
Account. The Securities are being acquired by the Purchaser for its own
account and with no current intention of distributing or reselling such
Securities or any part thereof in any transaction that would be in violation of
the securities Laws of the United States of America or any state, without
prejudice, however, to the rights of the Purchaser at all times to sell or
otherwise dispose of all or any part of the Securities under an effective
Registration Statement under the Securities Act or under an exemption from said
registration available under the Securities Act. The Purchaser understands and agrees that if the Purchaser should in the
future decide to dispose of any Securities, it may do so only in compliance with
the Securities Act and applicable state securities Laws, as then in effect. The
Purchaser agrees to the imprinting, so long as required by Law, of a legend on
all certificates representing the Securities. 

15 

(b)     Purchaser
Status. The Purchaser is an “Accredited Investor” (as defined in Rule
501(a)) under the Securities Act. 

(c)     Restricted
Shares. The Purchaser understands (i) that the Cash Common Shares, the IP
Common Shares and the Warrant have not been, and the Warrant Shares issuable
upon exercise of the Warrant will not (subject to such rights set forth in
Article 8 of this Agreement) be registered under the Securities Act or any state
securities Laws, by reason of their issuance by the Company in a transaction
exempt from the registration requirements thereof and (ii) the Cash Common
Shares, the IP Common Shares, the Warrant and the Warrant Shares may not be sold
unless such disposition is registered under the Securities Act and applicable
state securities Laws or is exempt from registration thereunder.

(d)     Investment
Experience. The Purchaser acknowledges that the purchase of the Securities
is a highly speculative investment and that it can bear the economic risk and
complete loss of its investment and has such knowledge and experience in
financial and/or business matters that it is capable of evaluating the merits
and risks of the investment contemplated hereby.

4.6     Receipt of
Information. The Purchaser represents that it has had an opportunity to ask
questions and receive answers and documents from the Company regarding the
business, properties, prospects and financial condition of the Company and
concerning the terms and conditions of the offering of the Securities. 

4.7     No Brokers or
Finders. Except as contemplated by this Agreement, no agent, broker, finder,
or investment or commercial banker or other Person (if any) engaged by or acting
on behalf of the Purchaser or any of its Affiliates is or will be entitled to
any brokerage or finder’s or similar fee or other commission as a result of this
Agreement or the Contemplated Transactions. 

4.8     Sufficient
Funds. The Purchaser, or the Purchaser’s affiliates or designees, will have
at the Closing funds sufficient to perform its obligations under this Agreement
and to consummate the Contemplated Transactions. 

4.9     Litigation.
There is no legal action, suit, arbitration or other legal, administrative or
other governmental investigation, inquiry, proceeding or other Actions pending
or, to the knowledge of the Purchaser, threatened against or affecting the
Purchaser or relating to any of the Company Agreements or the Contemplated
Transactions which, if determined adversely to the Purchaser, individually or in
the aggregate, has had or would reasonably be expected to have a material
adverse effect on the Purchaser’s ability to consummate the Contemplated
Transactions. The Purchaser is not subject to any Decree that, individually or
in the aggregate, has had or would reasonably be expected to have a material
adverse effect on the Purchaser’s ability to consummate the Contemplated
Transactions. 

4.10     No General
Solicitation. The Purchaser did not learn of the investment in the
Securities as a result of any public advertising, and is not aware of any public
advertisement or general solicitation in respect of the Company or its
securities.

4.11     Prohibited
Transactions. Other than with respect to the transactions contemplated
herein, since the earlier to occur of: (a) the time that the Purchaser was first
contacted by the Company, or any other Person regarding an investment in the
Company and (b) the thirtieth (30th) day prior to the date hereof,
neither the Purchaser nor any Affiliate of the Purchaser which (i) had knowledge
of the transactions contemplated hereby, (ii) has or shares discretion relating
to the Purchaser’s investments or trading or information concerning the
Purchaser’s investments, or (iii) is subject to the Purchaser’s review or input
concerning such Affiliate’s investments or trading decisions (collectively,
“Trading Affiliates”) has, directly or indirectly, nor has any Person acting on
behalf of, or pursuant to, any understanding with the Purchaser or Trading
Affiliate effected or agreed to effect any transactions in the securities of the
Company or involving the Company’s securities.

4.12     Reliance on
Exemptions. The Purchaser understands that the Cash Common Shares, the IP
Common Shares and the Warrant are being offered and sold to it in reliance upon
specific exemptions from the registration requirements of United States federal
and state securities Laws and that the Company is relying upon the truth and
accuracy of, and the Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Purchaser set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Purchaser to acquire the Cash Common Shares, the IP Common
Shares and the Warrant.

16 

4.13     Affiliates.
The Purchaser is not, has not within the thirty (30) days prior to the date of
this Agreement been, and, at the Closing Date will not be, Affiliated with, or
an Affiliate of, any other Purchaser. 

