Document:

Exhibit 4.1

 

NOTES AND WARRANTS PURCHASE AGREEMENT

 

This Notes and Warrants Purchase Agreement
(this “Agreement”) is made and entered into as of April 10, 2012, by and among ChinaCast Education Corporation,
a Delaware corporation (the “Company”), Fir Tree Value Master Fund, L.P. (“Fir Tree Value”),
Fir Tree Capital Opportunity Master Fund, L.P. (“Fir Tree Capital” and, collectively with Fir Tree Value, “Fir
Tree”), Lake Union Capital Fund, LP (“Lake Union Capital”), Lake Union Capital TE Fund, LP (“Lake
Union Capital TE”), MRMP Managers LLC (“MRMP”), Harkness Trust (“Harkness”), Ashford
Capital Partners, L.P. (“Ashford”), Anvil Investment Associates, L.P. (“Anvil”) and Columbia
Pacific Opportunity Fund, L.P. (“Col-Pac”) (each of Fir Tree Capital, Fir Tree Value, Lake Union Capital, Lake
Union Capital TE, MRMP, Harkness, Ashford, Anvil and Col-Pac, individually, a “Purchaser” and collectively,
the “Purchasers”).

 

RECITALS

 

WHEREAS, the Company is seeking financing
from the Purchasers for the purposes set out in a mutually agreed upon schedule of proceeds.

 

WHEREAS, the Company and each Purchaser
is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2)
of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933
Act.

 

WHEREAS, the Company has authorized certain
promissory notes of the Company, in substantially the form attached hereto as Exhibit A (each, a “Note,”
and collectively, the “Notes”).

 

WHEREAS, each Purchaser wishes to purchase,
and the Company wishes to sell, upon the terms and conditions stated in this Agreement, that aggregate principal amount of Notes,
set forth opposite such Purchaser’s name in the Schedule of Purchasers attached hereto.

 

WHEREAS, in consideration for the Notes,
the Company shall, as soon as practicable after the date hereof, issue to each Purchaser certain warrants (the "Warrants")
convertible into shares of the Company's common stock (the "Common Stock") pursuant to the terms of this Agreement.
The shares of Common Stock issuable upon exercise of the Warrants are referred to herein as the “Warrant Shares.”

 

WHEREAS, the Notes, the Warrants and the
Warrant Shares collectively are referred to herein as “Securities”.

 

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

 

article
1

Purchase and Sale;
Closing

 

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

 

    	 

    	 

    

 

Section
1.2           Purchase Price.
At the Closing (as hereinafter defined), each Purchaser shall pay to the Company the U.S. dollar amount set opposite such Purchaser’s
name in the Schedule of Purchasers hereof by wire transfer of immediately
available U.S. dollar funds to the bank account designated in writing by the Company to each Purchaser prior to the Closing; provided,
however, payment shall be made subject to the disbursement mechanics set
forth in Section 5 of the Agreement.

 

Section
1.3           The Closing.
The closing (the “Closing”) of the purchase and sale of the
Notes shall occur concurrently with the execution and delivery of this Agreement. The Closing shall take place remotely via the
exchange of documents and signatures or at such location as may be mutually acceptable by the parties. 

 

Section
1.4           Securities Act Exemption.
The sale of the Securities to the Purchasers will be made without registration under the 1933 Act, in reliance upon the exemption
afforded by Section 4(2) of the 1933 Act or pursuant to other available exemptions from the registration requirements of the 1933
Act and in reliance on similar exemptions under state securities or “blue sky” laws.

 

Section
1.5           Other Agreements.
Concurrently with or immediately following the Closing, each of the Company and the Purchasers shall execute and deliver the Note(s)
to which it is party. The Notes and this Agreement collectively are referred to herein as the “Transaction Documents”.

 

article
2

Representations and Warranties of the Purchasers

 

Each Purchaser hereby severally makes the
following representations and warranties, each of which is true and correct on the date hereof.

 

Section
2.1           Existence and Power.
The Purchaser is duly organized and validly existing under the laws of the jurisdiction of its organization and has the power,
authority and capacity to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions
contemplated hereby.

 

Section
2.2           No Conflict.
The execution and delivery of this Agreement by the Purchaser, and the performance by the Purchaser of the transactions contemplated
hereby, do not and will not (i) constitute a default or violation under the organizational and/or management documents of the Purchaser,
or (ii) conflict with or violate any laws, judgments, orders or decrees applicable to the Purchaser or by which its properties
or assets are bound, except for such breaches, conflicts, defaults, rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. As used in this Agreement, the term “Material
Adverse Effect” shall mean, in respect of a party, a material adverse effect
on the business, condition (financial or otherwise), properties or results of operations of such party, or an event, change or
occurrence that would materially and adversely affect the ability of such party to perform its obligations under the Transaction
Documents to which it may be a party.

 

Section
2.3           Valid and Enforceable Agreement; Authorization.
This Agreement has been duly executed and delivered by the Purchaser and constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally,
and (b) general principles of equity.

 

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Section
2.4           No Public Sale or Distribution.  Such
Purchaser is (i) acquiring the Note, (ii) the Warrants and (iii) upon exercise of Warrants will acquire the Warrant Shares issuable
upon exercise of the Warrants, in each case, for its own account (or in connection with, or pursuant to, one or more participation
agreements by such Purchaser with, and for the benefit of, one or more funds or managed accounts that are “accredited investors”
(as defined in Rule 501(a) of Regulation D) that are managed by the investment manager of such Purchaser) and not with a view towards,
or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under
the 1933 Act. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.  Such Purchaser
does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

 

Section
2.5           Accredited Investor Status.  Such
Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

 

Section
2.6           Reliance on Exemptions.  Such
Purchaser understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy
of, and such Purchaser's compliance with, the representations, warranties, agreements, acknowledgments and understandings of such
Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire
the Securities.

 

Section
2.7           Information.  Such
Purchaser and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities that have been requested by such Purchaser.  Such
Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of and receive answers from the Company
and to obtain any additional information which the Company possesses or can acquire without undue effort or expense, and all such
questions have been answered to the satisfaction of such Purchaser.  Neither such inquiries nor any other due diligence
investigations conducted by such Purchaser or its advisors, if any, or its representatives shall modify, amend or affect such Purchaser's
right to rely on the Company's representations and warranties contained herein.  Such Purchaser understands that its
investment in the Securities involves a high degree of risk.  Such Purchaser has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

Section
2.8           No Governmental Review.  Such
Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on
or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities
nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

Section
2.9           Transfer or Resale.  Such
Purchaser understands: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Purchaser
shall have delivered to the Company an opinion of counsel, in a form reasonably satisfactory to the Company, to the effect that
such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration,
or (C) such Purchaser provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred
pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule
144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made
only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in
the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated
thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933
Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.  

 

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Section
2.10         Legends.  Such
Purchaser understands that the certificates or other instruments representing the Note and the Warrants and, until such time as
the resale of the Warrant Shares have been registered under the 1933 Act, the stock certificates representing the Warrant Shares,
except as set forth below, shall bear any legend as required by the “blue sky” laws of any state and a restrictive
legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (AS AMENDED, THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED,
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (B) AN
EXEMPTION OR QUALIFICATION UNDER APPLICABLE SECURITIES LAWS OR (C) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED. ANY ATTEMPT TO TRANSFER, SELL, PLEDGE OR HYPOTHECATE THIS SECURITY IN VIOLATION OF THESE
RESTRICTIONS SHALL BE VOID.

 

The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder of the Securities upon which it is stamped or issue to such holder
by electronic delivery at the applicable balance account at The Depository Trust Company (“DTC”), if, unless
otherwise required by state securities laws, (i) such Securities are registered for resale under the 1933 Act, (ii) in connection
with a sale, assignment or other transfer, such holder provides the Company with an opinion of counsel, in a form reasonably satisfactory
to the Company, to the effect that such sale, assignment or transfer of the Securities may be made without registration under the
applicable requirements of the 1933 Act, or (iii) the Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule
144A, if applicable; provided, that such holder provides the Company with reasonable assurance that such Securities can
be sold, assigned or transferred pursuant to Rule 144 or Rule 144A, if applicable.  

 

Section
2.11         General Solicitation.  Such
Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the
Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar.

 

article
3

Representations and Warranties of the Company

 

The Company hereby makes the following representations
and warranties, each of which is true and correct on the date hereof.

 

    	4

    	 

    

 

Section
3.1           Existence and Power.
The Company and each of the Subsidiaries (an entity shall be deemed to be a “Subsidiary” of another person if such
person directly or indirectly owns, beneficially or of record, an amount of voting securities of other interests in such entity
that is sufficient to enable such person to elect at leased a majority of the members of such entity’s board of directors
or other governing body, or at least 50% of the outstanding equity or financial interests of such entity) is an entity duly incorporated
or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as
currently conducted. The Company has the requisite power and authority to execute and deliver this Agreement, to perform its obligations
hereunder and consummate the transactions contemplated hereby.

