Document:

ex4_2.htm

  
    Exhibit
4.2

     

    REGISTRATION
RIGHTS AGREEMENT

     

    THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), is made and
entered into as of April 2, 2009, by and among: (i) Network CN Inc., a Delaware
corporation (the “Company”); (ii) Sculptor
Finance (MD) Ireland Limited, Sculptor Finance (AS) Ireland Limited and Sculptor
Finance (SI) Ireland Limited (together the “Original Investors”), as the
holders of the New Notes (as defined below) and (iii) Keywin Holdings Limited
(“Keywin,” and together
with the Original Investors, the “Investors”).

     

    This
Agreement is made in connection with (i) the Note Exchange Agreement, dated
April 2, 2009, by and among the Company, the Original Investors and certain
other individuals named therein (the “Exchange Agreement”), which
provides for, among other things, the exchange of the Company’s 3% Senior
Secured Convertible Notes, due June 30, 2011 held by the Original Investors for
the same aggregate principal amount of the Company’s 1% Senior Unsecured
Convertible Promissory Notes, due April 1, 2012 (the “New Notes”), convertible into
up to 214,924,824 shares of the Company’s common stock (the “Conversion Shares”) upon the
terms and conditions set forth in the Exchange Agreement and the New Notes, and
(ii) the Note Conversion and Option Agreement, dated April 2, 2009, by and
between the Company and Keywin (the “Option Agreement” and together
with the Exchange Agreement, the “Principal Agreements”),
pursuant to which the Company agreed to exchange the Company’s 3% Senior Secured
Convertible Notes, due June 30, 2011 held by Keywin for 307,035,463 shares of
the Company’s common stock (the “Keywin Shares”), in full
satisfaction of the Company’s obligations under such notes, and to grant Keywin
an option to purchase from the Company an aggregate of 122,814,185 shares of the
Company’s common stock (the “Option Shares”) for an
aggregate purchase price of $2,000,000, on the terms and conditions set forth in
the Option Agreement. Capitalized terms used but not defined herein shall have
the meanings given to such terms in the Exchange Agreement.

     

    As an
inducement to the Investors to enter into the Principal Agreements, and in
satisfaction of a condition to the obligations of the Investors thereunder, the
Company has agreed to grant registration rights with respect to the Registrable
Securities (as hereinafter defined), as follows:

     

    1.            
Certain
Definitions.

     

    For
purposes of this Agreement the following terms shall have the following
meanings:

     

    (a) “Affiliate” has the meaning set
forth in Rule 405 under the Securities Act (except where otherwise expressly
provided).

     

    (b) “Blue Sky” means the statutes
of any state regulating the sale of corporate securities within that
state.

     

    (c) “Business Day” means any day
other than a Saturday, a Sunday, or a day on which banking institutions in New
York, New York are authorized or required by law or executive order to remain
closed.

     

    (d) “Commission” means the U.S.
Securities and Exchange Commission.

     

    (e) “Effective Date”  The
term “Effective Date” means with respect to any Registration Statement the
earlier of (i) the ninetieth (90th) day following the Filing Date (as defined
below) or (ii) in the event the Registration Statement receives a “full review”
by the Commission, the one hundred twentieth (120th) day following the Filing
Date or (iii) the date which is within three Business Days after the date on
which the Commission informs the Company the (x) the Commission will not review
a Registration Statement and (y) the Company may request the acceleration of the
effectiveness of a Registration Statement and the Company makes such request;
provided, that, in any event (i), (ii) or (iii), if the Effective Date falls on
a Saturday, Sunday or any other day that is a legal holiday or a day on which
the Commission is authorized or required by law or other government action to
close, the Effective Date shall be the following Business Day.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f) “Effectiveness Period” means,
as to any Registration Statement required to be filed pursuant to this
Agreement, the period commencing on the Effective Date of such Registration
Statement and ending on the earliest to occur of (i) the second anniversary of
such Effective Date, (ii) such time as all of the Registrable Securities covered
by such Registration Statement have been publicly sold by the Holders of the
Registrable Securities included therein, or (iii) such time as all of the
Registrable Securities covered by such Registration Statement may be sold by the
Holders pursuant to Rule 144 as determined by the counsel to the Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the Company's transfer agent and the affected Holders.

     

    (g) “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

     

    (h) “Filing Date” means, with
respect to the Registration Statement required to be filed pursuant to Section 2(a) hereof,
the earlier of (i) the date on which such Registration Statement is deemed to be
filed initially with the Commission and (ii) the ninetieth (90th)
calendar day following the date when the Company receives a written request
pursuant to Section
2(a), or as soon as reasonably practicable thereafter.

     

    (i) “FINRA” shall mean the
Financial Industry Regulatory Authority.

     

    (j) “FINRA Rules” shall mean the
conduct rules and the by-laws of FINRA.

     

    (k) “Holder” means any Investor or
any permitted assignee of record of such Registrable Securities and the rights
under this Agreement in accordance with Section 9(c) hereof.

     

    (l) “Keywin Holders” means Keywin
and any Holders who received Registrable Securities from Keywin.

     

    (m) “Majority Holders” shall mean,
on any date, (i) Holders of a majority of the Shares constituting the
Registrable Securities held by the Keywin Holders, and (ii) Holders of a
majority of the Shares constituting the Registrable Securities held by the OZ
Holders; for the purposes of this definition, Holders of the New Notes and the
Keywin Options shall be deemed to be the Holders of the number of Shares into
which such New Notes and Keywin Options are or would be convertible or
exercisable for as of such date.

     

    (n) “OZ Holders” means the Original
Investors and any Holders who received Registrable Securities from the Original
Investors.

     

    (o) “Person” means a corporation,
association, partnership, organization, business, individual, government or
political subdivision thereof or governmental agency.

     

    (p) “Prospectus” means the
prospectus included in any Registration Statement, including any preliminary prospectus,
and any such prospectus as amended or supplemented by any amendment or
prospectus supplement, including post-effective amendments, and all materials
incorporated by reference or explicitly deemed to be incorporated by reference
in such Prospectus.

     

    
      
        
        

      

      
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    (q) “Registrable Securities” means:
(i) the Keywin Shares; (ii) any Shares issuable upon conversion or exercise of
any of the New Notes or the Keywin Option, until the earliest of (A) their
effective registration under the Securities Act and the resale of all such
Shares, (B) the date on which such Shares are sold pursuant to Rule 144 under
circumstances in which any legend borne by such Shares relating to restrictions
on transferability thereof, under the Securities Act or otherwise, is removed or
are freely transferable without restriction under Rule 144, (C) the date on
which such Shares cease to be outstanding, or (D) the date on which such Shares
are sold or transferred in a transaction in which the transferor’s rights under
this Agreement are not assigned; or (iii) any securities issued or issuable by
way of any stock split, dividend, recapitalization, merger, consolidation or
other reorganization or otherwise, and any capital stock of the Company or
voting capital stock of the Company issuable upon conversion, exercise or
exchange thereof.

     

    (r) “Registration Statement” means
any registration statement filed pursuant to Section 2(a) hereof
or any registration statement filed pursuant to the piggyback registration
rights set forth in Section 3 hereof, as
the context may require.

     

    (s) “Rule 144,” “Rule 405” and “Rule 415” mean, in each case,
such rule as promulgated under the Securities Act.

     

    (t) “Securities” means the Keywin
Shares, the Keywin Option, the Option Shares, the New Notes and the Conversion
Shares.

     

    (u) “Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.

     

    (v) “Shares” means the shares of
common stock of the Company, par value $0.001 per share or any other capital
stock of the Company into which such shares are reconstituted.

     

    (w) “Underwritten Offering” means a
sale of securities of the Company to an underwriter or underwriters for
reoffering to the public.

     

    Unless
the context otherwise requires, any reference herein to a “Section” or “clause”
refers to a Section or clause, as the case may be, of this Agreement, and the
words “herein,” “hereof’ and “hereunder” and other words of similar import refer
to this Agreement as a whole and not to any particular Section or other
subdivision. Unless the context otherwise requires, any reference to a statute,
rule or regulation refers to the same (including any successor statute, rule or
regulation thereto) as it may be amended from time to time.

     

    2.            
Demand
Registration

     

    (a) At any
time immediately after the Closing Date, any Holder (each, an “Initiating Holder”), may
demand registration (each, a “Demand Registration”) under
the Securities Act, of all or any portion of the Registrable Securities owned by
such Initiating Holder. In order to accomplish such demand, the Initiating
Holder shall send a written request of the demand to the Company (which request
shall specify, subject to the limitations set forth in Section 2(c) hereof,
the Registrable Securities intended to be disposed of by such Holder or its
transferees and the intended method of distribution thereof). The Company shall,
within ten (10) calendar days of the receipt thereof, give written notice of
such request to all Holders, giving such Holders ten (10) calendar days after
receipt of such notice to request in writing to participate in such Demand
Registration Statement.  The Company shall thereafter use its
reasonable best efforts to file as soon as practicable, and in any event within
forty-five (45) calendar days’ receipt of a request from an Initiating Holder, a
registration statement under the Securities Act covering the applicable
Registrable Securities of the Initiating Holder and such other Holders who have
requested to participate (each, a “Demand Registration
Statement”). Such Demand Registration Statement shall contain (except if
otherwise required pursuant to written comments received from the Commission
upon a review of such Registration Statement) the “Plan of Distribution”
attached hereto as Annex A.