ARTICLE 5 
COVENANTS

5.1     Conduct of
Business.

(a)     Except as expressly
contemplated by this Agreement or consented to in writing by the Purchaser, from
the date hereof through the earlier of (i) the Closing Date, and (ii)
termination of this Agreement (the “Restricted Period”), the Company and its
Subsidiaries shall conduct their businesses in the ordinary course, consistent
with past practice and generally in a manner such that the representations and
warranties contained in Article 3, to the extent such matters are within the
Company’s or any of its Subsidiary’s control, shall continue to be true and
correct in all material respects on and as of the Closing Date (except for
representations and warranties made as of a specific date) as if made on and as
of the Closing Date. The Company shall give the Purchaser prompt notice of any
event, condition or circumstance known or that becomes known to the Company
occurring during the Restricted Period that would constitute a violation or
breach of (i) any representation or warranty, whether made as of the date hereof
or as of the Closing Date, or (ii) any covenant of the Company contained in this
Agreement; provided, however, that no such notification shall relieve or cure
any such breach or violation of any such representation, warranty or covenant or
otherwise affect the accuracy of any such representation or warranty for the
purposes of Section 6.1. Without limiting the generality of the foregoing,
except as otherwise expressly contemplated by the terms of this Agreement or
agreed in writing by the Purchaser during the Restricted Period, the Company
shall not, and will cause its Subsidiaries not to: 

(i)     make a capital
expenditure of more than $50,000 except (x) pursuant to agreements or
commitments entered into by the Company or any of its Subsidiaries prior to the
date hereof and included on Schedule 3.12(a), (y) unless otherwise reserved
against in the Company’s most recent financial statements filed with the
Commission prior to the date hereof, or (z) except as set forth on Schedule
5.1(a)(i); 

(ii)     enter into any or
amend any Contractual Obligation, other than in the ordinary course of business,
or, in any event, involving more than $50,000 except as set forth on Schedule
5.1(a)(ii); 

(iii)     except as set
forth on Schedule 5.1(a)(iii), enter into, modify, make, renew, extend or
otherwise alter any credit agreement, note or other similar agreement (including
any interest rate or currency swap, hedge, collar or straddle or similar
transaction) or instrument to which the Company or a Subsidiary is a party or
incur or otherwise become liable with respect to any indebtedness which, in the
aggregate, exceeds $50,000, other than trade payables incurred in the ordinary
course of business and consistent with past practice; 

(iv)      enter into any
Contractual Obligation with respect to the acquisition of any material business,
assets or property (real, personal or mixed, tangible or intangible, including
stock or other equity interests in, or evidences of the indebtedness of, any
other corporation, partnership or entity); 

(v)     form any joint
venture or partnership; 

(vi)     sell, lease,
license, surrender, relinquish, encumber, pledge, transfer, amend, convey or
otherwise dispose of any business, property or assets (whether tangible or
intangible) having a material market value; 

(vii)    fail to maintain any
material property of the Company or any of its Subsidiaries in customary repair,
order and condition consistent with the Company’s or such Subsidiary’s current
maintenance policies, ordinary wear and tear excepted; 

(viii)   discontinue, permit to lapse or
otherwise fail to keep in full force and effect any material policies of
insurance or knowingly take any action that would cause any such policy to
terminate or be terminable prior to the expiration of its stated term; 

(ix)     except as required
by applicable Law, make or change any material Tax election of the Company or
any of its Subsidiaries, change any annual Tax accounting period of the Company
or any of its Subsidiaries, adopt or change any Tax accounting method of the
Company or any of its Subsidiaries, file any return, declaration, report, claim
for refund, or information return or statement relating to Taxes (including any
schedule or attachment thereto, and including any amendment thereof, a “Return”) relating to the Company or any
of its Subsidiaries in a manner that is materially inconsistent with past
practice, enter into any closing agreement relating to material Taxes of the
Company or any of its Subsidiaries, settle any material claim made by any
Governmental Authority including social security administration, domestic or
foreign, having jurisdiction over the assessment, determination, collection or
other imposition of Tax or assessment relating to the Company or any of its
Subsidiaries (a “Tax Claim”), surrender any right to claim a refund of Taxes
relating to the Company or any of its Subsidiaries, consent to any extensions or
waivers of the limitations period applicable to any Tax Claim or assessment
relating to the Company or any of its Subsidiaries, or enter into a Tax sharing
agreement or similar arrangement with respect to the Company or any of its
Subsidiaries; 

17 

(x)     except pursuant to
the Investors’ Rights Agreement, purchase, redeem or otherwise acquire, split,
combine or reclassify, directly or indirectly, any of the Common Stock or other
equity securities or give notice of any intention to exercise any right to
purchase, redeem or otherwise acquire, split, combine or reclassify, any of the
Common Stock or other equity securities (including any such purchase,
redemption, acquisition or notice in accordance with the terms of the Articles
of Incorporation or Bylaws or any stockholders agreement); 