 

Section
3.2           Valid and Enforceable Agreement; Authorization.
This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally,
and (b) general principles of equity.

 

Section
3.3           Valid Issuance of the Securities.
The Securities, when issued and delivered in accordance with the terms and for the consideration set forth in this Agreement, will
constitute legal and binding obligations of the Company, be validly issued and free of restrictions on transfer other than restrictions
on transfer under this Agreement or the Note(s), applicable state and federal securities laws and liens or encumbrances created
by or imposed by the Purchaser, and enforceable against the Company in accordance with their terms, except that such enforcement
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement
of creditors’ rights generally, and (b) general principles of equity. The shares of the Company’s common stock
issuable upon exercise of the Warrants have been duly reserved for issuance, and upon issuance in accordance with the terms of
the Warrants will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions
on transfer under applicable federal and state securities laws and liens or encumbrances created by or imposed by the Purchaser.

 

Section
3.4           No General Solicitation.  Neither
the Company, nor any of its Subsidiaries or affiliates, nor any Person acting on its or their behalf, has engaged in any form of
general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities.  

 

Section
3.5           No Integrated Offering.  None
of the Company, its Subsidiaries, any of their affiliates, and any Person acting on their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration
of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings or otherwise.

 

article
4

Covenants of the Company

 

Section
4.1           Use of Proceeds.  The
Company shall use the proceeds from the sale of the Securities for the purposes set out in a mutually agreed upon schedule of proceeds.

 

Section
4.2           Warrants.
The Company shall, as soon as practicable after the date hereof, issue to each Purchaser the number of Warrants set forth next
to their respective names on the Schedule of Purchasers attached hereto,
each of which (a) shall be convertible into one share of the Company's Common Stock at an exercise price of $4.00 per share (which
exercise price shall not be subject to any adjustment mechanism), (b) expire on the fifth anniversary of issuance and (c) include
anti-dilution protections for ordinary stock splits, stock dividends and recapitalizations.

 

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Section
4.3           Registration Rights.

 

(a)          The
Company and Fir Tree shall, as soon as practicable after the date hereof, enter into a registration rights agreement (the “New
Fir Tree Registration Rights Agreement”) on substantially the same terms as the Registration Rights Agreement between
the Company and Fir Tree, dated as of November 23, 2009 (the “Old Registration Rights Agreement”), with the
exception that: (a) (i) the demand registration rights set forth in Section 2.1.1 of the Old Registration Rights Agreement shall
commence instead on August 1, 2012; (ii) the piggy-back registration rights set forth in Section 2.2.1 of the Old Registration
Rights Agreement shall commence instead on September 1, 2012; and (iii) the first sentence of the defined term “Registrable
Securities” under the Old Registration Rights Agreement shall be defined to mean the 6,452,423 shares of Common Stock held
by Fir Tree as of the date hereof and the Warrants and the Warrants Shares to be issued to Fir Tree under this Purchase Agreement
and (b) the New Fir Tree Registration Rights Agreement shall include such other changes as to be agreed upon by the parties thereto.
The Old Registration Rights Agreement (including any and all rights and obligations thereunder) shall be terminated by the Company
and Fir Tree concurrently with the execution of the New Fir Tree Registration Rights Agreement and any and all existing breaches
or violations thereof shall thereby be waived by the Company and Fir Tree.

 

(b)          
The Company and the Purchasers, other than Fir Tree, shall, as soon as practicable after the date hereof, enter into a registration
rights agreement (the “New Piggy-Back Registration Rights Agreement”) which will provide such Purchasers with
the same piggy-back registration rights as shall be provided to Fir Tree under the New Fir Tree Registration Rights Agreement.
Notwithstanding anything to the contrary in the foregoing, (a) the New Fir Tree Registration Rights Agreement and the New Piggy-Back
Registration Rights Agreement may be contained in one and the same document and (b) in no event shall the Purchasers other than
Fir Tree be entitled to any demand registration rights under any such registration rights agreement or the provisions of this Section
4.3.

 

Section
4.4           Information Rights.
So long as the Notes are outstanding, any Purchaser holding the Notes shall have the right to receive (i) a weekly report detailing
the use of the proceeds from the Notes issued pursuant to this Agreement and (ii) any other information that the Purchasers may
reasonably request.

 

article
5

Disbursement Mechanics

 

Section
5.1           Commitment.
As provided in Section 1.2 of this Agreement, each of the Purchasers shall make available to the Company an advance (each, an “Advance”)
on the date of the Purchase Agreement in the principal amount stated on the Schedule of Purchasers.

 

Section
5.2           Subsequent Advance.
After May 25, 2012 and prior to the earlier of (i) the Maturity Date and (ii) the first date on which the Notes together with
all accrued interest have been repaid in full, the Company may deliver to the Purchasers a written notice (the “Borrowing
Notice”) (a) setting out that no Default (as defined under the Notes) has occurred
and is continuing; and (b) requesting a subsequent advance from each of the Purchasers of up to the same amount funded by each
such Purchaser in its initial Advance at Closing (each, a “Subsequent Advance”).
The Borrowing Notice shall be deemed to repeat the Company's representations and warranties in Section 5 of the Notes as of
the date of such Borrowing Notice. Upon receipt of the Borrowing Notice, each of the Purchasers, in its sole discretion, may make
available to the Company its Subsequent Advance in immediately available funds. For the avoidance of doubt, any Subsequent Advance
shall be considered an increase in the principal amount of the Notes held by such Purchaser commencing on the date such Subsequent
Advance is made available and the Company shall issue the relevant Purchaser in accordance with this Agreement one Warrant for
every two dollars of such Subsequent Advance.

 

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article
6

Miscellaneous Provisions

 

Section
6.1           Public Disclosure.
The parties will consult with each other before issuing, and provide each other the opportunity to review and comment upon and
use reasonable efforts to agree on any press release, filing with the SEC or public statement with respect to this Agreement and
the transactions contemplated hereby and under the other Transaction Documents, and will not issue any such press release or make
any filings with the SEC or any public statement prior to such consultation and (to the extent practical) agreement, except as
may be required by law or by rules and regulations of, or pursuant to any agreement of, a stock exchange or trading system. Each
party will not unreasonably withhold approval from the others with respect to any public disclosure. 

 

Section
6.2           Notice.
Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) with return receipt requested or sent by reputable overnight courier service (charges prepaid):

 

(a)          if
to a Purchaser, to its address and fascimile number set fort on the Schedule of Purchasers, with copies to such Purchaser’s
representatives as set forth on the Schedule of Purchasers.

 

(b)          if
to the Company, at its address, as follows:

 

ChinaCast Education Corporation

Unit 1005, Golden Tower B2

No. 82 Dongsihuanzhong Rd, Chaoyang

Beijing 100124 China

Attention: Doug Woodrum

Fax: +(86) 10 8751 0788

 

with a copy to (which shall not constitute
notice):

 

Fried, Frank, Harris, Shriver
& Jacobson

9th Floor, Gloucester Tower,
The Landmark,

15 Queen’s Road Central

Hong Kong

Attention: Doug Freeman

Fax: +(852) 3760 3611

 

A party may by notice to the other parties designate additional
or different addresses for subsequent notices or communications. Notices will be deemed to have been given hereunder when delivered
personally, three business days after deposit in the U.S. mail postage prepaid with return receipt requested and two business days
after deposit postage prepaid with a reputable overnight courier service for delivery on the next business day.

 

Section
6.3           Entire Agreement.
This Agreement and the other Transaction Documents embody the entire agreement and understanding of the parties hereto with respect
to the subject matter hereof and supersede all prior and contemporaneous oral or written agreements, representations, warranties,
contracts, correspondence, conversations, memoranda and understandings between or among the parties or any of their agents, representatives
or affiliates relative to such subject matter, including, without limitation, any term sheets, emails or draft documents.

 

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Section
6.4           Assignment; Binding Agreement.
This Agreement and the various rights and obligations arising hereunder shall inure to the benefit of and be binding upon the parties
hereto and their successors and assigns.

 

Section
6.5           Counterparts.
This Agreement may be executed in multiple counterparts, and on separate counterparts, each of which shall be deemed an original,
but all of which taken together shall constitute one and the same instrument. Any counterpart or other signature hereupon delivered
by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement by such party.

 

Section
6.6           Governing Law; Jurisdiction.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The parties hereto agree
that any suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be
instituted in any State or U.S. federal court in The City of New York and County of New York, and waives any objection which it
may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction
of such courts in any suit, action or proceeding. The parties hereto each hereby waive any right to trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Agreement. 

