Document:

Unassociated Document

     

    
      ASSET
PURCHASE AGREEMENT

       

      THIS
ASSET PURCHASE AGREEMENT (the “Agreement”) is
effective December 31, 2009 by and among, Brownie’s Marine Group, Inc., a Nevada
corporation (the “Buyer”) and Robert M.
Carmichael, an individual residing in the State of Florida (the “Seller”).

       

      W I T N E S S E T
H:

       

      WHEREAS,
the Seller owns certain intellectual property itemized on Exhibit
A;

       

      WHEREAS,
the Buyer currently licenses such intellectual property from the Seller in
consideration of royalty fees;

       

      WHEREAS,
the Buyer believes there are opportunities to develop markets for the
intellectual property; and

       

      WHEREAS,
Buyer believes that it would be in the best interests of the Buyer to acquire
the intellectual property, thereby eliminating royalty fees, and providing the
Buyer with an opportunity to develop and market the intellectual property;
and

       

      WHEREAS,
the Buyer wishes to purchase or acquire from the Seller and the Seller wishes to
sell, assign and transfer to the Buyer, the intellectual property upon the terms
and subject to the conditions hereinafter set forth.

       

      NOW,
THEREFORE, in consideration of the mutual covenants, representations and
warranties made herein, and of the mutual benefits to be derived hereby, the
parties hereto agree as follows:

       

      DEFINITIONS

       

      The terms
defined below, whenever used in this Agreement (including the Exhibits and
Schedules attached hereto), shall have the respective meanings indicated below
for all purposes of this Agreement.  All references herein to a
Section, Article, Exhibit or Schedule are to a Section, Article, Exhibit or
Schedule of or to this Agreement, unless otherwise indicated.

       

      Affiliate:  of
a Person shall mean a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
first Person.  “Control” (including the terms “controlled by” and
“under common control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management policies of a
person, whether through the ownership of voting securities, by contract or
credit arrangement, or otherwise.

       

      Agreement:  shall
have the meaning provided in the first paragraph, above.

       

      Applicable
Law:  shall mean all applicable provisions of all
constitutions, treaties, statutes, laws (including the common law), rules,
regulations, ordinances, codes or orders of any governmental
authority.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Assets:  shall
have the meaning provided in Section 1.1.

       

      Buyer: shall mean
Brownie’s Marine Group, Inc., a Nevada corporation, and any of its successors
and assigns.

       

      Closing:  shall
have the meaning provided in Section 2.1.

       

      Closing
Date:  shall have the meaning provided in Section
2.1.

       

      Code:  shall
mean the Internal Revenue Code of 1986, as amended.

       

      Collateral
Documents:  shall mean the Intellectual Property
Assignments.

       

      Confidential
Information:  shall mean any information (in any form
whatsoever) concerning the Assets that is not already generally available to the
public.

       

      Consent:  shall
mean any consent, approval, authorization, waiver, permit, grant, franchise,
concession, agreement, license, exemption or order of registration, certificate,
declaration or filing with, or report or notice to, any Person, including but
not limited to any Governmental Authority.

       

      Contract:  shall
mean all agreements and contracts related to the Assets, whether oral or
written.

       

      Intellectual Property
Assets:  shall have the meaning provided in Section
3.1.4(a)

       

      Intellectual Property
Assignments:  shall have the meaning provided in Section
4.

       

      IRS:  shall
mean the Internal Revenue Service.

       

      Lien:  shall
mean any mortgage, pledge, hypothecation, right of others, claim, security
interest, encumbrance, lease, sublease, license, occupancy agreement, adverse
claim or interest, easement, covenant, encroachment, burden, title defect, title
retention agreement, voting, trust agreement, interest, equity, option, lien,
right of first refusal, charge or other restrictions or limitations of any
nature whatsoever, including but not limited to such as may arise under any
Contracts.

       

      Person:  shall
mean any natural person, firm, partnership, association, corporation, company,
limited liability company, trust, business trust, Governmental Authority or
other entity.

       

      Seller:  shall
mean Robert M. Carmichael.

       

      ARTICLE
I

       

      SALE
AND PURCHASE OF THE ASSETS

       

      1.1    Assets.  Subject
to the terms, conditions and qualifications set forth herein and for the
consideration set forth in Article II hereof, Seller agrees to convey, transfer,
assign and deliver to the Buyer at the Closing all of Seller’s right, title and
interest in and to the Seller’s intellectual property described on Exhibit A
herein (including, without limitation, all goodwill associated with Seller’s
permits, claims, work in process), the Intellectual Property Assets, the
Confidential Information, any and all rights of the Sellers under Contracts
entered into by Seller relating to the Assets (the foregoing items are
collectively referred to herein as the “Assets”). The Assets
transferred pursuant to this Agreement shall be sold and conveyed to the Buyer
free and clear of all Liens of any nature or description.  The Assets
are described as follows:  (a) United States Patents  (a)
United States Patents 7,083,484, 6,860,773, 6,652,339 and 6,200,026 --
Inflatable dive marker and collection bag; and (b) Current works in progress for
an entire new series of 3-dimensional dive flags and divers raft/float
system.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      ARTICLE
II

       

      THE
CLOSING

       

      2.1    Date.  The
closing of the sale and purchase of the Assets (the “Closing”) shall take
place on December 31, 2009 (the “Closing
Date”).

       

      2.2    Consideration.  In
consideration of the sale, assignment, conveyance and delivery by the Seller of
the Assets to Buyer pursuant to the terms and conditions of this Agreement on
the Closing Date, the Buyer shall pay to the Seller an aggregate purchase price
of Four Hundred Thousand (400,000) shares of common stock of the Company (the
“Shares”).

       

      2.3    Allocation of Purchase
Price.  The consideration referenced in Section 2.2, above (and
any and all other capitalized costs), shall be allocated among the Assets in
accordance with an allocation schedule to be prepared by the Buyer in accordance
with the Code, which allocation shall be binding upon the Buyer and the
Seller.

       

      ARTICLE
III

       

      REPRESENTATIONS
AND WARRANTIES

       

      3.1    Representations and
Warranties of the Seller.  Seller represents, warrants and
covenants to the Buyer as follows:

       

      3.1.1  Authorization,
etc.  The Seller has the power and authority to execute and
deliver this Agreement and each of the Collateral Documents to which it is a
party, to perform fully its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby.  The
execution and delivery by the Seller of this Agreement and the Collateral
Documents to which it is a party, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all requisite
legal actions.  The Seller has duly executed and delivered this
Agreement and each of the Collateral Documents to which it is a
party.  This Agreement is a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, except that
(a) such enforcement may be subject to bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the exercise of judicial discretion by the court before which
any proceeding therefore may be brought.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      3.1.2  No Conflicts,
etc.  The execution, delivery and performance by the Seller of
this Agreement and each of the Collateral Documents to which it is a party, and
the consummation of the transactions contemplated hereby and thereby, do not and
will not conflict with or result in a violation of or a default under (with or
without the giving of notice or the lapse of time or both) (i) any Applicable
Law applicable to the Seller, or the Assets, (ii) the legal authority of the
Seller, or (iii) any Contract or other contract, agreement or other instrument
to which the Seller or any Affiliate thereof is a party or by which the Seller
may be bound or affected.  

       

      3.1.3  Assets.  The
Seller has good title to all the Assets free and clear of any and all
Liens.  

       

      3.1.4  Intellectual
Property.

       

      (a)    Title.  Exhibit
A contains a correct list of all Intellectual Property that is owned by the
Seller and used in, held for use in connection with, or necessary for the
conduct of, or otherwise material to the Seller’s conveyance of the intellectual
property contemplated by this Agreement (the “Intellectual Property
Assets”).  The Seller is the sole owner all of the Intellectual
Property Assets, free from any Liens and free from any requirement of any past,
present or future royalty payments, license fees, charges or other payments, or
conditions or restrictions whatsoever.

       

      (b)    Transfer.  Immediately
after the Closing, the Buyer will own or otherwise have the right to use all the
Intellectual Property Assets, free from any Liens.

       

      3.1.5  Investment.

       

      (a)    Seller is
an Accredited Investor as that term is defined in Regulation D promulgated under
the Securities Act of 1933, as amended (the "Act").

       

      (b)    Seller
acknowledges that the Shares are being acquired solely for the account of Seller
and not with a view to, or for resale in connection with, any distribution in
any jurisdiction where such sale or distribution would be
precluded.  The Seller does not intend to dispose of all or any part
of the Shares except in compliance with the provisions of the Act and applicable
state securities laws, and understands that the Shares are being offered
pursuant to a specific exemption under the provisions of the Act, which
exemption(s) depends, among other things, upon the compliance with the
provisions of the Act.  Seller has relied solely on the reports of the
Company filed with the Securities and Exchange Commission in making its decision
to acquire the Shares.