     

    
      
        
        

      

      
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    (b) The
Company shall use its commercially reasonable efforts to cause a Demand
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event prior to the
Effective Date, and to keep such Demand Registration Statement continuously
effective under the Securities Act (including the filing of any necessary
amendments, post-effective amendments and supplements) during the Effectiveness
Period.

     

    (c) Notwithstanding
anything to the contrary provided for herein: (i) in no event shall the Company
be obligated to effect, throughout the term of this Agreement, more than two
Demand Registrations for the OZ Holders and more than two Demand Registrations
for the Keywin Holders (except that two or more registration statements filed in
response to one demand shall be counted as one Demand Registration); and (ii)
the Company shall not be obligated to register in any twelve (12) month period,
Registrable Securities equaling in excess of twenty-five percent (25%) of the
Company’s fully diluted share capital (as determined from time to time and after
giving effect to the full conversion of the New Notes and the full exercise of
the Keywin Options).  If the Initiating Holder and the other
participating Holders combined request the registration of more Registrable
Securities that are permitted under this Section 2(c)(ii),
then the Company shall reduce the amount of Registrable Securities to be
included in such Demand Registration pro rata based on the number of Registrable
Securities owned by each such Holder; provided, however, that the
number of Registrable Securities shall not be reduced unless all other
securities of the Company are first entirely excluded from the
registration.

     

    (d) If,
pursuant to Section
2(a), the Initiating Holders intends to distribute the Registrable
Securities covered by their request by means of an underwriting, it shall so
advise the Company as a part of their request made pursuant to Section 2(a), and the
Company shall include such information in the written notice provided to the
other Holders in accordance with Section
2(a).  The underwriter(s) will be selected by the Initiating
Holders holding a majority of the Registrable Securities to be registered under
such Demand Registration, subject only to the reasonable approval of the
Company.  If the Demand Registration is underwritten and the managing
underwriters advise the Company in writing that in their reasonable good faith
judgment the number of Registrable Securities requested to be included
exceeds the number that can be sold in such offering, at a price reasonably
related to fair value, then the Company shall include in such registration only
the aggregate amount of Registrable Securities that the underwriter believes may
be sold and shall reduce the amount of Registrable Securities to be included in
such registration, first, as to the
Company, second
as to each of the security holders of the Company that is not a Holder, third as to the
Holders pro rata. A registration shall not be considered to be a Demand
Registration under Section 2, if: (i) as
a result of the foregoing allocation, the Initiating Holders are not able to
register and sell in the Demand Registration at least 75% of the Registrable
Securities sought to be included in the Demand Registration Statement by such
Holder, subject to clause (ii) of Section 2(c) hereof;
(ii) the gross proceeds of the securities included in the registration on behalf
of the Company constitute at least 20% of the total gross proceeds of the Demand
Registration; (iii) the Demand Registration Statement requested by the
Initiating Holders does not become effective for any reason within one hundred
and twenty (120) calendar days of the request for Demand Registration by an
Initiating Holder pursuant to Section 2(a); (iv)
after the Demand Registration has become effective, such registration or the
related offer, sale or distribution of Registrable Securities thereunder is
interfered with by any
stop order, injunction or other order or requirement of the Commission or
other governmental agency or court for any reason not attributable to such
Initiating Holder and such interference is not thereafter eliminated; or (v) the
conditions specified in the underwriting agreement, if any, entered into in
connection with such Demand Registration are not satisfied or waived, other than
by reason of a failure by such Initiating Holders.

     

    
      
        
        

      

      
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    (e) If any
holder of the Company’s securities that is not a Holder under this Agreement
exercises demand registration rights to have the Company register its securities
under the Securities Act (a “Third Party Demand
Registration”) within a period of thirty (30) calendar days before or
after the time the Holder shall have requested a Demand Registration, then the
Holder’s Demand Registration shall have priority over such Third Party Demand
Registration.

     

    (f)
Notwithstanding anything to the contrary herein, if after such time as all of
the Registrable Securities held by the OZ Holders may be sold without any
restrictions pursuant to Rule 144, the OZ Holders shall still have the right to
request in writing Demand Registration pursuant to Section 2(a) hereof
(subject to the limitations set forth in Section 2(c)), provided, however, that each
OZ Holder(s) participating in a Demand Registration under this Section 2(f) shall
bear its pro rata share of the expenses of such Demand Registration Statement
based on the proportion of its Registrable Securities covered under such Demand
Registration Statement, including its pro rata share of any Registration
Expenses set forth in Section 6
hereof.  To the extent that any Registration Expenses are incurred,
assumed or paid by the Company that are otherwise payable by an OZ Holder under
this Section
2(f), such OZ Holder shall reimburse the Company for the full amount of
the Registration Expenses so incurred, assumed or paid as promptly as practical
after receipt of a documented request therefor.

     

    3.            
Piggy-Back
Registration.

     

    (a) If the
Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection with
any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to each Holder written notice of such determination and, if within
fifteen (15) calendar days after receipt of such notice, any such Holder shall
so request in writing, the Company shall include in such registration statement
all or any part of such Registrable Securities such Holder requests to be
registered, subject to the limitations set forth in clause (ii) of Section 2(c)
hereof.

     

    (b) If any
registration pursuant to this Section 3 is
underwritten in whole or in part, the Company may require that the Registrable
Securities requested for inclusion pursuant to this section be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters.

     

    (c) If (i)
the registration pursuant to this Section 3 is
underwritten and in the good faith judgment of the managing underwriter the
inclusion of the Registrable Securities requested to be registered would
interfere with the successful marketing of the  offering, or (ii) if
the Company determines, in response to comments from the Commission, that it
needs to reduce the number of shares to be included in such Registration
Statement, then the number of shares of Registrable Securities to be included in
the offering will be reduced to such smaller number with the participation in
the offering to be in the following order of priority: (A) first, the securities
which the Company proposes to sell for its own account, and (B) second, the
shares of Registrable Securities requested by Holders to be included in such
registration, pro rata among the respective Holders thereof on the basis of the
number of shares of Registrable Securities that the Holders have requested the
Company to include in the registration, and (C) third, any other securities
requested to be included; provided, however, that after
such time as all of the Registrable Securities held by the OZ Holders may be
sold without any restrictions pursuant to Rule 144, any reduction in the number
of shares of Registrable Securities pursuant to this Section 3(c) will be
in the following order of priority: (A) first, the securities which the Company
proposes to sell for its own account, and (B) second, pro rata among the other
shareholders of the Company (including, for the avoidance of doubt, any OZ
Holders) on the basis of the number of shares that each such shareholder has
requested the Company to include in the registration.

     

    
      
        
        

      

      
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    4.           
 Registration
Procedures.  In connection with the Company's
registration obligations hereunder, the Company shall:

     

    (a) Not less
than four (4) Business Days prior to the filing of a Registration Statement or
any related Prospectus or any amendment or supplement thereto, the Company shall
furnish to each Holder copies of the “Selling Stockholders” section of such
document, the “Plan of Distribution” and any risk factor contained in such
document that addresses specifically this transaction or the Selling
Stockholders, as proposed to be filed which documents will be subject to the
review of such Holder.  The Company shall not file a Registration
Statement, any Prospectus or any amendments or supplements thereto in which the
“Selling Stockholder” section thereof differs from the disclosure received from
a Holder in its Selling Holder Questionnaire (as amended or
supplemented).

     

    (b) (i)  Prepare
and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in accordance with Section 2(a) in order
to register for resale under the Securities Act all of the required Registrable
Securities; (ii) cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to
any comments received from the Commission with respect to each Registration
Statement or any amendment thereto and, as promptly as reasonably possible
provide the Holders true and complete copies of all correspondence from and to
the Commission relating to such Registration Statement that would not result in
the disclosure to the Holders of material and non-public information concerning
the Company; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the Registration Statements
and the disposition of the Registrable Securities covered by each Registration
Statement.

     

    (c) Notify
the Holders as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than three (3) Business Days prior to such filing and, in the
case of (v) below, not less than three (3) Business Days prior to the financial
statements in any Registration Statement becoming ineligible for inclusion
therein) and (if requested by any such Person) confirm such notice in writing no
later than two (2) Business Days following the day: (i)(A) when a Prospectus or
any Prospectus supplement or post-effective amendment to a Registration
Statement is proposed to be filed; (B) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company shall
provide true and complete copies thereof and all written responses thereto to
each of the Holders that pertain to the Holders as a Selling Stockholder or to
the Plan of Distribution, but not information which the Company believes would
constitute material and non-public information); and (C) with respect to each
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration Statement
or Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.