 

Section
6.7           No Third Party Beneficiaries or Other Rights.
Nothing herein shall grant to or create in any person not a party hereto, or any such person’s dependents or heirs, any right
to any benefits hereunder, and no such party shall be entitled to sue any party to this Agreement with respect thereto.

 

Section
6.8           Waiver; Consent.
This Agreement may not be changed, amended, terminated, augmented, rescinded or discharged (other than in accordance with its terms),
in whole or in part, except by a writing executed by the parties hereto. No waiver of any of the provisions or conditions of this
Agreement or any of the rights of a party hereto shall be effective or binding unless such waiver shall be in writing and signed
by the party claimed to have given or consented thereto. Except to the extent otherwise agreed in writing, no waiver of any term,
condition or other provision of this Agreement, or any breach thereof shall be deemed to be a waiver of any other term, condition
or provision or any breach thereof, or any subsequent breach of the same term, condition or provision, nor shall any forbearance
to seek a remedy for any noncompliance or breach be deemed to be a waiver of a party’s rights and remedies with respect to
such noncompliance or breach.

 

Section
6.9           Word Meanings.
The words such as “herein”, “hereinafter”, “hereof”, and “hereunder” refer to this
Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The singular
shall include the plural, and vice versa, unless the context otherwise requires. The masculine shall include the feminine and neuter,
and vice versa, unless the context otherwise requires.

 

Section
6.10         No Broker. No
party hereto has engaged any third party as broker or finder or incurred or become obligated to pay any broker’s commission
or finder’s fee in connection with the transactions contemplated by this Agreement other than such fees and expenses for
which it shall be solely responsible.

 

Section
6.11         Further Assurances.
The Purchasers and the Company each hereby agree to execute and deliver, or cause to be executed and delivered, such other documents,
instruments and agreements, and take such other actions, as a party hereto may reasonably request in connection with the transactions
contemplated by this Agreement.

 

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Section
6.12         Costs and Expenses.
The Purchasers and the Company shall each pay their own respective costs and expenses incurred in connection with the negotiation,
preparation, execution and performance of this Agreement, including, but not limited to, attorneys’ fees.

 

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

 

Section
6.14         Severability.
If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

 

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IN WITNESS WHEREOF, each of the parties hereto
has caused this Agreement to be executed as of the date first above written.

 

	 	PURCHASERS:
	 	 
	 	Fir Tree Value Master Fund, L.P.
	 	 	 
	 	By:	/s/ Brian Meyer
	 	Name:	Brian Meyer
	 	Title:	Authorized Person
	 	 	 
	 	Fir Tree Capital Opportunity Master Fund, L.P.
	 	 	 
	 	By:	/s/ Brian Meyer
	 	Name:	Brian Meyer
	 	Title:	Authorized Person
	 	 	 
	 	Lake Union Capital Fund, LP
	 	 	 
	 	By:	/s/ Michael Self
	 	Name:	Michael Self
	 	Title:	Managing Member of the General Partner
	 	 	 
	 	Lake Union Capital TE Fund, LP
	 	 	 
	 	By:	/s/ Michael Self
	 	Name:	Michael Self
	 	Title:	Managing Member of the General Partner
	 	 	 
	 	MRMP Managers LLC
	 	 	 
	 	By:	/s/ Ned L. Sherwood
	 	Name:	Ned L. Sherwood
	 	Title:	Investment Manager
	 	 	 
	 	Harkness Trust
	 	 	 
	 	By:	/s/ Theodore H. Ashford
	 	Name:	Theodore H. Ashford
	 	Title:	Trustee
	 	 	 
	 	Ashford Capital Management, Inc. w/discretion f.b.o.
	 	Ashford Capital Partners, L.P.
	 	 	 
	 	By:	/s/ Theodore H. Ashford III
	 	Name: 	Theodore H. Ashford III
	 	Title:	C.E.O., President & C.I.O., Ashford Capital
	 	 	Management Inc.

 

Signature Page to Note Purchase Agreement

 

    	10

    	 

    

 

	 	Ashford Capital Management, Inc. w/discretion f.b.o.
	 	Anvil Investment Associates, L.P.
	 	 	 
	 	By:	/s/ Theodore H. Ashford III
	 	Name: 	Theodore H. Ashford III
	 	Title:	C.E.O., President & C.I.O., Ashford Capital
	 	 	Management Inc.
	 	 	 
	 	Columbia Pacific Opportunity Fund, L.P.
	 	 	 
	 	By:	/s/ Alex Washburn
	 	Name: 	Alex Washburn
	 	Title:	Managing Partner

 

[Signature pages continued on next page.]

 

Signature Page to Note Purchase Agreement

 

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	 	ChinaCast Education Corporation
	 	 	 
	 	By:	/s/ Derek Fang
	 	Name: 	Derek Fang
	 	Title:	Chief Executive Officer

 

Signature Page to
Note Purchase Agreement

 

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SCHEDULE OF PURCHASERS

 

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

 

    	13

    	 

    

 

EXHIBIT A

 

FORM OF NOTE

 

    	 

    	 

    

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (AS AMENDED, THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY
STATE. THIS SECURITY MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, (B) AN EXEMPTION OR QUALIFICATION UNDER APPLICABLE SECURITIES LAWS OR (C) AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. ANY ATTEMPT TO TRANSFER, SELL, PLEDGE OR HYPOTHECATE
THIS SECURITY IN VIOLATION OF THESE RESTRICTIONS SHALL BE VOID.

 

PROMISSORY NOTE

 

FOR VALUE RECEIVED, and subject to the
terms and conditions set forth herein, CHINACAST EDUCATION CORPORATION, a Delaware entity (the "Borrower"),
hereby unconditionally promises to pay to the order of [Name of Noteholder] or its assigns (the "Noteholder",
and together with the Borrower, the "Parties"), the principal amount of [AMOUNT
OF LOAN] (the "Loan"), together with all accrued interest thereon, as provided
in this Promissory Note (the "Note").

 

This Note has been issued pursuant to the
Notes and Warrants Purchase Agreement, dated as of April 10, 2012, by and among the Company, the Noteholder and the other parties
thereto (the “Purchase Agreement”).

 

1.     Definitions.
Capitalized terms used herein shall have the meanings set forth in this Section 1.

 

"Advance" means each disbursement
made by the Noteholder to the Borrower pursuant to the Purchase Agreement.

 

"Applicable
Rate" means the rate equal to twenty percent (20.0%) per annum.

 

"Borrower" has
the meaning set forth in the introductory paragraph.

 

"Business
Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to close.

 

"Debt" of the Borrower,
means all (a) indebtedness for borrowed money; (b) obligations for the deferred purchase price of property or services, except
trade payables arising in the ordinary course of business; (c) obligations evidenced by notes, bonds, debentures or other similar
instruments; (d) obligations as lessee under capital leases; (e) obligations in respect of any interest rate swaps, currency exchange
agreements, commodity swaps, caps, collar agreements or similar arrangements entered into by the Borrower providing for protection
against fluctuations in interest rates, currency exchange rates or commodity prices or the exchange of nominal interest obligations,
either generally or under specific contingencies; (f) obligations under acceptance facilities and letters of credit; and (g) guaranties,
endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to purchase,
to provide funds for payment, to supply funds to invest in any Person, or otherwise to assure a creditor against loss, in each
case, in respect of indebtedness set out in clauses (a) through (f) of a Person other than the Borrower.

 

    	A-1

    	 

    

 

"Default" means
any of the events specified in Section 7 which constitutes an Event of Default or which, upon the giving of notice, the
lapse of time, or both pursuant to Section 7 would, unless cured or waived, become an Event of Default.

 

"Event
of Default" has the meaning set forth in Section 7.

 

"Governmental
Authority" means the government of any nation or any political subdivision thereof, whether at the national,
state, territorial, provincial, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions
of, or pertaining to, government (including any supranational bodies such as the European Union or the European Central Bank).

 

"Law" as
to any Person, means any law (including common law), statute, ordinance, treaty, rule, regulation, policy or requirement of any
Governmental Authority and authoritative interpretations thereon, whether now or hereafter in effect, in each case, applicable
to or binding on such Person or any of its properties or to which such Person or any of its properties is subject.

 

"Lien" means
any mortgage, pledge, hypothecation, encumbrance, lien (statutory or other), charge or other security interest.

 

"Loan" has
the meaning set forth in the introductory paragraph.

 

"Maturity
Date" means the earlier of (a) April 10, 2013 and (b) the date on which all amounts under this Note shall
become due and payable pursuant to Section 9.

 

"Note" has
the meaning set forth in the introductory paragraph.

 

"Noteholder" has
the meaning set forth in the introductory paragraph.