       

      3.2    Representations and
Warranties of the Buyer.  The Buyer represents and warrants to
the Seller as follows:

       

      3.2.1  Authorization,
etc.  The Buyer has the power and authority to execute and
deliver this Agreement and each of the Collateral Documents to which it is a
party, to perform fully its obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby.  The
execution and delivery by the Buyer of this Agreement and the Collateral
Documents to which it is a party, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all requisite
action of the Buyer.  The Buyer has duly executed and delivered this
Agreement and each of the Collateral Documents to which it is a
party.  This Agreement is a legal, valid and binding obligation of the
Buyer, enforceable against it in accordance with its terms, except that (a) such
enforcement may be subject to bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws now or hereafter in effect relating
to creditors’ rights and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the exercise of judicial discretion by the court before which any proceeding
therefore may be brought.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      3.2.2  Organization.  The
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation with full power and
authority to carry on its business and to own or lease and to operate its
properties as and in the places where such business is conducted and such
properties are owned, leased or operated.

       

      3.2.3  No Conflicts,
etc.  The execution, delivery and performance by the Buyer of
this Agreement and each of the Collateral Documents to which it is a party, and
the consummation of the transactions contemplated hereby and thereby, do not and
will not conflict with or result in a violation of or a default under (with or
without the giving of notice or the lapse of time or both) (i) any Applicable
Law applicable to the Buyer, or (ii) the certificate of incorporation or bylaws
of the Buyer. 

       

      3.2.4  Issuance of the
Shares.  The Shares are duly authorized and, when issued and
paid for in accordance with this Agreement, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens and shall not be
subject to preemptive rights or similar rights of shareholders.

       

      ARTICLE
IV

       

      OBLIGATIONS
OF SELLER AT CLOSING

       

      At the
Closing, Seller will deliver to the Buyer all documents, certificates and
agreements necessary to transfer to the Buyer good and marketable title to the
Assets, free and clear of any and all Liens thereon, including without
limitation, assignments with respect to the Intellectual Property Assets (the
“Intellectual Property
Assignments”).

       

      ARTICLE
V

       

      OBLIGATIONS
OF BUYER AT CLOSING

       

      At the
Closing, the Buyer will deliver to the Seller the consideration provided under
Section 2.2 and copies of the corporate resolutions necessary to authorize the
execution, delivery and performance of this Agreement and the applicable
Collateral Documents by the Buyer.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      ARTICLE
VI

       

      MISCELLANEOUS

       

      6.1    Expenses.  Subject
to the terms and provisions of this Agreement, the Seller, on the one hand, and
the Buyer, on the other hand, shall bear their respective expenses, costs and
fees (including attorneys’ and accountants’ fees) in connection with the
preparation, execution and delivery of this Agreement and compliance
herewith.

       

      6.2    Severability.  If
any provision of this Agreement, including any phrase, sentence, clause, Section
or subsection is inoperative or unenforceable for any reason, such circumstances
shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative, or unenforceable
to any extent whatsoever.

       

      6.3    Notices.  All
notices, requests, demands, waivers and other communication required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if (a) delivered
personally, (b)
mailed by first-class, registered or certified mail, return receipt requested,
postage prepaid, or (c) sent by reputable,
nationally recognized next-day or overnight mail or delivery or (d) sent by telecopy
or telegram.

       

      
        
          	
                  (i)    if
      to the Seller to:

                	
                  Robert
      M. Carmichael

                
	 
      	
                  940
      N.W. 1st
      Street

                
	 
      	
                  Fort
      Lauderdale, Florida  33301

                
	 
      	 
      
	
                  (ii)    if
      to the Buyer to:

                	
                  Brownie’s
      Marine Group, Inc.

                
	 
      	
                  940
      N.W. 1st
      Street

                
	 
      	
                  Fort
      Lauderdale,
Florida  33301

                

        

      

      

      or, in
each case, at such other address as may be specified in writing to the other
parties hereto.

       

      All such
notices, requests, demands, waivers and other communications shall be deemed to
have been received (w) if by personal
delivery on the date of such delivery, (x) if by certified or
registered mail, on the fifth (5th) day
after the mailing thereof, (y) if by next-day or
overnight mail or delivery, on the day delivered, (z) if by telecopy or
telegram, on the next day following the day on which such telecopy or telegram
was sent, provided that a copy is also sent by certified or registered
mail.

       

      6.4    Entire
Agreement.  This Agreement (including the Exhibits and
Schedules hereto) the Collateral Documents (when executed and delivered)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.

       

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

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      6.6    Governing Law,
etc.  This Agreement shall be governed in all respects,
including as to validity, under the laws of the State of Florida without giving
effect to the conflict of laws rules thereof.  The Buyer and the
Seller hereby irrevocably submit to the jurisdiction of the courts of the State
of Florida and the Federal courts of the United States of America located in the
State of Florida, solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such document,
that is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in said courts or that the venue thereof may not
be appropriate or that this Agreement or any of such document may not be
enforced in or by said courts, and the parties hereto irrevocably agree that all
claims with respect to such action or proceeding shall be heard and determined
in such court in Broward County, Florida.

       

      6.7    Binding
Effect.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and there respective successors and permitted
assigns.

       

      6.8    Assignment.  This
Agreement shall be freely assignable or transferable by the Buyer to, and shall
inure to the benefit of, and be binding upon any other corporate entity that
shall succeed to the business presently being operated by the
Buyer.  This Agreement shall not be assignable by the Seller without
the prior written consent of the Buyer.

       

      6.9    Amendment; Waivers,
etc.  No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth
in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.

       

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

       

       

      
        
          	 
      	
                  BUYER:

                
	 
      	 
      
	 
      	
                  BROWNIE’S
      MARINE GROUP, INC. a Nevada corporation

                
	 
      	 
      
	 
      	
                  By:
      /s/Robert M. Carmichael

                
	 
      	
                  Name:  Robert
      M. Carmichael

                
	 
      	
                  Title:    President

                
	 
      	 
      
	 
      	 
      
	 
      	
                  SELLER:

                
	 
      	 
      
	 
      	
                  /s/Robert
      M. Carmichael

                
	 
      	
                  Robert
      M. Carmichael

                

        

      

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      EXHIBIT
A

      SCHEDULE
3.1.14

      INTELLECTUAL PROPERTY
ASSETS

      

      
        	
                 

                Patent
      No.

                 

              	
                 

                Title

              	
                 

                Filing
      Date

                 

              
	
                I.I.P

              	
                Three-Dimensional
      Dive Flag development in progress

              	
                TBD

              
	
                I.I.P

              	
                Novel
      Dive Raft / Float system for Divers

              	
                TBD

              
	
                7,083,484

              	
                Inflatable
      dive marker and collection bag

              	
                February
      28, 2005

              
	
                6,860,773

              	
                Inflatable
      dive marker and collection bag

              	
                November
      21, 2003

              
	
                6,652,339

              	
                Inflatable
      dive marker and collection bag

              	
                March
      12, 2001

              
	
                6,200,026

              	
                Inflatable
      dive marker and collection bag

              	
                March
      27, 1998INVESTOR
RIGHTS AGREEMENT

     

    by and
among

     

    China
MediaExpress Holdings, Inc.,

     

    Mr.
Zheng Cheng,

     

    Ou
Wen Lin,

     

    Qingping
Lin,

     

    Thousand
Space Holdings Limited,

     

    Bright
Elite Management Limited,

     

    and

     

    Starr
Investments Cayman II, Inc.

     

    January
[•], 2010

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE OF
CONTENTS

    

    
      
        
          
            	
                    1.

                  	
                    Definitions.

                  	
                    1

                  
	
                    2.

                  	
                    Governance Matters.

                  	
                    5

                  
	
                    3.

                  	
                    Restrictions on Transfer.

                  	
                    7

                  
	
                    4.

                  	
                    Right of First Offer.

                  	
                    8

                  
	
                    5.

                  	
                    Tag-along

                  	
                    9

                  
	
                    6.

                  	
                    Performance-based Adjustment

                  	
                    9

                  
	
                    7.

                  	
                    Put Option

                  	
                    10

                  
	
                    8.

                  	
                    Drag-along

                  	
                    11

                  
	
                    9.