     

    
      
        
        

      

      
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    (d) Use its
reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.

     

    (e) Furnish
to each Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto and all exhibits to the extent requested by
such Person (including those previously furnished) promptly after the filing of
such documents with the Commission.

     

    (f) Promptly
deliver to each Holder, without charge, as many copies of each Prospectus or
Prospectuses, and each amendment or supplement thereto as such Persons may
reasonably request.  The Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.

     

    (g) Prior to
any public offering of Registrable Securities, register or qualify the
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States, to keep each such registration
or qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by the Registration Statements.

     

    (h) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee
pursuant to the Registration Statements, which certificates shall be free, to
the extent permitted by the Principal Agreements, of all restrictive legends,
and to enable such Registrable Securities to be in such denominations and
registered in such names as any such Holders may request.

     

    (i) Upon the
occurrence of any event contemplated by Section 4(c)(v), as
promptly as reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.

     

    (j) In the event the Commission
seeks to characterize any offering pursuant to a Registration Statement filed
pursuant to this Agreement as constituting an offering of securities by or on
behalf of the Company, or in any other manner, such that the Commission does not
permit such Registration Statement to become effective and used for resales in a
manner that does not constitute such an offering or permit the continuous resale
at the market by the Holders participating therein (or as otherwise may be
acceptable to each Holder) without being named therein as an “underwriter,” then
the Company shall reduce the number of shares to be included in such
Registration Statement by all Holders (subject to the priorities set forth in
the remainder of this paragraph) until such time as the Staff and the Commission
shall so permit such Registration Statement to become effective as aforesaid. In
making such reduction, the Company shall reduce or eliminate the shares in the
following manner: first, shares, if
any, to be included by the Company; second, shares, if
any, to be included by each of the security holders of the Company (other than
the Holders); and third, shares to be
included by all Holders as a group, pro rata within each group based on the
number of Registrable Securities owned by such Holder; provided, however, that if
the inclusion of shares by a particular Holder or a particular set of Holders
results in the Commission’s “by or on behalf of the Company” offering position,
the shares held by such Holder or set of Holders shall be the only shares
subject to reduction (and if by a set of Holders on a pro rata basis by such
Holders or on such other basis as would result in the exclusion of the least
number of shares by all such Holders).

     

    
      
        
        

      

      
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    In addition, in the event that the
Commission requires any Holder seeking to sell securities under a Registration
Statement filed pursuant to this Agreement to be specifically identified as an
“underwriter” in order to permit such Registration Statement to become
effective, and such Holder does not consent to being so named as an underwriter
in such Registration Statement, then, in each such case, the Company shall
reduce the total number of Registrable Securities to be registered on behalf of
such Holder, until such time as the Commission does not require such
identification or until such Holder accepts such identification and the manner
thereof. In the event of any reduction in Registrable Securities pursuant to
this paragraph, the Company shall thereafter use its reasonable best efforts to
find alternative methods to register the Registrable Securities with the
Commission for resale by any affected Holder; and (ii) in the event the Company,
after conducting a pre-filing conference with the Commission, if possible,
reasonably determines that it is unable to, or it is inadvisable for the Company
to attempt to, register all of the Registrable Securities in a single
registration statement, then the Company may elect to fulfill the registration
requirements hereunder by registering the Registrable Securities in two or more
Registration Statements, provided that the Company shall use its reasonable best
efforts to file each subsequent Registration Statement no later than the earlier
of (A) sixty (60) calendar days following the date on which the last of the
Registrable Securities registered under the preceding Registration Statement
were sold or (B) six (6) months following the date on which the preceding
Registration Statement was declared effective.

     

    5.            
Holder’s
Obligations.

     

    (a) Each
Holder agrees to furnish to the Company a completed
questionnaire in the form attached to this Agreement as Annex A (a “Selling Holder
Questionnaire”) and information regarding such Holder’s intended method
of distribution of its Registrable Securities.  The Company shall not
be required to include the Registrable Securities of a Holder in a Registration
Statement who fails to furnish to the Company a fully completed Selling Holder
Questionnaire and the Holder’s plan of distribution at least five (5) Business
Days prior to the Filing Date.

     

    (b) Each such
Holder agrees to notify the Company as promptly as practicable of any inaccuracy
or change in information previously furnished by such Holder to the Company or
of the occurrence of any event in either case as a result of which any
Prospectus relating to such registration contains or would contain an untrue
statement of a material fact regarding such Holder or such Holder’s intended
method of disposition of such Registrable Securities or omits to state any
material fact regarding such Holder or such Holder’s intended method of
disposition of such Registrable Securities required to be stated therein or
necessary to make the statements therein not misleading, and promptly to furnish
to the Company any additional information required to correct and update any
previously furnished information or required so that such Prospectus shall not
contain, with respect to such Holder or the disposition of such Registrable
Securities, an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.

     

    (c) Each
Holder further agrees not to sell any Registrable Securities pursuant to a
Registration Statement without delivering, or causing to be delivered, a
Prospectus to the purchasers thereof and, following termination of the
Effectiveness Period, to notify the Company, within ten (10) Business Days of a
request by the Company, of the amount of Registrable Securities sold pursuant to
such Registration Statement and, in the absence of a response, the Company may
assume that all of the Holder’s Registrable Securities were so
sold.

     

    
      
        
        

      

      
        - 8
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    6.           
Registration
Expenses.

     

    Except with respect to the expenses
incurred in connection with the Registration Statements under Section 2(f) hereof,
the Company agrees to bear and to pay or cause to be paid promptly upon request
being made therefor all expenses incident to the Company’s performance of or
compliance with this Agreement, including, but not limited to, (a) all
Commission and any FINRA registration and filing fees and expenses, (b) all fees
and expenses in connection with the qualification of the Registrable Securities
for offering and sale under U.S. state securities and “blue sky” laws, including
reasonable fees and disbursements of one counsel for the placement agent or
underwriters, if any, in connection with such qualifications, (c) all expenses
relating to the preparation, printing, distribution and reproduction of the
Registration Statement, the related Prospectus and each amendment or supplement
to each of the foregoing, the certificates representing the Registrable
Securities and all other documents relating hereto, (d) all fees and expenses of
Holders in connection with any Registration Statement, whether or not such
registration statement becomes effective, (e) fees and expenses of any escrow
agent or custodian, and of the registrar and transfer agent for the Shares, (f)
fees, disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or “cold
comfort” letters required by or incident to such performance and compliance),
(g) all underwriting discounts and commissions and placement agent fees and
commissions attributable to the sale of such Registrable Securities, and (h)
fees, expenses and disbursements of any other Persons, including special
experts, retained by the Company in connection with the Registration Statements
(collectively, the “Registration
Expenses”).  To the extent that any Registration Expenses are
incurred, assumed or paid by any Holder of Registrable Securities or any
underwriter or placement agent therefor, the Company shall reimburse such Person
for the full amount of the Registration Expenses so incurred, assumed or paid
promptly after receipt of a documented request therefor.

     

    7.             Indemnification.

     

    (a) Indemnification by the
Company.  The Company shall indemnify and hold harmless each
Holder, its Affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 7 as a
Holder) from and against any loss, claim, damage or liability, joint or several,
or any action in respect thereof (including, without limitation, any loss,
claim, damage, liability or action relating to purchases and sales of
Securities), to which that Holder may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any Blue Sky laws, any
other federal or state statutory law or regulation, any applicable laws in a
jurisdiction other than the United States, at common law or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in any such Registration Statement, (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus, any
“free writing prospectus” (as defined in Rule 405 under the Securities Act)
prepared by or on behalf of the Company or used or referred to by the Company in
connection with the sale of the Securities, or any “issuer information” (“Issuer Information”) filed or
required to be filed pursuant to Rule 433(d) under the Securities Act, or (iii)
any omission or alleged omission to state therein a material fact required to be
stated

     

    
      
        
        

      

      
        - 9
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    therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and shall reimburse
each Holder promptly upon demand for any legal or other expenses reasonably
incurred by that Holder in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however,
that the Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with any
written information provided by a Holder; and provided, further, that with
respect to any such untrue statement in or omission from any related preliminary
Prospectus, the indemnity agreement contained in this Section 7(a) shall
not inure to the benefit of any Holder from whom the person asserting any such
loss, claim, damage, liability or action received Securities to the extent that
such loss, claim, damage, liability or action of or with respect to such Holder
results from the fact that both (A) a copy of the final Prospectus was not sent
or given to such person at or prior to the written confirmation of the sale of
such Registrable Securities to such person and (B) the untrue statement in or
omission from the related preliminary Prospectus was corrected in the final
Prospectus unless, in either case, such failure to deliver the final Prospectus
was a result of non-compliance by the Company with Section 4 hereof.
This indemnity agreement shall be in addition to any liability that the Company
may otherwise have.