(xi)     except for Exempt
Issuances as defined in the Certificate of Designation, issue or sell, or issue
any rights to purchase or subscribe for, or subdivide or otherwise change, any
shares of the Company’s or any of its Subsidiaries’ stock or other securities or
similar rights; 

(xii)     declare or pay any
dividends on or make other distributions (whether in cash, stock or property or
any combination thereof), directly or indirectly, in respect of the Common
Stock; 

(xiii)    amend the Articles of
Incorporation or Bylaws or the organizational documents of any Subsidiary,
except as contemplated herein; 

(xiv)     except for a Claim
for which the Company will be repaid all amounts payable thereunder or will not
otherwise be responsible for any such payments, settle any material Claim of, or
against, the Company or its Subsidiaries for an amount in excess of
$250,000;

(xv)     change any method of
accounting or accounting practice used by the Company or any of its
Subsidiaries, except for any change required by GAAP, by any Governmental
Authority or by a change in Law; 

(xvi)    cause or permit, by any
act or failure to act, any material License to expire or to be revoked,
suspended, or modified, or take any action that could reasonably be expected to
cause any Governmental Authority to institute proceedings for the suspension,
revocation, or adverse modification of any material License; 

(xvii)    maintain any significant
amount of investments in or trade in equities or other speculative securities;

(xviii)   take any corporate or
other action in furtherance of any of the foregoing; or 

(xix)     agree to do any of
the foregoing. 

(b)     The Company shall
timely file with the Commission a Current Report on Form 8-K pursuant to Item 1
of such Form when such form is required to be filed.

5.2     Regulatory
Approval; Litigation.

(a)     The Purchaser and the
Company agrees that it will use its reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, and to assist and cooperate
with the other party in doing all things, which may be required to obtain all
necessary actions or non-actions, waivers, consents and approval from
Governmental Authorities in order to consummate the Contemplated Transactions,
including without limitation, obtaining the consent of the NASDAQ for the
listing of the Cash Common Shares, the IP Common Shares and the Warrant Shares,
subject only to official notice of issuance; provided, however, that, in
connection with obtaining any such action, non-action, waiver, consent or
approval, the Purchaser shall not be required to agree, and the Company, without
the consent of the Purchaser shall not agree, to any condition or action that
the Purchaser reasonably believes would, individually or in the aggregate,
adversely affect Purchaser’s ability to obtain the benefits (financial or
otherwise) from the Contemplated Transactions (including benefits set forth in
the Company Agreements). 

18 

(b)     The Purchaser and the
Company agree that if any Action is brought seeking to restrain or prohibit or
otherwise relates to consummation of the Contemplated Transactions, the parties
shall use all commercially reasonable efforts to defend such Action, whether
judicial or administrative, and to seek to have any stay or temporary
restraining order entered by any court or Governmental Authority reversed or
vacated. 

5.3     Access.

(a)     During the Restricted
Period, upon reasonable notice, the Company shall (and shall cause its
Subsidiaries to) afford to the officers, employees, accountants, counsel,
financial advisors and other representatives of the Purchaser, reasonable access
during normal business hours, during the period prior to the Closing Date, to
all its books, records, properties, plants and personnel and, during such
period, the Company shall (and shall cause its Subsidiaries to) furnish promptly
to the Purchaser (i) a copy of each report, schedule, registration statement and
other document filed, published, announced or received by it during such period
pursuant to the requirements of Federal or state Laws, as applicable, and (ii)
all other information concerning it and its business, properties and personnel
as the Purchaser may reasonably request. The Purchaser will hold any information
obtained pursuant to this Section 5.5 in confidence in accordance with, and will
otherwise be subject to, the provisions of the Confidentiality Agreement. Any
investigation by the Purchaser shall not affect the representations and
warranties of the Company or the conditions to its obligations to consummate the
transactions contemplated by this Agreement. 

(b)     During the Restricted
Period, the Company shall promptly keep the Purchaser and its representatives
informed of any material development in the business of the Company or its
Subsidiaries. Without limiting the foregoing, during the Restricted Period, the
Company shall cause its officers to consult and cooperate with representatives
of the Purchaser in order to facilitate the Closing. 

5.4     Employee Benefits
Matters. Without limiting the generality of the foregoing, except as
otherwise expressly agreed in writing by the Purchaser, the Company shall not,
and shall cause its Subsidiaries not to, take any of the following actions
during the Restricted Period:

(a)     enter into any new
Employment Agreement, other than as contemplated by Section 7.1(f);

(b)     adopt any new Company
Benefit Plan or, except as may be required by applicable Law, amend any existing
Company Benefit Plan; 

(c)     grant any stock
options or other equity-based compensation to any employee or director of the
Company or any of its Subsidiaries; 

(d)     increase the
salaries, wages, or other compensation or benefits of any employee or director
of the Company or any of its Subsidiaries; or 

(e)     agree to do any of
the foregoing. 