 

"Parties" has
the meaning set forth in the introductory paragraph.

 

"Permitted
Debt"  means Debt (a) existing or arising under this Note; (b) existing as of the date of this Note; (c) indebtedness
of the Company in an amount not to exceed $5.0 million outstanding at any one time in the aggregate for the purposes permitted
under Section 4.1 of the Purchase Agreement and upon the same terms as this Note; provided, however, if the terms
of such indebtedness are materially more favorable than the terms of this Note, then the Noteholder shall be entitled to receive
the same terms of such indebtedness with respect to this Note; and (d) indebtedness of the Company which is subordinated to this
Note.

 

    	A-2

    	 

    

 

"Person" means
any individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership,
unincorporated organization, Governmental Authority or other entity.

 

2.    Final
Payment Date; Optional Prepayments.

 

2.1       Final
Payment Date. The aggregate unpaid principal amount of the Loan, all accrued and unpaid interest and all other amounts payable
under this Note shall be due and payable on the Maturity Date.

 

2.2       Optional
Prepayment. The Borrower may prepay the Loan prior to the Maturity Date in whole or in part at any time or from time to time
by paying 102.5% of the principal amount to be prepaid together with accrued interest on the prepaid principal amount to the date
of prepayment; provided, however, that if the Loan is repaid in full prior to the Maturity Date, the Borrower shall pay
to the Noteholder an additional amount equal to the greater of (a) ten percent (10.0%) of the aggregate principal amount of the
Loan minus the sum of (i) all interest paid thereon plus (ii) any prepayment penalties paid in accordance with the first clause
of this sentence and (b) zero. No prepaid amount may be reborrowed.

 

3.    Interest.

 

3.1       Interest
Rate. Except as otherwise provided herein, the outstanding principal amount of the Loan made hereunder shall bear interest
at the Applicable Rate from the date the Loan was made until the Loan is paid in full, whether at maturity, upon acceleration,
by prepayment or otherwise.

 

3.2       Interest
Payment Dates. Interest shall be payable semi-annually in arrears to the Noteholder with the first interest payment due on
October 10, 2012.

 

3.3       Computation
of Interest. All computations of interest shall be made on the basis of a year of 365 days, and the actual number of days elapsed.
Interest shall accrue on the Loan on the day on which the Loan is made, and shall not accrue on the Loan for the day on which it
is paid.

 

3.4       Interest
Rate Limitation. If at any time and for any reason whatsoever, the interest rate payable on the Loan shall exceed the maximum
rate of interest permitted to be charged by the Noteholder to the Borrower under applicable Law, such interest rate shall be reduced
automatically to the maximum rate of interest permitted to be charged under applicable Law.

 

4.    Payment
Mechanics.

 

4.1      Manner
of Payments. All payments of interest and principal shall be made in lawful money of the United States of America no later
than 12:00 PM on the date on which such payment is due by cashier's check, certified check or by wire transfer of immediately available
funds to the Noteholder's account at a bank specified by the Noteholder in writing to the Borrower from time to time.

 

    	A-3

    	 

    

 

4.2      Application
of Payments. All payments made hereunder shall be applied first to the payment of any fees or charges outstanding hereunder,
second to accrued interest, and third to the payment of the principal amount outstanding under the Note.

 

4.3     Business
Day Convention. Whenever any payment to be made hereunder shall be due on a day that is not a Business Day, such payment shall
be made on the next succeeding Business Day and such extension will be taken into account in calculating the amount of interest
payable under this Note.

 

4.4     Evidence
of Debt. The Noteholder is authorized to record on the grid attached hereto as Exhibit A the Loan made to the Borrower and
each payment or prepayment thereof. The entries made by the Noteholder shall, to the extent permitted by applicable Law, be prima
facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that
the failure of the Noteholder to record such payments or prepayments, or any inaccuracy therein, shall not in any manner affect
the obligation of the Borrower to repay (with applicable interest) the Loan in accordance with the terms of this Note.

 

4.5     Rescission
of Payments. If at any time any payment made by the Borrower under this Note is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, the Borrower's obligation to make such
payment shall be reinstated as though such payment had not been made.

 

5.    Representations
and Warranties. The Borrower hereby represents and warrants to the Noteholder on the date hereof as follows:

 

5.1      Power
and Authority. The Borrower has the power and authority, and the legal right, to execute and deliver this Note and to perform
its obligations hereunder.

 

5.2      Authorization;
Execution and Delivery. The execution and delivery of this Note by the Borrower and the performance of its obligations hereunder
have been duly authorized by all necessary corporate action in accordance with all applicable Laws. The Borrower has duly executed
and delivered this Note.

 

5.3     No
Conflict or Result in a Breach or Default. The execution, delivery and performance by the Borrower of this Note will not conflict
with or result in a breach of or default under any Law to which the Borrower is subject or any material agreement to which the
Borrower is a party.

 

6.     Limitation
on Indebtedness. Until all amounts outstanding under this Note have been repaid in full, the Company shall not incur any Debt
other than Permitted Debt.

 

7.     Events
of Default. The occurrence and continuance of any of the following shall constitute an Event of Default hereunder:

 

    	A-4

    	 

    

 

7.1    Failure
to Pay. The Borrower fails to pay (a) any principal amount of the Loan when due or (b) interest or any other amount when due
and such failure continues for 30 business days after written notice to the Borrower.

 

7.2    Bankruptcy.
 

 

(a)     the
Borrower commences any case, proceeding or other action (i) under any existing or future Law relating to bankruptcy, insolvency,
reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate
it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts or (ii) seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the Borrower makes a general assignment for the benefit
of its creditors;

 

(b)    there
is commenced against the Borrower any case, proceeding or other action of a nature referred to in Section 7.2(a) above which
(i) results in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged
or unbonded for a period of 90 days; or

 

(c)     there
is commenced against the Borrower any case, proceeding or other action seeking issuance of a warrant of attachment, execution or
similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which
has not been vacated, discharged, or stayed or bonded pending appeal within 90 days from the entry thereof.

 

7.3     Representation
or Warranty Proves to be False. Any representation or warranty made by Borrower in connection with this Note shall prove to have
been false in any material respect when made.

 

8.    Notice
of Event of Default. Borrower covenants and agrees that until this Note is paid in full it will promptly after becoming aware
of the occurrence of an Event of Default or an event, act or condition that, with notice or lapse of time or both, would constitute
an Event of Default, provide each Noteholder with a certificate of the chief executive officer or chief financial officer of Borrower
specifying the nature thereof and Borrower’s proposed response thereto.

 

9.    Remedies.
Upon the occurrence of any Event of Default and at any time thereafter during the continuance of such Event of Default, the Noteholder
may at its option, by written notice to the Borrower (a) declare the entire principal amount of this Note, together with all accrued
interest thereon and all other amounts payable hereunder, immediately due and payable; and/or (b) exercise any or all of its rights,
powers or remedies under applicable Law; provided, however that, if an Event of Default described in Section 7.2
shall occur, the principal of and accrued interest on the Loan shall become immediately due and payable without any notice, declaration
or other act on the part of the Noteholder.

 

    	A-5

    	 

    

 

10.  Lost,
Destroyed or Mutilated Note. Upon receipt of evidence reasonably satisfactory to the Borrower of the loss, theft, destruction
or mutilation of this Note, and upon delivery of an unsecured indemnity agreement from any Noteholder reasonably satisfactory to
the Borrower, or, in the case of any such mutilation, upon the surrender of such Note for cancellation to the Borrower, the Borrower
at its expense will execute and deliver to such Noteholder, in lieu thereof, a new Note of like tenor. Any Note in lieu of which
any such new Note has been so executed and delivered by the Borrower shall thereafter be deemed to be not outstanding for any purpose.

 

11.  Miscellaneous.

 

11.1    Notices.
 

 

(a)     All
notices, requests or other communications required or permitted to be delivered hereunder shall be delivered in writing, in each
case to the address specified below or to such other address as such Party may from time to time specify in writing in compliance
with this provision:

 

(i)      If
to the Borrower:

 

ChinaCast Education
Corporation

Unit 1005, Golden Tower B2

No. 82 Dongsihuanzhong Rd, Chaoyang

Beijing 100124 China

Attention: Doug Woodrum

Fax: +(86) 10 8751 0788

 

(ii)     If
to the Noteholder:

 

[Address of Noteholder]

 

(b)      Notices
if (i) mailed by certified or registered mail or sent by hand or overnight courier service shall be deemed to have been given when
received; (ii) sent by facsimile during the recipient's normal business hours shall be deemed to have been given when sent (and
if sent after normal business hours shall be deemed to have been given at the opening of the recipient's business on the next business
day); and (iii) sent by e-mail shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient
(such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgment).