                  	
                    Other Covenants

                  	
                    12

                  
	
                    10.

                  	
                    Earn-out.

                  	
                    14

                  
	
                    11.

                  	
                    Legend

                  	
                    14

                  
	
                    12.

                  	
                    Miscellaneous

                  	
                    14

                  

          

        

      

    

     

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

     

    INVESTOR
RIGHTS AGREEMENT, dated as of January [ ], 2010, by and among China MediaExpress
Holdings, Inc., a Delaware corporation (the “Company”), Mr. Zheng
CHENG, a citizen of the People’s Republic of China (the “PRC” or “China”),
identification number 350103197103110058 (the “Founder”), Ou Wen
Lin, a citizen of the Republic of Philippines, passport number G15042722, and
Qingping Lin, a citizen of the PRC, identification number 350127194911134311,
Thousand Space Holdings Limited, a company organized under the laws of the
British Virgin Islands (“Thousand”), Bright
Elite Management Limited, a company organized under the laws of the British
Virgin Islands (“Bright”, together
with the Founder, Ou Wen Lin, Qingping Lin and Thousand, the “Sponsor
Shareholders”), and Starr Investments Cayman II, Inc., a company
organized with limited liability under the laws of the Cayman Islands (the
“Investor”).

     

    WHEREAS,
the Company, the Sponsor Shareholders, the Investor together with other parties
entered into a Securities Purchase Agreement (the “Purchase Agreement”)
dated as of January 12, 2010, pursuant to which the Company agreed to sell to
the Investor, and the Investor agreed to purchase from the Company, (i) one
million (1,000,000) shares of Preferred Stock (the “Purchased Shares”)
and (ii) warrants of the Company entitling the Investor to purchase 1,545,455
shares of Common Stock at US$6.47 per share (the “Purchased Warrants”),
in each case on the terms and subject to the conditions set forth in the
Purchase Agreement (the “Securities
Purchase”);

     

    WHEREAS,
on the terms and conditions set forth in the Purchase Agreement, the Sponsor
Shareholders agreed to transfer to the Investor 150,000 shares of Common Stock
(the “Transferred
Shares”), and such transfer, the “Stock Transfer,”
together with the Securities Purchase, the “Transactions”);

     

    WHEREAS,
it is a condition to the closing of the transactions contemplated by the
Purchase Agreement that the Company, the Sponsor Shareholders and the Investor
enter into this Agreement.

     

    NOW,
THEREFORE, in consideration of the foregoing and the agreements contained in
this Agreement, and intending to be legally bound by this Agreement, the
Company, the Sponsor Shareholders and the Investor agree as
follows:

     

    
      
        	
                1.

              	
                Definitions. As
      used in this Agreement, the following terms shall have the respective
      meanings set forth in this Section
1:

              

      

    

     

    “Affiliate” of any
Person shall mean any other Person directly or indirectly controlling or
controlled by or under common control with such Person. For purposes of this
definition, “control” when used with respect to any Person has the meaning
specified in Rule 12b-2 under the Exchange Act (including SEC and judicial
interpretations thereof); and the terms “controlling” and “controlled” shall
have meanings correlative to the foregoing.

     

    “Audited Consolidated Net
Profit” shall mean the “Net Income Attributable to the Parent” as
calculated and disclosed pursuant to Statement of Financial Accounting Standards
(“SFAS”) No. 160, as set forth on the audited consolidated financial statements
of the Company prepared in accordance with US GAAP and audited without
qualification by a reputable international accounting firm appointed by the
Company (but subject to the Investor’s prior written consent, which consent
shall not be unreasonably withheld, it being understood that, for the fiscal
year ended December 31, 2009 Deloitte & Touche Tohmatsu shall be acceptable
to Investor) (the “Audited Consolidated
Financial Statements”), which comprises a part of the Forms 10-K filed
with the SEC for the fiscal years ending December 31, 2009, 2010 or 2011, and
shall be adjusted to:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i)           add
back to the “Net Income Attributable to the Parent” any charges for (a)
“acquisition-related costs” as defined in and charged to expense pursuant to
SFAS No. 141 (R) and any other fees, expenses or payments to any third party
related to the Share Exchange (as defined in the Exchange Agreement), (b) the
amortization or intangibles, (c) impairment of goodwill, (d) compensation
expense arising from the Earn-out Shares (as defined in the Exchange Agreement)
and, any other share-based compensation, each (a)-(d) as it relates to any
acquisitions completed in, or pending at the end of, the applicable period
(including the Share Exchange), by the Company, the HKCo, the WFOE and the
PRCCo;

     

    (ii)          add
back to the “Net Income Attributable to the Parent” any out of pocket expenses
incurred to design, implement and annually assess disclosure controls and
procedures and internal controls over financial reporting by the Company or its
Subsidiaries as a consequence of the Company’s compliance with the
Sarbanes-Oxley Act;

     

    (iii)         add
back to the “Net Income Attributable to the Parent” any charges for Taxes
payable by any of the Company, the HKCo, the WFOE and the PRCCo that are
directly attributable to the Share Exchange and that apply to the applicable
period; and

     

    (iv)         deduct
from the “Net Income Attributable to the Parent” the financial statement tax
benefit of the amount in (i), (ii) and (iii) above, computed by multiplying the
amount of the adjustment in (i), (ii) or (iii) above by the statutory tax rate
applicable to the Company or its Subsidiaries that incurred the
expense;

     

    provided, however, that if the Company
is no longer required or eligible to file a Form 10-K, then the “Net Income
Attributable to Parent” as calculated and disclosed pursuant to SFAS No. 160 for
any particular fiscal year shall be as set forth on the Audited Consolidated
Financial Statements for such fiscal year.  For the avoidance of
doubt, any non-recurring profit or gain shall not be counted toward the Audited
Consolidated Net Profit.

     

    “Board” shall mean the
board of directors of the Company.

     

    “Business Day” means a
day that is a Monday, Tuesday, Wednesday, Thursday or Friday and is not a day on
which banking institutions in New York, New York or in Beijing, the PRC
generally are authorized or obligated by law, regulation or executive order to
close.

     

    “Capital Stock” shall
mean any and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (in each case however
designated) stock issued by the Company.

     

    “Closing” shall have
the meaning given to it in the Purchase Agreement.

     

    “Closing Date” shall
have the meaning given to it in the Purchase Agreement.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Closing Price” shall
mean, with respect to a share of Capital Stock of a Person, the price per share
of the final trade of the Capital Stock on the applicable Trading Day on the
principal national securities exchange on which the Capital Stock is listed or
admitted to trading; provided, however, that, if the Capital
Stock is not so listed or traded, the Closing Price shall be equal to the fair
market value of such share, as determined in good faith by the
Board.

     

    “Code” shall mean the
Internal Revenue Code of 1986, together with all regulations, rulings and
interpretations thereof or thereunder by the Internal Revenue
Service.

     

    “Common Stock” shall
mean the common stock of the Company, par value US$ 0.001 per
share.

     

    “Exchange Act” shall
mean the U.S. Securities Exchange Act of 1934, as amended and the rules and
regulations promulgated by the SEC thereunder.

     

    “FCPA” shall mean the
U.S. Foreign Corrupt Practices Act of 1977, as amended.

     

    “Founding Shareholder
Ownership Percentage” as of a particular date of determination shall mean
the percentage determined by a fraction, the numerator of which is the total
number of shares of Common Stock held, directly or indirectly, by such Founding
Shareholder and the denominator of which is the aggregate number of shares
Common Stock collectively held, directly or indirectly, by all of the Founding
Shareholders, in each case on a fully diluted and as-converted basis as of the
date of determination. As of the date hereof, and for all purposes herein, such
percentages shall be as follows unless revised by written notice to the
Investor signed by each of the Founding Shareholders: Mr. Zheng Cheng, 61.17%;
Ou Wen Lin, held indirectly through Thousand, 28.22%; and Qingping Lin, held
indirectly through Bright, 10.61%.

     

    “Founding
Shareholders” shall mean the Founder, Ou Wen Lin and Qingping Lin, and a
“Founding
Shareholder” shall mean any of them.

     

    “Governmental
Authority” shall mean any foreign governmental authority, the United
States of America, any state of the United States and any political subdivision
of any of the foregoing, and any agency, instrumentality, department,
commission, board, bureau, central bank, authority, court or other tribunal, in
each case whether executive, legislative, judicial, regulatory or
administrative.