     

    The
Company also shall indemnify and hold harmless as provided in this Section 7(a) or
contribute as provided in Section 7(d) hereof,
with respect to any loss, claim, damage, liability or action of each
underwriter, if any, of Registrable Securities registered under the Registration
Statement, its Affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls such
underwriter within the meaning of the Securities Act or the Exchange Act on
substantially the same basis as that of the indemnification of the selling
Holders provided herein and shall, if requested by any Holder, enter into an
underwriting agreement reflecting such agreement.

     

    (b) Indemnification by the
Holder.  Each Holder shall indemnify and hold harmless the
Company and its respective Affiliates, its officers, directors, employees,
representatives and agents, and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 7(b) as the
Company), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, applicable Blue Sky laws, any other federal or state statutory law or
regulation, any applicable laws in a jurisdiction other than the United States,
at common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any such Registration Statement
or any Prospectus forming part thereof or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with any information furnished in writing to the Company
by such Holder, and shall reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that no
such Holder shall be liable for any indemnity claims hereunder in excess of the
amount of net proceeds received by such Holder from the sale of Registrable
Securities pursuant to such Registration Statement unless such liability is the
direct result of the Holder’s gross negligence, willful misconduct or fraud.
This indemnity agreement will be in addition to any liability which any such
Holder may otherwise have.

     

    
      
        
        

      

      
        - 10
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    (c) Conduct of Indemnification
Proceedings.  Promptly after receipt by an indemnified party
under this Section
7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 7(a) or Section 7(b), notify
the indemnifying party in writing of the claim or the commencement of that
action; provided, however,
that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have hereunder except to the extent that it has
been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than hereunder. If any such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party hereunder for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof other
than the reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (i)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based upon advice of counsel to
the indemnified party) between the indemnified party and the indemnifying party
(in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained herein, shall use all reasonable best efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment or if the indemnifying party has not paid
the expenses and fees for which it is liable twenty (20) calendar days after
notice by the indemnified party of request for reimbursement. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding and (ii) does not include a statement or admission of
fault, culpability or a failure to act, by or on behalf of the indemnified
party.

     

    
      
        
        

      

      
        - 11
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    (d) Contribution.  If
the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party hereunder,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the Company from the offering and sale of the Notes, on the one
hand, and a Holder with respect to the sale by such Holder of Registrable
Securities, on the other, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and such Holder on the other
with respect to the statements or omissions that resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and a Holder on the other with respect to such offering and such sale
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Securities (before deducting expenses) received by or on behalf
of the Company, on the one hand, and the total discounts and commissions
received by such Holder with respect to the Securities, on the other, bear to
the total gross proceeds from the sale of Securities. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to the Company or information supplied by the Company on
the one hand or to any information contained in the relevant information
supplied by such Holder on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section 7 were to be
determined by pro rata
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above shall be deemed to
include, for purposes of this Section 7, any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending or preparing to defend any such action or claim.
Notwithstanding the provisions hereof, an indemnifying party that is a Holder of
Registrable Securities shall not be required to contribute any amount in excess
of the amount by which the total price at which the Registrable Securities sold
by such indemnifying party to any purchaser exceeds the amount of any damages
which such indemnifying party has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged omission
unless such party is guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) with respect to such statement or
omission. No person guilty of fraudulent misrepresentation shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

     

    The Holders’ obligations to contribute
pursuant to this Section 7 are several
and not joint. The provisions of this Section 7 shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Holder, the Company or any of the indemnified Persons referred to
herein, and shall survive the sale by a Holder of securities covered by the
Registration Statement.

     

    8.  
          Rule 144A and Rule
144.

     

    So long
as any Registrable Securities remain outstanding, the Company shall use its
reasonable best efforts to file the reports required to be filed by it under
Rule 144A(d)(4) under the Securities Act and the Exchange Act in a timely manner
and, if at any time the Company is not required to file such reports, it will,
upon the written request of any Holder of Registrable Securities, make publicly
available other information so long as necessary to permit sales of such
Holder’s securities pursuant to Rules 144 and 144A.  The Company
covenants that it will take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by Rules 144
and 144A (including, without limitation, the requirements of Rule
144A(d)(4)).  Upon the written request of any Holder of Registrable
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 8 shall be
deemed to require the Company to register any of its securities pursuant to the
Exchange Act.

     

    
      
        
        

      

      
        - 12
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    9.            
Miscellaneous.

     

    (a) Amendments and
Waivers. The provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of
Majority Holders. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose Registrable Securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders, may be given by Holders of a majority in aggregate
amount of the Registrable Securities being sold by such Holders pursuant to such
Registration Statement.

     

    (b) Notices. All notices
and other communications provided for or permitted hereunder shall be made in
writing by hand-delivery, first-class mail, telecopier or air courier
guaranteeing next-day delivery:

     

    
      	
              (i)  

            	
              If
      to the Company, initially at the address set forth in the Principal
      Agreements; and

            

    

     

    
      	
              (ii)  

            	
              If
      to the Holders, initially at its address set forth in the Principal
      Agreements.

            

    

     

    All such
notices and communications shall be deemed to have been duly given: when
delivered by hand, if personally delivered; one (1) Business Day after being
delivered to a next-day air courier; five (5) Business Days after being
deposited in the mail; and when receipt is acknowledged by the recipient’s
telecopier machine, if sent by telecopier.

     

    (c) Assignment of Registration
Rights.  The rights to cause the Company to register
Registrable Securities pursuant to this Agreement may be assigned by a Holder to
a transferee or assignee of Registrable Securities, only (i) such transfer or
assignment is in compliance with the Securities Act, and (ii) if such transferee
or assignee agrees to be subject to all restrictions in this Agreement and, as a
condition to the effectiveness of such transfer or assignment, executes and
delivers a counterpart to this Agreement agreeing to be treated as a
Holder.  Upon compliance with causes (i) and (ii) above, the
transferee or assignee will have the benefits of, and will be subject to the
restrictions in, this Agreement.

     

    (d) Successors and
Assigns. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns.

     

    (e) Counterparts. This
Agreement may be executed in any number of counterparts (which may be delivered
in original form or by telecopier) and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
agreement.

     

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

     

    
      
        
        

      

      
        - 13
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    (g) Governing Law. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof.  Each party agrees that all
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective Affiliates, employees or agents) (“Proceedings”) will be
commenced in the New York Courts.  Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient
forum.  Each party hereto hereby irrevocably waives personal service
of process and consents to process being served in any such Proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any Proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby.  If either party shall commence
a Proceeding to enforce any provisions of this Agreement, then the prevailing
party in such Proceeding shall be reimbursed by the other party for its
attorney’s fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Proceeding.

     

    (h) Remedies. In the
event of a breach by the Company or by any Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder agree that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further agree
that, in the event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be
adequate.

     

    (i) No Conflicts; No other
Agreements. Each of the Company represents, warrants and-agrees that
it has not entered into, and shall not, on or after the date of this Agreement,
enter into any agreement that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof and,
without limiting the generality of the foregoing, without the written consent of
the Majority Holders, it shall not grant to any present or future shareholder of
the Company (other than any Holder) rights to cause or participate (in any
manner) in any registration of Company securities similar to the rights provided
to the Holders herein, unless the rights so
granted are not in conflict or inconsistent with the provisions of this
Agreement.

     

    (j) No Piggyback on
Registrations. Except as and to the extent specified herein and in the
Principal Agreements, neither the Company nor any of its security holders (other
than the Holders in such capacity pursuant hereto) may include securities of the
Company in a Registration Statement other than the Registrable
Securities.

     

    (k) Severability. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

    
      
        
        

      

      
        - 14
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    (l) Independent Nature of
Investors' Obligations and Rights.  The obligations of each
Investor under this Agreement are several and not joint with the obligations of
each other Investor, and no Investor shall be responsible in any way for the
performance of the obligations of any other Investor under this
Agreement.  Nothing contained herein or in any Principal Agreement,
and no action taken by any Investor pursuant thereto, shall be deemed to
constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any of the Principal
Agreements.  Each Investor acknowledges that no other Investor will be
acting as agent of such Investor in enforcing its rights under this
Agreement.  Each Investor shall be entitled to independently protect
and enforce its rights, including without limitation the rights arising out of
this Agreement, and it shall not be necessary for any other Investor to be
joined as an additional party in any Proceeding for such purpose.  The
Company acknowledges that each of the Investors has been provided with the same
copy of the Agreement for the purpose of closing a transaction with multiple
Investors and not because it was required or requested to do so by any
Investor.

     

     [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK;

    SIGNATURE
PAGES TO FOLLOW]

     

     

     

     

     

     

     

    
      
        
        

      

      
        - 15
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    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.

