NETWORK CN INC (Form: 8-K, Received: 11/26/2007 12:57:07)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________

FORM 8-K

___________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 19, 2007

___________________

NETWORK CN INC.

(Exact Name of Registrant as Specified in Charter)

___________________

State of Delaware

(State or Other Jurisdiction

of Incorporation)

000-30264

(Commission File Number)

11-3177042

(I.R.S. Employer Identification No.)

21/F, Chinachem Century Tower

178 Gloucester Road

Wanchai, Hong Kong

(Address of Principal Executive Offices)

(852) 2833-2186

(Registrant’s telephone number, including area code)

□ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

□ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

□ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

□ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

On November 19, 2007, Network CN Inc. (the “Company”), Shanghai Quo Advertising Company Limited, a limited liability company and subsidiary of the Company (“Quo”) and the Designated Holders (as defined in the Purchase Agreement), entered into a Note and Warrant Purchase Agreement (the “Purchase Agreement”) with affiliated investment funds of Och-Ziff Capital Management Group (the “Investors”). Pursuant to the Purchase Agreement, the Company agreed to issue 3% Senior Secured Convertible Notes due June 30, 2011 in the aggregate principal amount of up to US$50,000,000 (the “Convertible Notes”) and warrants to acquire an aggregate amount of 34,285,715 shares of Common Stock of the Company (the “Warrants”). The Convertible Notes and Warrants are issuable in three tranches, with Convertible Notes in the aggregate principal amount of US$6,000,000, Warrants exercisable for 2,400,000 shares at $2.50 per share and Warrants exercisable for 1,714,285 shares at $3.50 per share, to be issued in the first tranche, Convertible Notes in the aggregate principal amount of US$9,000,000, Warrants exercisable for 3,600,000 shares at $2.50 per share and Warrants exercisable for 2,571,430 shares at $3.50 per share to be issued in the second tranche, and Convertible Notes in the aggregate principal amount of US$35,000,000, Warrants exercisable for 14,000,000 shares at $2.50 per share and Warrants exercisable for 10,000,000 shares at $3.50 per share to be issued in the third tranche, in each case, subject to the satisfaction or waiver of certain conditions of closing described in the Purchase Agreement. Forms of the Purchase Agreement, the Convertible Notes, and the Warrants are attached hereto as Exhibits 99.1-99.3.

The Convertible Notes will bear interest at 3% per annum payable semi-annually in arrears and mature on June 30, 2011. The Convertible Notes are convertible into shares of Common Stock at an initial conversion price of $1.65 per share, subject to customary anti-dilution adjustments. In addition, the conversion price will be adjusted downward on an annual basis if the Company should fail to meet certain annual earnings per share (“EPS”) targets described in the Convertible Notes. In the event of a default, or if the Company’s actual EPS for any fiscal year is less than 80% of the respective EPS target, certain of the Investors may require the Company to redeem the Convertible Notes at 100% of the principal amount, plus any accrued and unpaid interest, plus an amount representing a 20% internal rate of return on the then outstanding principal amount. The Warrants grant the holders the right to acquire shares of Common Stock at $2.50 and $3.50 per share, subject to customary anti-dilution adjustments. The exercise price of the Warrants will also be adjusted downward whenever the conversion price of the Convertible Notes is adjusted downward in accordance with the provisions of the Convertible Notes.

As a condition to the third closing, the Company will enter into various security agreements with certain of the Investors which will grant a first priority security interest in certain assets of the Company and its subsidiaries in favor of certain of the Investors.

In connection with the Purchase Agreement, the Company and the Investors entered into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed to register the shares of Common Stock issuable to the Investors, as applicable, upon the conversion of the Convertible Notes (the “Conversion Shares”) and exercise of the Warrants (the “Warrant Shares”) on a shelf registration statement on Form S-3 or such other form of registration statement available to the Company. The Company has also agreed to file additional registration statements under certain circumstances. The Registration Rights Agreement also provides for the payment of partial liquidated damages to the Investors under certain circumstances including the failure by the Company to file or obtain or maintain the effectiveness of the shelf registration statement as required under the Registration Rights Agreement. The Investors were also granted piggy-back registration rights pursuant to the Registration Rights Agreement. The registration rights granted under the Registration Rights Agreement are subject to customary exceptions and qualifications and compliance with certain registration procedures. A copy of the Registration Rights Agreement is attached hereto as Exhibit 99.4.

The foregoing descriptions do not purport to be a complete description of the terms of the documents, and this description is qualified in its entirety by the terms of the definitive documents or forms thereof which are attached as exhibits to this Current Report on Form 8-K, and which are incorporated by reference.

A press release dated November 26, 2007 describing the completion of the refinancing transaction is attached to this Form 8-K as Exhibit 99.5.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The description of the issuance and terms of the Convertible Notes and the Warrants and the entering into of the related security arrangements under the security documents is set forth above in Item 1.01 and is hereby incorporated by reference into this Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities

The description of the issuance and terms of the Convertible Notes and the Warrants and the entering into of the related arrangement and agreements is set forth above in Item 1.01 and is hereby incorporated by reference into this Item 3.02.

The issuance of the Convertible Notes and the Warrants was done in reliance on Regulation S of the Securities Act of 1933, as amended. As discussed above, the Conversion Shares and the Warrant Shares are entitled to certain registration rights pursuant to the Registration Rights Agreement.

Item 9.01 Financial Statements and Exhibits

(d) The following exhibits are filed as part of this report:

Number	Exhibit
99.1	Purchase Agreement, dated November 19, 2007, among the Company, Quo, the Designated Holders and the Investors
99.2	Form of Convertible Note
99.3	Form of Warrant
99.4	Registration Rights Agreement, dated November 19, 2007, between the Company and the Investors
99.5	Press release of the Company dated November 26, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 26, 2007

NETWORK CN INC.

(Registrant)

By: /s/ Daley Mok

Name: Daley Mok

Title: Chief Financial Officer and Secretary

EXHIBIT INDEX

Number	Exhibit
99.1	Purchase Agreement, dated November 19, 2007, among the Company, Quo, the Designated Holders and the Investors
99.2	Form of Convertible Note
99.3	Form of Warrant
99.4	Registration Rights Agreement, dated November 19, 2007, between the Company and the Investors
99.5	Press release of the Company dated November 26, 2007

Exhibit 99.1

EXECUTION VERSION

NOTE AND WARRANT PURCHASE AGREEMENT

by and among

NETWORK CN INC.

as the Company

SHANGHAI QUO ADVERTISING COMPANY LIMITED

as Quo

LINA ZHANG

QINXIU ZHANG

as the Designated Holders

AND

SCULPTOR FINANCE (MD) IRELAND LIMITED

SCULPTOR FINANCE (AS) IRELAND LIMITED

SCULPTOR FINANCE (SI) IRELAND LIMITED

OZ MASTER FUND, LTD.

OZ ASIA MASTER FUND, LTD.

OZ GLOBAL SPECIAL INVESTMENTS MASTER FUND, L.P.

as the Investors

Dated: November 19, 2007

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

This Note and Warrant Purchase Agreement (this “ Agreement ”) is dated as of November 19, 2007, by and between Network CN Inc., a Delaware corporation (the “ Company ”), Shanghai Quo Advertising Company Limited, a limited liability company, incorporated under the laws of PRC (“ Quo ”), the Designated Holders (as defined below) and the Investors (as defined below).

WHEREAS, the Company proposes to issue to the Investors (i) at the First Closing, the Company’s 3% Senior Secured Convertible Notes due June 30, 2011 in the aggregate principal amount of US$6,000,000 (the “ First Note ”), (ii) at the Second Closing, the Company’s 3% Senior Secured Convertible Notes due June 30, 2011 in the aggregate principal amount of US$9,000,000 (the “ Second Note ”), and (iii) at the Third Closing, the Company’s 3% Senior Secured Convertible Notes due June 30, 2011 in the aggregate principal amount of US$35,000,000 (the “ Third Note ”, together with the First Note and the Second Note, the “ Notes ”), each in substantially the form attached hereto as Exhibit A . The Notes shall be convertible into Common Stock at the option of the Investors on the terms stated therein. The shares of Common Stock issuable upon conversion of the Notes are referred to herein as “ Conversion Shares ”.

WHEREAS, concurrently with the purchase of the Notes, the Company proposes to issue to Investors, at each Closing, certain warrants to purchase shares of Common Stock of the Company, in each case, in substantially the form attached hereto as Exhibit B (each, a “ Warrant ” and collectively, the “ Warrants ”). The Warrants shall be exercisable for Common Stock at the option of the Investors on the terms stated therein. The shares of Common Stock issuable upon exercise of the Warrants are referred to herein as “ Warrant Shares ”.

WHEREAS, concurrently with the execution of this Agreement, the Company shall enter into * with * to * in *.

WHEREAS, following *, * will * of * and * will enter into * with * and *.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions

For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires the following terms shall have the meanings set forth below. Defined terms used but not otherwise defined herein shall have the meanings given to such terms in the other Sections of this Agreement or the Notes.

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

“ Affiliate ” of any specified Person means:

(a)

any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person, or

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

(b)

any other Person who is a director or officer of:

(1)

such specified Person,

(2)

any Subsidiary of such specified Person, or

(3)

any Person described in clause (a) above.

For the purposes of this definition, “control” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ * ” has the meaning given in the recitals.

“ Agreement ” has the meaning given in the recitals.

“ Applicable Agreements ” has the meaning given in Section 6(i).

“ Applicable Law ” has the meaning given in Section 6(i).

“ Basic Bank Account ” means the account of * to be established after the * with a nationally recognized banking institution (including any renewal or re-designation thereof).

“ Bloompoint Lock-up Agreement ” means the lock-up agreement dated the Closing Date by and between the Company and Bloompoint Investment Limited, a form of which is attached hereto as Exhibit H .

“ Bloompoint Waiver ” means the waiver of registration rights signed by Bloompoint Investment Limited and acknowledged by the Company on or prior to the Closing Date, a form of which is attached hereto as Exhibit I .

“ * ”

“ Business Day ” means a day, excluding a Saturday, Sunday, legal holiday or other days on which banks are required to be closed in the PRC, Hong Kong or New York.

“ Capital Lease ” means as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person.

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

“ Capital Stock ” means, with respect to any Person, any shares or other equivalents (however designated) of any class of corporate stock or partnership interests or any other participations, rights, warrants, options or other interests in the nature of an equity interest in such Person, including preferred stock, but excluding any debt security convertible or exchangeable into such equity interest.

“ Charter Documents ” has the meaning given in Section 6(i).

“ * ” has the meaning given in the recitals.

“ Closing ” has the meaning given in Section 5(c).

“ Closing Date ” means the date of the Initial Closing, Second Closing or the Third Closing, as applicable.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Commission ” means the Securities and Exchange Commission.

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

“ Company ” has the meaning given in the recitals.

“ Concession Advertising Rights Agreements ” means the agreements listed in Schedule I that have been or will be signed between the Intermediate Companies and the PRC Operating Companies.

“ Concession Advertising Rights ” means the permits for advertising granted to Intermediate Companies as listed in Schedule II for conducting Outdoor LED and other forms of outdoor advertisement business.

“ Conversion Shares ” has the meaning given in the recitals.

“ Debt ” as applied to any Person, means (i) all indebtedness for borrowed money, (ii) that portion of obligations with respect to Capital Leases which is properly classified as a liability on a balance sheet in conformity with GAAP, (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money, (iv) any obligation owed for all or any part of the deferred purchase price of property or services which purchase price is (y) due more than six months from the date of incurrence of the obligation in respect thereof, or (z) evidenced by a note or similar written instrument and (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that person.

“ Designated Holders ” means Lina Zhang and Qinxiu Zhang, the holders of 100% of the equity interests in Quo.

“ Disclosure Schedule ” has the meaning given in Section 6.

“ Environmental Laws ” has the meaning given in Section 6(cc).

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ First Note ” has the meaning given in the recitals.

“ First Note Purchase Price ” has the meaning given in Section 3(a).

“ Foreign Official ” has the meaning given in Section 6(ee).

“ Fully-Diluted ” has the meaning given in Section 6(d)(ii).

“ GAAP ” has the meaning given in Section 6(t)(i).

“ Governmental Authority ” has the meaning given in Section 6(i).

“ Group Companies ” means (i) prior to the *, the Company, its Subsidiaries and the PRC Operating Companies, and (ii) after giving effect to the *, the Company, its Subsidiaries (including * and *) and the PRC Operating Companies.

“ Joinder to the Purchase Agreement ” has the meaning given in Section 9(c).

“ Indemnified Party ” has the meaning given in Section 10(a).

“ Indemnifying Party ” has the meaning given in Section 10(a).

“ Initial Closing ” has the meaning given in Section 5(a).

“ Intellectual Property ” has the meaning given in Section 6(r)(i).

“ Intermediate Companies ” means the companies listed in Schedule III with whom the PRC Operating Companies have entered into or will enter into agreements to use the Concession Advertising Rights granted under the Concession Advertising Rights Agreements.

“ Investors ” means (i) Sculptor Finance (MD) Ireland Limited, Sculptor Finance (AS) Ireland Limited and Sculptor Finance (SI) Ireland Limited with respect to the Notes and the Conversion Shares issued upon conversion thereof and (ii) OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund, L.P with respect to the Warrants and the Warrant Shares issued upon exercise thereof.

“Investor Rights Agreement ” means the investor rights agreement dated the Closing Date by and among the Company, the Shareholders (as defined therein) and the Investors, a form of which is attached hereto as Exhibit C .

“ * ” has the meaning given in the recitals.

“ Lien ” means a mortgage, charge, pledge, lien, hypothecation or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

“ Management Lock-up Agreement ” means the lock-up agreement dated the Closing Date by and among the Company, Godfrey Hui, Daley Mok, Daniel So, William Lee, Benedict Fung and Stanley Chu, a form of which is attached hereto as Exhibit J .

“ Material Adverse Change ” has the meaning given in Section 6(t)(ii).

“ Material Adverse Effect ” means a material adverse effect on:

(a) the business, management, operations, property, earnings, assets, regulatory status, liabilities or condition (financial or otherwise) of the Group Companies taken as a whole;

(b) the ability of the Group Companies to perform their material obligations under the Transaction Documents; or

(c) the validity or enforceability of the Transaction Documents or the rights and remedies of any holder of the Securities under the Securities.

“Material Contract” means (i) all the Concession Advertising Rights Agreements listed in Schedule I attached hereto, (ii) any contract filed as an exhibit to the SEC Reports, (iii) any Restructuring Documents, including but not limited to the Structure Agreements, (iv) any contract for the furnishing of services or products to or by any Group Company pursuant to which such Group Company is likely to pay to another Person or receive from another Person more than US$1,000,000 in the aggregate, (v) any contract that is a material joint venture, partnership or other agreement (however named) involving a sharing of profits, losses, costs, or liabilities; (vi) any related party transaction among the Group Companies or among the Group Companies and their Affiliates; or (vii) any contract containing covenants that purport to restrict the business activity of any Group Company, or limit in any material respect the freedom of any Group Company to engage in any line of business that it is currently engaged in or proposes to engage in, to compete in any material respect with any entity or to obligate in any material respect any Group Company to share, license or develop any product or technology.

“ Money Laundering Laws ” has the meaning given in Section 6(kk).

“ Most Recent Balance Sheet ” has the meaning given in Section 6(t).

“ Non-Competition Agreements ” means (i) a non-competition agreement dated as of the Closing Date between Godfrey Hui and the Company, (ii) a non-competition agreement dated as of the Closing Date between Daley Mok and the Company (iii) a non-competition agreement dated as of the Closing Date between Daniel So and the Company, (iv) a non-competition agreement dated as of the Closing Date between Stanley Chu and the Company, (v) a non-competition agreement dated as of the Closing Date between William Lee and the Company, and (vi) a non-competition agreement dated as of the Closing Date between Benedict Fung and the Company, each in substantially the form attached hereto as Exhibit D .

“ Notes ” has the meaning given in the recitals.

“ Note and Warrant Purchase Amount ” has the meaning given in the recitals.

“ OFAC ” has the meaning given in Section 6(jj).

“ Offshore Security Documents ” means the security documents listed in Exhibit E attached hereto in form and substance satisfactory to the Investors.

“ Onshore Security Documents ” means the security documents listed in Exhibit F attached hereto in form and substance satisfactory to the Investors.

“ Outside Financing ” has the meaning given in Section 7(l).

“ Permits ” has the meaning given in Section 6(n).

“ Person ” means any individual, corporation, company (including any limited liability company), association, partnership, joint venture, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“ PFIC ” has the meaning given in Section 6(ii).

“ PRC ” means the People’s Republic of China, not including Taiwan, Hong Kong and Macau.

“ PRC Operating Companies ” means Quo, *, and *.

“ PRC Transfer Transactions ” has the meaning given in the recitals.

“ Preferred Stock ” means shares of preferred stock of the Company, par value US$0.001 per share.

“ Proceedings ” has the meaning given in Section 6(m).

“ Proposal ” has the meaning given in Section 7(bb).

“ Quo ” has the meaning given in the recitals.

“ Registration Rights Agreement ” means a registration rights agreement dated as of the Closing Date between the Company and the Investors, a form of which is attached hereto as Exhibit G .

“Regulation S” has the meaning given in Section 3(e).

“ Restructuring Documents ” means the documents evidencing the * and PRC Transfer Transaction, including but not limited to the Structure Agreements.

“ SEC Reports ” has the meaning given in Section 6(a)(i).

“ Second Closing ” has the meaning given in Section 5(b).

“ Second Note ” has the meaning given in the recitals.

“ Second Note Purchase Price ” has the meaning given in Section 5(b).

“ Securities ” means, collectively, the Notes, the Conversion Shares, the Warrants and the Warrant Shares.

“ Security Documents ” means the Offshore Security Documents and the Onshore Security Documents.

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

“ Shareholder Loan ” means loans provided by * to *in the amount up to * or such other maximum amount as permitted under PRC law.

“ Subsidiary ” means, (i) in respect of any Person, any corporation, company (including any limited liability company), association, partnership, joint venture or other business entity of which at least a majority of the total voting power of the voting stock is at the time owned or controlled, directly or indirectly, by:

(a) such Person,

(b) such Person and one or more Subsidiaries of such Person, or

and (ii) in respect of the Company, this includes any corporation, company (including any limited liability company), association, partnership, joint venture or other business entity from time to time organized and

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

existing under the laws of the PRC whose financial reporting is consolidated with the Company in any audited financial statements filed by the Company with the Commission in accordance with the Exchange Act.

“ Structure Agreements ” means * entered into by * and the PRC Operating Companies on or prior to the Third Closing which shall enable the Company to exclusively control and consolidate the PRC Operating Companies in its financial statements. Structure Agreements shall include, among other things, exclusive business cooperation agreements, equity pledge agreements, call option agreements, and proxy agreements, each such agreements shall be in a form and substance satisfactory to the Investors.

“ T3 Rights ” means the agency right of ninety-eight (98) freestanding advertisement light boxes to be situated at designated locations within the International Zone of Number Three Terminal of Beijing International Airport in Beijing, China.

“ * ” has the meaning given in Section 9(b)(ii).