     

    “IRR” shall mean, with
respect to the Investor’s investment in the Put Shares (as of any given
determination date of the Put Price with respect to the exercise of the Put
Option) (calculated in U.S. dollars), the annual discount rate at which the net
present value of all capital in-flows relating to such investment in the Put
Shares at the time of the Closing is equal to the net present value of all cash
out-flows from such investment in the Put Shares at the time of the
Closing.

     

    “Investor Ownership
Percentage” as of a particular date of determination shall mean the
percentage determined by a fraction, the numerator of which is the sum of the
number of (i) shares of Common Stock held by the Investor plus (ii) shares of Common
Stock issuable upon the conversion of the Purchased Shares or the exercise of
the Purchased Warrants, and the denominator of which is the total number of
shares of Common Stock issued and outstanding, on a fully-diluted and
as-converted basis as of the date of determination.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Lock-up Agreement”
shall have the meaning given to it in the Share Exchange Agreement.

     

    “Person” shall mean
any individual, association, partnership, limited liability company, joint
venture, corporation, trust, unincorporated organization, Governmental Authority
or any other form of entity.

     

    “Per Share Issuance
Price” shall, in the case of shares of Preferred Stock, equal US$ 30.00,
and, in the case of shares of Common Stock, equal US$ 10.00.

     

    “PRCCo” shall mean
Fujian Fenzhong Media Co., Ltd., a limited liability company operating in media
business established in the PRC.

     

    “Preferred Stock”
shall mean the Series A Preferred Stock of the Company, par value of US$ 0.001
per share.

     

    “Put Price” shall
mean, as of any given determination date, the product of the total number of the
Put Shares multiplied by the sum of (a) the Per Share Issuance Price plus (b) such amount as would
result in an IRR of twenty-three percent (23%) on the Per Share Issuance Price
from the date of Closing up to the date of the full payment of all the Put
Price, provided that
the aggregate Put Price shall be reduced on a dollar for dollar basis to the
extent that the Investor has recovered any amounts under Section 11 of the
Purchase Agreement, provided further that, in any
event, any given reduction shall reduce the Put Price with respect to only one
exercise of the Put Right and any further exercise of the Put Right shall only
be reduced by any additional amounts recovered by the Investor under Section 12
following the previous exercise of the Put Right. To the extent the Put Right is
exercised with respect to a combination of Preferred Stock and Common Stock, the
Put Price shall be equal to the sum of the Put Price for each class of Capital
Stock calculated separately.

     

    “Put Shares” means
such number of shares of Preferred Stock and such number of shares of Common
Stock (i) held by the Investor or issuable upon the conversion of Preferred
Shares or the exercise of the Purchased Warrants with respect to which the
Investor exercises the Put Right under Section 7.1, it being understood that,
the Investor may exercise such right in connection with all or any portion of
such shares that it holds at such time.

     

    “SEC” shall mean the
U.S. Securities and Exchange Commission or any other U.S. federal agency then
administering the Securities Act or Exchange Act.

     

    “Securities Act” shall
mean the U.S. Securities Act of 1933, as amended and the rules and regulations
of the SEC thereunder.

     

    “Share Exchange
Agreement” shall mean the share exchange agreement dated May 1, 2009
relating to the acquisition by the Company of all the outstanding capital stock
of Hong Kong Mandefu Holdings Ltd..

     

    “Short Sales” shall
include, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act and all types of direct
and indirect stock pledges, forward sale contracts, options, puts, calls, swaps
and similar arrangements (including on a total return basis), and sales and
other transactions through non-US broker dealers or foreign regulated
brokers.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “Subsidiary” of any
Person shall mean any corporation, partnership, joint venture, limited liability
company, trust, variable interest entity or other entity controlled by such
Person directly or indirectly through one or more intermediaries.

     

    “Tag-along Pro Rata
Share” shall mean the proportion that the number of the shares of Common
Stock held by the Investor (on an as-converted basis) as of the date of the
Transfer Notice bears to the aggregate number of shares of the Common Stock held
by the Investor (on an as-converted basis) and the Transferring Shareholder as
of the date of the Transfer Notice.

     

    “Tax” or “Taxes” shall mean all
forms of taxation, whenever created or imposed, and whether of the United States
or elsewhere, and whether imposed by a local, municipal, governmental, state,
foreign, federal or other Governmental Authority, or in connection with any
agreement with respect to Taxes, including all interest, penalties and additions
imposed with respect to such amounts.

     

    “Trading Day” shall
mean any Business Day on which the Common Stock is traded, or able to be traded,
on the principal national securities exchange on which the Common Stock is
listed or admitted to trading.

     

    “Transaction
Agreements” shall mean this Agreement, the Purchase Agreement, the
Certificate of Designations and the Registration Rights Agreement.

     

    “U.S. GAAP” shall mean
United States generally accepted accounting principles, as in effect from time
to time, applied on a consistent basis.

     

    “Warrants” shall mean
(i) 9.055 million redeemable warrants entitling the registered holders thereof
to purchase shares of Common Stock at a price of US$5.50 per share; and (ii) 2.1
million redeemable warrants entitling the registered holders thereof to purchase
shares of Common Stock at US$1.00 per share. For the avoidance of doubt,
Warrants, as used herein, shall exclude the Purchased Warrants.

     

    “WFOE” shall mean
Fujian Zongheng Express Information Technology Ltd., a limited liability company
established in the PRC and a wholly-owned Subsidiary of the
Company.

     

    
      
        	
                2.

              	
                Governance
      Matters.

              

      

    

     

    
      	
            	
              2.1

            	
              Preferred
      Director.

            

    

     

    (i)           Effective
as of the Closing, the Company shall increase the size of the Board by one
director.  The Investor shall have the right to one (1) director to
the Board (the “Preferred Director”),
pursuant to the terms hereof or of the Certificate of Designations of Preferred
Stock (the “Certificate of
Designations”), for so long as the Investor Ownership Percentage is
greater than or equal to 3% (the “Preferred
Threshold”).

     

    (ii)          In
the event any Preferred Director shall resign prior to the expiration of the
term for which he is elected to serve on the Board, then the Investor shall have
the right to nominate for election by the Board a replacement, provided that the Investor is
entitled to elect such Preferred Director pursuant to the terms hereof or of the
Certificate of Designations.  Each of the Sponsor Shareholders shall
cause such person designated by the Investor to be appointed to the
Board.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (iii)         The
Investor agrees to use reasonable efforts to cause the individual serving as the
Preferred Director to provide the Company, on a timely basis, with any
information relating to such individual that the Company may be required to
disclose pursuant to applicable law, rules and regulations.

     

    (iv)         Upon
appointment and election to the Board, (i) the Preferred Director shall serve as
a full member of the Board and shall receive the benefit of the same
indemnification and other protective agreements (and any related advancement of
expenses), indemnification provisions provided in the Company’s Certificate of
Incorporation, compensation (whether in the form of cash, equity award or
otherwise), expense reimbursement, perquisites and insurance coverage as the
other non-employee directors of the Company, and (ii) the Company shall not,
without the consent of the Investor, directly or indirectly, amend, alter or
repeal any of the provisions of the Certificate of Designations so as to
adversely change any of the rights, preferences or privileges of Preferred Stock
or Section 4(b) and (c) of the Certificate of Designations relating to the
Preferred Director.

     

    (v)          Effective
as of the Closing and for so long as the Investor is entitled to designate the
Preferred Director to the Company, the Investor shall have the right to appoint
one (1) director to each of the board of directors of the HKCo, WFOE and PRCCo,
and each of the Company and the Sponsor Shareholders shall cause such person
designated by the Investor to be appointed to the board of directors of the HKCo
effectively as of the Closing and cause such persons designated by the Investor
to be appointed to the board of directors of the WFOE and PRCCo respectively
within one (1) month after the Closing Date.

     

    (vi)        
The Investor shall have the right to, and shall have no duty not to (i) invest
in or engage in the same or similar business activities or lines of business as
the Company, and (ii) do business with any client or customer of the Company and
the Company shall not be deemed to have an interest or expectancy in any such
activities merely because the Company engages in the same or similar activities.
Neither the Investor nor any officer or director thereof nor any of the
Preferred Director shall be liable to the Company or its shareholders for breach
of any fiduciary duty by reason of any such activities of the Investor or of
such person’s participation therein. In the event that the Investor acquires
knowledge of a potential transaction or matter, from an independent, third-party
source, which may be a corporate opportunity for both the Investor and the
Company, the Investor shall have no duty to communicate or present such
corporate opportunity to the Company. The Company, to the fullest extent
permitted by law, renounces any interest or expectancy in such corporate
opportunity and waives any claim that such corporate opportunity should have
been presented to the Company. The Investor shall not be liable to the Company
or its shareholders for breach of any fiduciary duty as a shareholder of the
Company by reason of the fact that the Investor pursues or acquires such
corporate opportunity for itself, directs such corporate opportunity to another
person or entity or does not present such corporate opportunity to the
Company.