     

    
      
        
          
            
              	 	NETWORK CN
INC.	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ Godfrey
      Hui	 
	 	Name:
       	Godfrey
      Hui	 
	 	Title: 	Chief
      Executive Officer	 
	 	 	 	 

            

          

        

      

    

     

    
      
        
          
            
              
                	 	SCULPTOR
      FINANCE (MD) IRELAND LIMITED	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/ Carmel
      Naughton	 
	 	Name:
       	Carmel
      Naughton	 
	 	Title: 
       	Director	 
	 	 	 	 

              

            

          

        

      

       

      
        
          
            
              
                
                  	 	SCULPTOR
      FINANCE (AS) IRELAND LIMITED	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/ Jennifer
      Coyne	 
	 	Name:
       	Jennifer
      Coyne	 
	 	Title: 	Director	 
	 	 	 	 

                

              

            

          

        

         

        
          
            
              
                
                  
                    	 	SCULPTOR
      FINANCE (SI) IRELAND LIMITED	 
	 	 	 	 
	
                             

                          	
                            By:
      

                          	/s/
      Carmel Naughton 	 
	 	Name:
        	Carmel
      Naughton	 
	 	Title: 	Director	 
	 	 	 	 

                  

                

              

            

          

           

          
            
              
                
                  
                    	 	KEYWIN
      HOLDINGS LIMITED	 
	 	 	 	 
	
                             

                          	
                            By:
      

                          	/s/ 	 
	 	Name:  
      	
                          	 
	 	Title:	
                          	 
	 	 	 	 

                  

                

              

            

          

           

          
            
              [Signature Page to Registration
Rights Agreement]

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

      

    

    

    ANNEX
A

     

    Plan of
Distribution

     

    The
Selling Stockholders and any of their pledgees, donees, transferees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of Common Stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions.  These sales
may be at fixed or negotiated prices.  The Selling Stockholders may
use any one or more of the following methods when selling shares:

     

    
      	
              ·  

            	
              ordinary
      brokerage transactions and transactions in which the broker-dealer
      solicits Investors;

            

    

     

    
      	
              ·  

            	
              block
      trades in which the broker-dealer will attempt to sell the shares as agent
      but may position and resell a portion of the block as principal to
      facilitate the transaction;

            

    

     

    
      	
              ·  

            	
              purchases
      by a broker-dealer as principal and resale by the broker-dealer for its
      account;

            

    

     

    
      	
              ·  

            	
              an
      exchange distribution in accordance with the rules of the applicable
      exchange;

            

    

     

    
      	
              ·  

            	
              privately
      negotiated transactions;

            

    

     

    
      	
              ·  

            	
              to
      cover short sales made after the date that this Registration Statement is
      declared effective by the
Commission;

            

    

     

    
      	
              ·  

            	
              broker-dealers
      may agree with the Selling Stockholders to sell a specified number of such
      shares at a stipulated price per
share;

            

    

     

    
      	
              ·  

            	
              a
      combination of any such methods of sale;
and

            

    

     

    
      	
              ·  

            	
              any
      other method permitted pursuant to applicable
  law.

            

    

     

    The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.

     

    Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales.  Broker-dealers may receive commissions or
discounts from the Selling Stockholders (or, if any broker-dealer acts as agent
for the purchaser of shares, from the purchaser) in amounts to be
negotiated.  The Selling Stockholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions
involved.

     

    The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the shares of Common Stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.

     

    Upon the
Company being notified in writing by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of Common
Stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of Common Stock were sold, (iv)the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction.  In
addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with
applicable securities law.

     

    
      
        
        

      

      
        - 1
-

        
          

        

      

      
        
        

      

    

     

    The
Selling Stockholders also may transfer the shares of Common Stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this
prospectus.

     

    The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales.  In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.  Discounts,
concessions, commissions and similar selling expenses, if any, that can be
attributed to the sale of the securities will be paid by the Selling Stockholder
and/or the purchasers.  Each Selling Stockholder has represented and
warranted to the Company that it acquired the securities subject to this
registration statement in the ordinary course of such Selling Stockholder’s
business and, at the time of its purchase of such securities such Selling
Stockholder had no agreements or understandings, directly or indirectly, with
any person to distribute any such securities.

     

    The
Company has advised each Selling Stockholder that it may not use shares
registered on this Registration Statement to cover short sales of Common Stock
made prior to the date on which this Registration Statement shall have been
declared effective by the Commission.  If a Selling Stockholder uses
this prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act.  The Selling
Stockholders will be responsible to comply with the applicable provisions of the
Securities Act and Exchange Act, and the rules and regulations thereunder
promulgated, including, without limitation, Regulation M, as applicable to such
Selling Stockholders in connection with resales of their respective shares under
this Registration Statement.

     

    The
Company is required to pay all fees and expenses incident to the registration of
the shares, but the Company will not receive any proceeds from the sale of the
Common Stock.  The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.

     

    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

     

    ANNEX
B

     

    NETWORK
CN INC.

     

    Selling
Securityholder Notice and Questionnaire

     

    The
undersigned beneficial owner of common stock (the “Common Stock”), of Network CN
Inc., a Delaware corporation (the “Company”) understands that
the Company has filed or intends to file with the Securities and Exchange
Commission (the “Commission”) a Registration
Statement for the registration and resale of the Registrable Securities, in
accordance with the terms of the Amended and Restated Registration Rights
Agreement, dated as of April 2, 2009 (the “Registration Rights
Agreement”), among the Company and the Investors named
therein.  A copy of the Registration Rights Agreement is available
from the Company upon request at the address set forth below.  All
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Registration Rights Agreement.

     

    The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

     

    QUESTIONNAIRE

     

    
      	
               
      

            	
              1.

            	
              Name.

            

    

     

    
      
        	
                 
      

              	
                (a)

              	
                Full
      Legal Name of Selling Securityholder

              
	 	 	 
	 	 	 

      

    

    

    
      
        	
                 
      

              	
                (b)

              	
                Full
      Legal Name of Registered Holder (if not the same as (a) above) through
      which Registrable Securities Listed in Item 3 below are
    held:

              
	 	 	 
	 	 	 

      

    

    

    
      
        	
                 
      

              	
                (c)

              	
                Full
      Legal Name of Natural Control Person (which means a natural person who
      directly or indirectly alone or with others has power to vote or dispose
      of the securities covered by the questionnaire):

              
	 	 	 
	 	 	 

      

    

    

     

    2.  Address
for Notices to Selling Securityholder:

     

    
      
        
          
            
              
                	 	 
      
	 	 
      
	 	 
      
	  
      Telephone:	
                          
      

                      
	  
      Fax:	
                          
      

                      
	  
      Contact Person:   	
                          
      

                      

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              3.  Beneficial
      Ownership of Registrable
Securities:

            

    

     

    
      
        	
                 
      

              	
                Type
      and Principal Amount of Registrable Securities beneficially
      owned:

              
	 	 
	 	 
	 	 
	 	 

      

    

     

     

     

    
      	
               
      

            	
              4.  Broker-Dealer
      Status:

            

    

     

    
      	
               
      

            	
              (a)

            	
              Are
      you a broker-dealer?

            

    

     

    Yes    ̈                      No    ̈

    
      
      

    

     

    
      
        	 	Note: 
      	
                If
      yes, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration Statement.

              
	 	 	 
	
                 
      

              	
                (b)

              	
                Are
      you an affiliate of a
broker-dealer?

              

      

    

     

    Yes    ̈                      No    ̈

     

    
      	
               
      

            	
              (c)

            	
              If
      you are an affiliate of a broker-dealer, do you certify that you bought
      the Registrable Securities in the ordinary course of business, and at the
      time of the purchase of the Registrable Securities to be resold, you had
      no agreements or understandings, directly or indirectly, with any person
      to distribute the Registrable
Securities?

            

    

     

    Yes    ̈                      No    ̈

     

    
      
        	
                 
      

              	
                
                  Note:

                

              	
                
                  If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
  Statement.

                

              

      

    

    
      
      

    

     

    5.  Beneficial
Ownership of Other Securities of the Company Owned by the Selling
Securityholder.

     

    Except as
set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

     

    
      
        	
                 
      

              	
                Type
      and Amount of Other Securities beneficially owned by the Selling
      Securityholder:

              
	 	 
	 	 
	 	 

      

    

    
 

    
       
6.  Relationships
with the Company:

    

     

    Except as
set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                 
      

              	
                State
      any exceptions here:

              
	 	 
	 	 
	 	 

      

    

     

     

    7.  The Company has
advised each Selling Stockholder that it may not use shares registered on the
Registration Statement to cover short sales of Common Stock made prior to the
date on which the Registration Statement is declared effective by the
Commission, in accordance with 1997 Securities and Exchange Commission Manual of
Publicly Available Telephone Interpretations Section A.65.  If a
Selling Stockholder uses the prospectus for any sale of the Common Stock, it
will be subject to the prospectus delivery requirements of the Securities
Act.  The Selling Stockholders will be responsible to comply with the
applicable provisions of the Securities Act and Exchange Act, and the rules and
regulations thereunder promulgated, including, without limitation, Regulation M,
as applicable to such Selling Stockholders in connection with resales of their
respective shares under the Registration Statement.