“ Tax ” has the meaning given in Section 6(q).

“ Third Closing ” has the meaning given in Section 5(c).

“ Third Note ” has the meaning given in the recitals.

“ Third Note Purchase Price ” has the meaning given in Section 3(c).

“ Trading Market ” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the OTC Bulletin Board, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market

“ Transaction Documents ” means (i) at the Initial Closing, this Agreement (including the Disclosure Schedules), the Investor Rights Agreement, the Bloompoint Lock-up Agreement, the Management Lock-up Agreement, the Non-Competition Agreements, the Registration Rights Agreement, the Bloompoint Waiver and the Securities or any of them as the context may require; (ii) at the Second Closing, this Agreement (including the updated Disclosure Schedules, if any) and the Securities or any of them as the context may require; and (iii) at the Third Closing, this Agreement (including the updated Disclosure Schedules, if any), the Joinder to the Purchase Agreement, the Restructuring Documents, the Security Documents and the Securities or any of them as the context may require.

“ Warrant ” has the meaning given in the recitals.

“ Warrant Shares ” has the meaning given in the recitals.

“ Xuan Cai Yi (Beijing) ” means Xuan Cai Yi (Beijing) Advertising Company Limited, a limited liability company incorporated under the laws of PRC, 51% of which is held by the Company and the remaining 49% of which is held by certain individuals resident of the PRC.

“ UCC ” has the meaning given in Section 7(n).

“ US$ ” means the lawful currency of the United States from time to time.

2. Rules of Construction .

Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) “or” is not exclusive;

(d) all references in this Agreement to “Sections”, “Exhibits” and other subdivisions are to the designated Sections, Exhibits and subdivisions of this Agreement as originally executed;

(e) a reference to any person is, where relevant, deemed to be a reference to or to include, as appropriate, that person’s successors and permitted assignees or transferees;

(f) a reference to (or to any specified provision of) any agreement or document (including any Transaction Document) is to be construed as a reference to that agreement or document as it may be amended from time to time;

(g) 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.

(h) “including” means “including without limitation;”

(i) provisions apply to successive events and transactions; and

(j) references to a statute or statutory provision are to be construed as a reference to that statute or statutory provision as it may be amended from time to time.

3. Purchase and Sale of the Securities .

(a) Sale and Issuance of the First Note and Warrants . Subject to the terms and conditions of this Agreement, at the Initial Closing:

(i)

the Company shall issue and sell to the Investors, and the Investors shall purchase from the Company, the First Note, for an aggregate purchase price of US$6,000,000 (the “ First Note Purchase Price ”), convertible into shares of Common Stock at an initial conversion price of US$1.65 per share, rounded to the nearest whole share. The First Note shall be due and payable upon the terms and conditions set forth in the First Note and herein. All payments by the Company under the First Note of principal and interest shall be as set forth in the First Note.

(ii)

the Company shall, without any further consideration, issue to the Investors (x) Warrants to purchase that number of Warrant Shares equal to the quotient obtained by dividing the First Note Purchase Price by US$2.50, rounded to the nearest whole Warrant Share, and (y) Warrants to purchase that number of Warrant Shares equal to the quotient obtained by dividing the First Note Purchase Price by US$3.50, rounded to the nearest whole Warrant Share. The Warrants shall be exercisable upon the terms and conditions set forth in the Warrants and herein.

(b) Sale and Issuance of the Second Note and Warrants . Subject to the terms and conditions of this Agreement, at the Second Closing:

(i)

the Company shall issue and sell to the Investors, and the Investors shall purchase from the Company, the Second Note, for an aggregate purchase price of US$9,000,000 (the “ Second Note Purchase Price ”), convertible into shares of Common Stock at an initial conversion price of US$1.65 per share, rounded to the nearest whole share. The Second Note shall be due and payable upon the terms and conditions set forth in the Second Note and herein. All payments by the Company under the Second Note of principal and interest shall be as set forth in the Second Note.

(ii)

the Company shall, without any further consideration, issue to the Investors (x) Warrants to purchase that number of Warrant Shares equal to the quotient obtained by dividing the Second Note Purchase Price by US$2.50, rounded to the nearest whole Warrant Share, and (y) Warrants to purchase that number of Warrant Shares equal to the quotient obtained by dividing the Second Note Purchase Price by US$3.50, rounded to the nearest whole Warrant Share. The Warrants shall be exercisable upon the terms and conditions set forth in the Warrants and herein.

(c) Sale and Issuance of the Third Note and Warrants . Subject to the terms and conditions of this Agreement, at the Third Closing:

(i)

the Company shall issue and sell to the Investors, and the Investors shall purchase from the Company, the Third Note, for an aggregate purchase price of US$35,000,000 (the “ Third Note Purchase Price ”), convertible into shares of Common Stock at an initial conversion price of US$1.65 per share, rounded to the nearest whole share. The Third Note shall be due and payable upon the terms and conditions set forth in the Third Note and herein. All payments by the Company under the Third Note of principal and interest shall be as set forth in the Third Note.

(ii)

the Company shall, without any further consideration, issue to the Investors (x) Warrants to purchase that number of Warrant Shares equal to the quotient obtained by dividing the Third Note Purchase Price by US$2.50, rounded to the nearest whole Warrant Share, and (y) Warrants to purchase that number of Warrant Shares equal to the quotient obtained by dividing the Third Note Purchase Price by US$3.50, rounded to the nearest whole Warrant Share. The Warrants shall be exercisable upon the terms and conditions set forth in the Warrants and herein.

(d) Allocation of the Purchase Price .

(i)

At the First Closing, the Company and the Investors hereby acknowledge that for purposes of Section 1273(c)(2) of the Code, the allocated purchase price of the Warrants in Sections 3(a)(ii) and 5(a)(ii) for such purposes is equal to US$996,000 for the Warrants in its entirety. The Company and the Investors agree that the foregoing purchase price is a fair approximation of the fair market value of the Warrants and that they shall use the foregoing purchase price for all federal, state and local income tax purposes.

(ii)

At the Second Closing, the Company and the Investors hereby acknowledge that for purposes of Section 1273(c)(2) of the Code, the allocated purchase price of the Warrants in Sections 3(b)(ii) and 5(b)(ii) for such purposes is equal to US$1,494,000 for the Warrants in its entirety. The Company and the Investors agree that the foregoing purchase price is a fair approximation of the fair market value of the Warrants and that they shall use the foregoing purchase price for all federal, state and local income tax purposes.

(iii)

At the Third Closing, the Company and the Investors hereby acknowledge that for purposes of Section 1273(c)(2) of the Code, the allocated purchase price of the Warrants in Sections 3(c)(ii) and 5(c)(ii) for such purposes is equal to US$5,810,000 for the Warrants in its entirety. The Company and the Investors agree that the foregoing purchase price is a fair approximation of the fair market value of the Warrants and that they shall use the foregoing purchase price for all federal, state and local income tax purposes.

(e) Regulation S . The Securities will be offered and sold to the Investors pursuant to Regulation S (“ Regulation S ”) under the Act. Upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Act, the Securities shall bear the legends relating to the offer and the sale of the Securities as required by (i) Regulation S under the Act or (ii) any other applicable laws or regulations relating to the issuance of the Securities.

(f) Other Agreements . Simultaneously with the execution of this Agreement, the Company, the Investors and certain other parties shall enter into a Registration Rights Agreement and an Investor Rights Agreement.

4. Security Interest. The Notes will be secured by the security interest provided in the Offshore Security Documents and the Onshore Security Documents.

5. Closings .

(a) Initial Closing .

(i)

The consummation of the sale and issuance of the First Note and Warrants pursuant to Section 3(a) (the “ Initial Closing ”) shall take place remotely via the exchange of documents and signatures as soon practicable after all of the closing conditions specified in Section 9(a) hereof have been waived or satisfied in accordance thereto, or at such time and place as the Company and the Investors shall mutually agree upon, orally or in writing. If at the Initial Closing any of the closing conditions specified in Section 9(a) of this Agreement shall not be fulfilled, the Investors shall, at their election, be relieved of all of their obligations under this Agreement without thereby waiving any other right such Investors may have by reason of such failure or such non-fulfillment.

(ii)

At the Initial Closing, the Company shall deliver to the Investors duly executed First Notes and Warrants, in such denominations as requested by the Investors, and the Investors shall deliver US$6,000,000 by wire transfer of immediately available U.S. dollar funds to the bank account designated in writing by the Company prior to the Initial Closing.

(b) Second Closing .

(i)

The consummation of the sale and issuance of the Second Note and Warrants pursuant to Section 3(b) (the “ Second Closing ”) shall take place remotely via the exchange of documents and signatures as soon practicable after all of the closing conditions specified in Section 9(b) hereof have been waived or satisfied in accordance thereto, or at such time and place as the Company and the Investors shall mutually agree upon, orally or in writing. If at the Second Closing any of the closing conditions specified in Section 9(b) of this Agreement shall not be fulfilled, the Investors shall, at their election, be relieved of all of their obligations under this Agreement without thereby waiving any other right such Investors may have by reason of such failure or such non-fulfillment.

(ii)

At the Second Closing, the Company shall deliver to the Investors duly executed Second Notes and Warrants, in such denominations as requested by the Investors, and the Investors shall deliver US$9,000,000 by wire transfer of immediately available U.S. dollar funds to the bank account designated in writing by the Company prior to the Second Closing.

(i)

The consummation of the sale and issuance of the Third Note and Warrants pursuant to Section 3(c) (the “ Third Closing ”; for purposes of this Agreement, any reference to a “ Closing ”, shall mean the Initial Closing, the Second Closing and the Third Closing or as the context so requires) shall take place remotely via the exchange of documents and signatures as soon practicable after all of the closing conditions specified in Section 9(c) hereof have been waived or satisfied in accordance thereto, or at such time and place as the Company and the Investors shall mutually agree upon, orally or in writing. If at the Third Closing any of the closing conditions specified in Section 9(c) of this Agreement shall not be fulfilled, the Investors shall, at their election, be relieved of all of their obligations under this Agreement without thereby waiving any other right such Investors may have by reason of such failure or such non-fulfillment.

(ii)

At the Third Closing, the Company shall deliver to the Investors duly executed Third Notes and Warrants, in such denominations as requested by the Investors, and the Investors shall deliver US$35,000,000 by wire transfer of immediately available U.S. dollar funds to the bank account designated in writing by the Company prior to the Third Closing.

6. Representations and Warranties of the Company and Quo . Except as set forth in the Disclosure Schedule to be made part of this Agreement upon delivery thereof to the Investors on or prior to the Closing (“ Disclosure Schedule ”) which exceptions shall be deemed part of the representations and warranties made hereunder, the Company and Quo, jointly and severally, represent and warrant to the Investors the following as of the date of this Agreement, and such representations and warranties shall be deemed to be made as of the Closing Date (if different from the date of this Agreement), provided that each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances existing at the date on which such representation or warranty is deemed to be made (except that, for the avoidance of doubt, any representation or warranty that is expressed to be made by reference to the facts and circumstances existing as at a specific date shall be made by reference to the facts and circumstances existing as at such specific date):

(a) SEC Reports and OTC Requirements .

(i) The Company has filed with the SEC on a timely basis all forms, reports and schedules, proxy statements (collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein and including all registration statements and prospectuses filed with the SEC, the “ SEC Reports ”) required to be filed by the Company with the SEC during the twenty-four (24) months preceding the date of this Agreement. As of its date of filing, each SEC Report complied with the requirements of the Exchange Act or the Act (as applicable), and the rules and regulations promulgated thereunder and none of such SEC Reports (including any and all financial statements included therein) contained when filed or contains any untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

(ii) The Company has not, in the twelve (12) months preceding the date hereof, received notice from the Trading Market to the effect that the Company is not in compliance with the requirements of the Trading Market, and no disciplinary actions or proceedings have been initiated against the Company and no such actions are threatened.

(b)	Ownership of Shares of Subsidiaries; Affiliates.

(i)

Schedule 6(b)(i) of the Disclosure Schedule contains complete and correct lists of each Person in which the Company owns, directly or indirectly, any Capital Stock or similar equity interests, or otherwise maintains, directly or indirectly, control over management, operations and decision-making processes, showing, as to each Person, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its Capital Stock or similar equity interests outstanding owned by the Company.

(ii)

All of the outstanding shares of Capital Stock or similar equity interests of each Subsidiary or the PRC Operating Companies shown in Schedule 6(b)(i) of the Disclosure Schedule as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by the Company or another Subsidiary free and clear of any Lien.

(iii)

No Subsidiary is a party to, or otherwise subject to any legal or regulatory restriction or any agreement (other than this Agreement) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of Capital Stock or similar equity interests of such Subsidiary.

(iv)	None of the directors or executive officers of the Group Companies holds, directly or indirectly, any beneficial ownership interest in any of the Company’s Subsidiaries.

(c) Organization . Each of the Group Companies (i) has been duly organized, is validly existing and is in good standing under the laws of its jurisdiction of organization, (ii) has all requisite power and authority to carry on its business and to own, lease and operate its properties and assets, and (iii) is duly qualified or licensed to do business and is in good standing as a domestic or foreign corporation or limited liability company, as the case may be, authorized to do business in each jurisdiction in which the nature of such business or the ownership or leasing of such properties requires such qualification, except where the failure to be so qualified would not individually or in the aggregate have a Material Adverse Effect. The constitutional documents and certificates of each of the PRC Operating Companies are valid and have been duly approved or registered (as applicable) by competent PRC Governmental Authorities.

(d) Capitalization and Voting Rights .

(i) Capital Stock . The authorized capital stock of the Company consists of, immediately prior to the Closing, 5,000,000 shares of Preferred Stock and 800,000,000 shares of Common Stock, of which 69,151,608 shares of Common Stock are currently issued and outstanding. No shares of Preferred Stock are currently issued and outstanding. All of the outstanding shares of Common Stock have been validly issued, are fully paid and non-assessable, and are free and clear of any Lien.

(ii) Issued and Issuable Shares . As at the date hereof and immediately prior to the Closing, there is no Capital Stock issued or issuable pursuant to any exercise, conversion, exchange, subscription or otherwise in connection with any warrants, options (including pursuant to the Company’s stock option plan), convertible securities or any agreement to sell or issue Capital Stock or securities which may be exercised, converted or exchanged for Capital Stock, other than the shares of the Company’s Common Stock to be issued upon conversion of the Notes and the exercise of the Warrants (collectively, “ Fully-Diluted ”). Prior to the Closing Date, the Conversion Shares issuable upon conversion of the Notes and the Warrant Shares issuable upon the exercise of the Warrants have been duly reserved for issuance, which will constitute approximately 48% of the Company’s Capital Stock on a Fully Diluted basis. When the Conversion Shares and Warrant Shares are duly issued in accordance with the terms of the Notes or Warrants, as applicable, the Conversion Shares and Warrant Shares will have been validly issued, fully paid and non-assessable, and the issuance of the Conversion Shares and Warrant Shares will not be subject to any preemptive or similar right. Except as set forth on Schedule 6(d)(ii), all of the issued and outstanding shares of each of the Group Company’s Capital Stock as of the Closing are duly authorized, validly issued, fully paid and non-assessable, were issued in accordance with the registration or qualification provisions of the Act, if applicable, and any relevant “blue sky” laws of the United States, if applicable, or pursuant to valid exemptions therefrom and were issued in compliance with other applicable laws (including, without limitation, applicable PRC laws, rules and regulations) and are not subject to any rescission right or put right on the part of the holder thereof nor does any holder thereof have the right to require the Company to repurchase such Capital Stock.

(iii) Voting and Other Agreements . Except as set forth on Schedule 6(d)(iii) of the Disclosure Schedule and the SEC Reports, as at the date hereof and immediately prior to the Closing, there are no outstanding (A) options, warrants or other rights to purchase from any Group Company, (B) agreements, contracts, arrangements or other obligations of any Group Company to issue, or (C) other rights to convert any obligation into or exchange any securities for, in the case of each of clauses (A) through (C), shares of Capital Stock of, or other ownership or equity interests in, any Group Company. The Company is not a party or subject to any agreement or understanding and there is no agreement or understanding with any Person that affects or relates to (x) the voting or giving of written consents with respect to any security of the Company (including, without limitation, any voting agreements, voting trust agreements, shareholder agreements or similar agreements) or the voting by a director of the Company, (y) the sale, transfer or other disposition with respect to any security of the Company or (z) any restrictions with respect to the issuance or sale of the Securities or the consummation of the transactions contemplated under the Transaction Documents, or any provisions that would adversely affect the interests of the holders of the Securities or the consummation of the transactions contemplated under the Transaction Documents, including without limitation any right of first refusal or right to be consulted or to make a comparable offer with respect to the Securities, held by any security holder, creditor or anyone who holds similar rights in the Company (other than the holders of the Securities).

(e) No Registration Rights . Except as set forth on Schedule 6(e) of the Disclosure Schedules and in the Registration Rights Agreement, no holder of securities of any of the Group Companies is or will be entitled to have any registration rights with respect to such securities.

(f) Authorization . (i) Each of the Group Companies has all requisite corporate power and authority to execute, deliver and perform its obligations under each of the Transaction Documents (to the extent they are parties thereto) and to consummate the transactions contemplated thereby, (ii) this Agreement has been duly authorized, executed and delivered by the Company and Quo, and (iii) each of the Transaction Documents has been duly authorized and when executed and delivered by any of the Group Companies (to the extent they are parties thereto) shall constitute a legal, valid and binding obligation of the Group Companies enforceable against the Group Companies in accordance with its terms, except (i) to the extent rights to indemnity and contribution may be limited by state or federal securities laws or the public policy underlying such laws, (ii) enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and (iii) enforceability may be limited by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(g) Valid Issuance of the Note and Warrants .

(i)

The Notes, when issued, sold and delivered in accordance with the terms thereof and for the consideration set forth herein, will be free of restrictions on transfer, other than restrictions on transfer under applicable state and federal securities laws. Assuming the accuracy of the Investors’ representations in Section 8 below, the Notes will be issued in compliance with applicable state and federal securities laws. The Notes have been duly authorized by the Company and, when executed and delivered to the Investors by the Company, in accordance with the terms of this Agreement, the Notes will have been duly executed, issued and delivered by the Company and will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally.

(ii)

The Warrants, when issued and delivered in accordance with the terms thereof, will be free of restrictions on transfer, other than restrictions on transfer under applicable state and federal securities laws. Assuming the accuracy of the Investors’ representations in Section 8 below, the Warrants will be issued in compliance with applicable state and federal securities laws. The Warrants have been duly authorized by the Company and, when executed and delivered by the Company to the Investors, in accordance with the terms of this Agreement, the Warrants will have been duly executed, issued and delivered by the Company and will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally.

(h) Valid Issuance of Conversion Shares and Warrant Shares .

(i)

After giving effect to each Closing, the conversion rights attached to the Notes, when the Notes are issued on the Closing Date, will provide for the right to convert the Notes into approximately 30,303,000 Conversion Shares (subject to subdivision or consolidation thereof) as of the Closing Date (as calculated immediately following the Closing and assuming the conversion of all the Notes) at an initial conversion price of US$1.65. The Conversion Shares have been duly and validly authorized for issuance by the Company, and when issued pursuant to the terms of the Notes, will be validly issued, fully paid and non-assessable, not subject to any preemptive or similar rights, free from all taxes, Liens, charges and security interests with respect to the issuance thereof and free of restrictions on transfer other than as expressly contemplated by the Transaction Documents.