     

    2.2           Committee Membership.
For so long as the Investor is entitled to designate the Preferred Director
pursuant to the terms hereof or of the Certificate of Designations, the
Preferred Director or other person designated by the Investor shall be appointed
by the Board to sit on each regular committee of the Board, subject to such
person satisfying applicable qualifications under applicable law, regulation or
stock exchange rules and regulations.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
              3.

            	
              Restrictions on
      Transfer.

            

    

     

    3.1           Investor’s Lock-Up.
From the date of the Closing until the date that is six (6) months thereafter,
the Investor agrees that, without the prior written consent of the Company
(which consent may be given or withheld, or made subject to such conditions as
are determined by the Company, in its sole discretion), it will not directly or
indirectly sell, transfer, pledge, encumber, assign or otherwise dispose of any
Purchased Shares, Purchased Warrants or Transferred Shares or shares of Common
Stock issuable upon conversion of any Purchased Shares or exercise of any
Purchased Warrants (collectively the “Transaction Shares”)
to any Person, or enter into a transaction that would have the same effect, or
enter into any swap, hedge or other arrangement that transfers or intends to
transfer, in whole or in part, any of the economic or beneficial consequences of
ownership of any Transaction Shares, whether any of these transactions are to be
settled by delivery of any Transaction Shares, in cash or otherwise, publicly
disclose the intention to make any offer, sale, pledge or disposition, or to
enter into any transaction, swap, hedge or other arrangement, or engage in any
Short Sales with respect to any Transaction Shares other than (i) to its
Affiliates (including commonly controlled or managed investment funds) who
execute a written joinder agreement in a form approved by the Company pursuant
to which such transferee(s) agree(s) to be bound by the terms hereof; (ii)
pursuant to a tender or exchange offer recommended by the Board, (iv) pursuant
to a merger or consolidation recommended by the Board in which the Company will
not be the surviving entity.  Without the prior written consent of the
Company, Investor may not, at any time, transfer Preferred Shares to any Person
other than an Affiliate of Investor; provided that if at any such
time such transferee is no longer an Affiliate of Investor, Investor must ensure
that it reacquires the transferred Preferred Shares.

     

    Any
purported transfer which is not in accordance with the terms and conditions of
the above shall be, to the fullest extent permitted by law, null and void ab
initio and, in addition to other rights and remedies at law and in equity, the
Company shall be entitled to injunctive relief enjoining the prohibited
action.

     

    
      	
            	
              3.2

            	
              Sponsor Shareholders’
      Lock-up.

            

    

     

    3.2.1    From
the date of the Closing until the date that is twelve (12) months thereafter,
the Founder agrees that, without the prior written consent of the Investor
(which consent may be given or withheld, or made subject to such conditions as
are determined by the Investor, in its sole discretion), he will not at any time
directly or indirectly sell, transfer, pledge, encumber, assign or otherwise
dispose of any share of Common Stock to any Person, or enter into a transaction
that would have the same effect, or enter into any swap, hedge or other
arrangement that transfers or intends to transfer, in whole or in part, any of
the economic or beneficial consequences of ownership of such shares of Common
Stock, whether any of these transactions are to be settled by delivery of any
such shares of Common Stock, in cash or otherwise, publicly disclose the
intention to make any offer, sale, pledge or disposition, or to enter into any
transaction, swap, hedge or other arrangement, or engage in any Short Sales with
respect to any security of the Company.

     

    3.2.2    Until
the date that is six (6) months from the Date of Delivery (as defined in the
Lock-up Agreement), each of Thousand and Bright agrees that it will not violate
any of its lock-up obligations under the Lock-up Agreement.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    3.2.3    Each
of Mr. Ou Wen Lin and Mr. Qingping Lin agrees that he will not at any time
directly or indirectly sell, transfer, pledge, encumber, assign or otherwise
dispose of any of his equity interest in Thousand and Bright respectively to any
Person during the six (6)-month period described in Section 3.2.2
above.

     

    Any
purported transfer which is not in accordance with the terms and conditions of
above Sections 3.2.1, 3.2.2 and 3.2.3 shall be, to the fullest extent permitted
by law, null and void ab initio and, in addition to other rights and remedies at
law and in equity, the Investor shall be entitled to injunctive relief enjoining
the prohibited action.

     

    
      	
              4.

            	
              Right of First
      Offer.

            

    

     

    4.1           The
Investor shall have the right to purchase from the Company an amount of any
additional shares of Capital Stock that the Company may propose to issue and
sell equal to the Investor Ownership Percentage calculated as of the date of
delivery of the Notice of Issuance (as defined below) (the “ROFO Percentage”) to
the extent such additional shares of Capital Stock are actually
issued.

     

    4.2           In
the event the Company proposes to undertake an issuance of any shares of Capital
Stock, it shall give the Investor a written notice of its intention, describing
the type of the shares to be issued and the price and terms upon which the
Company proposes to issue such shares (a “Notice of
Issuance”).  The Investor shall have twenty-one (21) days from
the date of delivery of a Notice of Issuance to the Investor to agree to
purchase a portion of such shares equal to the ROFO Percentage (calculated as of
the date of delivery of such Notice of Issuance), for the price and upon the
terms specified in the Notice of Issuance.  On or prior to the
expiration of such twenty-one (21) day period, the Investor shall deliver a
written notice to the Company stating the quantity of the shares to be purchased
by the Investor (the “Investor Response”),
which written notice shall be binding on the Company and such Investor subject
only to the completion of the issuance of the shares described in the applicable
Notice of Issuance.

     

    4.3           The
Company shall have one hundred and twenty (120) days following the earlier of
(i) the expiration of the twenty-one (21) day period described in Section 4.2
and (ii) the delivery of the Investor Response to sell or enter into an
agreement to sell the shares with respect to which the Investor’ right to
purchase was not exercised, at a price and upon terms no more favorable than
those specified in the Notice of Issuance. If the Company does not sell such
shares or enter into an agreement to sell such shares within such one hundred
and twenty (120) day period, then the Company shall not thereafter issue or sell
any shares without first offering such shares to the Investor in the manner
provided in Section 4.2.

     

    4.4           The
right of first offer set forth in this Section 4 shall expire at any time the
Investor ceases to maintain the Preferred Threshold.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
      	
              5.

            	
              Tag-along.

            

    

     

    5.1           If
any Founding Shareholder (the “Transferring
Shareholder”) proposes to transfer any share of Capital Stock of the
Company to any bona fide third party (the “Transferee”), the
Investor shall have the right (the “Tag-Along Right”) but
not the obligation to require the Transferring Shareholder to require the
Transferee to purchase from the Investor, for the same consideration per share
of Common Stock and upon the same terms and conditions as to be paid and given
to the Transferring Shareholder up to a maximum of the Tag-along Pro Rata Share
of the Offered Shares (“Investor Tag
Shares”).

     

    5.2           If
the Transferring Shareholder proposes to transfer all or a portion of the shares
held by it, it shall send a written notice to the Investor (the “Transfer Notice”),
which shall state: (i) the name of the Transferring Shareholder, (ii) the number
of the shares (the “Offered Shares”)
proposed to be transferred, (iii) the price per share at which the Offered
Shares will be offered for sale, which price in each case must be in US$ cash
only and may not be in kind (the “Offer
Price”).

     

    5.3           Within
30 days following the receipt of the Transfer Notice, if the Investor elects to
exercise its Tag-along Right, it shall deliver a written notice of such election
to the Transferring Shareholder, specifying the number of the shares of Common
Stock with respect to which it has elected to exercise its Tag-along
Right.  Such notice shall be irrevocable and shall constitute a
binding agreement by the Investor to transfer such shares on the terms and
conditions set forth in the Transfer Notice.

     

    5.4           For
the avoidance of doubt, without the prior written consent of the Company, the
Investor shall not be permitted to transfer Preferred Stock pursuant to the
Tag-Along Right without converting into Common Stock.

     

    5.5           Where
the Investor has properly elected to exercise its Tag-along Right and the
proposed Transferee fails to purchase the shares from the Investor, the
Transferring Shareholder shall not make the proposed transfer, and if purported
to be made, such transfer shall be void.