     

    The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
and prior to the Effective Date for the Registration Statement.

     

    By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related
prospectus.  The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Registration Statement and the related prospectus.

     

    IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

     

    
      
        
          	 	Beneficial
      Owner:  	 
	 	 	 	 
	
                  Dated: _______________________________

                	
                  By:
      

                	 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

        

      

    

     

    
 

    PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

    Pillsbury
Winthrop Shaw Pittman LLP

    2300 N
Street, NW

    Washington,
D.C. 20037

    Facsimile:  (202)
663-8007

    Attn.:  Dawn
Bernd-Schulz, Esq.ex10_1.htm

  
    Exhibit 10.1

     

    
      NOTE EXCHANGE
AGREEMENT

       

      This Note
Exchange Agreement (this “Agreement”) is made
and entered into as of April 2, 2009, by and among (i) Sculptor Finance (MD)
Ireland Limited, Sculptor Finance (AS) Ireland Limited and Sculptor Finance (SI)
Ireland Limited (collectively, the “Existing
Noteholders”), (ii) OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and
OZ Global Special Investments Master Fund, L.P. (collectively, the “Existing Warrant
Holders,” and together with the Existing Noteholders, the “Holders”), and (iii)
Network CN Inc., a Delaware corporation (the “Company”).

       

      RECITALS

       

      WHEREAS,
each Existing Noteholder currently holds that principal amount of the 3% Senior
Secured Convertible Notes due June 30, 2011 of the Company set forth opposite
such Existing Noteholder’s name on Schedule A (the
“Old
Notes”);

       

      WHEREAS,
the Existing Warrant Holders currently hold warrants to purchase an aggregate of
34,285,715 shares of the Company’s common stock (the “Warrants”);

       

      WHEREAS,
in connection with the issuance of the Old Notes, the Company executed that
certain Note and Warrant Purchase Agreement, dated November 19, 2007, as amended
by the First Amendment to the Note and Warrant Purchase Agreement, dated as of
January 31, 2008, with the Holders and the other parties named therein (the
“Purchase
Agreement”) which provides that the Old Notes are secured by the security
interests provided in the Offshore Security Documents and Onshore Security
Documents (as defined in the Purchase Agreement) (“Security Interests
I”).

       

      WHEREAS,
in connection with the Purchase Agreement, the Company executed that certain
Security Agreement, dated January 31, 2008, with Sculptor Finance (MD) Ireland
Limited, as the collateral Agent (the “Collateral Agent”)
for and representative of the Holders (the “Security Agreement”),
pursuant to which the Company granted a security interest to the Holders in the
Collaterals (as defined in the Security Agreement) (“Security Interests
II,” and together with Security Interests I, the “Security
Interests”);

       

      WHEREAS,
the Holders desire to cancel the Warrants and exchange the Old Notes for the
Company’s 1% Unsecured Senior Convertible Notes due 2012 (the “New Notes”), on the
terms and conditions set forth in this Agreement (the “Exchange”);

       

      WHEREAS,
the Company desires to issue to the Existing Noteholders that principal amount
of New Notes in exchange for the Old Notes in the Exchange in the amount set
forth on Schedule A;

       

      WHEREAS,
the Company desires to cancel the Warrants and issue to the Existing Noteholders
the New Notes in exchange for the Old Notes;

       

      WHEREAS,
the board of directors of the Company has authorized the issuance of the New
Notes substantially in the form of Exhibit A
hereto;

       

      WHEREAS,
in connection with the Exchange, the Holders have agreed to release the
Securities Interests and terminate the Security Agreement;

       

      WHEREAS,
the Existing Noteholders agreed to sell a portion of the 3% Senior Secured
Convertible Notes Due June 30, 2011 held by them (the “Sale Convertible
Notes”) to Keywin Holdings Limited (the “New Investor”)
pursuant to that certain Note Purchase Agreement, of even date herewith, by and
between the Existing Noteholders and the New Investor (the “Note Purchase
Agreement”);

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      WHEREAS,
in connection with the Exchange and the sale of the Sale Convertible Notes, the
Company and the New Investor will enter into the Note Exchange and Option
Agreement pursuant to which the Sale Convertible Notes will be exchanged for
307,035,463 shares of the Company’s common stock and the Company will grant the
New Investor an option to purchase an aggregate of 122,814,185 shares of the
Company’s common stock (the “Option”) for an
aggregate purchase price of $2,000,000 (the “Note Exchange and Option
Agreement”);

       

      WHEREAS,
in connection with the issuance of the New Notes, the Company will agree to
provide the Holders and the New Investor certain registration rights in respect
of the Company’s common stock issuable upon conversion of the New Notes pursuant
to the Amended and Restated Registration Rights Agreement, to be entered into by
the Company, the Holders and the New Investor, substantially in the form of
Exhibit B
hereto (the “Registration Rights
Agreement”); and

       

      WHEREAS,
in connection with the issuance of the New Notes the Company will agree to
provide the Holders certain investor’s rights pursuant to the Letter Agreement,
to be entered into by the Company, the Holders and the New Investor,
substantially in the form of Exhibit C hereto
(the “Letter
Agreement,” together with this Agreement, the Note Purchase Agreement,
the Registration Rights Agreement, the Note Exchange and Option Agreement and
the New Notes, the “Transaction
Documents”).

       

      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

      Exchange

       

      Section
1.1 Exchange and Sale of the New
Notes.  Upon the terms and subject to the conditions of this
Agreement, at the Closing (as defined herein), the Company shall issue and
exchange, subject to Section 1.2 hereof, to the Existing Noteholders, and
the Existing Noteholders agree to accept from the Company, that aggregate
principal amount of New Notes set forth in Schedule A in
exchange for that aggregate principal amount of Old Notes set forth in Schedule A,
together with all accrued and unpaid interest thereon.

       

      Section
1.2 Cancellation of Old
Notes.  Pursuant to the Old Notes and the Purchase Agreement,
each Existing Noteholder hereby agrees that such Existing Noteholder’s Old Notes
shall be cancelled in connection with the Exchange and all of the Company’s
obligations thereunder shall be deemed to have been satisfied.

       

      Section
1.3 Release of Security
Interests. Subject to the completion of the sale and exchange of the New
Notes, pursuant to Section 1.1 hereof, each Holder hereby agrees that the
Security Agreement is terminated and the Security Interests and any other
security interests arising out of the Purchase Agreement and the Old Notes shall
be released and discharged.  Each Holder hereby releases and reconveys
to the Company, without recourse, any and all of its right, title, claim and
interest in and to the Collaterals, provided, however, that the
Company shall bear all expenses in connection with such
release.  

       

      Section
1.4 Cancellation of
Warrants.  Each Existing Warrant Holder hereby agrees that such
Existing Warrant Holder’s Warrants shall be cancelled in connection with the
Exchange and all of the Company’s obligations thereunder shall be deemed to have
been satisfied.

       

      Section
1.5 Regulation
S.  The issuance of the New Notes to Existing Noteholders will
be made without registration of the New Notes under the Securities Act of 1933,
as amended (together with the rules and regulations promulgated thereunder, the
“Securities
Act”), in reliance upon the exemption therefrom provided by Regulation S
promulgated under the Securities Act (the “Regulation S”) and in
reliance on similar exemptions under state securities or “blue sky”
laws.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      Section
1.6 Closing
Mechanics.  The closing of the transactions contemplated by
this Agreement shall occur at the offices of Pillsbury Winthrop Shaw Pittman
LLP, 2300 N Street, N.W., Washington, D.C., or such other location as may be
mutually acceptable at 9:00 a.m., Eastern Standard Time, on the date hereof
or at such other time on the same date or such other date as the parties may
agree in writing (such time and date, the “Closing
Date”).  On the Closing Date, the Company shall issue New Notes
to each Existing Noteholder in the amounts set forth on Schedule A
attached hereto.

       

      Section
1.7 Conditions to
Closing.