(ii)

After giving effect to each Closing, the conversion rights attached to the Warrants, when the Warrants are issued on the Closing Date, will provide for the right to purchase in the aggregate (i) up to 20,000,000 Warrant Shares, at an exercise price of US$2.50 and (ii) up to 14,285,715 Warrant Shares, at an exercise price of US$3.50 (in each case, subject to subdivision or consolidation thereof) as of the Closing Date (as calculated immediately following the Closing and assuming the exercise of all the Warrants in each of clauses (i) and (ii) above). The Warrant Shares have been duly and validly authorized for issuance by the Company, and when issued pursuant to the terms of the Warrants will be validly issued, fully paid and non-assessable, not subject to any preemptive or similar rights, free from all taxes, Liens, charges and security interests with respect to the issuance thereof and free of restrictions on transfer other than as expressly contemplated by the Transaction Documents.

(i) Compliance with Instruments . The articles of incorporation, certificate of incorporation, by-laws or other organizational documents of the Group Companies (the “ Charter Documents ”) are in the form previously provided to the Investors, and none of the Group Companies is in violation of its respective Charter Documents. None of the Group Companies is, nor does any condition exist (with the passage of time or otherwise) that could reasonably be expected to cause any of the Group Companies to be, (i) in violation of any statute, rule, regulation, law or ordinance, or any judgment, decree or order applicable to any of the Group Companies or any of their properties (collectively, “ Applicable Law ”) of any federal, state, national, provincial, local or other governmental authority, governmental or regulatory agency or body, court, arbitrator or self-regulatory organization of applicable jurisdictions (each, a “ Governmental Authority ”), or (ii) in breach of or in default under any bond, debenture, note or other evidence of indebtedness, indenture, mortgage, deed of trust, lease or any other agreement or instrument to which any of them is a party or by which any of them or their respective property is bound (collectively, “ Applicable Agreements ”).

(j) No Conflicts . Neither the execution, delivery or performance of this Agreement, any other Transaction Document or the Restructuring Documents nor the consummation of any of the transactions contemplated herein or therein will conflict with, violate, constitute a breach of or a default (with the passage of time or otherwise) under, require the consent of any Person or a Governmental Authority (other than consents already obtained) or result in the imposition of a Lien (other than a Lien arising under the Security Documents and the transactions contemplated by the Transaction Documents) on any assets of any of the Group Companies under or pursuant to (i) the Charter Documents, (ii) any Applicable Agreement, or (iii) any Applicable Law. Immediately following consummation of the transactions contemplated in the Transaction Documents, no default will exist under the Notes.

(k) Secu rity Interests .

(i)

When executed and delivered, the Offshore Security Documents will create valid and enforceable first-priority security interests in favor of the Investors in all the pledged collateral specified therein, which security interests will secure the repayment of the Notes issued at each Closing and the other obligations purported to be secured thereby. As of the Closing Date, the pledgors under the Offshore Security Documents will own such pledged collateral free and clear of all Liens (except for Liens arising by operation of law and Liens arising under the Offshore Security Documents).

(ii)

When executed and delivered and subject to the approval by and filing with the relevant Governmental Authority, the Onshore Security Documents will create valid and enforceable first-priority security interests in favor of the Investors in all the pledged collateral specified therein, which security interests will secure the repayment of the Notes issued at each Closing and the other obligations purported to be secured thereby. When each of the Onshore Security Documents is filed with, and approved by, the relevant Governmental Authority pursuant to the terms specified therein, the security interests represented thereby will be perfected.

(l) Governmental Filings . No filing with, consent, approval, authorization or order of, any Governmental Authority is required to be made by any of the Group Companies for the consummation of the transactions contemplated by the Transaction Documents, except as have been made or obtained prior to the date of this Agreement or obtained after the Closing in accordance with the terms of the Transaction Documents.

(m) Proceedings . Except as disclosed in Schedule 6(m) of the Disclosure Schedules and the SEC Reports, there is no action, claim, suit, demand, hearing, notice of violation or deficiency, or proceeding, domestic or foreign (collectively, “ Proceedings ”), pending or, to the best knowledge of the Company after due inquiry, threatened, that seeks to restrain, enjoin, prevent the consummation of, or otherwise challenges any of the Transaction Documents, the Restructuring Documents or any of the transactions contemplated therein.

(n) Permits . Except as set forth in Schedule 6(n) of the Disclosure Schedule, each of the Group Companies possesses all licenses (including the concession advertising rights set forth in Schedule II), permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all Governmental Authorities, presently required or necessary to own or lease, as the case may be, and to operate their respective properties and to carry on their respective businesses as now conducted (“ Permits ”). All of the material Permits are valid and in full force and effect. Each of the Group Companies has fulfilled and performed all of its respective obligations with respect to such Permits and to the best knowledge of the Company after due inquiry, no event has occurred which allows, or after notice or lapse of time could allow, revocation or termination thereof or result in any other impairment of the rights of the holder of any such Permit. None of the Group Companies has received actual notice of any Proceeding relating to revocation or modification of any such Permit.

(o) Title to Property . Each of the Group Companies has good and marketable title to all real property and personal property owned by it, in each case free and clear of any Liens as of the Closing Date, except such Liens as permitted under the Transaction Documents. For real property not owned by any of the Group Companies and currently used or planned to be used for the business operations of the Group Companies, each of such Group Companies has good and marketable title to all leasehold estates in real and personal property being leased by it and, in each case free and clear of all Liens as of the Closing Date.

(p) Insurance . Schedule 6(p) of the Disclosure Schedule contains a complete and correct list of insurance policies insuring the Group Companies and their respective businesses, assets, employees, officers and directors. Each of the Group Companies maintains and will continue to maintain insurance in amounts and covering risks as are necessary, prudent and customary with industry practice for the conduct of their respective businesses and the value of their respective properties. Each of the Group Companies is in compliance with the terms of such policies and instruments, and there are no claims by any of the Group Companies under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause. None of the Group Companies has been refused any insurance coverage sought or applied for, and none of the Group Companies has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business.

(q) Taxes . All Tax returns required to be filed by each of the Group Companies have been filed (taking into account all extensions of due dates), and all such returns are true, complete and correct. All Taxes that are due from each of the Group Companies have been paid other than those (i) currently payable without penalty or interest or (ii) being diligently contested in good faith and by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP. There are no proposed Tax assessments against any of the Group Companies. The accruals and reserves on the books and records of each of Group Companies in respect of any Tax liability for any Taxable period not finally determined are adequate to meet any assessments of Tax for any such period. For purposes of this Agreement, the term “ Tax ” and “ Taxes ” shall mean all federal, state, national, provincial, local and foreign taxes, and other assessments of a similar nature (whether imposed directly or through withholding), including any interest, additions to tax, or penalties applicable thereto.

(r) Intellectual Property .

(i) Schedule 6(r) of the Disclosure Schedule contains a complete and accurate list of all patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems, software or procedures), trademarks, service marks, trade names or master works, whether or not registered, filed, or issued under the authority of any governmental authority, (collectively, “ Intellectual Pro perty ”) and a complete and accurate list of all licenses granted by any Group Company to any third party with respect to the Intellectual Property. Each of the Group Companies owns, or is validly licensed under, or has the right to use, all Intellectual Property necessary for the conduct of its business and all Intellectual Properties owned by the Group Companies necessary for the conduct of their businesses are valid and in full force and effect. As of the Closing Date, such Intellectual Property is or will be free and clear of all Liens. No Proceedings have been asserted by any Person challenging the use of any such Intellectual Property by any of the Group Companies or questioning the validity or effectiveness of the Intellectual Property or any license or agreement related thereto and there are no facts which would form a valid basis for any such Proceeding. The use of such Intellectual Property any of the Group Companies will not infringe on the Intellectual Property rights of any other Person.

(ii) Each of the Group Companies has taken reasonable steps and measures to establish and preserve ownership of or right to use all Intellectual Property in the operation of its business, including any Intellectual Property that was jointly developed with any third-parties, or any Intellectual Property for which improper or unauthorized disclosure would impair its value or validity, and has made all appropriate filings, registrations and payments of fees in connection with the foregoing. There is no infringement or misappropriation by any other Person of any Intellectual Property of any of the Group Companies. No Proceedings in which any of the Group Companies alleges that any Person is infringing upon, or otherwise violating, any Intellectual Property of any of the Group Companies are pending, and none has been served, instituted or asserted by any of the Group Companies.

(iii) No former or current employee, no former or current consultant, and no third-party joint developer of any of the Group Companies has any rights in any Intellectual Property made, developed, conceived, created or written by the aforesaid employee or consultant during the period of his or her retention by the Group Companies which can be asserted against any Group Company.

(iv) No Intellectual Property owned by any Group Company is the subject of any Lien, license or other contract granting rights or security interest therein to any other Person, except for Liens, licenses or other contracts granting rights or security interest that do not materially interfere with the use made and proposed to be made of such Intellectual Property by any Group Company. Each of the Group Companies has not (A) transferred or assigned, (B) granted an exclusive license to or (C) provided or licensed, any Intellectual Property owned by the Group Companies and necessary for the conduct of their business to any Person.

(s) Internal Controls . Each of the Group Companies maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(t) Financial Statements; No Undisclosed Liabilities .

(i) The financial statements of the Company included in the SEC Reports have been prepared in accordance with the applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“ GAAP ”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present the financial condition, results of operations and cash flows of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. All other financial, statistical, and market and industry-related data included in the SEC Reports are based on or derived from sources that the Company reasonably believes to be reliable and accurate.

(ii) Subsequent to the date of the Company’s unaudited financial statements (including balance sheet, income statement and statement of cash flows) filed for the nine-month period ended September 30, 2007, except as disclosed therein or in any subsequent SEC Report, (A) none of the Group Companies has incurred any liabilities, direct or contingent or has entered into any transactions not in the ordinary course of business, (B) there has not been any decrease in the Capital Stock or any increase in long-term indebtedness or any increase in short-term indebtedness of the Group Companies, or any payment of or declaration to pay any dividends or any other distribution with respect to the Group Companies, and (C) there has not been any material adverse change in the properties, business, prospects, operations, regulatory status, earnings, assets, liabilities or condition (financial or otherwise) of the Group Companies taken as a whole; excluding any changes caused by (x) the condition of the industry of the Company that do not disproportionately affect the Company, (y) the failure of the Company to meet its financial projections or (z) the execution and delivery of this Agreement and consummation of the transactions contemplated hereby (each of clauses (A), (B) and (C), a “ Material Adverse Change ”). There is no event that is reasonably likely to occur in the foreseeable future, which if it were to occur, could, individually or in the aggregate, have a Material Adverse Change.

(iii) Without limiting the generality of the foregoing paragraph (ii), the Company has no liabilities or obligations (whether actual, accrued, absolute, fixed, contingent, liquidated, unliquidated or otherwise, and whether due or to become due), except for (i) liabilities or obligations shown on the balance sheet as of September 30, 2007 (the “ Most Recent Balance Sheet ”), (ii) liabilities under any agreements, contracts, commitments, licenses or leases which have arisen prior to the date of the Most Recent Balance Sheet and which are not required to be reflected in a balance sheet, or the notes thereto, prepared in accordance with GAAP (none of which relates to a breach of contract, breach of warranty, tort, infringement, environmental, health or safety matter, violation of Applicable Laws or proceeding brought by Governmental Authorities), (iii) liabilities incurred in the ordinary course of business since September 30, 2007 (none of which relates to a breach of contract, breach of warranty, tort, infringement, environmental, health or safety matter, violation of Law or proceeding brought by Governmental Authorities) and/or (iv) other liabilities that are, individually and in the aggregate, immaterial.

(u) Debt . Based on the financial condition of the Company as of the Closing Date after giving effect to the receipt by the Company of the proceeds from the sale of the Notes in the aggregate amount of US$50,000,000, (i) the Group Companies’ assets exceeds the amount that will be required to be paid on or in respect of the Group Companies’ existing Debts and other liabilities (including contingent liabilities) as they mature; (ii) the Group Companies are able to pay their Debt and other liabilities (including contingent obligations) as they mature; and (iiii) the current cash flow of each of the Group Companies, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company has no knowledge of any facts or circumstances which lead it to believe that it or any other Group Companies will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. None of the Group Companies is, or has reason to believe it is likely to be, in default with respect to any Debt and no waiver of default is currently in effect. None of the Group Companies has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien (other than by operation of law). None of the Group Companies is a party to, or otherwise subject to any provision contained in, any instrument evidencing Debt of any of the Group Companies, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Debt of the Company.

(v) No Stabilization . None of the Group Companies has nor has anyone acting on its behalf, (i) taken, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of any of the Group Companies to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid anyone any compensation for soliciting purchases of, the Securities, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Group Companies.

(w) No Sale to the U.S. None of the Group Companies, their respective Affiliates, or any person acting on its or their behalf has, directly or indirectly, made offers or sales of any security, or solicited offers to buy, sell or offer to sell or otherwise negotiate in respect of, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner or under circumstances that would require the registration of the Securities under the Act.

(x) No Directed Selling Efforts . None of the Group Companies, their respective Affiliates, or any person acting on its or their behalf (other than the Investors, their Affiliates or persons acting on its behalf, as to whom the Company makes no representation) has engaged in any directed selling efforts (within the meaning of Regulation S) with respect to the Securities; and each of the Company, its Subsidiaries, their respective Affiliates and each person acting on its or their behalf has complied with the offering restrictions requirement of Regulation S.

(y) No Registration . Assuming the accuracy of the Investors’ representations and warranties set forth in Section 8, no registration under the Act of the Securities is required for the offer and sale of the Securities in the manner contemplated herein.

(z) Labor Matters . None of the Group Companies is bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or sought to represent any of the employees, representatives or agents of the Group Companies. There is no strike or other labor dispute involving any of the Group Companies pending or threatened. There is no employment related charge, complaint, grievance, investigation, unfair labor practice claim or inquiry of any kind, pending against any of the Group Companies.

(aa) Material Contracts .

(i)	All of the Material Contracts are valid, subsisting, in full force and effect and binding upon the applicable Group Company and to the other parties thereto.

(ii)

Each Group Company is not in default in any material respect under any Material Contract. No Group Company is aware of any material default thereunder by any other party to any Material Contract that would constitute such a material default, or give any Person the right to declare a material default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, a Material Contract.

(iii)

No Group Company has given to or received from any Person any notice or other communication (whether oral or written) regarding any actual, alleged, possible, or potential material violation or material breach of, or material default under, any Material Contract.

(iv)

With respect to each Material Contract to which it is a party, each Group Company has taken all necessary corporate actions to (a) enter into, execute, adopt, assume, issue, and deliver such Material Contract, and (b) perform its obligations pursuant to the respective terms and conditions of such Material Contract.

(v)

Each of the Material Contracts does not (a) violate any provision of, the respective Charter Documents of any Group Company, or (b) materially breach, or constitute a material default under, or result in the creation or imposition of, any Lien other than Permitted Liens, pursuant to which any Group Company is a party or by which any Group Company or any of their properties is bound, or (c) violate any Applicable Law to which any Group Company is subject to or by which any Group Company or any of their respective properties is bound.

(bb) Brokers and Finders . Except as set forth in Schedule 6(bb), the Company has not engaged any broker, finder, commission agent or other similar person in connection with the transactions contemplated under the Transaction Documents, and the Company is not under any obligation to pay any broker’s fee or commission in connection with such transactions.

(cc) Environmental Matters . Each of the Group Companies (i) is in compliance with any and all currently applicable foreign, federal, state, national, provincial, and local laws and regulations relating to the protection of the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“ Environmental Laws ”), (ii) has received and is in compliance with all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business, (iii) has not received actual notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, (iv) none of the Group Companies has knowledge of any facts which would give rise to any Proceedings, public or private, against it or any violation of Environmental Laws arising out of the operations of the Group Companies; and (v) none of the Group Companies has stored any hazardous materials on real properties now or formerly owned, leased or operated by any of them, and has not disposed of any hazardous materials, in a manner contrary to any Environmental Laws.

(dd) Encumbrances . As of the Closing Date, except for any such restrictions provided under the laws of the jurisdiction of incorporation of any of the Group Companies, as applicable, there will be no encumbrances or restrictions on the ability of any of the Group Companies (i) to pay dividends or make other distributions on such parties’ Capital Stock or to make loans or advances or pay any indebtedness to, or investments in, any of the Group Companies, or (ii) to transfer any of its property or assets to any of the Group Companies, except for such restrictions set forth in the Transaction Documents.

(ee) Foreign Corrupt Practices Act . None of the Group Companies or any of their respective officers, directors or employees have offered, promised to pay, or authorized the payment of any money, or offered, given or promised to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for any government or any department, agency or instrumentality thereof, including any entity or enterprise owned or controlled by a government, or for any public international organization, to any political party or official thereof or to any candidate for political office (individually and collectively, a “ Foreign Official ”) or to any person knowing or being aware of a high probability that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any Foreign Official, for the purpose of: (i) influencing any act or decision of such Foreign Official in his official capacity; (ii) inducing such Foreign Official to do or omit to do any act in violation of his lawful duty; (iii) securing any improper advantage; (iv) inducing such Foreign Official to influence or affect any act or decision of any entity or enterprise owned or controlled by a government; or (v) assisting the Company in obtaining or retaining business for or with, or directing business to the Company. Each of the Group Companies has established policies, procedures and controls that are reasonably designed to prohibit dealings with persons and countries that are subject to trade sanctions and economic embargo programs enforced by the Treasury Department’s Office of Foreign Asset Control. In addition, the operations of the Group Companies have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, the anti-money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency.

(ff) Ranking of Obligations . The payment obligation of the Company under this Agreement will rank senior to all existing and future debt of the Company.

(gg) Related Party Transactions . Other than as set forth on Schedule 6(gg) of the Disclosure Schedule and in the SEC Reports, no relationship, direct or indirect, exists between or among any of the Group Companies or any Affiliate of the Group Companies, on the one hand, and any former or current director, officer, stockholder, customer or supplier of any of them (including any member of their immediate family), on the other hand.

(hh) Investment Company . None of the Group Companies is, and as a result of the offer and sale of the Securities contemplated herein will not be, required to register as an “investment company” under, and as such term is defined in, the U.S. Investment Company Act of 1940, as amended in connection with or as a result of the offer and sale of the Securities.

(ii) PFIC . None of the Group Companies is or intends to become a “passive foreign investment company” within the meaning of Section 1297 of the Code (“ PFIC ”).

(jj) OFAC . Neither the Company nor any director, officer, agent, employee, Affiliate or Person acting on behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC ”); and the Company will not directly or indirectly use the proceeds of the sale of the Notes, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person or entity, towards any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

(kk) Money Laundering Laws . The operations of each of the Group Companies are and have been conducted at all times in compliance with the money laundering statutes of applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any applicable governmental agency (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving any of the Group Companies with respect to the Money Laundering Laws is pending or threatened.