     

    5.6           For
avoidance of doubt, the Investor shall have a Tag-Along Right with respect to
any sale of any equity interests of Thousand or Bright by Ou Wen Lin or Qingping
Lin, calculating the Investor Tag Shares as if Ou Wen Lin or Qingping Lin, as
applicable, were transferring Capital Stock owned by Thousand or Bright,
directly on a basis proportional with the disposition of their equity interests
of Thousand or Bright.

     

    5.7           The
Tag-Along right shall expire at any time the Investor ceases to maintain the
Preferred Threshold.

     

    
      	
              6.

            	
              Performance-based
      Adjustment.

            

    

     

    6.1           The
parties acknowledge that the Investor’s Percentage Ownership immediately
following the Closing is calculated based upon a post-money valuation of US$
343,462,957 (the “Valuation”) and
estimated Audited Consolidated Net Profit for the fiscal years of 2009, 2010 and
2011 as set forth below (each a “Profits
Target”):

    

    
      
        
          
            
              
                
                  
                    	
                            Fiscal

                            Year

                          	 
      	
                            Audited Consolidated

                            Net Profit

                          
	
                            2009

                          	 
      	US$ 	
                            42
      million

                          
	
                            2010

                          	 
      	US$ 	
                            55
      million

                          
	
                            2011

                          	
                              

                          	US$  	
                            70
      million

                          

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    6.2           The
Company shall and the Sponsor Shareholders shall procure that the Company
deliver to the Investor the Audited Consolidated Financial Statements within
ninety (90) days after the end of each fiscal year of 2009, 2010 and
2011.  If the Audited Consolidated Net Profit for any given year is
less than the corresponding Profits Target as set forth in Section 6.1 above,
then the Founding Shareholders shall, within thirty (30) after the date of the
Audited Consolidated Financial Statements, on a pro rata basis based on their
respective Founding Shareholder Ownership Percentage, pay to the Investor an
amount in cash in U. S. dollars equal to the amount derived from the formula set
forth below (such amount the “Performance Adjustment
Amount”):

    

    
      
        	
                Performance

                Adjustment

                Amount

              	
                =

              	
                Investor

                Ownership

                Percentage

              	
                X

              	
                (Profits
      Target – Audited

                Consolidated
      Net Profits)

              	
                 
      X

              	
                Valuation

              
	
                Profits
      Target

              

      

    

     

    6.3           The
Investor and the Sponsor Shareholders hereby agree that the payment of any
Performance Adjustment Amount shall be treated as an adjustment to the Purchase
Price (as defined in the Purchase Agreement) for U.S. federal income tax
purposes.

     

    6.4           At
the sole option of the Founding Shareholders, the Founding Shareholders may
satisfy their obligation to pay the Investor the Performance Adjustment Amount
by a transfer of additional shares of Common Stock to the Investor (the “Performance-based Share
Transfer”) based on the average of the closing price of Common Stock for
the thirty (30)-day period ending three (3) Business Days prior to the date that
the Performance based Share Transfer is made, provided, however, that the
Performance Adjustment Amount may be satisfied through the Performance-based
Share Transfer only to the extent that the aggregate number of shares of Common
Stock acquired or acquirable by the Investor from the Transactions together with
the number of shares transferred pursuant to the Performance-based Share
Transfer does not exceed 19.9% of the total number of shares of Common Stock
issued and outstanding as of the date of the Purchase Agreement and any
remaining Performance Adjustment Amount shall be paid in cash.

     

    6.5           The
Founding Shareholders shall be responsible for any and all documentary, stamp,
or similar issue or transfer tax due on any Performance-based Share Transfer
pursuant to the Section 6.4 on or prior to the closing of such
transfer.

     

    
      	
              
                7.

              

            	
              Put
      Option.

            

    

     

    7.1           The
Investor shall have the right (the “Put Right”) but not
the obligation to sell the Put Shares to the Founding Shareholders at a price
equal to the Put Price and the Founding Shareholders shall have the obligation
to purchase such Put Shares on a pro rata basis based on Founding Shareholder
Ownership Percentage, at the Put Price if:

     

    7.1.1     the
Audited Consolidated Net Profit for the fiscal year of 2012 is less than the
Audited Consolidated Net Profit for the fiscal year of 2011;

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    7.1.2     the
Company fails to meet 50% of any Profits Target as set forth in Section 6.1 for
any of fiscal year 2009, 2010 or 2011; or

     

    7.1.3     the
Company or any of the Sponsor Shareholders materially breaches any covenants or
agreements set forth in Sections 9 or 10 of the Purchase Agreement or Sections
2, 3, 4, 5, 6 or 9.2 of this Agreement, and fails to rectify such breach to the
satisfaction of the Investor within sixty (60) days after the date of the
written notice by the Investor.

     

    7.2           The
Company shall, and the Sponsor Shareholders shall procure the Company to,
immediately upon the occurrence of any of the events as set forth in Sections
7.1.1, 7.1.2 and 7.1.3 deliver a written notice to the Investor.  From
the date of such delivery or the date the Investor is aware of the occurrence of
any such event, the Investor shall have thirty (30) days to deliver a written
notice (the “Put
Notice”) to the Founding Shareholders of the exercise of its Put
Right.

     

    7.3           The
Founding Shareholders shall complete the purchase of the Put Shares from and pay
the entire Put Price to the Investor within three (3) months after the delivery
of the Put Notice by the Investor.  The payment of the Put Price shall
be in cash in U.S. dollars, provided that in the event of
an exercise of Put Right pursuant to Section 7.1.2, the Founding Shareholders
may pay the Put Price in kind (other than the shares of the Company with an
equivalent value, provided that the type of
consideration and the valuation thereof shall be subject to the Investor’s
review and consent), acting reasonably.

     

    7.4           Regarding
any event or circumstance giving rise to a Put Right, to the extent that the
Investor chooses to exercise the Put Right with respect to less than all the Put
Shares within the applicable 30-day put exercise period, the Investor shall be
deemed to have waived the Put Right as to the remaining Put Shares in connection
with the such event or circumstance, but, for the avoidance of doubt, not with
respect to any subsequent event or circumstance giving rise to a similar Put
Right.

     

    7.5           The
Put right shall expire at any time the Investor ceases to maintain the Preferred
Threshold.

     

    
      	
              8.

            	
              Drag-along.

            

    

     

    8.1           In
the event that (i) the Investor has exercised the Put Right and the Founding
Shareholders fail to complete the purchase of the Put Shares from, and to pay
the entire Put Price to, the Investor in accordance with Section 7.3, or (ii)
any Founding Shareholder fails to perform in accordance with Section 6, the
Investor shall have the right (the “Drag-along Right”)
but not the obligation to require the Founding Shareholders to sell up to all
shares of Capital Stock directly or indirectly held by the Founding Shareholders
pursuant to a managed sale process conducted by an investment bank of
internationally recognized standing with demonstrable experience in the Chinese
and international markets and designated by the Investor (“Designated Investment
Bank”) to a bona fide third party buyer or buyers designated by the
Investor to which the Investor will also sell all shares of Capital Stock held
by it at a price per share (in US$ cash only and may not be in kind) reflecting
an enterprise value which shall not be less than the product of the Company's
last twelve months’ net income (as adjusted using the same methodology as
Audited Consolidated Net Profit) times seven (7) (the “Drag-along
Sale”).

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    8.2           If
the Investor wishes to exercise its Drag-Along Right, the Investor shall provide
a written notice to the Founding Shareholders (the “Drag Notice”), which
shall state (i) the name of the buyer or buyers, (ii) the material terms and
timing of the proposed transaction, (iii) the price in US$ cash, and (iv) a
reasonably detailed calculation showing that the valuation is no less than the
price required in Section 8.1.  The Investor shall have 120 days
following the Founding Shareholders’ receipt of the Drag Notice to consummate
the proposed transaction and to exercise its Drag-along Right. The Founding
Shareholders shall execute such documents or take such other actions as may be
reasonably necessary or appropriate to effect the Drag-along Sale to the
designated buyer or buyers.

    

    
      	
              9.

            	
              Other
      Covenants.

            

    

     

    9.1           Repurchase of
Warrants. The
Company shall use its reasonable best efforts to, and the Sponsor Shareholders
shall use their reasonable best efforts to cause the Company to, develop and
implement a plan to repurchase and retire four million (4,000,000) outstanding
Warrants.

     

    9.2           Compliance with Certificate
of Designations. The
Company shall, and each of the Sponsor Shareholders shall cause the Company to,
comply with the Certificate of Designations, the Amended and Restated
Certificate of Incorporation (the “Certificate of
Incorporation”) and the Bylaws of the Company.