       

      (a) The
obligation of the Holders hereunder to consummate the transactions contemplated
hereby at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for the Holders’ sole benefit and may be waived by the Holders at any time in
its sole discretion by providing the Company with prior written notice
thereof:

       

      (i) The
Company shall have executed and delivered the New Notes in the aggregate
principal amount set forth in Schedule A;

       

      (ii) The
Company and the New Investor shall have executed and delivered the Registration
Rights Agreement;

       

      (iii) The
Company and the New Investor shall have executed and delivered the Note Exchange
and Option Agreement;

       

      (iv) The New
Investor and the Existing Noteholders shall have executed and delivered the Note
Purchase Agreement;

       

      (v) The
Company and the New Investor shall have executed and delivered the Letter
Agreement;

       

      (vi) The
representations and warranties of the Company and the New Investor in each of
the Transaction Documents shall be true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the Closing Date
and the Company has complied in all material respects with all the agreements
and satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date; and

       

      (vii) The
Company shall have delivered the opinions of Pillsbury Winthrop Shaw Pittman
LLP, U.S. counsel to the Company, dated the Closing Date, in the form and
substance attached hereto as Exhibit
D;

       

      (b) The
obligation of the Company hereunder to consummate the transactions contemplated
hereby at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for the Company’s sole benefit and may be waived by the Company at any time in
its sole discretion by providing the Holders with prior written notice
thereof:

       

      (i) Each
Existing Noteholder and the New Investor shall have executed and delivered to
the Company the Registration Rights Agreement;

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (ii) The New
Investor shall have executed and delivered the Note Exchange and Option
Agreement;

       

      (iii) The New
Investor and the Existing Noteholders shall have executed and delivered the Note
Purchase Agreement;

       

      (iv) The
Existing Noteholders and the New Investor shall have executed and delivered the
Letter Agreement;

       

      (v) The
Existing Noteholders shall have delivered, or caused to be delivered, to the
Company (i) the Old Notes being exchanged pursuant to this Agreement and
(ii) all documentation related to the right, title and interest in and to
all of the Old Notes, and whatever documents of conveyance or transfer may be
necessary or reasonably desirable to transfer to and confirm in the Company all
right, title and interest in and to (free and clear of any mortgage, lien,
pledge, charge, security interest, encumbrance, title retention agreement,
option, equity or other adverse claim thereto) the Old Notes;

       

      (vi) The
Existing Warrant Holders shall have delivered, or caused to be delivered, to the
Company (i) the Warrants being cancelled pursuant to this Agreement and
(ii) all documentation related to the right, title and interest in and to
all of the Warrants, and whatever documents of conveyance or transfer may be
necessary or reasonably desirable to transfer to and confirm in the Company all
right, title and interest in and to (free and clear of any mortgage, lien,
pledge, charge, security interest, encumbrance, title retention agreement,
option, equity or other adverse claim thereto) the Warrants; and

       

      (vii) The
representations and warranties of each Holder in this Agreement shall be true
and correct in all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date and that the Holders shall have complied
in all material respects with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing
Date.

       

      ARTICLE
2

      Representations
and Warranties of the Holders

       

      Each
Holder hereby severally makes the following representations and warranties (it
being understood, however, that the Existing Warrant Holders are only making the
representations and warranties set forth in Sections 2.1 through 2.3 and the
Existing Noteholders are only making the representations and warranties set
forth in Sections 2.1 through 2.2 and Sections 2.4 through 2.8), each of which
is true and correct on the date hereof and the Closing Date and shall survive
the Closing Date and the transactions contemplated hereby to the extent set
forth herein.

       

      Section
2.1 Existence and Power.
The Holder 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
Holder, and the performance by the Holder 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 Holder, or (ii) conflict with
or violate any laws, judgments, orders or decrees applicable to the Holder 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.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      Section
2.3 Valid and Enforceable
Agreement; Authorization.  This Agreement has been duly
executed and delivered by the Holder and constitutes a legal, valid and binding
obligation of the Holder, enforceable against the Holder 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
2.4 Title to
Warrants.  The Existing Warrant Holder has good and valid title
to the Warrants in the aggregate principal amount set forth on Schedule B, free and
clear of any mortgage, lien, pledge, charge, security interest, encumbrance,
title retention agreement, option, equity or other adverse claim
thereto.  The Existing Warrant Holder has not, in whole or in part,
(i) assigned, transferred, hypothecated, pledged or otherwise disposed of
the Warrants or its rights in such Warrants, or (ii) given any person or
entity any transfer order, power of attorney or other authority of any nature
whatsoever with respect to such Warrants which would limit the Existing Warrant
Holder’s power to transfer the Warrants hereunder.

       

      Section
2.5 Title to Old
Notes.  The Existing Noteholder has good and valid title to the
Old Notes in the aggregate principal amount set forth on Schedule A, free and
clear of any mortgage, lien, pledge, charge, security interest, encumbrance,
title retention agreement, option, equity or other adverse claim
thereto.  The Existing Noteholder has not, in whole or in part,
(i) assigned, transferred, hypothecated, pledged or otherwise disposed of
the Old Notes or its rights in such Old Notes, or (ii) given any person or
entity any transfer order, power of attorney or other authority of any nature
whatsoever with respect to such Old Notes which would limit the Existing
Noteholder’s power to transfer the Old Notes hereunder.

       

      Section
2.6 Regulation S
Representations.

       

      (a) The
Existing Noteholder and the person(s), if any, for whose account it is acquiring
New Notes and the shares of the Company’s common stock underlying the New Notes
(the “Underlying
Common Stock,” and together with the New Notes, the “Securities”) is not a
“U.S. Person” (as defined in Rule 902 of Regulation S) and the Existing
Noteholder is purchasing the Securities outside the United States in an offshore
transaction meeting the requirements of Regulation S.

       

      (b) The
Existing Noteholder acknowledges that the Securities are “restricted securities”
as defined in Rule 144 under the Securities Act and have not been and will not
be registered under the Securities Act, or any other law of the U.S. or any
other jurisdiction thereof, and accordingly may not be offered or sold or
otherwise transferred in the United States or to, or for the account or benefit
of, U.S. Persons unless registered or an exemption from registration is
available.

       

      (c) The
Existing Noteholder acknowledges that it is not subscribing pursuant hereto for
Securities as a result of or pursuant to any “general solicitation or
general advertising” (as
those terms are used in Regulation D under the 1933 Act), including, but not
limited to (i) any advertisement, article, notice or other communications
published in any newspaper, magazine or similar media (including any internet
site whose information about the Company is not password protected) or broadcast
over television or radio, or (ii) any seminar or meeting whose attendees,
including the Existing Noteholder, had been invited as a result of, subsequent
to or pursuant to any of the foregoing.

       

      (d) The
Securities to be acquired by the Existing Noteholder shall be acquired for
investment for the Existing Noteholder’s own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, and that
the Existing Noteholder has no present intention of selling, granting any
participation in, or otherwise distributing the same.  The Existing
Noteholder does not presently have any contract, undertaking, agreement or
arrangement with any Person to sell, transfer or grant participations to such
Person or to any third Person, with respect to any of the
Securities.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      (e) The
Existing Noteholder will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit any offers to buy, purchase or
otherwise acquire or take a pledge of) any of the Securities except in
compliance with the Securities Act, applicable state securities laws and the
respective rules and regulations promulgated thereunder.

       

      (f) The
Existing Noteholder is, and each account for which it is purchasing is, an
“accredited investor” as defined in Rule 501 of Regulation D under the
Securities Act.

       

      (g) The
Existing Noteholder has the knowledge, sophistication and experience necessary
to make, and is qualified to make decisions with respect to, investments in
shares presenting an investment decision like that involved in the purchase of
the securities, including investments in Securities issued by the Company and
investments in comparable companies, can bear the economic risk of a total loss
of its investment in the Securities and has requested, received, reviewed and
considered all information it deemed relevant in making an informed decision to
purchase the Securities.

       

      (h) The
Existing Noteholder understands that the Securities are being offered and sold
to it in reliance on specific exemptions from the registration requirements of
the United States federal and state securities laws and that the Company is
relying upon the truth and accuracy of, and the Existing Noteholder’s compliance
with, representations, warranties and agreements of the Existing Noteholder set
forth herein in order to determine the availability of such exemptions and the
eligibility of the Existing Noteholder to acquire the Securities.

       

      Section
2.7 Legends.  Each
Existing Noteholder understands that the Securities will bear the following
legend (in addition to any legend required under applicable state securities
laws), and the removal of such legend(s) shall be governed by the terms of such
legend(s):

       

      THIS
SECURITY HAS 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) DELIVERY TO THE COMPANY OF 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.

      

      Section
2.8 Tax
Advice.  Each Existing Noteholder acknowledges that (i)
purchasing, holding and disposing of the Securities may have tax consequences
under the laws of the United States, (ii) the tax consequences are not described
in this Agreement, and (iii) it is solely the Existing Noteholder’s responsible
for determining the tax consequences applicable to its particular circumstances
and should consult its own tax advisors concerning investment in such
securities.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      ARTICLE
3

      Representations,
Warranties and Covenants of the Company

       

      The
Company hereby makes the following representations, warranties, and covenants
each of which is true and correct on the date hereof and the Closing Date and
shall survive the date of the Closing and the transactions contemplated hereby
to the extent set forth herein.