5.5     Legends. Any
legends placed on the Cash Common Shares, the IP Common Shares, the Warrant or
the Warrant Shares or other securities issuable, if any, pursuant to the
Contemplated Transactions shall be removed by the Company upon delivery of an
opinion of counsel reasonably acceptable to the Company stating that such legend
is no longer necessary. 

5.6      Board of
Directors. Prior to or upon the Closing, the Company will take all action
necessary so that, upon the Closing, the Purchaser shall be able to nominate Mr.
Bruno Wu and 2 other individuals for appointment to the Board of Directors, it
being expressly understood and agreed that any right for Purchaser to nominate
such directors (the “Purchaser Designees”) be consistent with NASDAQ Listing
Rule 5640. Purchaser’s nomination rights pursuant to this Section 5.6 must be
proportionate to Purchaser’s beneficial ownership of Common Stock of the Company
and, following the Closing, the number of any Purchaser Designees shall be
proportionate to Purchaser’s beneficial ownership; provided, however, that
Purchaser shall not have the right to nominate any Purchaser Designees at such
time that Purchaser beneficially owns less than 5% of the Common Stock of the
Company (the “Board Threshold”). Any Purchaser Designee appointed or nominated
to the Board of Directors pursuant to this Section 5.6 shall, subject to the
Board Threshold, continue to hold office until such Purchaser Designee’s term
expires, subject, however, to prior death, resignation, replacement, retirement,
disqualification or termination of term of office.

19 

5.7     Reasonable Efforts
to Secure Financing. Prior to the Closing, the Purchaser will use reasonable
efforts to secure $50 million of financing, which proceeds will be used by YOD
to produce its own original content. 

5.8     Stockholder
Approval. As promptly as practicable after the Closing, the Company
covenants and agrees to use commercially reasonable efforts to obtain any
approvals of the Company’s stockholders required under the Company’s
organizational documents, applicable law and/or the listing rules and
regulations of NASDAQ to obtain the Required Vote to approve the sale and
issuance of the Warrant Shares and the IP Common Shares, and such vote shall
require the approval of both actions and not permit the shareholders to approve
the issuance of the IP Common Shares without the approval of the Warrant shares,
and vice versa.

ARTICLE 6 
CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE PURCHASER TO CLOSE

6.1     Conditions to
Closing. The obligation of the Purchaser to enter into and complete the
Closing are subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by the Purchaser:

(a)     Representations
and Covenants. The representations and warranties of the Company contained
in this Agreement shall be true and correct in all material respects (other than
those which are qualified as to materiality, Material Adverse Effect or other
similar term, which shall be true and correct in all respects) on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date (except that representations and warranties made as of a specific
date shall be true and correct in all material respects (except as aforesaid) on
such date); the Company shall have in all material respects performed and
complied with all covenants and agreements required by this Agreement to be
performed or complied with by the Company on or prior to the Closing Date; and
the Company shall have delivered to the Purchaser a certificate, dated the date
of the Closing Date and signed by an executive officer of the Company, to the
foregoing effect. 

(b)     Secretary’s
Certificate. The Purchaser shall have received a certificate of the
Secretary or an Assistant Secretary certifying that attached thereto are true
and complete copies of (i) the Articles of Incorporation and the Company’s
Amended and Restated Bylaws, and (ii) all resolutions adopted by the Board of
Directors of the Company authorizing the execution, delivery and performance of
this Agreement and the Company Agreements and the consummation of the
Contemplated Transactions, and that all such resolutions are in full force and
effect and are all the resolutions adopted in connection with the transactions
contemplated hereby and thereby, and certifying the names and signatures of the
officers of the Company authorized to sign this Agreement, the Company
Agreements, and the other documents to be delivered hereunder and
thereunder.

(c)     Good Standing.
The Company shall have delivered to the Purchaser a good standing certificate
(or its equivalent) for the Company from the secretary of state of Nevada.

(d)     No Actions.
(i) No Action shall be pending or overtly threatened by any Governmental
Authority or any other party against the Company or any of its directors or
against that Purchaser, which Action is reasonably likely to (A) restrain or
prohibit the consummation of any of the Contemplated Transactions, or (B) result
in damages that alone or together with the costs and expenses of defending such
Action are material in relation to the Company and its Subsidiaries, taken as a
whole, and (ii) no Law, order, decree, rule or injunction shall have been
enacted, entered, promulgated or enforced by any Governmental Authority that
prohibits or makes illegal the consummation of any of the Contemplated
Transactions. 

(e)     No Material Adverse Effect. Since the
  date hereof, no event or development shall have occurred (or failed to occur)
  and there shall be no circumstance (and that Purchaser shall not have become
  aware of any previously existing circumstance) that, individually or in the
  aggregate, has had or would reasonably be expected to have a Material Adverse
  Effect. 