(ll) Oth er Representations and Warranties Relating to the P RC Operating Companies at the Closing .

(i) All consents, approvals, authorizations or licenses requisite under PRC law for the due and proper establishment and operation of each of the PRC Operating Companies has been duly obtained from the relevant PRC Governmental Authorities.

(ii) All consents, approvals, authorizations or licenses requisite under PRC law for the Concession Advertising Rights granted pursuant to the Concession Advertising Rights Agreements to be rendered valid, binding and enforceable, have been duly obtained by the relevant PRC Governmental Authorities and are in full force and effect.

(iii) All filings and registrations with the PRC Governmental Authorities required in respect of each of the PRC Operating Companies and its operations including, without limitation, the registrations with the State Administration of Industry and Commerce, the State Administration for Foreign Exchange, tax bureau and customs authorities have been duly completed in accordance with the relevant PRC rules and regulations.

(iv) Each of the PRC Operating Companies has complied with all relevant PRC laws and regulations regarding the contribution and payment of its registered share capital, the payment schedule of which has been approved by the relevant PRC Government Authorities. There are no outstanding rights of, or commitments made by the Company or any Subsidiary to sell any equity interest in the PRC Operating Companies.

(v) None of the PRC Operating Companies is in receipt of any letter or notice from any relevant PRC Governmental Authority notifying it of revocation of any licenses or qualifications issued to it or any subsidy granted to it by any PRC Governmental Authority for non-compliance with the terms thereof or with applicable PRC laws, or the need for compliance or remedial actions in respect of the activities carried out by any of the PRC Operating Companies.

(vi) Each of the PRC Operating Companies has conducted its business activities within the permitted scope of business or has otherwise operated its business in compliance with all relevant legal requirements and with all requisite licenses and approvals granted by competent PRC Governmental Authorities. As to licenses, approvals and government grants and concessions requisite or useful for the conduct of any part of the business of any of the PRC Operating Companies which are subject to periodic renewal, the Company has no knowledge of any grounds on which such requisite renewals will not be granted by the relevant PRC Governmental Authorities.

(vii) Each of the PRC Operating Companies has duly acquired the qualifications to advertise digital outdoor advertising in the PRC.

(viii) With regard to employment and staff or labor, each of the PRC Operating Companies has complied with all applicable PRC laws and regulations, including without limitation, laws and regulations pertaining to welfare funds, social benefits, medical benefits, insurance, retirement benefits, pensions or the like.

(mm) Full Disclosure . None of the Transaction Documents, the Disclosure Schedules or any other documents, certificates or instruments furnished to the Investor by or on behalf of the Company in connection with the transactions contemplated by this Agreement contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges and agrees that the Investors do not make any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 8 hereof.

7. Covenants of the Company and Quo .

The Company and Quo, jointly and severally, hereby agree:

(a) To (i) advise the Investors promptly after obtaining knowledge (and, if requested by the Investors, confirm such advice in writing) of the issuance by any state securities commission of any stop order suspending the qualification or exemption from qualification of the Securities for offer or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any state securities commission or other regulatory authority, (ii) use its commercially reasonable efforts to prevent the issuance of any stop order or order suspending the qualification or exemption from qualification of the Securities under any state securities or “blue sky” laws, and (iii) if at any time any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Securities under any such laws, use its commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time.

(b) So long as any of the Securities are “restricted securities” within the meaning of Rule 905 under the Act, to, during any period in which the Company is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, provide to each holder of such restricted securities and to each prospective investor (as designated by such holder) of such restricted securities, upon the request of such holder or prospective investor, any information required to be provided by Rule 144A(d)(4) under the Act.

(c) Upon the consummation of the transactions contemplated under the Transaction Documents or in the event this Agreement is terminated by the Investors pursuant to Section 11(b)(ii), to pay, in accordance with the applicable terms and conditions in connection with such payments, (i) all costs, expenses, fees and taxes incident to and in connection with the preparation, issuance, delivery, conversion and/or exchange of the Securities, (ii) all fees and expenses of the PRC, US and other counsel, accountants and any other experts or advisors retained by the Group Companies, (iv) all fees and expenses of the PRC, US and other counsel, accountants and any other experts or advisors retained by the Investors up to US$200,000 and (v) all fees and expenses (including any filing, regulatory and registration fees) relating to the perfection of Liens.

(d) To use commercially reasonable efforts to do and perform all things required to be done and performed under the Transaction Documents prior to and after the Closing Date.

(e) Prior to making any public disclosure or filings as may be required by Applicable Laws with respect to any Transaction Documents and the transactions contemplated hereby and thereby, to provide the Investors and their counsels with the reasonable opportunity to review and comment on such public disclosure documents and consider in good faith any comments received by the Investors or their counsels.

(f) To maintain the listing and trading of the Common Stock on the Trading Market or on an alternative trading market reasonably acceptable to the Investors.

(g) For so long as the Investors own any of the Securities, the Company will furnish to the Investors copies of all reports and other communications (financial or otherwise) furnished by the Company to the holders of its Securities and, as soon as available, copies of any reports or financial statements furnished to or filed by the Company with the Commission pursuant to Section 13 or 15(d) of the Exchange Act or any national securities exchange on which any class of securities of the Company may be listed; provided , however , that any such report or financial statements filed on the Commission’s EDGAR database need not be separately furnished.

(h) To pay all stamp, documentary and transfer taxes and other duties, if any, which may be imposed by any Governmental Authorities or any political subdivision thereof or taxing authority thereof or therein with respect to the issuance of the Securities or the sale thereof to the Investors.

(i) The Company will use its commercially reasonable efforts not to become, and cause its Subsidiaries not to become, a PFIC. If the Company determines that it or any of its Subsidiaries has become a PFIC, the Company will promptly notify the Investors and provide all information requested by the Investors that is necessary for it to make a qualified electing fund (QEF) election.

(j) Not register any transfer of the Securities that is not (i) made in accordance with the provisions of Regulation S, (ii) made pursuant to registration under the Act, or (iii) made pursuant to an available exemption under the Act.

(k) Prior to the Closing Date, the Company shall not, without the express prior written consent of the Investors (which consent shall be at the Investors’ sole discretion), pursue or discuss any capital raising transaction or transactions with any Person other than the Investors or its Affiliates (“ Outside Financing ”).

(l) Prior to the Closing Date, the Company shall not, and shall procure that its Subsidiaries shall not, do anything or take any step, action or measure (or omit to take the same), that has or could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

(m) The Company shall not use the net proceeds from the sale of the Notes, in any amount, for any purpose other than as set forth in Section 4.1(d) of the Note.

(n) In the event that any of the Group Companies acquires any Person following the Closing Date, the Company shall cause such Group Company to obtain, as a condition precedent to the consummation of such acquisition, an opinion of counsel, which includes, among others, opinions substantially to the effect that (i) the transaction documents governing such acquisition are enforceable according to their terms and (ii) neither the execution, delivery or performance of such transaction documents nor the consummation of any of the transactions contemplated therein will conflict with, violate, constitute a breach of or a default (with the passage of time or otherwise) under, require the consent of any Person or a Governmental Authority (other than consents already obtained) or result in an imposition of a Lien (other than a Lien arising under the transactions contemplated in such transaction documents) on any assets of any of such Group Company under or pursuant to (x) the Charter Documents, (y) the Applicable Agreements or (z) any Applicable Law.

(o) The Company shall authorize and at all times keep reserved for issuance and delivery upon conversion of the Notes and the exercise of the Warrants such number of Conversion Shares and Warrant Shares or other shares of the Company as are from time to time issuable upon conversion of any Notes and the exercise of the Warrants and will, from time to time, take all necessary steps to amend its articles of incorporation to provide a sufficient reserve of Conversion Shares and Warrant Shares for issuance upon conversion of the Notes and the exercise of the Warrants, respectively.

(p) The Company shall refrain, and shall cause the other Group Companies and PRC Operating Companies and each of their respective officers, directors and employees to refrain from offering, promising to pay, or authorizing the payment of any money, or offering, giving, promising to give, or authorizing the giving of anything of value, to any Foreign Official or to any person knowing or being aware of a high probability that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any Foreign Official, for the purpose of: (i) influencing any act or decision of such Foreign Official in his official capacity; (ii) inducing such Foreign Official to do or omit to do any act in violation of his lawful duty; (iii) securing any improper advantage; (iv) inducing such Foreign Official to influence or affect any act or decision of any entity or enterprise owned or controlled by a government; or (v) assisting the Company in obtaining or retaining business for or with, or directing business to the Company. Each of the Group Companies will continue to maintain policies, procedures and controls that are reasonably designed to prohibit dealings with persons and countries that are subject to trade sanctions and economic embargo programs enforced by the Treasury Department’s Office of Foreign Asset Control. In addition, the operations of Group Companies will be conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, the anti-money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency.

(q) Promptly as reasonably practicable but in no event later than 90 days following the Closing Date, each of the Group Companies shall obtain reasonably adequate insurance covering its properties, operations, personnel and business, and is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged.

(r) Promptly as reasonably practicable following the Closing Date, each of the Group Companies shall execute appropriate nondisclosure and confidentiality agreements with their executive officers, directors, key personnel and consultants.

(s) Promptly and to the extent reasonably practicable following the Closing Date, the Company shall deliver to the Investors a certificate representing the Pledged Stock (as defined in the Offshore Security Documents) to be charged by the Company, accompanied by undated stock powers or transfer forms duly executed in blank by the Company pursuant to the Offshore Security Documents.

(t) The Company covenants to use commercially reasonable efforts to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as the Conversion Shares and Warrant Shares are “restricted securities” as defined in Rule 144(a)(3), if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and make publicly available in accordance with Rule 144(c) (and, if the Investors own any Conversion Shares or Warrant Shares, furnish to the Investors) such information as is required to sell such Conversion Shares or Warrant Shares under Rule 144. The Company further covenants that it will take such further action as any holder of the Conversion Shares or Warrant Shares may reasonably request, to the extent required from time to time to enable such person to sell such Conversion Shares or Warrant Shares without registration under the Act within the requirements of the exemption provided by Rule 144.

(u) The Company shall, by no later than the four (4) Business Days (in the City of New York) following each Closing Date, file a Form 8-K announcing the respective Closing of the transactions contemplated hereby and the material terms thereof, which must be reviewed and consented to by the Investors prior to the filing, which consent shall not be unreasonably withheld or delayed; and to provide the draft of such Form 8-K to the Investors reasonably in advance for review. The Company and the Investors shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor the Investors shall issue any such press release or otherwise make any such public statement (i) without the prior consent of the Company, with respect to any press release of the Investors, or (ii) without the prior consent of the Investors, with respect to any press release of the Company, in either case of (i) and (ii), which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication, provided , however , that the Investors may report to their respective stockholders, limited partners, members or other owners, as the case may be, regarding the general status of their investment in the Company; and provided , further , that Investors may disclose to any Person that is reasonably necessary in connection with a proposed acquisition of the Securities from the Investors or to any Person determined by the Investors to be potential stockholders, limited partners, members or other investors of the Investors in any media, including without limitation, in connection with any marketing materials distributed for or on behalf of the Investors, the general status of the investment in the Company, including without limitation the name of the Company, a description of the business conducted by the Company and the actual or estimated return on investment realized by the Investors resulting from or relating to the investment in the Company. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Investors, or include the name of the Investors in any other filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of the Investors, except (x) as required by federal securities law in connection with the filing of the Transaction Documents (including signature pages thereto) with the Commission and (y) to the extent such disclosure is required by law or Trading Market regulations.

(v) From the date of this Agreement to the Closing Date, each of the Group Companies and their respective officers and directors will not, and the Company will cause its other representatives not to, directly or indirectly, (i) solicit, or initiate any proposal (a “ Proposal ”) relating to (A) direct or indirect acquisition or purchase of any equity securities (any and all shares of Capital Stock of the Group Companies, securities of the Group Companies convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares and any securities that represent the right to receive such equity securities) or any tender offer or exchange offer or (B) a merger, amalgamation, share exchange or consolidation or (C) a sale of all or substantially all of the assets of the Group Companies, (ii) participate in any discussions or negotiations regarding or furnish to any Person any information or otherwise facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Proposal (other than a modified Proposal of the Investors, if any), or (iii) authorize, engage in, or enter into any agreement or understanding with respect to, any Proposal. Each of the Group Companies and their respective officers and directors will, and each of the Company will cause its other representatives to, terminate any existing activities or discussions in relation to any Proposal with any other party other than the Investors and its representatives.

The Company will immediately (within one Business Day) advise the Investors of, and inform the Investors of the terms of, and the identity of the Person making any Proposal that any of the Group Companies or any of their representatives or Affiliates may receive from the date of this Agreement to the Closing Date.

(w) Prior to the Closing Date, if the Group Companies or their respective officers and directors violate any of the obligations set forth in Section 7(v) above, the Company shall pay to the Investors all fees and expenses incurred by the Investors in connection with the transactions contemplated by the Transaction Documents, including, without limitation, any amounts payable under Section 11(b) hereof and all legal and accounting fees and expenses, travel and accommodation fees and expenses, and due diligence fees and expenses.

(x) Prior to and following the Closing Date, each of the Group Companies (i) shall exercise its rights and comply with its obligations under each Restructuring Document to which it is party and (ii) shall not amend or waive, assign or transfer, terminate suspend or abandon, all or any part of a Restructuring Document.

(y) If, at any time following the Closing Date, any and all of Capital Stock of the PRC Operating Companies may be legally transferred to the Company or a Subsidiary of the Company then the Company shall, and shall procure that each relevant Group Company shall, take all such action and do all such things to effect, to the fullest extent permitted by PRC law, the transfer of such Capital Stock to the Company or a Subsidiary of the Company.

(z) The Company and Quo shall use their best efforts and shall cause the other PRC Operating Companies to use their best efforts to, enter into the Concession Advertising Rights Agreements to be entered into by Quo and the other PRC Operating Companies as specified in Schedule I attached hereto as soon as practicable after the Closing Date.

(aa) The Company shall cause each of the PRC Operating Companies and the Intermediate Companies to acquire the Concession Advertising Rights as listed in Schedule II attached hereto prior to or on such date as set forth therein.

8. Investors’ Representations, Warranties and Agreements . The Investors, jointly and severally, represent and warrant to the Company that:

(a) None of the Investors is a “U.S. Person” (as defined in Rule 902 of Regulation S) and the Investors understand that no action has been or will be taken in any jurisdiction by the Company that would permit a public offering of the Securities in any country or jurisdiction where action for that purpose is required. The Investors are not acquiring the Securities for the account or benefit of any U.S. persons except in accordance with exemption from registration requirements of the Act below or in a transaction not subject thereto.

(b) None of the Investors are acquiring the Securities with a view to any distribution thereof that would violate the Act or the securities laws of any state of the United States or any other applicable jurisdiction.

(c) Each Investor (A) agrees on its own behalf and on behalf of any investor account for which it has purchased the Securities that it will not offer, sell or otherwise transfer any of the Securities prior to (x) the date which is 1 year after the later of the date of the commencement of the offering and the date of original issuance (or of any predecessor of any Security proposed to be transferred by the Investors) and (y) such later date, if any, as may be required by applicable law, except (a) to the Company, (b) pursuant to a registration statement that has been declared effective under the Act, (c) for so long as any Security is eligible for resale pursuant to Rule 144A under the Act, to a person it reasonably believes is a “qualified institutional buyer” as defined in Rule 144A that purchases for its own account or for the account of another qualified institutional buyer to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales to Persons who are not “U.S. Persons” (within the meaning of Regulation S) that occur outside the United States within the meaning of Regulation S or (e) pursuant to any other available exemption from the registration requirements of the Act, and (B) agrees that it will give to each person to whom such Security is transferred a notice substantially to the effect of this paragraph.

(d) The Investors acknowledge that the Securities are “restricted securities” as defined in Rule 144 under the Act.

(e) No form of “directed selling efforts” (as defined in Rule 902 of Regulation S), general solicitation or general advertising in violation of the Act has been or will be used nor will any offers by means of any directed selling efforts in the United States be made by the Investors or any of its representatives in connection with the offer and sale of any of the Securities.

(f) The Securities to be acquired by the Investors shall be acquired for investment for the Investors’ 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 Investors have no present intention of selling, granting any participation in, or otherwise distributing the same. The Investors do 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.

(g) The Investors 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 Act, applicable state securities laws and the respective rules and regulations promulgated thereunder.

(h) The Investors understand 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 Investors’ compliance with, representations, warranties and agreements of the Investors set forth herein and in the Notes and Warrants in order to determine the availability of such exemptions and the eligibility of the Investors to acquire the Securities.

(i) The Investors understand that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of an investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

(j) Each of the Investors has the requisite power and authority to execute, deliver and perform its obligations under each of the Transaction Documents (to the extent they are parties thereto) and to consummate the transaction contemplated thereby. This Agreement has been duly authorized and when executed and delivered by the Investors (to the extent they are parties thereto) constitutes a valid and binding obligation of the Investors enforceable against the Investors in accordance with its terms, except (i) to the extent rights to indemnity and contribution may be limited by state or federal securities laws or the public policy underlying such laws, (ii) enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and (iii) enforceability may be limited by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(k) The Investors hereby covenant with the Company not to make any sale of the Securities without (i) complying with the provisions of this Agreement, or (ii) without satisfying the requirements of the Act and the rules and regulations promulgated thereunder, including, without limitation, causing the prospectus delivery requirement under the Act to be satisfied, if applicable.

(l) The Investors understand that nothing in this Agreement or any other materials presented to the Investors in connection with the purchase and sale of the Securities constitutes legal, tax or investment advice.

9. Conditions Precedent to the Obligation of the Investors to Purchase the Notes .

(a) The Investors’ obligation to purchase the First Note under this Agreement at the Initial Closing is subject to the satisfaction or waiver of each of the following conditions on or prior to the Initial Closing:

(i)

All the representations and warranties of each of the Group Companies shall be true and correct as of the date hereof and at the Closing Date. Each of the Group Companies shall have performed, satisfied and complied with, to the satisfaction of the Investors, all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by them at or prior to the Initial Closing.

(ii)

No injunction, restraining order or order of any nature by a Governmental Authority shall have been issued as of the Closing Date that could prevent or interfere with the consummation of the transactions contemplated under the Transaction Documents to be entered into at the Initial Closing; and no stop order suspending the qualification or exemption from qualification of any of the Securities in any jurisdiction shall have been issued and no Proceeding for that purpose shall have been commenced or be pending or threatened as of the Closing Date.

(iii)

No action shall have been taken and no Applicable Law shall have been enacted, adopted or issued that could, as of the Closing Date, reasonably be expected to prevent the consummation of the transactions contemplated under the Transaction Documents to be entered into at the Initial Closing. No Proceeding shall be pending or threatened other than Proceedings that if adversely determined could not, individually or in the aggregate, adversely affect the issuance or marketability of the Securities.

(iv)

The Company shall have obtained any and all approvals, consents and waivers necessary for consummation of the transactions contemplated by the Transaction Documents to be entered into at the Initial Closing, including, but not limited to, all Permits, authorizations, approvals or consents of any Governmental Authority.