 

11.2    Governing
Law. This Note and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon,
arising out of or relating to this Note and the transactions contemplated hereby shall be governed by the laws of the State of
New York without giving effect to its principles or rules of conflict of laws to the extent such principles or rules would require
or permit the application of the laws of another jurisdiction.

 

    	A-6

    	 

    

 

11.3    Submission
to Jurisdiction.

 

(a)     The
Borrower hereby irrevocably and unconditionally (i) agrees that any legal action, suit or proceeding arising out of or relating
to this Note may be brought in the courts of the State of New York or of the United States of America for the Southern District
of New York and (ii) submits to the exclusive jurisdiction of any such court in any such action, suit or proceeding. Final judgment
against the Borrower in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit
on the judgment.

 

(b)     Nothing
in this Section 11.3 shall affect the right of the Noteholder to (i) commence legal proceedings or otherwise sue the Borrower
in any other court having jurisdiction over the Borrower or (ii) serve process upon the Borrower in any manner authorized by the
laws of any such jurisdiction.

 

11.4    Venue.
The Borrower irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may
now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Note in any court referred
to in Section 11.3 and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

11.5    Waiver
of Jury Trial. THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

 

11.6    Counterparts;
Integration; Effectiveness. This Note and any amendments, waivers, consents or supplements hereto may be executed in counterparts,
each of which shall constitute an original, but all taken together shall constitute a single contract. This Note constitutes the
entire contract between the Parties with respect to the subject matter hereof and supersede all previous agreements and understandings,
oral or written, with respect thereto.

 

11.7    Successors
and Assigns. This Note or any of the rights hereunder may not be assigned or transferred by the Noteholder to any Person without
the prior written consent of the Borrower. The Borrower may not assign or transfer this Note or any of its rights hereunder without
the prior written consent of the Noteholder. This Note shall inure to the benefit of, and be binding upon, the Parties and their
permitted assigns.

 

11.8    Waiver
of Notice. The Borrower hereby waives demand for payment, presentment for payment, protest, notice of payment, notice of dishonor,
notice of nonpayment, notice of acceleration of maturity and diligence in taking any action to collect sums owing hereunder.

 

    	A-7

    	 

    

 

11.9    Interpretation.
For purposes of this Note (a) the words "include," "includes" and "including" shall be deemed to
be followed by the words "without limitation"; (b) the word "or" is not exclusive; and (c) the words "herein,"
"hereof," "hereby," "hereto" and "hereunder" refer to this Note as a whole. The definitions
given for any defined terms in this Note shall apply equally to both the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Unless the context otherwise
requires, references herein: (x) to Schedules, Exhibits and Sections mean the Schedules, Exhibits and Sections of this Note; (y)
to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time
to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Note shall be construed
without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or
causing any instrument to be drafted.

 

11.10    Amendments
and Waivers. No term of this Note may be waived, modified or amended except by an instrument in writing signed by both of the
parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.

 

11.11    Headings.
The headings of the various Sections and subsections herein are for reference only and shall not define, modify, expand or limit
any of the terms or provisions hereof.

 

11.12    No
Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising on the part of the Noteholder, of any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

 

11.13    Severability.
If any term or provision of this Note is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision
in any other jurisdiction.

 

11.14   Fees
and Expense. The Borrower shall pay upon written demand all reasonable costs and expenses (including, without limitation, reasonable
attorneys’ fees) incurred by any Noteholder in enforcing its interests under this Note. Borrower agrees to indemnify each
Noteholder and each of its respective directors, officers, trustees, employees and agents against, and to hold each of them harmless
from, any actual losses, damages, claims, liabilities and related expenses arising out of, in any way connected with or as a result
of the execution, delivery, enforcement, performance, or administration of this Note; provided that the foregoing indemnity
shall not apply to any losses, damages, claims, liabilities or related expenses (A) to the extent they have resulted from the wilful
misconduct, bad faith or gross negligence of any Noteholder or any director, officer, trustee, employee or agent of a Noteholder
or (B) arising from a breach of the obligations of this Note by a Noteholder or any director, officer, trustee, employee or agent
of a Noteholder.

 

    	A-8

    	 

    

 

[SIGNATURE PAGE FOLLOWS]

 

    	A-9

    	 

    

  

IN WITNESS WHEREOF, the Borrower has executed
this Note as of April 10, 2012.

 

	 	
        CHINACAST EDUCATION CORPORATION

         

	 	By	 
	 	 
	 	Name:
	 	Title:

 

	By its acceptance of this Note, the	 
	Noteholder acknowledges and agrees to be	 
	bound by the provisions of this Note.	 
	 	 
	[Name of NOTEHOLDER]	 
	 	 
	By	 	 
	 	 
	Name:	 
	Title:	 

 

    	A-10

    	 

    

 

Exhibit
A

  

Advances
and Payments on the Loan

 

	Date of Advance	 	Amount of 
Advance	 	 	Amount of 
Principal Paid	 	 	Unpaid Principal 
Amount of Note	 	 	Name of Person 
Making the 
Notation	 
	                               	 	 	          	 	 	 		 	 	 		 	 	 		 
		 	 		 	 	 		 	 	 		 	 	 		 
		 	 		 	 	 		 	 	 		 	 	 		 
		 	 		 	 	 		 	 	 		 	 	 		 
		 	 		 	 	 		 	 	 		 	 	 		 
		 	 		 	 	 		 	 	 		 	 	 		 
		 	 		 	 	 		 	 	 		 	 	 		 
		 	 		 	 	 		 	 	 		 	 	 		 
		 	 		 	 	 		 	 	 	      	 	 	 		 
		 	 		 	 	 		 	 	 		 	 	 		 
		 	 		 	 	 	      	 	 	 		 	 	 	    	 

 

    	A-11EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT
(“Agreement”), dated as of March 15, 2012 is made by and among LY RETAIL LLC, a limited liability company organized
under the laws of California (the “Company”), LUXEYARD, INC., a corporation organized under the laws of Delaware
and parent of the Company (the “Parent”) and Christian Vega (the “Executive”). Each of the
Company, the Parent and the Executive are referred to herein individually as a “Party” and collectively as the
“Parties.”

 

RECITALS:

 

WHEREAS, the Company
wishes to employ the Executive as its Chief of Business Development (“CBD”) and the Executive wishes to accept such
employment, on the terms set forth below, effective as of February 27, 2012 (“Effective Date”);

 

NOW, THEREFORE, in
consideration of the foregoing premises, and the covenants, representations and warranties set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and accepted, the Parties, intending to
be legally bound, hereby agree as follows:

 

1.          Term.
The Company hereby employs the Executive, and the Executive hereby accepts such employment, for an initial term commencing as of
the Effective Date and continuing through February 20, 2015, unless sooner terminated in accordance with the provisions of Section
5 hereof. The period during which the Executive is employed hereunder being hereinafter referred to as the “Term”.

 

2.          Duties.
During the Term, the Executive shall be employed by the Company as its Chief of Business Development (“CBD”) reporting
directly to the Company’s Chief Executive Officer. The Executive shall devote a reasonable amount of his working time (but
no less than an average of forty (40) hours per each work week during the Term excluding holidays, vacation and sick days) and
effort to the faithful performance of his duties hereunder

 

3.          Place
of Performance. Employee shall be based at the Company’s New York City, New York offices, or such other location as the
parties may agree upon from time to time.

 

4.          Compensation.

 

(a)          Base
Salary. The Company shall pay the Executive during the Term a salary at a minimum rate of One Hundred Ten Thousand Dollars
($110,000.00) per annum (the “Base Salary”) for the period beginning on the Effective Date through the first
twelve (12) consecutive months of the Term (the “First Contract Year”), in accordance with the customary payroll practices
of the Company applicable to senior executives. Notwithstanding the foregoing, in the event that fashion division of the Company
in any monthly period achieve gross revenues in the amount equal to or greater than One Hundred Fifty Thousand Dollars ($150,000.00),
then Executive’s Base Salary shall be increased to and remain at the Hundred Forty Thousand ($140,000.00) subject to any
subsequent annual increases as set forth hereinbelow. For each year thereafter, the Parent’s Board (or compensation committee
of the Parent’s Board, or, at the discretion of the Parent’s Board, by a committee composed of two or more members
of the Parent’s Board (for purposes of this Agreement, the “Committee”) shall review the Executive’s Base
Salary and shall provide a minimum of four percent (4%) annual increase for such increases therein as it may, in its discretion,
deem appropriate. (Any such increased salary shall constitute the “Base Salary” as of the time of the increase.)

 

    	 

    	 

    

 

(b)          Bonus.
At the end of the First Contract Year the Parties agree and acknowledge that Parties shall negotiate in good faith with respect
to various bonuses that Executive may be awarded for the performances of Executive’s directly reporting areas during the
First Contract Year as well as discussing bonus plans for Executive on a going-forward basis over the remainder of the Term.