(f)     Consents and
Amendments. Any and all consents, approvals, orders, Licenses and other
actions necessary to be obtained from Governmental Authorities, the Company’s
Board and the Company’s shareholders in order to consummate the Contemplated
Transactions, including, without limitation, the issuance of the Earn-Out Shares
(as defined in the 7SF Share Purchase Agreement). 

(g)     NASDAQ
Listing. When issued in accordance with the terms hereof, the Cash Common
Shares, the IP Common Shares and the Warrant Shares shall have been approved for
listing on NASDAQ, subject only to official notice of issuance. 

20 

(h)     Voting
Agreement. The Purchaser shall have received a voting agreement, in form and
substance reasonably acceptable to the Purchaser, duly executed by Bruno Wu and
Xuesong Song (the “Voting Agreement”).

(i)     License
Agreement. The Purchaser shall have received the Content License Agreement,
in substantially the form attached hereto as Exhibit B, duly executed by
the Company (the “License Agreement”), duly executed and delivered by the
Company. 

(j)     Promissory
Note. The Purchaser shall have received the Promissory Note, in
substantially the form attached hereto as Exhibit C (the “Promissory
Note”), duly executed and delivered by the Company, with a principal amount of
$17,717,846.60.

(k)     Resignations.
Xuesong Song and Shane McMahon shall resign their board of director positions as
Executive Chairman and Chairman, respectively, and their respective employment
agreements shall terminate on January 31, 2016 and each shall deliver to the
Company such waivers or other agreements so that the Company shall have no
further obligations thereunder provided, that Mr. Song and Mr. McMahon shall
remain as members of the Board of Directors immediately following the Closing
until their replacement.

ARTICLE 7 
CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE COMPANY TO CLOSE

7.1     Conditions to
Closing. The obligation of the Company to enter into and complete the
Closing are subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by the Company:

(a)     Representations
and Covenants. The representations and warranties of each Purchaser
contained in this Agreement shall be true and correct in all material respects
(other than those which are qualified as to materiality, which shall be true and
correct in all respects) on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date (except that representations
and warranties made as of a specific date shall be true and correct in all
material respects (except as aforesaid) on such date); each Purchaser shall have
in all material respects performed and complied with all covenants and
agreements required by this Agreement to be performed or complied with by it on
or prior to the Closing Date; and each Purchaser shall have delivered to the
Company a certificate, dated the date of the Closing Date and signed by the
applicable Purchaser, to the foregoing effect. 

(b)     No Actions.
(i) No Action shall be pending or overtly threatened by any Governmental
Authority or any other party against the Company or any of its directors or any
Purchaser, which Action is reasonably likely to (A) restrain or prohibit the
consummation of any of the Contemplated Transactions, or (B) result in damages
that alone or together with the costs and expenses of defending such Action are
material in relation to the Company and its Subsidiaries, taken as a whole, and
(ii) no Law, order, decree, rule or injunction shall have been enacted, entered,
promulgated or enforced by any Governmental Authority that prohibits or makes
illegal the consummation of any of the Contemplated Transactions.

(c)     Consents and
Amendments. Any and all consents, approvals, orders, Licenses and other
actions necessary to be obtained from Governmental Authorities in order to
consummate the Contemplated Transactions.

(d)     Valuation. The
Company shall have received a valuation report from a valuation firm selected by
the Company (the “Valuation Firm”) with respect to the Titles (as such term is
defined in the License Agreement), and the Company shall have deemed such
valuation report to be satisfactory (such approved valuation report, the “Titles
Valuation Report”). 

(e)     Voting
Agreement. The Purchaser shall have duly executed and delivered the Voting
Agreement. 

(f)     License
Agreement. The Company shall have received the License Agreement duly
executed and delivered by the Purchaser. 

(g)     Promissory Note.
The Company shall have received the Promissory Note duly executed and
delivered by the Purchaser, with a principal amount of $17,717,846.60.

21 

ARTICLE 8 
RIGHT OF FIRST OFFER; OTHER AGREEMENTS
OF THE COMPANY

8.1     Registration
Rights.

(a)     The Company shall
prepare and file with the Commission a Registration Statements on Form S-3, or
any other eligible form if the Company is not eligible to use Form S-3, for the
purpose of registering under the Securities Act all of the Registrable
Securities for resale by, and for the accounts of, the holders of Registrable
Securities as selling stockholders thereunder (the “Mandatory Registration
Statement”). The Mandatory Registration Statement shall permit the holders of
Registrable Securities to offer and sell, on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act, any or all of the Registrable
Securities.

(b)     The Company shall
prepare and file the Mandatory Registration Statement (the “First Mandatory
Registration Statement”) with the Commission by later of (i) April 30, 2016, and
(ii) the date that is two (2) Business Days after the date that the Company has
received all of the information from holders of Registrable Securities required
to prepare and file the Mandatory Registration Statement with the
Commission.

(c)     The Company agrees to
use its reasonable best efforts to cause the Mandatory Registration Statement to
become effective as soon as practicable. 