(v)	The Investors shall have received at the Initial Closing:

(1) a certificate dated the Closing Date, signed by the Chief Executive Officer of the Company on behalf of the Group Companies to the effect that (a) the representations and warranties set forth in Section 6 are true and correct with the same force and effect as though expressly made at and as of the Closing Date, (b) each of the Group Companies has complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date, (c) at the Closing Date, since the date hereof or since the date of the most recent financial statements in the SEC Reports, no event or events have occurred, no information has become known nor does any condition exist that could, individually or in the aggregate, have a Material Adverse Effect, (d) since the date of the most recent financial statements in the SEC Reports, none of the Group Companies has incurred any liabilities or obligations, direct or contingent, not in the ordinary course of business, or entered into any other transactions not in the ordinary course of business, and there has not been any change in the Capital Stock or long-term indebtedness of any of the Group Companies, and (e) the sale of any of the Notes or Warrants have not been enjoined (temporarily or permanently);

(2) a certificate dated the Closing Date, signed by the Secretary of the Company, including specimen signatures of those officers of the Company authorized to sign the Transaction Documents, to which the Company is a party, on behalf of the Company, attaching true, complete and up to date copies of the certificate of incorporation and by-laws of the Company, attaching the certificate of good standing of the Company and certifying as to such other maters as the Investors may reasonably require;

(3) certificates dated the Closing Date, signed by the legal representative or another authorized officer of Quo (and acknowledged by the Designated Holders), including specimen signatures of such persons authorized to sign the Transaction Documents, to which Quo is a party, on behalf of Quo, attaching true, complete and up to date copies of the business license and articles of association of Quo and certifying as to such other maters as the Investors may reasonably require;

(4) the opinions of Crone Rozynko LLP, U.S. counsel to the Company, dated the Closing Date, in the form and substance reasonably satisfactory to the Investors;

(5) the opinions of Shanghai Kingstar Law Firm, PRC counsel to the Company and Quo, dated the Closing Date, in the form and substance reasonably satisfactory to the Investors; and

(6) Bloompoint shall have executed the Bloompoint Waiver in form and substance satisfactory to the Investors.

(vi)

Each of the Transaction Documents to be entered into at the Initial Closing (including the Notes and Warrants) shall have been executed and delivered by all parties thereto, and the Investors shall have received a fully executed original (or clearly legible facsimile copy) of each such Transaction Document.

(vii)

The Investors shall have received the Disclosure Schedule in form and substance satisfactory to the Investors.

(viii)

Neither the Company nor any other party to any of the Transaction Documents shall be in breach or default under their respective obligations thereunder.

(ix)

The board of directors of the Company shall have approved and authorized by all necessary corporate or other action (i) the execution and delivery of the Transaction Documents, (ii) all actions to be performed or satisfied under the Transaction Documents (including, without limitation, the reserve for issuance of the Conversion Shares issuable upon conversion of the Notes and Warrant Shares issuable upon exercise of the Warrants), (iii) the consummation of the transactions contemplated by the Transaction Documents, (iv) the pricing terms of the Securities, and (v) all other actions necessary in connection with the transactions contemplated by the Transaction Documents and the offering of the Notes and the issuance of the Warrants, and shall have provided the Investors with a copy of such authorizations.

(x)

The board of directors or its equivalent of Quo shall have approved and authorized by all necessary corporate or other action (i) the execution and delivery of the Transaction Documents, (ii) all actions to be performed or satisfied under the Transaction Documents, (iii) the consummation of the transactions contemplated by the Transaction Documents, and (iv) all other actions necessary in connection with the transactions contemplated by the Transaction Documents and shall have provided the Investors with a copy of such authorizations.

(xi)	The Investors shall have completed and be satisfied with the results of all business, legal and financial due diligence, and any items requiring correction identified by the Investors shall have been corrected to the Investors’ satisfaction.

(xii)

The Investors shall have received all necessary internal approval for the transactions contemplated hereunder or under the Transaction Documents.

(xiii)

The Company shall have received due and proper waivers, or shall have entered into amendments or agreements effecting such waivers, by the security holder, creditor or anyone who holds similar rights in the Company (other than the holders of the Securities), of any restrictions with respect to the issuance or sale of the Securities or the consummation of the transactions contemplated under the Transaction Documents, or any provisions that would materially and adversely affect the interests of the holders of the Securities or the consummation of the transactions contemplated under the Transaction Documents, including without limitation registration rights, any right of first refusal or right to be consulted or to make a comparable offer with respect to the Securities, held by any such security holder, creditor or holder of similar rights.

(b) The Investors’ obligation to purchase the Second Note under this Agreement at the Second Closing is subject to the satisfaction or waiver of each of the following conditions on or prior to the Second Closing:

(i)

All the representations and warranties of each of the Group Companies shall be true and correct as of the Closing Date. Each of the Group Companies shall have performed, satisfied and complied with, to the Investors’ satisfaction, all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by them at or prior to the Second Closing.

(ii)

No injunction, restraining order or order of any nature by a Governmental Authority shall have been issued as of the Closing Date that could prevent or interfere with the consummation of the transactions contemplated under the Transaction Documents to be entered into at the Second Closing; and no stop order suspending the qualification or exemption from qualification of any of the Securities in any jurisdiction shall have been issued and no Proceeding for that purpose shall have been commenced or be pending or threatened as of the Closing Date.

(iii)

No action shall have been taken and no Applicable Law shall have been enacted, adopted or issued that could, as of the Closing Date, reasonably be expected to prevent the consummation of the transactions contemplated under the Transaction Documents. No Proceeding shall be pending or threatened other than Proceedings that if adversely determined could not, individually or in the aggregate, adversely affect the issuance or marketability of the Securities.

(iv)	The Company shall have obtained any and all approvals, consents and waivers necessary for consummation of the transactions contemplated by the Transaction Documents, including, but not limited to, all Permits, authorizations, approvals or consents of any Governmental Authority.

(v)

The Investors shall have received at the Second Closing, a certificate dated the Closing Date, signed by the Chief Executive Officer of the Company on behalf of the Group Companies to the effect that (a) the representations and warranties set forth in Section 6 are true and correct with the same force and effect as though expressly made at and as of the Closing Date, (b) each of the Group Companies has complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date, (c) at the Closing Date, since the date hereof or since the date of the most recent financial statements in the SEC Reports, no event or events have occurred, no information has become known nor does any condition exist that could, individually or in the aggregate, have a Material Adverse Effect, (d) since the date of the most recent financial statements in the SEC Reports, none of the Group Companies has incurred any liabilities or obligations, direct or contingent, not in the ordinary course of business, or entered into any other transactions not in the ordinary course of business, and there has not been any change in the Capital Stock or long-term indebtedness of any of the Group Companies, and (e) the sale of any of the Notes or Warrants have not been enjoined (temporarily or permanently).

(vi)	The Company shall provide sufficient documentation evidencing that any and all T3 Rights have been legally and validly (i) * by , (ii) and (iii) * in compliance with all applicable PRC laws.

(vii)

The Designated Holders of Quo shall have been replaced by nominees of the Investors and such replacement shall have been properly approved and registered with the relevant PRC Government Authority in accordance with PRC law.

(viii)

Each of the Transaction Documents to be entered into at the Second Closing (including the Notes and Warrants) shall have been executed and delivered by all parties thereto, and the Investors shall have received a fully executed original (or clearly legible facsimile copy) of each such Transaction Document.

(ix)	The Investors shall have received updated Disclosure Schedules to the extent circumstances have changed since the First Closing in form and substance satisfactory to the Investors .

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

(x)	Neither the Company nor any other party to any of the Transaction Documents shall be in breach or default under their respective obligations thereunder.

(xi)

(xii)

All the conditions specified in Section 9(a) above shall have been fulfilled or satisfied for the Second Closing, unless waived in writing by the Investors.

(c) The Investors’ obligation to purchase the Third Note under this Agreement at the Third Closing is subject to the satisfaction or waiver of each of the following conditions on or prior to the Third Closing:

(i)

All the representations and warranties of each of the Group Companies (including * and *) shall be true and correct as of the Closing Date. Each of the Group Companies (including * and *) shall have performed, satisfied and complied with, to the Investors’ satisfaction, all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with b them at or prior to the Third Closing.

(ii)

No injunction, restraining order or order of any nature by a Governmental Authority shall have been issued as of the Closing Date that could prevent or interfere with the consummation of the transactions contemplated under the Transaction Documents to be entered into at the Third Closing; and no stop order suspending the qualification or exemption from qualification of any of the Securities in any jurisdiction shall have been issued and no Proceeding for that purpose shall have been commenced or be pending or threatened as of the Closing Date.

(iii)

No action shall have been taken and no Applicable Law shall have been enacted, adopted or issued that could, as of the Closing Date, reasonably be expected to prevent the consummation of the transactions contemplated under the Transaction Documents. No Proceeding shall be pending or threatened other than Proceedings that if adversely determined could not, individually or in the aggregate, adversely affect the issuance or marketability of the Securities.

(iv)	The Company shall have obtained any and all approvals, consents and waivers necessary for consummation of the transactions contemplated by the Transaction Documents, including, but not limited to, all Permits, authorizations, approvals or consents of any Governmental Authority.

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

(v)

The Company shall have received due and proper waivers, or shall have entered into amendments or agreements effecting such waivers, by the security holder, creditor or anyone who holds similar rights in the Company (other than the holders of the Securities), of any restrictions with respect to the issuance or sale of the Securities or the consummation of the transactions contemplated under the Transaction Documents, or any provisions that would materially and adversely affect the interests of the holders of the Securities or the consummation of the transactions contemplated under the Transaction Documents, including without limitation any right of first refusal or right to be consulted or to make a comparable offer with respect to the Securities, held by any such security holder, creditor or holder of similar rights.

(vi)

The Investors shall have received on the Closing Date a certificate dated the Closing Date, signed by the Chief Executive Officer of the Company on behalf of the Group Companies (including * and *) to the effect that (a) the representations and warranties set forth in the this Agreement and the Joinder to the Purchase Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Date, (b) each of the Group Companies (including * and *) has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date in the Transaction Documents, (c) at the Closing Date, since the date hereof or since the date of the most recent financial statements in the SEC Reports, no event or events have occurred, no information has become known nor does any condition exist that could, individually or in the aggregate, have a Material Adverse Effect on the Group Companies (including * and *), (d) since the date of the most recent financial statements in the SEC Reports, none of the Group Companies (including * and *) has incurred any liabilities or obligations, direct or contingent, not in the ordinary course of business, or entered into any other transactions not in the ordinary course of business, and there has not been any change in the Capital Stock or long-term indebtedness of any of the Group Companies (including * and *), and (e) the sale of any of the Notes or Warrants has not been enjoined (temporarily or permanently);

(vii)

The respective board of directors (or its equivalent) of the Group Companies shall have approved and authorized by all necessary corporate or other action, as applicable, (i) the execution and delivery of the Transaction Documents to which they are a party, (ii) all actions to be performed or satisfied under the Transaction Documents to which they are a party, (iii) the consummation of the transactions contemplated by the Transaction Documents to which they are a party, and (iv) all other actions necessary in connection with the transactions contemplated by the Transaction Documents and the offering of the Notes and the issuance of the Warrants, and shall have provided the Investors with a copy of such authorizations.

(viii)

The * shall have been * in accordance with Applicable Law within 120 days after the Initial Closing. In particular, the * of the * from * shall not exceed * and is only made up of the * as of the date of the * and * for * but excluding any *, * and

(ix)	other obligations.

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

(x)	The PRC Transfer Transaction shall have been consummated in accordance with Applicable Law and to the satisfaction of the Investors. In particular, * shall have entered into the * with the *.

(xi)

The * to the *, in form and substance satisfactory to the Investors, shall have been executed and delivered by * and *, with such additional representations, warrants, covenants and agreements as the Investors may require, and the Investors shall have received a fully executed original (or clearly legible facsimile copy) of the * to the *.

(xii)

The Offshore Security Documents and the Onshore Security Documents shall have been executed and delivered by the parties thereto and the Investors shall have received a fully executed original (or clearly legible facsimile copy) of the Offshore Security Documents and the Onshore Security Documents.

(xiii)

The security provided by the Offshore Security Documents and the Onshore Security Documents shall have been perfected, charged, approved, registered with relevant filing agents or Government Authorities, as applicable.

(xiv)

The Investors and their counsel shall be satisfied that (i) the Lien granted to the Investors, for the benefit of the Secured Parties (as defined in the Offshore Security Documents) in the collateral described in the Offshore Security Documents is a first priority Lien; and (ii) no Lien exists on any of the collateral described therein other than the Lien created in favor of the Investors, for the benefit of the Secured Parties, pursuant to the Notes and the Offshore Security Documents.

(xv)	All the shareholders of * and * shall have been replaced by nominees of the Investors and such replacement shall have been properly approved and registered with the relevant PRC Government Authority in accordance with PRC law.

(xvi)

The Investors shall have received copies of all documents executed and delivered under or in connection with the transactions contemplated in the Transaction Documents that are required to be executed and delivered at or prior to the Closing Date.

(xvii)

The Investors shall have received updated Disclosure Schedules to the extent circumstances have changed since the Second Closing in form and substance satisfactory to the Investors.

(xviii)

Neither the Company nor any other party to any of the Transaction Documents shall be in breach or default under their respective obligations thereunder.

(xix)

The Investors shall have received at the Third Closing, the opinions of BVI counsel, US counsel and PRC Counsel, in each case, dated the Closing Date, in form and substance satisfactory to the Investors;

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

(xx)	The Investors shall have approved a fund flow chart setting forth how the proceeds from the issue of the Notes will be transferred to the PRC Operating Companies through * and converted into RMB.

(xxi)

The Investors shall have received certified copies of searches of all applicable registers of security interests applicable to the Group Companies, such searches to be satisfactory to the Investors.

(xxii)

All the conditions specified in Section 9(b) above shall have been fulfilled, satisfied or remain satisfied for the Third Closing, unless waived in writing by the Investors,

10. Indemnification .

(a) Each of the Company and Quo (each such Person being referred to as an “ Indemnifying Party ”), jointly and severally, agrees to indemnify and hold harmless the Investors, each of their Affiliates and their respective officers, directors, partners, shareholders, counsel, employees and agents (each Investor and such other person being referred to as an “ Indemnified Party ”), to the fullest extent lawful, from and against any losses, claims, damages, liabilities and reasonable expenses (or actions in respect thereof) other than those arising from the Investors’ gross negligence or willful misconduct, as incurred, related to or arising out of or in connection with:

(i)	any breach or violation by the Company or Quo or their respective Affiliates of any of the representations, warranties, covenants and agreements set forth in any Transaction Document;

(ii)

any untrue statement or alleged untrue statement of a material fact, or the omission or alleged omission to state in the Disclosure Schedule, 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;

(iii)

any litigation, suit, proceeding or investigation with respect to the affairs, conduct or behavior of the Group Companies or their respective agents, employees, contractors, representatives or any affiliates thereof arising out of acts, omissions or events occurring prior to Closing Date; or

(iv)	any fees (including costs and expenses) or commissions to any broker, finder or agent engaged by the Group Companies,

and will reimburse the Indemnified Parties for all reasonable expenses (including, without limitation, fees and expenses of counsel) as they are incurred in connection with investigating, preparing, defending or settling any such action or claim, whether or not in connection with litigation in which any Indemnified Party is a named party.

(b) As promptly as reasonably practical after receipt by an Indemnified Party under this Section 10 of notice of the commencement of any action for which such Indemnified Party is entitled to indemnification under this Section 10, such Indemnified Party will, if a claim in respect thereof is to be made against the Indemnified Party under this Section 10, notify the Indemnifying Party of the commencement thereof in writing; but the omission to so notify the Indemnifying Party (i) will not relieve such Indemnifying Party from any liability under paragraph (a) above unless and only to the extent it is materially prejudiced as a result thereof and (ii) will not, in any event, relieve the Indemnifying Party from any obligations to any Indemnified Party otherwise than the indemnification obligation provided in paragraph (a) above. In case any such action is brought against any Indemnified Party, and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein and, to the extent that it may determine, jointly with any other Indemnifying Party similarly notified, to assume the defense thereof, with counsel satisfactory to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be counsel to the Indemnifying Party) at the expense of the Indemnifying Party; provided , however , that if (i) the use of counsel chosen by the Indemnifying Party to represent the Indemnified Party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to it and/or other Indemnified Party that are different from or additional to those available to the Indemnifying Party, (iii) the Indemnifying Party shall not have employed counsel satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action or (iv) the Indemnifying Party shall authorize the Indemnified Party to employ separate counsel at the expense of the Indemnifying Party, then, in each such case, the Indemnifying Party shall not have the right to direct the defense of such action on behalf of such Indemnified Party or parties and such Indemnified Party or parties shall have the right to select separate counsel (including local counsel) to defend such action on behalf of such Indemnified Party or parties at the expense of the Indemnifying Party. After notice from the Indemnifying Party to such Indemnified Party of its election so to assume the defense thereof and approval by such Indemnified Party of counsel appointed to defend such action, the Indemnifying Party will not be liable to such Indemnified Party under this Section 10 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such Indemnified Party in connection with the defense thereof, unless the Indemnified Party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that in connection with such action the Indemnifying Party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, representing the Indemnified Party who are parties to such action or actions). The Indemnifying Party shall not, without the prior written consent of the Indemnified Party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Party.

(c) The indemnity and expense reimbursement obligations set forth herein (i) shall be in addition to any liability any of the Group Companies may otherwise have to any Indemnified Party, (ii) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Investors or any other Indemnified Party and (iii) shall be binding on any successor or assign of the Group Companies or their respective business and assets.

11. Termination .

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

(a) The Company and the Investors may terminate this Agreement at any time by mutual written consent (i) at any time prior to any Closing, and (ii) if the transaction contemplated hereby shall not have occurred on or prior to July 1, 2008.

(b) The Investors may terminate this Agreement at any time prior to the Closing Date by written notice to the Company if any of the following has occurred:

(i) since the date hereof, any Material Adverse Change or any development involving or reasonably expected to result in a Material Adverse Effect that could, in the Investors’ judgment, be expected to (A) make it impracticable or inadvisable to proceed with the offering or delivery of the Notes or the issuance and delivery of the Warrants on the terms and in the manner contemplated in this Agreement, the Notes and/or the Warrants, as applicable, or (B) materially impair the investment quality of any of the Securities;

(ii) if the Second Closing shall not have occurred on or prior to forty-five (45) days after the Initial Closing by failure of the Company or Quo to satisfy the conditions contained in Section 9(b) on or prior to the Closing Date;

(iii) if the Third Closing shall not have occurred on or prior to one hundred twenty (120) days after the Initial Closing by failure of the Company, Quo, * and * to satisfy the conditions contained in Section 9(c) on or prior to the Closing Date;

(iv) any outbreak or escalation of hostilities or other national or international calamity or crisis, including acts of terrorism, or material adverse change or disruption in economic conditions in, or in the financial markets of, the United States, the European Union, the Peoples’ Republic of China or Hong Kong (it being understood that any such change or disruption shall be relative to such conditions and markets as in effect on the date hereof), if the effect of such outbreak, escalation, calamity, crisis, act or material adverse change in the economic conditions in, or in the financial markets of, the United States, the European Union, the Peoples’ Republic of China or Hong Kong could be reasonably expected to make it, impracticable or inadvisable to proceed with the consummation of the transactions on the terms and in the manner contemplated in this Agreement or the Notes;

(v) suspension of trading in the Common Stock by the Trading Market;

(vi) the enactment, publication, decree or other promulgation after the date hereof of any Applicable Law that could be reasonably expected to have a Material Adverse Effect; or

(vii) the declaration of a banking moratorium by any federal or New York state Governmental Authority; or the taking of any action by any Governmental Authority after the date hereof in respect of its monetary or fiscal affairs that could reasonably be expected to have a material adverse effect on the financial markets in the United States, European Union, the Peoples’ Republic of China, Hong Kong or elsewhere.