     

    9.3           Economic
Sanctions.

     The
Sponsor Shareholders and the Company shall procure that neither the Company, nor
any of its Subsidiaries, nor any agent or other person acting for or on behalf
of the neither the Company or any of its Subsidiaries, shall engage in any
transactions or enter into any contract or association with or involving,
directly or indirectly, countries, territories, governments, entities,
individuals and other persons (including transactions or contracts which the
Company or such Subsidiary knows or has reasons to believe involve goods,
services or technology of origin from such countries or territories) that, at
the date of the transaction, contract, or association, are targets of any law,
regulation, order or license relating to any economic sanctions program
administered by the U.S. Department of the Treasury’s Office of Foreign Assets
Control, including without limitation any program the regulations of which are
codified in Chapter V of Subtitle B of Title 31 of the U.S. Code of Federal
Regulations.

     

    9.4           Anti-corruption.

     

    9.4.1    
The Sponsor Shareholders and the Company shall ensure that neither the Company
nor any of its Subsidiaries, nor any agent or other person acting for or on
behalf of the Company or any of its Subsidiaries, shall, in connection with the
operations of the Company or such Subsidiary, in violation of any applicable law
or regulation, offer, promise or give, or authorize or approve the payment, gift
or promise of anything of value, directly or through a third party, to any
officer or employee of a non-U.S. government or any department, agency, or
instrumentality thereof, or any entity owned in whole or in part or controlled
by any such non-U.S. government or any department, agency, or instrumentality
thereof, or of a public international organization, or any person acting in an
official capacity for or on behalf of any such government or department, agency
or instrumentality, or for or on behalf of any such public international
organization, including any non-U.S. political party, party official or
candidate for non-U.S. political office for the purpose of securing any improper
business advantage for the Company or any of its Subsidiaries, including to
obtain or retain business.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    9.4.2    
 Each of the Company and the Sponsor Shareholders covenants to maintain the
FCPA Compliance Program (as such term is defined in the Purchase Agreement)
adopted prior to the Closing and insure that such FCPA Compliance Program will
be binding on the Company, each of its Subsidiaries and their respective
Affiliates, including the directors, officers, employees and agents of each such
person and the shareholders acting on behalf of each such person.  In
implementing the FCPA Compliance Program, the Sponsor Shareholders and the
Company covenant that they will use their respective reasonable best efforts to
ensure that the Company and each of its Subsidiaries and their respective
Affiliates, including the directors, officers, employees, agents and other
business partners of each such entity and the shareholders acting on behalf of
each such entity, follow the policies and procedures set forth in the FCPA
Compliance Program.  The Sponsor Shareholders and the Company further
covenant to arrange for personnel training to acquaint employees of the Company
and each of its Subsidiaries with the FCPA Compliance Program.

     

    9.4.3      The
Sponsor Shareholders and the Company covenant with the Investor that (i) it will
ensure that the representation set out in section 4.23 of the Purchase Agreement
remains true, accurate and not misleading at all times after the Closing and
(ii) it will certify to the foregoing on an annual basis by letter directed to
the Investor for so long as the Investor Ownership Percentage is greater than or
equal to 1%.

     

    9.4.4      The
Company agrees to, and the Sponsor Shareholders shall ensure the Company to,
maintain, throughout the course of this Agreement, books and records that
accurately reflect its assets and transactions in reasonable detail, and to
maintain a system of internal accounting controls to ensure that all
transactions are properly authorized by management.  Further, the
Investor shall be allowed reasonable access to the Company’s books and records
during regular business hours and with reasonable prior written notice, and
shall have the right to audit the Company on a periodic basis.

     

    9.4.5      The
Company further covenants that, should it learn of or have reason to suspect any
breach of the covenants in this Section 9.4, it will promptly notify the
Investor.  Following dispatch of such notification the Company shall
(i) investigate the suspected breach and (ii) take any measure that may be
required, or that the Investor may reasonably request, to remediate any
suspected breach of the FCPA Compliance Program (including by dismissing
employees that have breached the FCPA Compliance Program) and to insure
continued compliance of the Company with FCPA, local anti-corruption laws and
the provisions of this clause 9.4.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    9.4.6      Subject
to the PRC laws, during the term of this Agreement, the Company agrees in good
faith to obtain certification, to the reasonable satisfaction of the Investor,
on an annual basis from all Reporting Employees as to whether they are
Government Officials or immediate family members of a Government Official, and
the Company agrees to make immediate disclosure to the Investor of such fact and
all relevant details with respect thereto. In carrying out its obligations under
this clause 9.4, the Company shall in good faith exercise its reasonable best
efforts to (A) insure the truth, accuracy and completeness of the certification
provided by the Reporting Employees and (B) take legally permissible
disciplinary or punitive action, as may be reasonably requested by the Investor,
against any Reporting Employees for their failure to fully cooperate with the
Company. For the purposes of this provision, “Reporting Employees”
shall refer to any directors, indirect owners, any employee working with the
sales department, finance department or legal department of the Company and any
other employee whose work by nature shall create rights or obligations on behalf
of the Company. “Government Official”
shall refer to any officer, employee or any other person acting in an official
capacity for any government or any department, agency or instrumentality
thereof, including any entity or enterprise majority-owned or otherwise
controlled by a government, or a public international organization (each a
“Government
Entity”), in each case, only to the extent that the Company, in the
course of its business, interacts or engages with such Government Entity; “immediate family
members” shall refer to the spouses, siblings, parents, or children
(including by virtue of adoption) of a Government Official.

     

    
      	
              10.

            	
              Earn-out. The
      Investor agrees that the Company may issue and deliver up to an aggregate
      of 15,000,000 shares of Common Stock of the Company to HMDF Shareholders
      (as defined in the Share Exchange Agreement) in accordance with the terms
      of the Share Exchange Agreement.

            

    

     

    
      	
              11.

            	
              Legend.

            

    

     

    11.1       
 The Purchased Shares and all shares of Common Stock issued upon conversion
thereof shall be stamped or imprinted with a legend in substantially the
following form (in addition to any legend required by state securities
laws):

     

    THE
SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS.  SUCH SECURITIES AND ANY SECURITIES ISSUED
HEREUNDER OR THEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND APPLICABLE
LAWS.  COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE
SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE
COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

     

    
      	
              12.

            	
              Miscellaneous.

            

    

     

    12.1         Governing
Law. This
Agreement shall be governed in all respects by the laws of the State of State of
Delaware without regard to any choice of laws or conflict of laws provisions
that would require the application of the laws of any other
jurisdiction.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    12.2         Jurisdiction;
Enforcement. Any dispute, controversy or claim arising out of or relating
to this Agreement or its subject matter (including a dispute regarding the
existence, validity, formation, effect, interpretation, performance or
termination of this Agreement) (each a “Dispute”) shall be
finally settled by arbitration.

     

    (a)           The
place of arbitration shall be Hong Kong, and the arbitration shall be
administered by the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance
with the HKIAC Administered Arbitration Rules then in force (the “HKIAC
Rules”).

     

    (b)           The
arbitration shall be decided by a tribunal of three (3) arbitrators, whose
appointment shall be in accordance with the HKIAC Rules; provided, however, that the third
presiding arbitrator must be licensed to practice Delaware state law and in good
standing with the Delaware State Bar, as of the date the Notice of Arbitration
is received by the HKIAC Secretariat.

     

    (c)           Arbitration
proceedings (including but not limited to any arbitral award rendered) shall be
in English.

     

    (d)           Subject
to the agreement of the tribunal, any Dispute(s) which arise subsequent to the
commencement of arbitration of any existing Dispute(s), shall be resolved by the
tribunal already appointed to hear the existing Dispute(s).

     

    (e)           The
award of the arbitration tribunal shall be final and conclusive and binding upon
the parties as from the date rendered.

     

    (f)           Judgment
upon any award may be entered and enforced in any court having jurisdiction over
a party or any of its assets.  For the purpose of the enforcement of
an award, the parties irrevocably and unconditionally submit to the jurisdiction
of any competent court and waive any defenses to such enforcement based on lack
of personal jurisdiction or inconvenient forum.

     

    12.3         Successors and
Assigns. Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties (including transferees of any Capital
Stock).  Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this
Agreement.  For avoidance of doubt, the rights set forth in Sections
2, 4.2, 5, 6, 7 and 8 are not transferable to any third party without the prior
written consent of the Company.