(d)     Each holder of
Registrable Securities shall cooperate with the Company as reasonably requested
in connection with the preparation and filing of the Mandatory Registration
Statement hereunder, including, without limitation, by furnishing in writing 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 the registration of such
Registrable Securities and by executing such documents in connection with such
registration as the Company may reasonably request. The Company shall promptly
notify the holders of Registrable Securities of the effectiveness of the
Mandatory Registration Statement within one (1) Business Days from the Business
Day that the Company telephonically confirms effectiveness with the Commission.

(e)     The Company shall be
required, absent contrary comment or instruction, oral or written, from the
Commission, to keep the Mandatory Registration Statement effective for the
Mandatory Effectiveness Period. Thereafter, the Company shall be entitled to
withdraw the applicable Mandatory Registration Statement and holders of
Registrable Securities shall have no further right to offer or sell any of the
Registrable Securities pursuant to such withdrawn Mandatory Registration
Statement (or any prospectus relating thereto).

(f)     The offer and sale of
the Registrable Securities pursuant to the Mandatory Registration Statement
shall not be underwritten. 

(g)     Notwithstanding the
foregoing, if the Commission prevents the Company from including any or all of
the Registrable Securities on the Mandatory Registration Statement due to
limitations on the use of Rule 415 of the Securities Act for the resale of the
Registrable Securities by the holders of Registrable Securities or by General
Instruction I.B.6. of Form S-3, the applicable Mandatory Registration Statement
shall register the resale of the maximum number of shares of Common Stock as is
permitted by the Commission (the “Registration Cap”), with the shares of Common
Stock included in such Mandatory Registration Statement being determined pro
rata, subject to any comment or instruction, oral or written, from the
Commission, based on the number of Registrable Securities of each holder of
Registrable Securities relative to the total number of Registrable Securities,
excluding, for this sole purpose and only with regard to the Mandatory
Registration Statement, Registrable Securities held by Persons other than the
Purchaser. 

(h)     The Mandatory
Registration Statement shall be prepared and filed as promptly as possible,
provided that in no event will the Company file a Registration Statement with
respect to the registration of the resale of remaining Registrable Securities by
holders of Registrable Securities earlier than 180 calendar days following the
date the immediately prior Mandatory Registration Statement is declared
effective by the Commission or later than 210 calendar days following the date
the immediately prior Mandatory Registration Statement is declared effective by
the Commission (subject to the matters and limitations set forth below). 

(i)     Notwithstanding
anything herein to the contrary, if the Commission, by written or oral comment
or otherwise, limits the Company’s ability to file, or prohibits or delays the
filing of, a Registration Statement with respect to any or all the Registrable
Securities which were not included in the Mandatory Registration Statement or
any subsequent Mandatory Registration Statement because of a Registration Cap,
it shall not be a breach or default by the Company under this Agreement of its
obligations as set forth above.

22 

8.2     Rule 144. The
Company shall file all reports required to be filed by it under the Securities
Act and the Exchange Act and shall take such further action as the holders of
Registrable Securities may reasonably request, all to the extent required to
enable the holders of Registrable Securities to sell the Cash Common Shares, the
IP Common Shares or the Common Stock into which the Warrant may be converted
pursuant to and in accordance with Rule 144. Such action shall include, but not
be limited to, making available adequate current public information meeting the
requirements of paragraph (c) of Rule 144. 

8.3     Availability of
Common Stock. The Company shall at all times reserve and keep available out
of its authorized but unissued Common Stock, for the purpose of effecting the
conversion of the Warrant, at least the full number of shares of Common Stock
then issuable upon the conversion of such securities. The Company will, from
time to time, in accordance with the Laws of the State of Nevada, increase the
authorized amount of Common Stock if at any time the number of shares of Common
Stock remaining unissued and available for issuance shall be insufficient to
permit conversion of the Warrant. 

8.4     No Rights
Plan. From the date hereof and for as long as the Purchaser, its affiliates
or designees, beneficially owns Common Stock, without the prior written consent
of the Purchaser, the Company shall not adopt or enter into any “poison pill”
rights plan or any similar plan or agreement or declare or pay any dividend of
any rights to purchase stock of the Company in connection with such a plan or
agreement.

ARTICLE 9 
INDEMNIFICATION

9.1   
 Indemnification. The Company hereby agrees to indemnify,
defend and hold harmless the Purchaser, their respective Affiliates and its
directors, managers, officers, agents, advisors, representatives, employees,
successors and assigns (each, a “Purchaser Indemnitee”) from and against all
Claims, including without limitation, interest, penalties and attorneys’ fees
and expenses, asserted against, resulting to, or imposed upon or incurred by
such Purchaser Indemnitee by a third party and arising out of or resulting from
any allegation or Claim in respect of any wrongful action or inaction by the
Company in connection with the authorization, execution, delivery and
performance of this Agreement or the Company Agreements, except to the extent
that the Purchaser Indemnitee has committed a material breach of its
representations, warranties or obligations under this Agreement, which breach is
the cause of the Company’s wrongful action or inaction. 