(c) The Company may terminate this Agreement at any time prior to the Closing Date by written notice to the Investors based upon the Investors’ intentional breach of its representations, warranties, covenants and obligations under this Agreement.

12. Survival of Representations and Indemnities . The representations and warranties, covenants, indemnities and contribution and expense reimbursement provisions and other agreements of the Company and Quo set forth in this Agreement shall remain operative and in full force and effect, and will survive, regardless of (i) any investigation, or statement as to the results thereof, made by or on behalf of the parties hereto, and (ii) acceptance of the Notes and Warrants, and payment for them hereunder.

13. Substitution of Investors . The Investors shall have the right to substitute any one of its Affiliates as the investor of the Securities, by written notice to the Company, which notice shall be signed by the Investors and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations and warranties set forth in Section 8. Upon receipt of such notice, wherever the word “Investors” is used in this Agreement (other than in this Section 13), such word shall be deemed to refer to such Affiliate in lieu of the original Investor or Investors so substituted. In the event that such Affiliate is so substituted as a investor hereunder and such Affiliate thereafter transfers to the original Investor or Investors all of the Securities then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word “Investors” is used in this Agreement (other than in this Section 13), such word shall no longer be deemed to refer to such Affiliate, but shall refer to the original Investor or Investors, as the case may be, and the original Investor or Investors shall have all the rights of an original holder of the Securities under this Agreement.

14. Miscellaneous .

(a) Notices given pursuant to any provision of this Agreement shall be addressed as follows: (i) if to the Company, Quo and the Designated Holders, to: 21/F, Chinachem Century Tower, 178 Gloucester Road, Hong Kong, Fax: +852-2833-2186, Attention: Daley Mokwith a copy to Crone Rozynko, LLP, Fax: +1-415-955-8910, Attention: Alisande Rozynko, and (ii) (a) if to OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund, L.P., to: 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 and Scott Ciccone, and (b) if to Sculptor Finance (MD) Ireland Limited, Sculptor Finance (AS) Ireland Limited or Sculptor Finance (SI) Ireland Limited, to: 5 Habormaster Place, IFSC, Dublin 1, Ireland, Fax: +353-1-6806050, Attention: The Directors, with a copy to 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 and Scott Ciccone.

(b) Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it nor any other person acting on its behalf will provide the Investors or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto the Investors shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that the Investors shall be relying on the foregoing representations in effecting transactions contemplated hereunder.

(c) This Agreement has been and is made solely for the benefit of and shall be binding upon the parties hereto and, to the extent provided in Section 10 hereof, the controlling persons and their respective agents, employees, officers, directors, partners, counsel, and shareholders referred to in Section 10, and their respective heirs, executors, administrators, successors and assigns, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement; provided , however , that subject to applicable laws and regulations, this Agreement, the Securities and all rights hereunder and thereunder may be transferred or assigned in whole or in part by the Investors, and the Company shall assist the Investors in consummating any such transfer or assignment.

(d) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(e) 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.

(f) 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.

(g) No failure to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

(h) This Agreement may be signed in various counterparts which together shall constitute one and the same instrument. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

(i) The headings in this Agreement are for convenience of reference only and shall not constitute part of this Agreement nor limit or otherwise affect the meaning of any provision of this Agreement.

(j) 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, in each case to the extent permitted by applicable law, and the parties hereto shall use their 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, to the extent permitted by applicable law.

(k) No amendment, modification or supplement shall be effective, nor shall any waivers or similar consents to depart from the provisions of this Agreement be given without the prior written consent of the Investors.

[Signature Page(s) to Follow]

	NETWORK CN INC.

	By:	/
		Name:
		Title:


	SHANGHAI QUO ADVERTISING COMPANY LIMITED

	By:
		Name:
		Title:




		Lina Zhang



		Qinxiu Zhang

	INVESTORS:


	SCULPTOR FINANCE (MD) IRELAND LIMITED



	By:
	Name:
	Title:



	SCULPTOR FINANCE (AS) IRELAND LIMITED


	By:
	Name:
	Title:



	SCULPTOR FINANCE (SI) IRELAND LIMITED


	By:
	Name:
	Title:

	OZ MASTER FUND, LTD.

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



	By:
	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:
	N ame:	Joel Frank
	Title:	CFO



	OZ GLOBAL SPECIAL INVESTMENTS MASTER FUND, L.P.


	By:	OZ Advisors LP, its General Partner
	By:	Och-Ziff Holding Corporation, its General Partner


	By:
	Name:	Joel Frank
	Title:	CFO

Exhibit 99.2

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE (A) ABSENCE OF (I) A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE SECURITIES ACT OR (II) AN OPINION OF COUNSEL TO THE HOLDER THAT SUCH REGISTRATION IS NOT REQUIRED OR (B) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF THE SECURITIES ACT.

SECURED CONVERTIBLE PROMISSORY NOTE

US$[_________]

___________, 2007

Hong Kong, China

FOR VALUE RECEIVED, NETWORK CN INC., a Delaware corporation (hereinafter called the “ Borrower ”), hereby promises to pay to [ Name of the Investor ], a company organized under the laws of the Republic of Ireland (the “ Holder ”) or its registered assigns or successors in interest or order, without demand, the sum of [___________(US$__________)] , or if less, the aggregate principal amount of the borrowing outstanding (“ Principal Amount ”), plus accrued and unpaid interest thereon, on June 30, 2011 (the “ Maturity Date ”).

This Secured Convertible Promissory Note (“ Note ”) has been entered into pursuant to, and is subject to, a Note and Warrant Purchase Agreement dated as of November 19, 2007 by and among the Borrower and the Holder, among others (the “ Purchase Agreement ”), and shall be governed by the terms of such Purchase Agreement. The securities represented by this Note are also subject to the Registration Rights Agreement and the Investor Rights Agreement. This Note is secured by the Security Documents .

The following terms shall apply to this Note:

ARTICLE I

DEFINITIONS

1.1 Definitions . Except as otherwise defined herein, each capitalized term used herein shall have the meaning assigned to it in the Purchase Agreement. As used in this Note, the following terms, unless the context otherwise requires, have the following meanings:

(a) “Bridge Loan Note” means a six-month convertible note issued to Wei An Developments Limited on November 12, 2007 in the principal amount of $5,000,000 and at the interest rate of 12% per annum.

(b) “Bridge Loan Warrant” means a warrant issued to Wei An Developments Limited on November 12, 2007 to purchase a total of 250,000 shares of the Company’s Common Stock at an exercise price of US$2.3 per share and within two years after the issuance.

(c) “Broker’s Warrant” means the warrant issued to * on September 10, 2007 to purchase a total of 300,000 shares of the Company’s Common Stock at an exercise price of US$3.0 per share and within two years after the issuance.

(d) “Common Stock Equivalent” means any shares, securities, exchangeable securities, subscription rights, options or other obligations of the Borrower which are by their terms capable of being subscribed, exchanged, exercisable or otherwise convertible into any Common Stock of the Borrower.

(e) “ ESOP ” means (i) the 2004 Stock Incentive Plan filed as an exhibit to the Company’s registration statement on form S-8 filed with the SEC on April 22, 2004 ; (ii) the 2007 Stock Option / Stock Issuance Plan filed as an exhibit to the Company’s proxy statement on form 14A filed with the SEC on October 19, 2007; it being understood that no more than *%, *%, *%, *%, and the remaining of the total number of shares of Common Stock issuable under the ESOP shall be issued in November and December of 2007, 2008, 2009, 2010, and 2011, respectively.

(f) “ Exempt Issuance ” means the issuance of (a) up to 7,500,000 shares of Common Stock under either the Company’s ESOP, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Note, or to employees, consultants, service providers, officers or directors of the Borrower pursuant to any other stock or option plan duly adopted for such purpose by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Note, provided that such securities have not been amended since the date of this Note to increase the number of such securities or to decrease the exercise, exchange or conversion price of such securities.

(g) “ Permitted Indebtedness ” means (a) the indebtedness evidenced by this Note, (b) the Indebtedness existing on the date of this Note and set forth on the Most Recent Balance Sheet, (c) lease obligations, purchase money indebtedness of up to $2,000,000, in the aggregate, incurred in connection with the acquisition of capital assets and lease obligations with respect to newly acquired or leased assets and (d) indebtedness that is expressly subordinate to the Notes pursuant to a written subordination agreement with the Holder and does not exceed $2,000,000 in the aggregate; and (e) trade payable and other accounts payable incurred in the ordinary course of business of the Company of up to $2,000,000 in the aggregate.

(h) “ Permitted Lien ” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Borrower) have been established in accordance with GAAP and duly reflected in the Financial Statements; (b) Liens imposed by law which were incurred in the ordinary course of the Borrower’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Borrower’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Borrower and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien; and (c) Liens incurred in connection with Permitted Indebtedness under clauses (c) thereunder, provided that such Liens are not secured by assets of the Company or its Subsidiaries other than the assets so acquired or leased.

ARTICLE II

INTEREST

2.1 Interest Rate . The Borrower hereby agrees to pay interest to the Holder in respect of the outstanding Principal Amount of this Note at a per annum rate equal to 3% (“ Interest Rate ”) in cash. Such interest shall accrue on the outstanding Principal Amount of this Note from and after the date hereof and shall be payable semi-annually in arrears with the first interest payment due on December 31, 2007 and succeeding interest payments due on the last Business Day of each June and December thereafter. All computations of interest hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) occurring in the period for which such interest is payable.

2.2 Default Interest . Notwithstanding anything to the contrary contained in Section 2.1 , upon the occurrence and during the continuation of any Event of Default (as defined below), Interest on the outstanding Principal Amount of this Note shall accrue at 25% per annum from the date of such Event of Default until the Redemption Price is paid in full (as defined below), payable on demand.

2.3 No Prepayment . The Borrower may not prepay all or any part of the Note at any time without the express written consent of the Holder.

2.4 Taxes . Any and all payments by the Borrower to or for the account of the Holder under this Note shall be made free and clear of and without deduction for any Taxes, except as required by Applicable Law. If the Borrower shall be required by any Applicable Law to deduct any Taxes from or in respect of any sum payable under this Note to the Holder, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable un der this ‎ Section 2.4 ), the Holder receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with Applicable Law, and (iv) as promptly as practicable after the date of such payment, the Borrower shall furnish to the Holder the original or a certified copy of a receipt evidencing payment thereof.

ARTICLE III

CONVERSION RIGHTS

3.1 Holder’s Conversion Rights . The Holder shall have the right, but not the obligation, to convert all or a part of the outstanding Principal Amount of this Note, together with any accrued and unpaid interest thereon to the date of such conversion, into such number of fully paid and non-assessable Common Stock of the Borrower (the “ Conversion Shares ”), at any time prior to the Maturity Date, subject to the terms and conditions set forth in this Article 3 , at a conversion price (the “ Conversion Price ”) per share of Common Stock calculated in accordance with Section 3.2 .

3.2 Conversion Price .

(a) The initial conversion price (the “ Initial Conversion Price ”) shall be US$1.65, as proportionally adjusted for any subdivision, consolidation, reclassification or similar event of the Common Stock.

(b) The Initial Conversion Price shall be adjusted downwards if the Actual EPS for the fiscal year ending 31 December 2008 is less than the 2008 EPS Target as follows:

2008 Adjusted Conversion Price =Initial Conversion Price X [1- (2008 EPS Target - Actual 2008 EPS) / 2008 EPS Target]

(c) The Conversion Price then in effect (as adjusted if applicable) shall be further adjusted downwards if the Actual EPS for the fiscal year ending 31 December 2009 is less than the 2009 EPS Target as follows:

2009 Adjusted Conversion Price = Conversion Price then in effect X [1-(2009 EPS Target - Actual 2009 EPS) / 2009 EPS Target]

(d) The Conversion Price then in effect (as adjusted if applicable) shall be further adjusted downwards if the Actual EPS for the fiscal year ending 31 December 2010 is less than the 2010 EPS Target as follows:

2010 Adjusted Conversion Price = Conversion Price then in effect X [1-(2010 EPS Target - Actual 2010 EPS) / 2010 EPS Target]

(e) “EPS Target” means, for the fiscal years ending 31 December 2008, 2009 and 2010, the recurring earning per share of US$0.081, US$0.453, and US$0.699, respectively.

Text marked by “*” has been omitted pursuant to a request for confidential treatment and was filed separately with the Securities and Exchange Commission.

(f) “Actual EPS” for a fiscal year means the amount of fully diluted recurring earning per share calculated in accordance with the earning per share stated in the Borrower’s audited financial statements contained in its annual report filed with the U.S. Securities and Exchange Commission(the “ SEC ”) for such fiscal year. For the avoidance of doubt, the net income amount for a fiscal year used for the calculation of the Actual EPS shall exclude the following expenses or income for such fiscal year (without double counting): (i) accounting charges arising from or in connection with the issuance or conversion of the Notes and their embedded derivatives; and all other accounting charges related to the Notes and their embedded derivatives, if any, (ii) accounting charges arising from or in connection with the issuance or exercise of the Warrants, Bridge Loan Warrant and Broker’s Warrant; and all other accounting charges related to the Warrants, Bridge Loan Warrant and Broker’s Warrant, if any, (iii) the after tax amount of interest recognized in each of the relevant fiscal year associated with this Note and Bridge Loan Note, (iv) accounting income or charges arising from any changes or introduction of new accounting standards after the Initial Closing; and (v) any extraordinary gain or loss. The amount of each of the aforementioned items shall be determined in accordance with the GAAP. Furthermore, the number of shares used for the calculation of the Actual EPS shall exclude the number of (i) shares of Common Stock issued or issuable upon conversion of the Notes , (ii) shares of Common Stock issued or issuable upon exercise of the Warrants, (iii) shares of Common Stock and options issued or issuable under the ESOP in accordance with the GAAP, (iv) up to * or * in relation to the *of *; (v) shares of Common Stock issued or issuable upon exercise of the Bridge Loan Warrant, and (vi) shares of Common Stock issued or issuable upon exercise of the Broker’s Warrant.

(g) In the event of any dispute with the calculation of Actual EPS for any fiscal year between the Borrower and the Holder, the Borrower and the Holder shall negotiate in good faith to resolve such disagreement; if resolution cannot be achieved within thirty (30) days from the date of the initial disagreement, the Borrower and the Holder shall jointly appoint an independent accounting firm with international reputation, who shall not be the auditors of the Borrower to resolve the dispute with respect to the calculation of the relevant Actual EPS, whose decision shall be final and binding upon the Borrower and the Holder. The fees and costs of the independent accounting firm incurred in the resolution of the amount of relevant Actual EPS in dispute shall be reasonably determined by the independent accounting firm and set forth in its decision, and shall be allocated between and paid by the Borrower, on the one hand, and the Holder, on the other hand, in inverse proportion to the extent they prevailed on the amount of relevant Actual EPS in dispute.

(h) If the Third Closing fails to be completed before December 31, 2007, the EPS Target for 2008 shall be adjusted as follows:

Adjusted 2008 EPS Target = 0.081 * [(365-X) / 365]

Where

X --

The actual number of days for the period commencing from January 1, 2008 to the date of the Third Closing.

(i) In the event of any restatement of the Borrower’s audited financial statements at a date later than their publication in the Borrower’s annual report filed with the SEC for the relevant fiscal year, the Conversion Price then in effect shall be appropriately adjusted notwithstanding any earlier adjustment, provided that any restatement caused by changes to the GAAP itself shall not trigger any adjustment of the Conversion Price then in effect.

(j) For the avoidance of doubt, any adjustment to the Conversion Price then in effect can only result in a downward adjustment. If the actual Conversion Price after adjustment is more than the Conversion Price then in effect, the Conversion Price shall remain unchanged.

3.3 Conversion Procedures .

(a) In the event that the Holder elects to convert this Note into Common Stock, the Holder shall give notice of such election by delivering an executed and completed notice of conversion (a “ Notice of Conversion ”) to the Borrower, which Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount, accrued an unpaid interest and amounts being converted. The date specified in the Notice of Conversion, or if no date is specified, then the date of the delivery of the Notice of Conversion, shall be referred to as the “ Conversion Date .” A form of Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit A .

(b) Pursuant to the terms of the Notice of Conversion, the Borrower shall deliver, or cause to be delivered, such number of Conversion Shares as determined pursuant to this Note via physical certificates. In the case of the exercise of the conversion rights set forth herein, the conversion privilege shall be deemed to have been exercised and the Conversion Shares issuable upon such conversion shall be deemed to have been issued upon the Conversion Date. The Holder shall be treated for all purposes as the beneficial holder of such shares of Common Stock, unless the Holder provides the Borrower written instructions to the contrary.

(c) The number of Conversion Shares to be issued upon each conversion of this Note pursuant to this Article 3 shall be determined by dividing the Principal Amount and accrued interest to be converted, if any, by the then applicable Conversion Price. No fractional shares of Common Stock shall be issued upon any conversion of this Note. In lieu of the Borrower issuing any fractional shares to the Holder upon any conversion of this Note, the Borrower shall make an adjustment and payment in cash to the Holder.

3.4 Further Adjustment Events.

(a) The Conversion Price and number and kind of shares or other securities to be issued upon conversion shall be subject to adjustment from time to time upon the happening of certain events while this conversion right remains outstanding, as follows:

(i) Merger, Sale of Assets, etc . If (A) the Borrower effects any merger or consolidation of the Borrower with or into another entity, (B) the Borrower effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Borrower or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the Borrower consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more persons or entities whereby such other persons or entities acquire more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement or other business combination), or (E) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate Common Stock of the Borrower (in any such case, a “ Fundamental Transaction ”), this Note, as to the Principal Amount thereof and accrued and unpaid interest thereon, shall thereafter be deemed to evidence the right to convert into such number and kind of shares or other securities and property as would have been issuable or distributable on account of such Fundamental Transaction, upon or with respect to the securities subject to the conversion right immediately prior to such Fundamental Transaction. The foregoing provision shall similarly apply to successive Fundamental Transactions of a similar nature by any such successor or purchaser. Without limiting the generality of the foregoing, the provisions of this Section shall apply to such securities of such successor or purchaser after any such Fundamental Transaction.