 

(c)          Option
Grant. Immediately after he signs this Agreement, Executive shall be granted an option under the Company’s newly adopted
stock option plan to purchase Two Hundred Thousand (200,000) shares of the Parent’s common stock. These
options will vest per the stock option plan and are “post-split.” Furthermore, all options granted are subject to Internal
Revenue Service IRC code section 422 limitations. Executive also agrees and acknowledges that he will be subject to the
terms and conditions of a lock-up agreement (the “Lock-Up Agreement”) that Executive will be required to execute in
order to obtain the Option Grant.

 

(d)          Equity
Incentive Compensation. Executive shall be entitled to participate in any equity compensation plan of Parent or the Company
in which he is eligible to participate, and may, without limitation, be granted in accordance with any such plan options to purchase
units of Company membership interest, shares of Parent’s common stock, shares of restricted stock, and other equity awards
in the discretion of the Parent’s Board or the Committee.

 

(e)          Benefits.
The Executive shall be permitted during the Term to participate in any group life, hospitalization or disability insurance plans,
health programs, retirement plans, fringe benefit programs and other benefits that may be available to other senior executives
of the Company or Parent generally, in each case to the extent that the Executive is eligible under the terms of such plans or
programs.

 

(f)          Vacation.
The Executive shall be entitled to vacation of no less than fifteen (15) business days per year. Unused vacation days shall not
carry-over into subsequent years.

 

(g)          Expenses.
The Company shall pay or reimburse the Executive for all ordinary and reasonable out-of-pocket expenses actually incurred (and,
in the case of reimbursement, paid) by the Executive during the Term in the performance of the Executive’s services under
this Agreement, in accordance with the Company’s policies regarding such reimbursements.

 

    	 

    	 

    

 

 

5.          Termination
of Employment; Change of Control.

 

(a)          Termination
upon Death or Disability. This Agreement and Executive’s employment hereunder shall automatically terminate on the date
on which Executive dies or becomes permanently incapacitated. Executive shall be deemed to have become “permanently incapacitated”
on the date that is thirty (30) days after the Company has determined that Executive has suffered a Permanent Incapacity (as defined
below) and so notifies Executive. For purposes of this Agreement, “Permanent Incapacity” shall mean that (i) Executive
is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that
can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii)
Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or
can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for
a period of not less than three (3) months under an accident and health plan covering employees of the service provider’s
employer.

 

(b)          Termination
by the Company for Cause. The Company may terminate this Agreement and Executive’s employment hereunder with Cause (as
defined below), effective upon delivery of written notice to Executive given at any time during the Term (without any necessity
for prior notice). For purposes of this Agreement, “Cause” shall mean the Executive’s: (i) conviction of any
felony or any other crime involving moral turpitude, (ii) material fraud against the Company or any of its subsidiaries or affiliates
or material theft of or maliciously intentional damage to the property of the Company or any of their subsidiaries or affiliates,
(iii) willful and material breach of Executive’s fiduciary duties to the Company, or (iv) material breach by Executive of
any material provision of this Agreement. Termination for Cause is only allowed if the Company gives the Executive 30 day’s
notice of the termination within 30 days of Company becoming aware of the alleged incident causing the termination under this provision,
provides the basis of the claims, and the Executive is given 15 days to explain and/or correct the condition or incident at issue
to the reasonable satisfaction of Company.

 

(c)          Termination
by Company or Executive without Cause. The Company or Executive may terminate this Agreement and Executive’s employment
hereunder without Cause, effective upon delivery of thirty (30) days prior written notice to Executive or Company given at any
time during the Term (without any necessity for prior notice) provided that the Company complies with all provisions of this Agreement,
including without limitation, obligations related to severance, vesting of options and continuation of benefits as set forth herein.

 

6.          Payments
Upon Termination.

 

(a)          Upon
termination of this Agreement and Executive’s employment hereunder due to Executive’s death or disability pursuant
to Section 5(a) hereof, (i) the Executive (or the Executive’s estate or beneficiaries in the case of the death of
the Executive) shall be entitled to receive: (i) three (3) months of Executive’s then annual Base Salary compensation; (ii)
if a bonus for Executive was negotiated pursuant to paragraph 4 (b) hereinabove then a prorated bonus for the year of the Executive’s
death or disability; (iii) a continuation of the Executive’s disability and death benefits; (iv) reimbursement of all unpaid
expenses on behalf of the Company; (v) all unpaid and unused vacation days. Executive (or the Executive’s estate or beneficiaries
in the case of the death of the Executive) shall have no further rights to any other compensation or benefits hereunder, or any
other rights hereunder..

 

    	 

    	 

    

 

(b)          Upon
termination of this Agreement and Executive’s employment hereunder (i) by the Company for Cause pursuant to Section
5(b) hereof, (i) the Company shall pay to Executive any monies that are currently owed for any services previously rendered
by Executive, unused vacation days and other benefits (including any bonus for a calendar year completed before termination) earned
and accrued under this Agreement prior to the date of termination (and reimbursement under this Agreement for expenses incurred
prior to the date of termination) and (ii) the Executive shall have no further rights to any other compensation or benefits under
this Agreement on or after the termination of employment.

 

(c)          Upon
termination of this Agreement and Executive’s employment hereunder by the Company without Cause pursuant to Section 5(c)
hereof, the Company shall pay to Executive: (i) an amount equal to three (3) months of Executive’s then Base Salary in bi-weekly
payments per the normal pay cycles ii) reimbursement under this Agreement for expenses incurred prior to the date of termination
iii) any bonus that may be owed for a calendar year pursuant to paragraph 4 (b) hereinabove iv) a lump sum payment for all unused
vacation time; and v) a continuation of Executive’s health insurance benefits for a period of six (6) consecutive months.
Executive shall have no further rights to any other compensation or benefits under this Agreement on or after the termination of
employment.

 

(d)          In
the event of any conflict between any provision in this Agreement and any term of an applicable employee stock option plan, stock
option grants, or other equity-based compensation plan, the express terms of this Agreement shall prevail and control. All other
provisions of any employee stock option plans, stock grants and/or any other equity-based compensation plan that do not conflict
with a provision of this Agreement shall continue to be governed by their own terms and conditions as they apply to any and all
stock options issued by the Company to the Executive.

 

(e)          Unless
the payment is required to be delayed pursuant to Code Section 409A (as defined below), the cash amounts payable to the Executive
(or the Executive’s estate or beneficiaries in the case of the death of the Executive) under this Section 6 shall
be paid to the Executive (or the Executive’s estate or beneficiaries in the case of the death of the Executive) in a single-sum
payment within 60 days following the effective date of termination of this Agreement and Executive’s employment hereunder.

 

7.          Parachutes.
If any amount payable to or other benefit receivable by the Executive pursuant to this Agreement would be deemed to constitute
a Parachute Payment (as defined below), alone or when added to any other amount payable or paid to or other benefit receivable
or received by the Executive which is deemed to constitute a Parachute Payment (whether or not under an existing plan, arrangement
or other agreement), and would result in the imposition on the Executive of an excise tax under Section 4999 of the Code, then
the Parachute Payments shall be reduced (but not below zero) so that the maximum amount of the Parachute Payments (after reduction)
shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the excise tax imposed
by Section 4999 of the Code. Any such reduction shall be made by first reducing severance benefits (if any). Notwithstanding the
foregoing, if the reduction of Parachute Payments under this Section 7 would be equal to or greater than $50,000, then there
shall be no such reduction and the full amount of the Parachute Payment shall be payable. “Parachute Payment” shall
mean a “parachute payment” as defined in Section 280G of the Code. The calculation under this Section 7 shall
be as determined by the Parent’s accountants.

 

    	 

    	 

    

 

8.          Execution
of Release. The Executive acknowledges that, if required by the Company prior to making the payments and benefits set forth
in Section 5 (other than accrued but unpaid Base Salary and other benefits), all such payments and benefits are subject
to his execution of a general release from liability of the Company, Parent, and their respective Officers (including his successor),
Directors/Managers and employees, and such release becoming irrevocable by its terms. The release will be limited to claims relating
exclusively to Executive’s employment with the Company as of the date of termination and conditioned on the Company’s
payment of all terms and conditions set forth in this Agreement. The Release will not release claims for the payment of any future
stock option payments provided and detailed above. The Release will not add any terms or conditions relating to post employment
that are not included in this Agreement..