9.2     Terms of
Indemnification. The obligations and liabilities of the Company with respect
to Claims by third parties will be subject to the following terms and
conditions: (a) a Purchaser Indemnitee will give the Company prompt notice of
any Claims asserted against, resulting to, imposed upon or incurred by such
Purchaser Indemnitee, directly or indirectly, and the Company will undertake the
defense thereof by representatives of their own choosing which are reasonably
satisfactory to such Purchaser Indemnitee; provided that the failure of any
Purchaser Indemnitee to give notice as provided in Section 11.3 shall not
relieve the Company of its obligations under this Article 9; (b) if within a
reasonable time after notice of any Claim, the Company fails to defend, such
Purchaser Indemnitee will have the right to undertake the defense, compromise or
settlement of such Claims on behalf of and for the account and at the risk of
the Company, subject to the right of the Company to assume the defense of such
Claim at any time prior to settlement, compromise or final determination
thereof; (c) if there is a reasonable probability that a Claim may materially
and adversely affect a Purchaser Indemnitee other than as a result of money
damages or other money payments, such Purchaser Indemnitee will have the right
at its own expense to defend, or co-defend, such Claim; (d) neither the Company
nor the Purchaser Indemnitee will, without the prior written consent of the
other, settle or compromise any Claim or consent to entry of any judgment
relating to any such Claim; (e) with respect to any Claims asserted against a
Purchaser Indemnitee, such Purchaser Indemnitee will have the right to employ
one counsel of its choice in each applicable jurisdiction (if more than one
jurisdiction is involved) to represent such Purchaser Indemnitee if, in such
Purchaser Indemnitee’s reasonable judgment, a conflict of interest between such
Purchaser Indemnitee and the Company exists in respect of such Claims, and in
that event the fees and expenses of such separate counsel shall be paid by the
Company; and (f) the Company will provide each Purchaser Indemnitee reasonable
access to all records and documents of the Company relating to any Claim.

ARTICLE 10 
TERMINATION

10.1     Termination of
Agreement. The Parties may terminate this Agreement as provided below: 

23 

(a)     the Purchaser and the
Company may terminate this Agreement by mutual written consent at any time prior
to the Closing; 

(b)     this Agreement shall
terminate in the event the 7SF Share Purchase Agreement is terminated;

(c)     the Purchaser may
terminate this Agreement by giving written notice to the Company at any time
prior to the Closing (i) in the event the Company has breached any material
representation, warranty, or covenant contained in this Agreement in any
material respect (or breached in any respect, if such representation, warranty
or covenant is qualified by materiality or material adverse effect), and the
Purchaser has notified the Company of the breach or (ii) if the Closing shall
not have occurred on or before January 31, 2016 by reason of the failure of any
condition precedent under Section 6.1 hereof (unless the failure results
primarily from the Purchaser breaching any representation, warranty, or covenant
contained in this Agreement); and

(d)     the Company may
terminate this Agreement by giving written notice to the Purchaser at any time
prior to the Closing (i) in the event a Purchaser has breached any material
representation, warranty, or covenant contained in this Agreement in any
material respect (or breached in any respect, if such representation, warranty
or covenant is qualified by materiality or material adverse effect), and the
Company has notified the Purchaser of the breach or (ii) if the Closing shall
not have occurred on or before January 31, 2016, by reason of the failure of any
condition precedent under Section 7.1 hereof (unless the failure results
primarily from the Company itself breaching any representation, warranty, or
covenant contained in this Agreement). 

10.2     Effect of
Termination. Upon termination of this Agreement pursuant to Section 10.1
above, all rights and obligations of the Parties hereunder shall terminate
without any liability of either Party to the other Party (except for any
liability of the Party then in breach).

ARTICLE 11 
MISCELLANEOUS

11.1     Survival. All
representations and warranties, covenants and agreements of the Company and the
Purchaser contained in this Agreement shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any Purchaser
or any controlling Person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling Person thereof, and such
representations and warranties shall survive for a period of 24 months from the
Closing Date. The covenants and agreements contained herein shall survive in
accordance with their terms.

11.2     Fees and
Expenses. On the Closing Date, the Company shall pay its own expenses and
the expenses of the Purchaser incurred in connection with the negotiation,
execution, delivery, performance and consummation of this Agreement and the
Contemplated Transactions.