(ii) Reclassification, etc . If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes, this Note, as to the Principal Amount hereof and accrued and unpaid interest hereon, shall thereafter be deemed to evidence the right to convert into an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

(iii) Stock Splits, Combinations and Dividends . If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event.

(iv) Share Issuance . So long as any amount of this Note is outstanding, if the Borrower shall issue any Common Stock except for Common Stock issued or issuable pursuant to an Exempt Issuance, prior to the full conversion or payment of this Note, for a consideration less than the Conversion Price then in effect(as adjusted if applicable), then, and thereafter successively upon each such issuance, the Conversion Price shall be reduced to such other lower issue price. For purposes of this adjustment, the issuance of any security or debt instrument of the Borrower carrying the right to convert such security or debt instrument into Common Stock or of any warrant, right or option to purchase Common Stock shall result in an adjustment to the Conversion Price upon the issuance of the above-described security, debt instrument, warrant, right, or option and again upon the issuance of shares of Common Stock upon exercise of such conversion or purchase rights if such issuance is at a price lower than the then applicable Conversion Price. For the avoidance of doubt, any issuance of shares of Common Stock issuable upon conversion of the Bridge Loan Note or exercise of the Bridge Loan Warrant shall trigger the adjustment under this Section 3.4 (a) (iv) .

(b) If the Borrower at any time or from time to time, prior to the full conversion of this Note, shall take any action affecting its Common Stock or share capital similar to or having an effect similar to any of the actions described in Section 3.4(a) , then, and in each such case, the Conversion Price shall be adjusted in such manner as would be equitable in the circumstances.

3.5 Notice as to Adjustments . Whenever the Conversion Price is adjusted pursuant to this Article 3 , the Borrower shall promptly mail to the Holder a notice setting forth the Conversion Price after such adjustment and setting forth a statement of the facts requiring such adjustment.

3.6 Reservation and Registration . The Borrower covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note, free from all Liens, preemptive rights or any other actual contingent purchase rights of Persons other than the Holder, not less than the aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of this Article II) upon the conversion of this Note. The Borrower covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, pursuant to the Registration Rights Agreement, shall be registered for public sale in accordance therewith. The Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

3.7 Transfer Taxes . The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary, stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates.

ARTICLE IV

COVENANTS OF THE BORROWER

4.1 Affirmative Covenants of the Borrower .

(a) Maintenance of Insurance . The Borrower shall, and shall cause other Group Companies to, maintain such insurance policies as are normal and customary for companies in the same business and of the same or similar size as the Borrower to cover the risks of the business carried on by the Borrower or other Group Companies.

(b) Qualified Accounting Firm . The Borrower shall maintain the engagement of Jimmy Cheung & Co. / Webb and Company, P.A. or shall appoint at its own expense an accounting firm of international reputation (each, a “ Qualified Accounting Firm ”), as auditor of the Group Companies, and shall cause this auditor to audit the Group Companies’ consolidated annual financial statements for the fiscal year beginning January 1, 2007 and perform interim reviews of the Group Companies’ consolidated quarterly financial statements, all in accordance with Regulation S-X.

(c) Maintaining Records; Information Rights . The Borrower shall maintain financial records in accordance with generally accepted practices and, upon reasonable notice, at all reasonable times and as often as the Holder may reasonably request, permit any authorized representative designated by the Holder to visit and inspect the properties and financial records of the Group Companies and to make extracts from such financial records, and permit any authorized representative designated by the Holder to discuss the affairs, finances and conditions of the Group Companies with the senior management personnel of the Borrower, the Qualified Accounting Firm, and such other employees as the Borrower shall deem appropriate, subject to the execution of appropriate non-disclosure agreements whereby the Holder agrees not to trade on any acquired inside information illegally.

(d) Use of Proceeds . The Borrower shall use the net proceeds from the sale of the Note for capital expenditures on tangible assets, leases, license rights and potential acquisitions related to the Group Companies’ media business and the expansion of the Group Companies as a whole.

4.2 Negative Covenants of the Borrower . The Borrower, covenants that, so long as all or any of the Principal Amount of this Note remains outstanding, no Group Company shall, without the prior written consent of the Holder:

(a) Charter Documents . Modify, alter, repeal or amend any Group Company’s Charter Documents or effect any change of legal form of any Group Company.

(b) Major Transaction . Merge, consolidate or amalgamate with or into any other Person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of its assets in any one transaction or series of transactions.

(c) Dividends or Repurchases . Declare or pay dividends or other distributions by any Group Company, or the redemption or repurchase more than a de minimis number of shares of its Common Stock other than as (a) permitted or required under the Transaction Documents, or (b) repurchases of Common Stock or Common Stock Equivalents of departing officers and directors of the Company.

(d) Equity Interests . Except for Exempt Issuance or as otherwise expressly contemplated in the Transaction Documents, authorize, reclassify, recapitalize, issue, offer or exchange any securities or other equity interests of any Group Company, including, without limitation, any and all shares of capital stock, securities convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares and any securities that represent the right to receive any of the foregoing.

(e) Benefit Plans . Grant of any equity incentives to, and adoption, amendment or termination of any equity incentive plan or employee benefit plan (including but not limited to the ESOP) for the benefit of, officers, directors or employees of any member of the Company Group.

(f) Expenditures . (i) Acquire, or invest in, any business, (ii) make any capital expenditure for an amount greater than US$2,000,000, (iii) dispose of any asset for an amount greater than US$2,000,000 or less than the book value of such asset (other than the sale of inventory in the ordinary course of business), (iv) acquire or purchase any interest in any real property for an amount greater than US$2,000,000, other than, in each case, as specifically pre-approved by the Board of Directors in an annual budget.

(g) Bankruptcy and Liquidation . Commence or consent by to any proceeding seeking (i) to adjudicate it as bankrupt or insolvent, (ii) liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of its indebtedness under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or (iii) the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property.

(h) Public Offering . Any public offering or registration of securities of any Group Company other than as expressly contemplated by the Transaction Documents.

(i) Fiscal Year . Change of the term of the fiscal year of any Group Company.

(j) Material Agreements . Enter into, extend, terminate or otherwise materially modify or amend: (i) any Material Contract and (ii) any other agreement with an Affiliate, officer, director, stockholder, consultant or employee of any Group Company.

(k) Indebtedness. Other than Permitted Indebtedness, create, incur, assume, guarantee or be or remain liable for, contingently or otherwise, or suffer to exist any (i) Debt that would rank senior or pari passu to the Note in order of payment, or (ii) any Debt that is convertible into the shares of Common Stock or other securities of the Borrower.

(l) Lien . Other than Permitted Liens, create, incur, assume, guarantee or be or remain liable for, contingently or otherwise, or suffer to exist any Liens.

(m) Financing . Enter or agree to any other capital raising transaction or transactions with any Person other than the Holder or its Affiliates; provided that, if the Holder fails to exercise the Warrants, in whole or in part, for an aggregate amount of $50,000,000 on or prior to July 1, 2008, the Borrower can raise up to in the aggregate amount of $50,000,000 in the form of the Common Stock of the Company from a Person other than the Holder or its Affiliates for a period of 180 days commencing on July 1, 2008 without the prior consent of the Holder. The Holder maintains its preemptive or similar rights with respect to any subsequent financing.

(n) Investments, Partnerships and Joint Ventures . (i) Subscribe, purchase or acquire any securities of, or any interest in, or the making of any contribution to, any Person (other than contributions by such Group Company to another Group Company), (ii) create or cause to be formed any new Subsidiary, (iii) enter into any partnerships, joint ventures or consortiums, or (iv) otherwise transfer all or any part of the businesses of the Group Companies to another Person.

(o) Compensation . Materially increase or change the compensation package (including salary, bonus and equity incentives, if any) of any member of the management team of any Group Company with an annual total compensation package in excess of US$100,000.

(p) Accountants . Appoint or remove of any independent public accountant of any Group Company, including the Qualified Accounting Firm.

(q) Litigation . Commence or settle of any litigation or claim involving a monetary payment greater than US$500,000 or which imposes restrictions on any Group Company or the conduct of its businesses, except collection actions against third parties in the ordinary course of business.

(r) Tax and Accounting Practices . Adopt or change a significant tax or accounting practice or the making of any significant tax or accounting election or the adoption of any position for purposes of any financial statements that, in the reasonable judgment of the Holder, shall have a material adverse effect on the Group Companies taken, taken as a whole, or on the Holder, unless the taking of such position is expressly contemplated by the Transaction Documents.

(s) Transactions with Related Parties . Enter into any transaction with any officer, director or employee of any Group Company or any “affiliate” or “associate” (as those terms are defined in Rule 405 promulgated under the Securities Act) or any of them (each of the foregoing, a “ Related Party ”), except (i) as expressly permitted by the Transaction Documents or (ii) in the ordinary course of business and pursuant to the reasonable requirements of the business of any Group Company, and, in the case of clause (ii), upon fair and reasonable terms no less favorable to the Group Company than would be obtained in a comparable arm’s-length transaction with a Person not a Related Party and which are disclosed in advance to the Holder and which are disclosed or disclosable in the audited financial statements of the Borrower.

(t) Other Businesses . Engage, directly or indirectly, in any business other than the business currently conducted by the Group Companies.

ARTICLE V

EVENTS OF DEFAULT

The occurrence of any of the following events shall constitute an event of default (“ Event of Default ”):

5.1 Failure to Pay Principal or Interest . the Borrower shall fail to pay any Principal Amount, when due, or any interest or other sum due under this Note or any Transaction Documents.

5.2 Breach of Covenant . The Borrower breaches any covenant or other term or condition of the this Note (including but not limited to the conversion obligations in Article 3 ) in any material respect, which failure is not cured, if possible to cure, within five Business Days after the Company has become or should have become aware of such failure.

5.3 Breach of Representations and Warranties . Any representation or warranty of the Borrower made herein or in any other Transaction Document shall be false or misleading in any material respect as of the date made and the Closing Date.

5.4 Receiver or Trustee . The Borrower or any Subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for them or for a substantial part of their property or business; or such a receiver or trustee shall otherwise be appointed.

5.5 Judgments . Any judgment against the Borrower or any Subsidiary of the Borrower or any of their property or other assets with actual damages, net of insurance proceeds in excess of $500,000 and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of thirty (30) calender days.

5.6 Non-Payment . A default by the Borrower or any Subsidiary under any one or more obligations in an aggregate monetary amount in excess of $100,000, unless the Borrower or such Subsidiary is contesting the validity of such obligation in good faith and has segregated cash funds equal to the contested amount.

5.7 Bankruptcy . Bankruptcy, insolvency, reorganization, or liquidation proceedings or other such proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such event, shall be instituted by or against the Borrower or any Subsidiary of Borrower.

5.8 Delisting . The Common Stock shall not be eligible for listing or quotation for trading on a Trading Market for a period of ten (10) consecutive trading days, and shall not be eligible to resume listing or quotation for trading thereon within thirty (30) trading days.

5.9 Stop Trade . An SEC or judicial stop trade order or OTC Bulletin Board or other exchange trading suspension with respect to Borrower’s Common Stock and not being rectified and resumed within thirty (30) trading days.

5.10 Failure to Deliver Common Stock . Borrower’s failure to timely deliver shares of Common Stock to the Holder prior to the seventh (7 ^th ) trading day after a conversion date.

5.11 Non-Registration . The failure to timely file the registration statements covering the Conversion Shares and the Warrant Shares in accordance with the Registration Rights Agreement.

5.12 Cross Default . A default by the Borrower of a material term, covenant, warranty or undertaking of any Transaction Document or other Material Contracts which is not cured after any required notice and/or cure period and could reasonably be expected to have a Material Adverse Effect.

5.13 Concession Advertising Rights Agreements . Termination of any Concession Advertising Rights Agreements to which any PRC Operating Company is a party or the failure of any Intermediate Companies to obtain or maintain any Concession Advertising Rights which could reasonably be expected to have a Material Adverse Effect.

5.14 Moratorium and Nationalization . (i) the confiscation, expropriation or nationalization by any Governmental Authority of any property or assets of the Borrower or any of its Subsidiaries if such confiscation, expropriation or nationalization could reasonably be expected to have a Material Adverse Effect; or (ii) if such revocation or repudiation could reasonably be expected to have a Material Adverse Effect, the revocation or repudiation by any Governmental Authority of any previously granted governmental permits or licenses to the Borrower’s PRC Subsidiaries or Intermediate Companies, or (iii) the imposition or introduction of material and discriminatory taxes, tariffs, royalties, customs or excise duties imposed on the Borrower’s PRC Subsidiaries, or the material and discriminatory withdrawal or suspension of material privileges or specifically granted material rights of a fiscal nature.

5.15 Security Interest . The Security Documents or any of the security provided for therein shall, at any time, cease to be in full force and effect for any reason other than the satisfaction in full of all obligations under the Note and discharge of the Note or any security interest created thereunder shall be declared invalid or unenforceable or the Borrower or any Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable.

5.16 Reservation Default . Failure by the Borrower to have reserved for issuance upon conversion of the Note the amount of Common Stock as set forth in this Note and the Transaction Documents.

5.17 Failure to Complete Subsequent Closings . The Second Closing fails to be completed within forty-five (45) days following the effective date of the Purchase Agreement or the Third Closing fails to be completed within one hundred and twenty (120) days following the effective date of the Purchase Agreement.

5.18 Material Adverse Effect . The occurrence of a Material Adverse Effect in respect of the Borrower or any of its Subsidiaries taken as a whole.

ARTICLE VI

REDEMPTION

6.1 Optional Redemption Rights . If (i) there is an occurrence of any Event of Default, or (ii) the Actual EPS for any of the fiscal years ending 31 December 2008, 2009, or 2010 is less than 80% of the respective EPS Target for such fiscal year, the Holder shall have the right, at its option, to require the Borrower to repurchase this Note (the " Redemption Rights") from the Holder for an aggregate purchase price in cash (the " Redemption Price ") equal to (i) the aggregate Principal Amount and any accrued and unpaid interest (including default interest), plus (ii) an amount representing a 20% Internal Rate of Return on the Principal Amount, calculated from the date hereof through and until the date of payment in full of the Redemption Price (the " Redemption Date ").

6.2 Redemption Procedures . The Holder may exercise the Redemption Rights under Section 6.1 by delivering written notice to the Borrower (the " Redemption Notice "). The Borrower shall pay the Holder the Redemption Price not later than twenty (20) Business Days after delivery of such Redemption Notice by the Holder, and this Note shall be cancelled and retired. If the Redemption Notice shall have been duly given, and if on the Redemption Date the Redemption Price payable upon repurchase of this Note on the Redemption Date is paid or tendered for payment or deposited with an independent payment agent so as to be available therefor, then notwithstanding that this Note shall not have been surrendered by the Holder, interest with respect to this Note shall cease to accrue after the Redemption Date and all rights with respect to this Note (other than the right to receive the Redemption Price) shall forthwith after the Redemption Date terminate.

6.3 Failure to Pay . In the event that the Holder exercises the Redemption Rights and the Borrower does not have sufficient funds to pay the Redemption Price in full, this Note and the then outstanding Principal Amount plus all accrued and unpaid interest thereon shall, notwithstanding the Holder’s surrender of the Note to the Borrower pursuant to Section 6.2 , remain outstanding until the date the Holder receives the Redemption Price in full and the Holder shall maintain all of its rights and remedies under this Note. For the avoidance of doubt, interest on the Principal Amount shall continue to accrue to the extent provided in Section 2.1 until the date the Holder receives the Redemption Price in full.

6.4 Internal Rate of Return . “Internal Rate of Return” as used in Section 6.1 means a compounded, cumulative internal rate of return, compounded annually calculated at the designated annual discount rate, which, when applied to any amount, and discounted annually, produces a net present value of such amount equal to zero. Internal rate of return, for all relevant purposes of this Note, shall be calculated by using the Microsoft Excel method of calculating internal rate of return, using the XIRR function (or if such program is no longer available, such other software program for calculating internal rate of return proposed by the Holder and reasonably acceptable to the Borrower).

ARTICLE VII

SENIOR STATUS OF NOTE

7.1 Senior Status of Note . Except for obligations arising from the Permitted Lien, the obligations of the Borrower under this Note shall rank senior to all other Debt of the Borrower, whether now or hereinafter existing. Upon any Liquidation Event, the Holder will be entitled to receive, before any distribution or payment is made upon, or set apart with respect to, any other Debt of the Borrower or any class of capital stock or the Borrower, an amount equal to the Principal Amount plus all accrued and unpaid interest thereon. For purposes of this Note, “ Liquidation Event ” means a liquidation pursuant to a filing of a petition for bankruptcy under applicable law or any other insolvency or debtor’s relief, an assignment for the benefit of creditors, or a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Borrower.

ARTICLE VIII

MISCELLANEOUS

8.1 Failure or Indulgence Not Waiver . No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

8.2 Notices . Any notice required or permitted pursuant to this Note shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, fax, electronic mail or similar means to the address as shown below (or at such other address as such party may designate by fifteen (15) days’ advance written notice to the other parties to this Note given in accordance with this section):

If to the Borrower, to:

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:

Crone Rozynko, LLP

101 Montgomery Street, Suite 1950

San Francisco, CA 94104

Tel: (415) 955-8900

Fax: (415) 955-8910

Attention: Alisande M. Rozynko

If to the Holder, to:

5 Habormaster Place, IFSC

Dublin 1, Ireland

Facsimile number: +353 1 6806050

Attention: The Directors

with a copy to:

c/o Och-Ziff Capital Management Group

9 West 57th St., 13th Floor

New York, NY 10019

Attention: Joel Frank, Scott Ciccone

Fax: +1-212-790-0077

Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a confirmation of delivery, and to have been effected at the expiration of two (2) days after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid.

8.3 Amendment Provision . The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

8.4 Assignability . This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns. Subject to applicable laws and regulations, this Note and all rights hereunder may be transferred or assigned in whole or in part by the Holder, and the Borrower shall assist the Holder in consummating any such transfer or assigned. A transfer of this Note may be effected only by a surrender hereof to the Borrower and the issuance by the Borrower of a new note or notes in replacement thereof, which shall be registered by the Borrower in accordance with Section 8.5 hereof once an executed copy of the replacement note has been executed by the transferee.

8.5 Transfer Register. In the event of a transfer, the Borrower shall maintain a register (the " Register ") for the registration or transfer of the Note, and shall enter the names and addresses of the registered holders of the Note, the transfers of the Note and the names and addresses of the transferees of the Note. the Holder and each assignee shall be provided reasonable opportunities to inspect the Register from time to time. The Borrower shall treat any registered holder as the absolute owner of the Note held by such holder, as indicated in the Register, for the purpose of receiving payment of all amounts payable with respect to such Note and for all other purposes. The Note is registered obligations and the right, title, and interest of any Person in and to such Note shall be transferable only upon notation of such transfer in the Register. Solely for purposes of this Section 8.5 and for tax purposes only, the keeper of the Register, if it is not the Borrower, shall be the Borrowers' agent for purposes of maintaining the Register. This Section 8.5 shall be construed so that the Note is at all times maintained in "registered form" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related regulations (and any other relevant or successor provisions of the Code or such regulations).

8.6 Cost of Collection . If default is made in the payment of this Note, the Borrower shall pay the Holder hereof reasonable costs of collection, including attorneys’ fees.