 

9.          Application
of Code Section 409A.

 

(a)          This
Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Code (“Code Section 409A”).
If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Code Section
409A, then such benefit or payment will be provided in full (to the extent not paid in part at earlier date) at the earliest time
thereafter when such sanctions will not be imposed. For purposes of Code Section 409A, all payments to be made upon a termination
of employment under this Agreement may only be made upon Executive’s “separation from service” (within the meaning
of such term under Code Section 409A) with the Company, each payment made under this Agreement will be treated as a separate payment,
and the right to a series of installment payments under this Agreement will be treated as a right to a series of separate payments.
In no event will Executive, directly or indirectly, designate the calendar year of payment, except as permitted under Code Section
409A.

 

(b)          Notwithstanding
anything herein to the contrary, if, at the time of Executive’s “separation from service” with the Company, the
Company has securities which are publicly traded on an established securities market and Executive is a “specified employee”
(as such term is defined in Code Section 409A) and it is necessary to postpone the commencement of any payments or benefits otherwise
payable under this Agreement as a result of such termination of employment to prevent any accelerated or additional tax under Code
Section 409A, then the Company will postpone the commencement of the payment of any such payments or benefits hereunder (without
any reduction in such payments or benefits ultimately paid or provided to Executive), until the first payroll date that occurs
after the date that is six (6) months following Executive’s “separation of service” with the Company. If any
payments are postponed due to such requirements, such postponed amounts will be paid with interest at the applicable federal rate
as provided under Section 7872(f)(2)(A) of the Code in a lump sum to Executive on the first payroll date that occurs after the
date that is six (6) months following Executive’s “separation of service” with the Company. If Executive dies
during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of Code Section 409A
will be paid to the personal representative of Executive’ s estate within sixty (60) days after the date of Executive’s
death. Payments pursuant to Section 6 of this Agreement are intended to satisfy the short-term deferral exception under
Code Section 409A.

 

    	 

    	 

    

 

(c)          All
reimbursements and in-kind benefits provided under this Agreement will be made or provided in accordance with the requirements
of Code Section 409A, including, where applicable, the requirement that (i) any reimbursement will be for expenses incurred during
Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible
for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement,
or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on
or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement
or in kind benefits is not subject to liquidation or exchange for another benefit.

 

(d)          To
the extent applicable, all grants, awards, bonuses or other payments made to Executive or for which Executive is eligible under
any Company bonus, incentive, deferred compensation plan or program or any other compensation arrangement will be structured to
comply with the requirements of Code Section 409A or an exception from such requirements.

 

10.         Covenants
of the Executive.

 

(a)          Confidentiality.
During the Term, the Company has and will continue to provide Executive with access to, and may confide in him, information, business
methods and systems, techniques and methods of operation developed at great expense by the Company and which are assets of the
Company. Executive recognizes and acknowledges that: (i) all Confidential Information (defined below) is the property of the Company
and is unique, extremely valuable and developed and acquired by great expenditures of time, effort and cost; (ii) the misuse, misappropriation
or unauthorized disclosure by Executive of the Confidential Information would constitute a breach of trust and would cause serious
irreparable injury to the Company; and (iii) it is essential to the protection of the Company’s goodwill and to the maintenance
of the Company’s competitive position that the Confidential Information be kept secret and that Executive not disclose the
Confidential Information to others or use same to his own advantage or to the advantage of others. Accordingly, Executive shall
not, during the Term or thereafter, directly or indirectly, in any manner, utilize or disclose to any person, firm, corporation,
association or other entity, or use on his own behalf, any confidential and proprietary information of the Company, including,
but not limited to, information relating to strategic plans, sales, costs, client lists, client preferences, client identities,
investment strategies, computer programs, profits or the business affairs and financial condition of the Company, or any of its
clients, or any of the Company’s business methods, systems, marketing materials, clients or techniques (collectively “Confidential
Information”), except for (i) such disclosures where required by law, but only after written notice to the Company detailing
the circumstances and legal requirement for the disclosure; or (ii) as authorized during the performance of Executive’s duties
for such use or purpose as are reasonably believed by Executive to be in the best interests of the Company. At any time, upon request,
Executive shall deliver to the Company all of its property including, but not limited to, it’s Confidential Information (whether
electronically stored or otherwise) which are in his possession or under his control. Property to be returned includes, but is
not limited to, notebook pages, documents, records, prototypes, client files, drawings, electronically stored data, computer media
or any other materials or property in Executive’s possession.

 

    	 

    	 

    

 

(b)          Noninterference.
During the Term and for a period of one (1) year following the end of the Term or Executive’s active engagement (meaning
that Executive’s services have been terminated by Company all of which are as set forth hereinabove) by Company whichever
is earlier (the “Restricted Period”), for whatever reason, he will not, directly for Executive or on behalf of any
third party, at any time or in any manner:

 

(i)          persuade,
induce, solicit, influence or attempt to influence, or cause any person who is an employee of the Company to terminate his or her
relationship with the Company or refer any such employee to anyone, without prior written approval from the Company;

 

(ii)         request
or cause any of the Company’s clients or potential clients to cancel, modify or terminate any existing or continuing or,
to Executive’s knowledge, prospective business relationship with the Company;

 

(iii)        persuade,
induce, solicit, influence or attempt to influence, or cause any client or, to Executive’s knowledge, prospective client
of the Company to cease or refrain from doing business, or to decline to do business, or to change or alter any existing or prospective
business relationship, with the Company;

 

(iv)        provide
any third party with any information concerning any client, or to Executive’s knowledge, prospective client of the Company,
including but not limited to, the disclosure of any client name or data, in whatever form, to such third party.

 

(c)          Noncompetition.
During the Term, Executive shall not, directly engage or participate in, or become employed by, or affiliated with, or enter
into or maintain a contractual relationship with, or render advisory or any other services to, any person or business entity
or organization, of whatever form, that competes with the Company in the United States or
any other location in which the Company conducts business prior to Executive’s termination date.

 

(d)          Injunctive
Relief. Executive acknowledges that his compliance with the covenants in Sections 9(a), 9(b) and 9(c)
hereof (the “Restrictive Covenants”) is necessary to protect the good will, Confidential Information and other proprietary
interests of the Company, that such covenants are supported by adequate and sufficient consideration, and that, in the event of
any violation or threatened violation by Executive of any such provision, the Company will sustain serious, irreparable and substantial
harm to its business, the extent of which will be difficult to determine and impossible to remedy by an action at law for money
damages. Accordingly, Executive agrees that, in the event of such violation or threatened violation by him, the Company shall be
entitled to seek an injunction before trial from any court of competent jurisdiction as a matter of course and upon the posting
of not more than a nominal bond, in addition to all such other legal and equitable remedies as may be available to the Company.
Executive further acknowledges that he has carefully considered the nature and extent of the restrictions contained herein and
the rights and remedies conferred upon the Company under this Agreement, and hereby acknowledges and agrees that the same are reasonable,
are designed to protect the legitimate business interests of the Company, and do not confer benefits upon the Company disproportionate
to the detriment upon him. In the event that Executive violates any of the covenants in this Agreement and the Company commences
legal action for injunctive or other relief, the Company shall have the benefit of the full period of the covenants, computed from
the date Executive ceased violation of the covenants, either by order of the court or otherwise. Executive acknowledges that any
claim or cause of action he may have against the Company shall not constitute a defense to the enforcement by the Company of his
covenants in Article 5 of this Agreement (e.g., these covenants are independent of any other provision in this Agreement and of
any other promise made to Executive). Executive also acknowledges that his experience and capabilities are such that he can obtain
suitable employment otherwise than in violation of the covenants in this Agreement and that the enforcement of these covenants
will not prevent the earning of a livelihood nor cause undue hardship. Without limiting the foregoing, in the event of a breach
by Executive of any Restrictive Covenant, the Company’s obligations under this Agreement shall immediately terminate, Executive
shall not be entitled to any additional monetary payments or benefits of any kind whatsoever and Executive shall reimburse the
Company for all of its attorneys fees and costs associated with any legal or equitable proceedings or litigation seeking to enforce
the terms of this Agreement.

 

    	 

    	 

    

 

(e)          Remedies
Cumulative and Concurrent. The rights and remedies of the Company as provided in this Section 10 shall be cumulative
and concurrent and may be pursued separately, successively or together, at the sole discretion of the Company, and may be exercised
as often as occasion therefor shall arise. The failure to exercise any right or remedy shall in no event be construed as a waiver
or release thereof.

 

(f)          Executive’s
Authorization. Executive authorizes the Company to inform any third parties, including future employers, prospective employers
and the Company’s clients or prospective clients, of the existence of this Agreement and his obligations under it.

 

(g)          Survivability.
The provisions of this Section 10 shall survive the cessation of Employee’s employment for any reason, as well as
the expiration of this Agreement at the end of its Term or at any time prior thereto.

 

(h)          Definition
of Company. For purposes of this Section 10, the term “Company” shall include the Company and any of its
parents (including the Parent), subsidiaries, affiliates or any related companies including their respective successors and assigns.