    

    12.4         Entire Agreement.
This Agreement, the Purchase Agreement and the other documents delivered
pursuant to the Purchase Agreement, including the Registration Rights Agreement
and Warrant, constitute the full and entire understanding and agreement among
the parties with regard to the subjects of this Agreement and such other
agreements and documents.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    12.5         Notices. Except as
otherwise provided in this Agreement, all notices, requests, claims, demands,
waivers and other communications required or permitted under this Agreement
shall be in writing and shall be mailed by reliable overnight delivery service
or delivered by hand, facsimile or messenger as follows:

     

    
      
        	
                if
      to the Company:

              	
                China
      MediaExpress Holdings, Inc

                Room
      2805

                Central
      Plaza

                Wanchai,
      Hong Kong

                Attention:
      Zheng Cheng and Jacky Lam

                Facsimile:
      +852.2827.6099

              
	 
      	 
      
	
                with
      a copy to:

              	
                Loeb
      & Loeb LLP

                345
      Park Avenue

                New
      York, NY 10145

                Attention:
      Mitchell S. Nussbaum / Frank J. Marinaro

                Facsimile:
      +1.212.656.1349

              
	 
      	 
      
	
                if
      to the Investor:

              	
                Starr
      Investments Cayman II, Inc.

                Bermuda
      Commercial Bank Building, 5th Floor

                19
      Par la Ville Road

                Hamilton
      HM 11

                Bermuda

                Attention:
      Stuart Osbourne / Jenny Barclay

              
	 
      	 
      
	
                with
      a copy to:

              	
                Starr
      Investments Cayman II, Inc.

                c/o
      Beijing C.V. Starr Investment Advisors

                Limited
      Shanghai Branch

                Suite
      4609-4611A, Tower II, Plaza 66,

                1266
      Nanjing West Road,

                Shanghai
      200040 People’s Republic of China

                Attention:
      John Lin / Dorothy Dong

                Facsimile:
      +8621.6288.9773

              
	 
      	 
      
	
                with
      a copy to:

              	
                Skadden,
      Arps, Slate, Meagher & Flom LLP

                30th
      Floor, Tower 2, China World Trade Centre

                No.
      1 Jianguomenwai Avenue

                Beijing
      100004 People’s Republic of China

                Attention:     
       Jon L Christianson

                Facsimile:      
      +8610.6535.5577

              
	 
      	 
      
	
                if
      to the Founder:

              	
                c/o
      China MediaExpress Holdings, Inc.

                Room
      2805, Central Plaza

                Wanchai,
      Hong Kong

                Attention:
      Zheng Cheng

                Facsimile:
      +852.2827.6099

              

      

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    

    
      	
              if
      to Ou Wen Lin:

            	
              c/o
      China MediaExpress Holdings, Inc.

              Room
      2805, Central Plaza

              Wanchai,
      Hong Kong

              Attention:
      Zheng Cheng

              Facsimile:
      +852.2827.6099

            
	 
      	 
      
	
              if
      to Qingping Lin:

            	
              c/o
      China MediaExpress Holdings, Inc.

              Room
      2805, Central Plaza

              Wanchai,
      Hong Kong

              Attention:
      Zheng Cheng

              Facsimile:
      +852.2827.6099

            
	 
      	 
      
	
              if
      to Thousand:

            	
              c/o
      China MediaExpress Holdings, Inc.

              Room
      2805, Central Plaza

              Wanchai,
      Hong Kong

              Attention:
      Zheng Cheng

              Facsimile:
      +852.2827.6099

            
	 
      	 
      
	
              if
      to Bright:

            	
              c/o
      China MediaExpress Holdings, Inc.

              Room
      2805, Central Plaza

              Wanchai,
      Hong Kong

              Attention:
      Zheng Cheng

              Facsimile:
      +852.2827.6099

            

    

     

    or in any
such case to such other address, facsimile number or telephone as either party
may, from time to time, designate in a written notice given in a like manner.
Notices shall be deemed given when actually delivered by overnight delivery
service, hand or messenger, or when received by facsimile if promptly
confirmed.

     

    12.6         Delays or
Omissions. No
delay or omission to exercise any right, power, or remedy accruing to any party
under this Agreement shall impair any such right, power, or remedy of such
party, nor shall it be construed to be a waiver of or acquiescence to any breach
or default, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default. All remedies, either under this Agreement or by law or
otherwise afforded to any holder, shall be cumulative and not
alternative.

     

    12.7         Amendments and
Waivers. Any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only if such amendment or waiver is in writing
and signed, in the case of an amendment, by all the parties hereto or, in the
case of a waiver, by the party against whom the waiver is to be effective, provided that with respect to
a waiver of the provisions set forth in Section 3.1.1 hereof, a waiver signed by
the Company shall constitute an effective waiver. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities, and the Company.

    

    12.8         Counterparts. This
Agreement may be executed in any number of counterparts and signatures may be
delivered by facsimile or in electronic format, each of which may be executed by
less than all the parties, each of which shall be enforceable against the
parties actually executing such counterparts and all of which together shall
constitute one instrument.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    12.9         Severability. If any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable, or void, portions of such provision,
or such provision in its entirety, to the extent necessary, shall be severed
from this Agreement and the balance of this Agreement shall be enforceable in
accordance with its terms.

     

    12.10       Titles and Subtitles;
Interpretation. The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement. When a
reference is made in this Agreement to a Section, Schedule or Annex, such
reference shall be to a Section, Schedule or Annex of this Agreement unless
otherwise indicated. Whenever the words “include,” “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words
“without limitation.” The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to in this Agreement means such
agreement, instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes. Each of the parties has participated in the drafting and negotiation
of this Agreement. If an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if it is drafted by each of the
parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of authorship of any of the provisions of this
Agreement.

     

    12.11       Withholding Rights.
Notwithstanding anything to the contrary contained in any of the Transaction
Agreements, the Company shall be entitled to deduct and withhold in respect of
any dividends or deemed dividends with respect to the Series A Preferred Stock
or any other amounts paid or deemed to be paid by the Company under any of the
Transaction Agreements, such amounts as the Company reasonably determines are
required to be deducted and withheld under the Code or any provision of state,
local, provincial or foreign tax law; provided that the Person with
respect to whom such deduction or withholding would occur shall be entitled to
provide the Company with such forms or other documents as may be required in
order to claim a reduction of any such deduction or withholding under the
applicable tax law.  To the extent that any such amounts are so
withheld, all appropriate and available evidence of such deduction and
withholding, including any receipts or forms required in order for the Person
with respect to whom such deduction and withholding occurred to establish the
deduction and withholding and payment to the appropriate taxing authority as
being for its account with the appropriate taxing authority, shall be delivered
to the Person with respect to whom such deduction and withholding has occurred,
and such withheld amounts shall be treated for all purposes as having been
delivered and paid to the Person otherwise entitled to the amounts in respect of
which such deduction and withholding was made.  Notwithstanding the
foregoing, the Company, at its option, may require any such amounts required to
be deducted and withheld to be reimbursed in cash to the Company by such Person
prior to the time when the amounts subject to any such deduction or withholding
are paid or are considered to be paid by the Company under the applicable tax
law, in which case any such reimbursements received by the Company (net of any
Taxes payable by the Company on such reimbursements) shall not be deducted and
withheld from any such payments or deemed payments.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

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

    

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	
                                CHINA
      MEDIAEXPRESS HOLDINGS,

                                INC.

                              
	 
      	 
      
	 
      	
                                By:

                              	 
      
	 
      	 
      	
                                Name:

                              
	 
      	 
      	
                                Title:

                              
	 
      	 
      
	 
      	
                                ZHENG
      CHENG

                              
	 
      	 
      
	 	 
	 
      	
                                OU
      WEN LIN

                              
	 
      	 
      
	 	 
	 
      	
                                QINGPING
      LIN

                              
	 
      	 
      
	 	 
	 
      	
                                THOUSAND
      SPACE HOLDINGS

                                LIMITED

                              
	 
      	 
      
	 
      	
                                By:

                              	 
      
	 
      	 
      	
                                Name:

                              
	 
      	 
      	
                                Title:

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      [Signature Page to Investor Rights
Agreement]

       

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              	 
      	
                      BRIGHT
      ELITE MANAGEMENT

                      LIMITED

                    
	 	 
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    
	 
      	 
      	 
      
	 
      	
                      STARR
      INVESTMENTS CAYMAN II,

                      INC.

                    
	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name

                    
	 
      	 
      	
                      Title:

                    

            

          

        

      

    

     

    
      [Signature Page to Investor Rights
Agreement]

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