       

      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 (b) 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 No
Conflict.  The execution of this Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby
(i) does not require the consent, approval, authorization, order,
registration or qualification of, or filing with, any governmental authority or
court, or body or arbitrator having jurisdiction over the Company other than as
contemplated in or by the Transaction Documents and state securities regulators;
and (ii) does not and will not constitute or result in a breach, violation
or default under any note, bond, mortgage, deed, indenture, lien, instrument,
contract, agreement, lease or license, whether written or oral, express or
implied, or with the Company’s Certificate of Incorporation or by-laws, or any
statute, law, ordinance, decree, order, injunction, rule, directive, judgment or
regulation of any court, administrative or regulatory body, governmental
authority, arbitrator, mediator or similar body on the part of the Company or on
the part of any other party thereto or cause the acceleration or termination of
any obligation or right of the Company or any other party thereto, except, in
the case of clause (ii) for such breaches, violations or defaults which
would not reasonably be expected to, singly or in the aggregate, result in a
Material Adverse Effect (as defined above).

       

      Section
3.3 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
3.4 Valid Issuance of the New
Notes.  The New Notes, 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, applicable state and federal securities laws and liens or
encumbrances created by or imposed by the Holder, 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.  Assuming the
accuracy of the Holders’ representations in Section 2.6 above, the New Notes
will be issued in compliance with applicable U.S. state and federal securities
laws.  The conversion rights attached to the New Notes will provide
for the right to convert the New Notes into 214,924,824 shares of the Company’s
common stock (subject to subdivision or consolidation therefore) at an initial
conversion price of US$0.02326, as calculated immediately following the Closing.
Assuming full conversion of the New Notes on the Closing Date, the shares of the
Company’s common stock issuable in respect of the New Notes shall represent 30%
of the fully-diluted share capital of the Company as of the Closing Date (after
giving effect to the consummation of the transactions contemplated under the
Note Exchange and Option Agreement, including the exercise of the Option by the
New Investor, and the issuance of any shares under any stock option or
restricted stock plan of the Company).  The Underlying Common Stock
has been duly reserved for issuance, and upon issuance in accordance with the
terms of the New Notes 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 Holder.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      Section
3.5 No Directed
Selling.  Neither the Company nor any of its affiliates, nor
any person acting on its behalf or their behalf, directly or indirectly, (i) has
used or will use any form of “directed selling efforts” (as defined in Rule 902
of Regulation S), general solicitation or general advertising in violation of
the Securities Act or made any offer by means of any directed selling efforts in
the United States in connection with the offer and sale of any of the New Notes,
or (ii) offered or solicited offers to buy or sell the New Notes by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.

       

      ARTICLE
4

      Miscellaneous
Provisions

       

      Section
4.1 Survival of Representations
and Warranties.  The agreements of the Company, as set forth
herein, and the respective representations and warranties of the Holders and the
Company as set forth herein in Sections 2 and 3, respectively, shall
survive the Closing Date.

       

      Section
4.2 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 Securities
Exchange Commission (“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
4.3 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 an
Existing Warrant Holder, at its address, as follows:

       

      c/o Och-Ziff Capital Management
Group

      9 West 57th St., 13th
Floor

      New York,
NY  10019

      Fax: +1-212-790-0077

      Attention: Joel Frank

      

      (b) if to an
Existing Noteholder, at , at its address, as follows:

       

      5 Harbourmaster Place,
IFSC

      Dublin 1, Ireland

      Fax: +353-1-6806050

      Attention: The Directors

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      

      with a copy to:

      c/o Och-Ziff Capital Management HK
Ltd

      Suite 2003A Cheung Kong
Center

      2 Queen’s Road Central

      Hong Kong S.A.R.

      Fax: +852-2297-0818

      Attention: Zoltan Varga and David C.
Zeiden

      

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

       

      Network
CN Inc.

      21F,
Chinachem Century Tower,

      178
Gloucester Road,

      Wanchai,
Hong Kong

      Tel:
(852) 2833-2186

      Fax:
(852) 2295-6977

      Attention:
Daley Mok

      

      with a copy to:

       

      Pillsbury
Winthrop Shaw Pittman LLP

      50
Fremont Street

      San
Francisco, CA 94105

      Attention:  Scott
Kline, Esq.

       

      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
4.4 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.

       

      Section
4.5 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
4.6 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
4.7 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.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      Section
4.8 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
4.9 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
4.10 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
4.11 No
Broker.  Except as set forth in Schedule 4.11 hereto,
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
4.12 Further
Assurances.  The Holders 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.

       

      Section
4.13 Costs and
Expenses.  The Holders 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; provided, however, that the Company
will pay the Holders’ legal expenses incurred in connection with the
negotiation, preparation, execution and performance of the Transaction Documents
in an amount not to exceed US$50,000.

       

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

       

      Section
4.15 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.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

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

       

       

      
        
          
            
              
                	 	HOLDERS:	 
	 	 	 
	 	SCULPTOR
      FINANCE (MD) IRELAND LIMITED	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/ Carmel
      Naughton  	 
	 	Name:
       	Carmel
      Naughton	 
	 	Title:	Director	 

              

            

          

           

           

        

      

    

    
      
        
          
            	 	SCULPTOR
      FINANCE (AS) IRELAND LIMITED	 
	 	 	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ Jennifer
      Coyne  	 
	 	Name: 
      	Jennifer
      Coyne	 
	 	Title:	Director	 

          

        

      

    

     

     

    
      
        
          
            	 	SCULPTOR
      FINANCE (SI) IRELAND LIMITED	 
	 	 	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ Carmel
      Naughton  	 
	 	Name:
      	Carmel
      Naughton	 
	 	Title: 	Director	 

          

        

      

    

     

    
      [Signature pages continued on next
page.]

       

       

       

       

       

       

       

       

       

       

       

      
        [Signature
Page to Note Exchange Agreement]

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              
                	 	OZ
      MASTER FUND, LTD.	 
	 	 	 
	 	By:
      OZ Management LP, its Investment Manager	 
	 	By:
      Och-Ziff Holding Corporation, its General Partner	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/ Joel
      Frank 	 
	 	Name: 
      	Joel
      Frank	 
	 	Title:
      	CFO	 

              

            

          

        

      

       

      

        
          
            
              
                
                  	 	OZ
      ASIA MASTER FUND, LTD.	 
	 	 	 
	 	By:
      OZ Management LP, its Investment Manager	 
	 	By:
      Och-Ziff Holding Corporation, its General Partner	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/ Joel
      Frank	 
	 	Name:
      	Joel
      Frank	 
	 	Title:	CFO	 

                

              

            

          

        

      

       

       

      
        
          
            
              
                
                  
                    	 	OZ
      GLOBAL SPECIAL INVESTMENTS MASTER FUND, L.P.
	 	 	 
	 	By:
      OZ Advisors II LP, its General Partner	 
	 	By:
      Och-Ziff Holding LLC, its General Partner	 
	 	 	 	 
	
                             

                          	
                            By:
      

                          	/s/ Joel
      Frank    	 
	 	Name: 
      	Joel
      Frank	 
	 	Title:	CFO	 

                  

                

              

            

          

        

      

       

       

      [Signature
pages continued on next page.]

       

       

       

       

       

       

       

       

       

       

       

       

       

      [Signature
Page to Note Exchange Agreement]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          
            	 	NETWORK
      CN INC.	 
	 	 	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ Godfrey
      Hui    	 
	 	Name:  
      	Godfrey
      Hui	 
	 	Title:
      	Chief
      Executive Officer	 
	 	 	 	 

          

        

      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

    [Signature
Page to Note Exchange Agreement]

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Schedule A

       

      

       

      
        
          
            	
                    Existing
      Noteholder Name

                  	
                    Aggregate
      Principal 

                    Amount

                    of
      Old Notes

                  	
                    Aggregate
      Principal 

                    Amount

                    of
      New Notes

                  
	
                    Sculptor
      Finance (MD) Ireland Limited

                  	
                    $2,243,000

                  	
                    $2,243,000

                  
	
                    Sculptor
      Finance (AS) Ireland Limited

                  	
                    $2,111,000

                  	
                    $2,111,000

                  
	
                    Sculptor
      Finance (SI) Ireland Limited

                  	
                    $646,000

                  	
                    $646,000

                  
	
                    TOTAL

                  	
                    $5,000,000

                  	
                    $5,000,000

                  

          

        

      

       

       

       

       

       

       

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Schedule B

       

      

       

      
        
          
            	
                    Name
      of Existing Warrant Holder

                  	
                    Aggregate
      Principal Amount of Warrants

                  
	
                    OZ
      Master Fund, Ltd.

                  	
                    15,377,143

                  
	
                    OZ
      Asia Master Fund, Ltd.

                  	
                    14,475,429

                  
	
                    OZ
      Global Special Investments Master Fund, L.P.

                  	
                    4,433,143

                  
	
                    TOTAL

                  	
                    34,285,715

                  

          

        

      

      

       

      

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT A

       

      Form of New
Notes

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
B

       

      Form of Registration Rights
Agreement

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
C

       

      Form of Letter
Agreement

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT D

       

      Form of
Opinion

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