 

11.         Other
Provisions.

 

(a)          Severability.
The Executive acknowledges and agrees that (i) he has had an opportunity to seek advice of counsel in connection with this Agreement.
If it is determined that any of the provisions of this Agreement or any part thereof, including, without limitation, any of the
Restrictive Covenants, is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.

 

(b)          Duration
and Scope of Covenants. If any court or other decision-maker of competent jurisdiction determines that any of the Restrictive
Covenants contained in this Agreement, including, without limitation, any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical scope of such provision, then, after such determination has become final
and unappealable, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes
enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.

 

    	 

    	 

    

 

(c)          Arbitration.

 

(i)          Subject
to the limitations of this Section 11(c), if any dispute arises between the Parties under or concerning this Agreement or
the terms hereof, or regarding the manner in which Executive was treated while employed by the Company, the termination of his
employment, or any alleged violation by the Company of Executive’s rights under any common law theory, or any applicable
federal, state, or local law, statute, regulation, or ordinance (including without limitation 42 U.S.C. § 1981, Title VII
of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and any other local,
state, or federal legislation that pertains to employee rights or discrimination in employment), the Parties agree to submit such
issue to final and binding arbitration in accordance with the then existing National Rules for the Resolution of Employment Disputes
of the American Arbitration Association. Nothing in this Section 11(c), however, will preclude the Company from seeking
the judicial relief set forth under Section 10 of this Agreement.

 

(ii)         The
Parties agree that the interpretation and enforcement of the arbitration provisions in this Agreement will be governed exclusively
by the Federal Arbitration Act (the “FAA”), 9 U.S.C. § 1 et seq., provided that they are enforceable under the
FAA, and will otherwise be governed by the law of the State of California.

 

(iii)        The
Parties agree and understand that one of the objectives of this arbitration agreement is to resolve disputes expeditiously, as
well as fairly, and to those ends it is the obligation of all Parties to raise any disputes subject to arbitration hereunder in
an expeditious manner. Accordingly, the Parties agree that, as to any dispute that can be brought hereunder, a demand for arbitration
must be postmarked or delivered in person to the other Party no later than six (6) months after the date the demanding Party knows
or should have known of the event or events giving rise to the claim. Failure to demand arbitration on a claim within these time
limits is intended to, and will to the furthest extent permitted by law, and is a waiver and release with respect to such claims.
If, and only if, the waiver and release of claims referenced in the immediately preceding sentence is found by a court of competent
jurisdiction to be unenforceable as against Executive or the Company under this Agreement, then the Parties will nevertheless submit
such claims to arbitration pursuant to this Section 11(c) within the time permitted by law.

 

(iv)        The
Company will pay the arbitrator’s fees.

 

(v)         Unless
otherwise agreed by the Parties, arbitration will take place in Los Angeles, California.

 

(vi)        In
rendering an award, the arbitrator will determine the rights and obligations of the Parties according to federal law and the substantive
law of the State of California without regard to any principles governing conflicts of laws and the arbitrator’s decision
will be governed by state and federal substantive law, including state and federal discrimination laws referenced in Section
11(c)(i) hereof, as though the matter were before a court of law.

 

    	 

    	 

    

 

(vii)       Any
arbitration award will be accompanied by a written statement containing a summary of the issues in controversy, a description of
the award, and an explanation of the reasons for the award. The decision of the arbitrator will be made within thirty (30) days
following the close of the hearing. The Parties agree that the award will be enforceable exclusively by any state or federal court
of competent jurisdiction within Los Angeles, California.

 

(viii)      It
is understood and agreed by the Parties that their agreement herein concerning arbitration does not contain, and cannot be relied
upon Executive to contain, any promises or representations concerning the duration of the employment relationship, or the circumstances
under or procedures by which the employment relationship may be modified or terminated.

 

(ix)         If
any part of this arbitration procedure is in conflict with any mandatory requirement or applicable law, the law will govern, and
that part of this arbitration procedure will be reformed and construed to the maximum extent possible in conformance with the applicable
law. The arbitration procedure will remain otherwise unaffected and enforceable.

 

(d)          Notices.
All notices, demands, consents, requests, instructions and other communications to be given or delivered or permitted under or
by reason of the provisions of this Agreement or in connection with the transactions contemplated hereby shall be in writing and
shall be deemed to be delivered and received by the intended recipient as follows: (i) if personally delivered, on the business
day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail
return receipt requested, two (2) business days after being mailed, (iii) if delivered by overnight courier (with all charges having
been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service of recognized
standing), or (iv) if delivered by facsimile transmission or other electronic means, including email, on the business day of such
delivery if sent by 6:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day.
If any notice, demand, consent, request, instruction or other communication cannot be delivered because of a changed address of
which no notice was given (in accordance with this Section 11(d), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the second business day the notice is sent (as evidenced
by a sworn affidavit of the sender). All such notices, demands, consents, requests, instructions and other communications will
be sent to the following addresses or facsimile numbers as applicable:

 

	If to the Company or Parent, to:	 	
        Luxeyard, Inc.

        8884 Venice Blvd.

        Los Angeles, Ca 90034

        Attention: Braden Richter, President and CEO

        Telephone No.: 323-488-3574

        Email.: brichter@luxeyard.com

 

    	 

    	 

    

 

	If to the Executive, to:	 	
        Mr. Christian Vega

        32-34 34th Street

        Astoria, New York 11106

        Telephone No.:718-663-9480________

        Email.: _____________________________

 

Any such person may by notice given in
accordance with this Section 11(d) to the other Parties hereto designate another address or person for receipt by such person
of notices hereunder.

 

(e)          Section
Headings. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to or “Section” or “Sections” refer to the corresponding Article or Section
or Sections of this Agreement, unless the context indicates otherwise.

 

Construction.
The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. Unless otherwise expressly provided, the word “including”
shall mean including without limitation. The Parties intend that each representation, warranty, and covenant contained herein shall
have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any respect,
the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is
in breach of such representation, warranty, or covenant. All words used in this Agreement will be construed to be of such gender
or number as the circumstances require.

 

(g)          Counterparts.
This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement
and all of which, when taken together, will be deemed to constitute one and the same agreement. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create
a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an original thereof.

 

(h)          Entire
Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes
all prior agreements, written or oral, with respect thereto. Any subsequent agreement that includes any term that conflicts in
any way with any term of this Agreement must be in writing, specifically identify the term in this Agreement that is being superceded
and be signed by both Parties.

 

    	 

    	 

    

 

(i)          Waivers
and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance. No delay on the
part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any Party of any such right, power or privilege nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

 

(j)          Assignment.
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs (in the case
of the Executive) and assigns. No rights or obligations of the Company under this Agreement may be assigned or transferred by the
Company except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the
Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company; provided,
however, that the assignee or transferee is the successor to all or substantially all of the assets of the Company and such assignee
or transferee assumes the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually
or as a matter of law.

 

(k)          Withholding.
The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be
required by law.

 

(l)          Binding
Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.

 

(m)          Survival.
Anything contained in this Agreement to the contrary notwithstanding, the provisions of Section 10 and any other provisions
of this Agreement expressly imposing obligations that survive termination of Executive’s employment hereunder, and the other
provisions of this Section 11 to the extent necessary to effectuate the survival of such provisions, shall survive termination
of this Agreement and any termination of the Executive’s employment hereunder.

 

(n)          Existing
Agreements. The Executive represents to the Company that he is not subject or a Party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding which might prohibit him from executing this Agreement or
limit his ability to fulfill his responsibilities hereunder.

 

(o)          GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD
TO ANY PRINCIPLES OF CONFLICTS OF LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
CALIFORNIA.

 

(p)          Waiver
of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WANES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the Parent, Company and the Executive have caused their respective signature pages to this Agreement to be duly executed as of
the date first written above.

 

	 	PARENT:
	 	LUXEYARD, INC.
	 	 	 
	 	By:	 
	 	Name:	Steve Beauregard
	 	Title:	COO & Emerging Categories

 

	 	COMPANY:
	 	LY RETAIL, LLC
	 	 	 
	 	By:	 
	 	Name:	Steve Beauregard
	 	Title:	COO & Emerging Categories

  

	 	EXECUTIVE:
	 	 
	 	 
	 	Name:	Christian Vega

 

    	 

    	 

    

 

* “Revenue”
shall mean the revenue of the Company as reflected in the financial statements contained in the Company’s Annual Report on
Form 10-K filed with the Securities and Exchange Commission for the applicable Fiscal Year. “Net Loss” shall
mean the net loss, if any, of the Company as reflected in the financial statements contained in the Company’s Annual Report
on Form 10-K filed with the Securities and Exchange Commission for the applicable Fiscal Year.

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