11.3     Notices. All
notices or other communications required or permitted hereunder shall be in
writing and shall be delivered personally, telecopied or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given if delivered personally or telecopied, on the date of such delivery, or if
sent by reputable overnight courier, on the first Business Day following the
date of such mailing, as follows: 

	 	(a) 	
      if to the Company:

YOU On Demand Holdings, Inc. 
375
Greenwich Street, Suite 516 
New York, New York 10013 
Attn: Board of
Directors
Telecopy: 86+10-8586-2775 

	 	(b) 	
      if to the Purchaser:

Beijing Sun Seven Stars Culture
Development Limited
Eastern Fangzheng Road, Southern Dongying
Village
Hancunhe Town, Fangshan District

Beijing, China 

Attn: Zhang Jie 

Telecopy: 86+10 5912-3988 

24 

	 	(c) 	
      With a copy (which shall not constitute notice or such
      other communication) to:

Shanghai Sun Seven Stars Cultural
Development Limited 
686 WuZhong Road, Tower D, 9th Floor 
Shanghai, China
201103 
Attn: Polly Wang 

Any party may by notice given in accordance with this Section
11.3 designate another address or Person for receipt of notices hereunder. 

11.4     Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of the parties hereto. Other than the
parties hereto and their successors and permitted assigns, and except as set
forth in Section 9.1, no Person is intended to be a beneficiary of this
Agreement. No party hereto may assign its rights under this Agreement without
the prior written consent of the other party hereto; provided, however, that,
the Purchaser may assign all or any portion of its rights and obligations
hereunder to any affiliates or designees of the Purchaser. Any assignee of any
Purchaser pursuant to the proviso of the foregoing sentence shall be deemed to
be a “Purchaser” for all purposes of this Agreement. 

11.5     Amendment and
Waiver.

(a)     No failure or delay
on the part of the Company or any Purchaser in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or the Purchaser at Law, in equity
or otherwise. 

(b)     Any amendment,
supplement or modification of or to any provision of this Agreement and any
waiver of any provision of this Agreement shall be effective only if it is made
or given in writing and signed by the Company (in the case of any amendment,
supplement, modification or waiver after the Closing, with the approval of not
less than a majority of the directors not appointed by the Purchaser) and the
Purchaser. 

11.6     Counterparts.
This Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, all of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

11.7     Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof. 

11.8     Governing Law;
Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be
governed by and construed in accordance with the Requirements of Law of the
State of New York without giving effect to the principles of conflict of Laws.
Each of the parties hereto hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the courts of the State of New York and
of the United States of America, in each case located in the County of New York,
for any Action arising out of or relating to this Agreement and the Contemplated
Transactions (and agrees not to commence any Action relating thereto except in
such courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in this
Agreement, or such other address as may be given by one or more parties to the
other parties in accordance with the notice provisions of Section 11.3, shall be
effective service of process for any action, suit or proceeding brought against
it in any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of New York or the United States of America,
in each case located in the County of New York, and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such Action brought in any such court has been brought in an
inconvenient forum. Each of the parties irrevocably and unconditionally waives,
to the fullest extent permitted by applicable Requirements of Law, any and all
rights to trial by jury in connection with any action, suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. 

25 

11.9     Severability.
If any one or more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions hereof shall
not be in any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions hereof. 

11.10     Entire
Agreement. This Agreement, together with the schedules and exhibits hereto,
and the Company Agreements referred to herein or delivered pursuant hereto, are
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement, together with
the schedules and exhibits hereto, and the Company Agreements referred to herein
or delivered pursuant hereto, supersede all prior agreements and understandings
between the parties with respect to such subject matter. 

11.11     Further
Assurances. Subject to the terms and conditions of this Agreement, from time
to time after the Closing, the Company and each Purchaser agree to cooperate
with one another, and at the request of the Company or the Purchaser, as
applicable, to execute and deliver any further instruments or documents and take
all such further action as the other party may reasonably request in order to
evidence or effectuate the consummation of the Contemplated Transactions and to
otherwise carry out the intent of the parties hereunder.

11.12     Public
Announcements. Except as required by any Requirement of Law, none of the
parties hereto will issue or make any reports, statements or releases to the
public with respect to this Agreement or the Contemplated Transactions without
consulting the Company or the Purchaser, as applicable. 

11.13    
Subsidiaries. Whenever this Agreement provides that a Subsidiary of
the Company is obligated to take or refrain from taking any action, the Company
shall cause such Subsidiary to take or refrain from taking such action.

[Signature pages follow] 

26 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their respective officers hereunto
duly authorized as of the date first above written.

	 	YOU ON DEMAND HOLDINGS, INC. 
	 	  
	 	By 	/s/ Shane McMahon
	 	Name: 	Shane McMahon 
	 	Title: 	Chairman 

[Signature Page to Amended and Restated Securities Stock
Purchase Agreement] 

	 	BEIJING SUN SEVEN STARS CULTURE
      DEVELOPMENT 
	 	LIMITED: 
	 	  
	 	
	 	  
	 	By: 	/s/ Bruno Wu
	 	Name: 	Bruno Wu 
	 	Title: 	Chairman & CEO

[Signature Page to Amended and Restated Securities Stock
Purchase Agreement] 

Exhibit A 
Form of Warrant 

Exhibit B 
Form of License Agreement 

Exhibit C 
Form of Promissory Note

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