8.7 Governing Law . This Note shall be governed by and construed in accordance with the laws of the State of New York , including, but not limited to, New York statutes of limitations.

8.8 Maximum Payments . Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

8.9 Construction . Each party acknowledges that its legal counsel participated in the preparation of this Note and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Note to favor any party against the other.

8.10 No Rescission, Set Off, Counterclaim or Defense . This Note is not subject to any right of rescission, set off, counterclaim or defense by the Borrower, including the defense of usury, nor would the operation of any of the terms of this Note or the other Transaction Documents, or the exercise of any right hereunder or thereunder, render this Note unenforceable (subject to principles of equity and bankruptcy, insolvency and other laws generally affecting creditors’ rights and the enforcement of debtors’ obligations), and the Borrower has not asserted any right of rescission, set off, counterclaim or defense with respect thereto.

8.11 Non-Business Days . Whenever any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due or action shall be required on the next succeeding business day and, for such payment, such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

* * *

[Remainder of the Page Intentionally Left Blank]

IN WITNESS WHEREOF , Borrower has caused this Note to be signed in its name by an authorized officer as of the date first set forth above.

	NETWORK CN INC.


	By:
		Name:
		Title:

ACCEPTED AND AGREED:

[INVESTOR]

By: _____________________________

Name

Title:

Exhibit A

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal and accrued and unpaid interest under the Secured Convertible Promissory Note due 2011 of NETWORK CN INC., a Delaware corporation (the “ Company ”), into shares of Common Stock according to the conditions hereof, as of the date written below. No fee will be charged to the holder for any conversion.

Conversion calculation:

Date to Effect Conversion:

Number of shares of Common Stock to be issued:

HOLDER: _______________________________________

(Print Name of Holder)

By: ________________________________

Name:
Title:

Exhibit 99.3

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR UNDER THE SECURITIES LAWS OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED. ANY ATTEMPT TO SELL, PLEDGE, HYPOTHECATE OR OTHERWISE TRANSFER THIS WARRANT OR THE SECURITIES ISSUABLE UPON THE EXERCISE THEREOF WILL BE VOID.

Void after

June 30, 2011

Issued this [_______], 2007

WARRANT TO PURCHASE COMMON STOCK

This Warrant is issued to [Name of the Investor] (the “ Holder ”), by Network CN Inc., a Delaware corporation (the “ Company ”), pursuant to the terms of that certain Note and Warrant Purchase Agreement dated as of November 19, 2007 by and among the Borrower and the Holder, among others (the “ Purchase Agreement ”). Terms used but not defined herein shall have the respective meaning set forth in the Purchase Agreement.

1. Purchase of Common Stock . Subject to the terms and conditions hereinafter set forth and set forth in the Purchase Agreement, the holder of this Warrant is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company up to the number of fully paid and nonassessable Common Stock (as defined below) that equals the Warrant Coverage Amount.

2. Definitions .

(a) Exercise Price . The exercise price for the Common Stock shall be US$[2.5][3.5] per share (such price, as adjusted from time to time, is herein referred to as the “ Exercise Price ”).

(b) Exercise Period . This Warrant shall be exercisable, in whole or in part, during the term commencing on the date hereof, and ending on the expiration of this Warrant pursuant to Section 12 hereof.

(c) Warrant Coverage Amount . The term “ Warrant Coverage Amount ” shall mean that number of Common Stock which equals to the quotient obtained by dividing the [First Note Purchase Price][Second Note Purchase Price][Third Note Purchase Price] (as defined in the Purchase Agreement) by US$[2.5][3.5], rounded to the nearest whole Common Stock.

(d) The Common Stock . The term “ Common Stock ” shall mean shares of Common Stock of the Company, par value US$0.001 per share.

3. Method of Exercise . While this Warrant remains outstanding and exercisable in accordance with Section 2 above, the holder may exercise, in whole or in part, the purchase rights evidenced hereby. Such exercise shall be effected by:

(i) the surrender of the Warrant, together with a notice of exercise to the Secretary of the Company at its principal offices; and

(ii) the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Common Stock being purchased.

4. Net Exercise . In lieu of exercising this Warrant pursuant to Section 3, the Holder may elect to receive, without payment by the Holder of any additional consideration, shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the holder hereof a number of Common Stock computed using the following formula:


	Y (A - B)
X =	A

Where

X --

The number of Common Stock to be issued to the holder of this Warrant.

Y --

The number of Common Stock purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation).

A --

The fair market value of one Common Stock (at the date of such calculation).

B --

The Exercise Price (as adjusted to the date of such calculations).

For purposes of this Section 4 , the fair market value of one Common Stock shall mean the average of the closing bid and asked prices of Common Stock quoted in the over-the-counter market in which the Common Stock is traded or the closing price quoted on any exchange on which the Common Stock is listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal for the ten (10) trading days prior to the date of determination of fair market value (or such shorter period of time during which such stock was traded over-the-counter or on such exchange). If the Common Stock is not traded on the over-the-counter market or on an exchange, the fair market value shall be as determined in good faith by the Company’s Board of Directors.

5. Updated Registry of Shareholders; Certificates for Common Stock . Upon the exercise of the purchase rights evidenced by this Warrant, the stock register of the Company shall be updated and one or more certificates for the number of Common Stock so purchased shall be issued as soon as practicable thereafter, and in any event within thirty (30) days of the delivery of the subscription notice.

6. Issuance of Common Stock . The Company covenants that the Common Stock, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved for the purpose of issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of Common Stock to provide for the exercise of the rights represented by this Warrant. In the event that there is an insufficient number of Common Stock reserved for issuance pursuant to the exercise of this Warrant, the Company will take appropriate action to authorize an increase in the capital stock to allow for such issuance or similar issuance acceptable to the Holder.

7. Adjustment of Exercise Price and Number of Common Stock . The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:

(a) Subdivisions, Combinations and Other Issuances . If the Company shall at any time prior to the expiration of this Warrant subdivide the Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock as a dividend, the number of Common Stock issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination. Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Common Stock purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.

(b) Reclassification, Reorganization and Consolidation . In case of any reclassification, capital reorganization, or change in the capital stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 7(a) above), then the Company shall make appropriate provision so that the holder of this Warrant shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of Common Stock as were purchasable by the holder of this Warrant immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the holder of this Warrant so that the provisions hereof shall thereafter be applicable with respect to any shares of stock or other securities and property deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price per share payable hereunder, provided the aggregate purchase price shall remain the same.

(c) Other Adjustment Event . If at any time prior to the expiration of this Warrant, the conversion price of the Notes is adjusted in accordance with Section 3 of the Notes, the Exercise Price shall be adjusted as follows:


	Y * [2.50][3.50]
X =	1.65

Where

X --

The Exercise Price of this Warrant after the adjustment.

Y --

The conversion price of the Notes after the adjustment in accordance with Section 3 of the Notes.

(d) Notice of Adjustment . When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the holder of such event and of the number of Common Stock or other securities or property thereafter purchasable upon exercise of this Warrant.

8. No Fractional Shares or Scrip . No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.

9. Representations of the Company . The Company represents that all corporate actions on the part of the Company, its officers, directors and stockholders necessary for the sale and issuance of this Warrant have been taken.

10. Transfers . Subject to compliance with the applicable federal and other securities laws and the provisions of this Section 10, this Warrant and all rights hereunder are transferable or assignable, in whole or in part, without charge to the Holder (except for transfer taxes), to any person or entity upon surrender of this Warrant properly endorsed or accompanied by written instructions of transfer.

11. Restrictive Legend . Each certificate representing the Common Stock shall be endorsed with the following legend (in addition to any legend required under applicable state securities laws):

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.

12. Expiration of Warrant . This Warrant shall expire and shall no longer be exercisable after 5:00 p.m., New York local time, on June 30, 2011.

13. Notices . Except as otherwise set forth in this Warrant, any notice required or permitted pursuant to this Warrant shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, fax, electronic mail or similar means to the address as shown below (or at such other address as such party may designate by fifteen (15) days’ advance written notice to the other parties to this Warrant given in accordance with this section):

If to the Company, to:

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:

Crone Rozynko, LLP

101 Montgomery Street, Suite 1950

San Francisco, CA 94104

Tel: (415) 955-8900

Fax: (415) 955-8910

Attention: Alisande M. Rozynko

If to the Holder, to:

5 Habormaster Place, IFSC

Dublin 1, Ireland

Facsimile number: +353 1 6806050

Attention: The Directors

with a copy to:

c/o Och-Ziff Capital Management Group

9 West 57th St., 13th Floor

New York, NY 10019

Attention: Joel Frank, Scott Ciccone

Fax: +1-212-790-0077

14. Governing Law . This Warrant and all actions arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions of the State of New York or of any other state.

15. Cooperation . The Company will not, by amendment of its bylaws or certificate of incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of the Warrant against impairment.

16. Waiver and Amendment . Any provision of this Warrant may be amended, waived or modified only upon the written consent of the Company and the Holder.

17. Payment of Taxes . The Company shall pay all stamp taxes attributable to the initial issuance of Common Stock issuable upon any exercise of the Warrant, excluding any tax or taxes which may be payable because of the transfer involved in the issuance or delivery of any certificates for Common Stock in a name other than that of the exercising Holder in respect of which such Common Stock are issued.

	“ THE COMPANY ”



	NETWORK CN INC.


	By:
	Name:
	Title:



	“ THE HOLDER ”

	[INVESTOR]

	By:
	By:


	By:
	Name:
	Title:

Exhibit 99.4

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of November 19, 2007 by and among (i) Network CN Inc., a Delaware corporation (the “ Company ”) and (ii) (a) Sculptor Finance (MD) Ireland Limited, Sculptor Finance (AS) Ireland Limited and Sculptor Finance (SI) Ireland Limited, as the initial purchasers of the Notes (as defined below) and (b) OZ Master Fund, Ltd., OZ Asia Master Fund, Ltd. and OZ Global Special Investments Master Fund, L.P., as the initial holders of the Warrants (collectively, the “ Investors ”). The Investors are each sometimes referred to individually as a “ Holder ” and collectively as the “ Holders ”.

This Agreement is made pursuant to the Note and Warrant Purchase Agreement dated November 19, 2007 (the “ Purchase Agreement ”) among the Investors, the Company, Shanghai Quo Advertising Company Limited and certain other individuals named therein, which provides for, among other things, the issuance and sale to the Investors, in one or more closings, of the Company’s 3% Senior Secured Convertible Notes due June 30, 2011, for an aggregate principal amount not exceeding US$50,000,000 (the “ Notes ”), convertible into Conversion Shares upon the terms and conditions set forth in the Purchase Agreement and the Notes. In addition, the Company has agreed to issue to the Investors at each closing of the Notes, without any further consideration thereof, certain Warrants (as defined in the Purchase Agreement), exercisable for Warrant Shares upon the terms and conditions set forth in the Purchase Agreement and the Warrants. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement (as defined below).

As an inducement to the Investors to enter into the Purchase Agreement, 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:

Certain Definitions .

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

(a) “ Aggregate Purchase Price ” means the aggregate purchase price paid at each Closing for the Notes and Warrants held by the Holders.

(b) “ Agreement ” means this Registration Rights Agreement, as the same may be amended from time to time pursuant to the terms hereof.

(d) “ 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.

(e) “ Closing Date ” means the date on which any Notes and Warrants in the Purchase Agreement are issued.

(f) “ Closing Price ” shall mean, on any day, (i) the closing price of the Shares (or any other security for which a closing price must be determined) on a national securities exchange or as quoted on the Nasdaq National Market on such day, as reported by the Wall Street Journal (National Edition) or (ii) if the Shares (or any such other security) are quoted on the Nasdaq National Market but no sale occurs on such day, the average of the closing bid and asked prices of the Shares (or any such other security) on the Nasdaq National Market on such day, as reported by the Wall Street Journal (National Edition) or (iii) if the Shares (or any such other security) are not so listed or quoted, the average of the closing bid and asked prices of the Shares (or any such other security) in the U.S. over-the-counter market or (iv) if no such trading market is readily available, the fair market value of the Shares (or any such other security) as determined in good faith by the Board of Directors of the Company or, if such determination is not satisfactory to the Holders of Registrable Securities for whom such determination is being made, by a nationally-recognized investment banking firm selected by the Company and Holders, the expenses for which shall be borne equally by the Company and the Holders.

(g) “ Commission ” means the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.

(h) “ Company ” has the meaning specified in the first paragraph of this Agreement.

(i) “Default Event” has the meaning assigned thereto in Section 2(d)

(j) “ Deferral Default Date ” has the meaning assigned thereto in Section 2(d).

(k) “ Deferral Notice ” has the meaning assigned thereto in Section 5(b).

(l) “ Deferral Period ” has the meaning assigned thereto in Section 5(b).

(m) “ Demand Registration ” has the meaning assigned thereto in Section 4(a).

(n) “ Demand Registration Statement ” means the registration statement referred to in Section 4(a), as amended or supplemented by any amendment or supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such registration statement.

(o) “ Effectiveness Default Date ” has the meaning assigned thereto in Section 2(d).

(p) “ Effective Period ” has the meaning assigned thereto in Section 2(a).

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

(r) “ Filing Date ” means, with respect to the Shelf Registration Statement required to be filed pursuant to Section 2(a) hereunder, the earlier of (A) the date on which such Shelf Registration Statement is deemed to be filed initially with the Commission and (B)(i) the 180 ^th calendar day following the date hereof, or (ii) if the Second Closing has not occurred as of the 45 ^th calendar day following the date hereof, then in respect of the Registrable Securities issuable upon conversion or exercise of the Notes or Warrants issued at the Initial Closing, the Filing Date shall be the 45 ^th calendar day following the date hereof, and with respect of the Registrable Securities, if any, issuable upon conversion or exercise of the Notes or Warrants issued at the Second Closing, the Filing Date shall be as soon as reasonably practicable following the Second Closing or (iii) if the Second Closing has occurred by the 45 ^th calendar day following the date hereof but the Third Closing has not occurred as of the 120 ^th calendar day following the date hereof, then in respect of the Registrable Securities issuable upon conversion or exercise of the Notes or Warrants issued at the Initial Closing and the Second Closing, the Filing Date shall be the 120 ^th calendar day following the date hereof, and in respect of the Registrable Securities, if any, issuable upon conversion or exercise of the Notes or Warrants issued at the Third Closing, the Filing Date shall be as soon as reasonably practicable following the Third Closing.

(s) “ Filing Default Date ” has the meaning assigned thereto in Section 2(d).

(t) “ Free Writing Prospectus ” means each 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.

(u) “ Holder(s) ” has the meaning specified in the recitals to this Agreement.

(v) “ Incidental Registration ” means a registration required to be effected by the Company pursuant to Section 3.

(w) “ Incidental Registration Statement ” means the registration statement referred to in Section 3(a), as amended or supplemented by any amendment or supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such registration statement.

(x) “ Initiating Holder ” has the meaning set forth in Section 4(a).

(y) “ Investors ” has the meaning specified in the recitals to this Agreement.

(z)

(aa) “ Issuer Information ” has the meaning set forth in Section 8(a) hereof.

(bb) “ Maintenance Default Date ” has the meaning set forth in Section 2(d)(iv).

(cc) “ Majority Holders ” shall mean, on any date, holders of the majority of the Shares constituting Registrable Securities; for the purposes of this definition, Holders of Notes and Warrants constituting Registrable Securities shall be deemed to be the Holders of the number of Shares into which such Notes and Warrants are or would be convertible or exercisable for as of such date.

(dd) “ Market Price ” means, on any date of determination, the average of the daily Closing Price of the Shares for the immediately preceding ten (10) days on which the relevant securities exchanges or trading systems are open for trading.

(ee) “ Material Event ” has the meaning assigned thereto in Section 5(a)(iv).

(ff) “ NASD ” shall mean the National Association of Securities Dealers, Inc.

(gg) “ NASD Rules ” shall mean the Conduct Rules and the By-Laws of the NASD.

(hh) “ Non-Investor Registration ” has the meaning assigned thereto in Section 4(d).

(ii) “ Notes ” has the meaning specified in the recitals of this Agreement.

(jj) “ Performance Default Date ” has the meaning assigned thereto in Section 2(d).

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

(ll) “ Prospectus ” means the prospectus included in any Relevant 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.

(mm) “ Purchase Agreement ” has the meaning specified in the first paragraph of this Agreement.

(nn) “ Registrable Securities ” means:

(i)

any Shares issuable upon conversion or exercise of any Notes or Warrants, until the earliest of (i) their effective registration under the Securities Act and the resale of all such Shares in accordance with the Relevant Registration Statement, (ii) the date on which such Shares are (A) 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 (B) freely transferable without restriction under Rule 144(k) or (iii) the date on which such Shares cease to be outstanding.

(ii)

any Shares issued or issuable with respect to the Registrable Securities by way of share dividend or share split or in connection with a combination of shares, 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.

(oo) “ Registration Expenses ” has the meaning assigned thereto in Section 7.

(pp) “ Relevant Registration Statement ” means any Demand Registration Statement, Shelf Registration Statement or Incidental Registration Statement, as the context may require.

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

(rr) “ Securitie s” means the Notes, the Warrants, the Conversion Shares and the Warrant Shares.

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

(tt) “ 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.

(uu) “ Shelf Registration Statement ” means the shelf registration statement referred to in Section 2(a), as amended or supplemented by any amendment or supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Shelf Registration Statement.

(vv) “ Staff ” has the meaning assigned thereto in Section 2(e).

(ww) “ Trading Market Default Date ” has the meaning assigned thereto in Section 2(d)(v).

(xx) “ Underwritten Incidental Registration ” shall have the meaning assigned thereto in Section 3(b).

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

(zz) “ Valid Business Reason ” shall have the meaning assigned thereto in Section 5(b).

(aaa) “ Warrants ” has the meaning specified in the first paragraph of this Agreement.

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.

Mandatory Registration.

(a) On or prior the Filing Date, the Company shall prepare and file with the Commission a shelf registration statement providing for the registration of, and the sale by the Holders on a continuous or delayed basis of all of the Registrable Securities, pursuant to Rule 415, or if Rule 415 is not available for offers or sales of Registrable Securities, for such other means of distribution of Registrable Securities as the Holders may specify. The Company agrees to use its reasonable best efforts to cause the Shelf Registration Statement to become effective within 180 days after the Filing Date and to keep such Shelf Registration Statement continuously effective until such time as there are no longer any Registrable Securities outstanding (the “ Effective Period ”). Without prejudice to any registration rights, existing as of the date hereof, held by the Company’s securityholders with respect to the Company’s securities, respectively, none of the Company’s securityholders (other than Holders of Registrable Securities) shall have the right to include any of the Company’s securities in the Shelf Registration Statement.

(b) The Company further agrees that it shall cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act; and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading, and the Company agrees to furnish to the Holders of the Registrable Securities copies of any supplement or amendment prior to its being used or promptly following its filing with the Commission; provided, however , that the Company shall have no obligation to deliver to Holders of Registrable Securities copies of any amendment consisting exclusively of an Exchange Act report or other Exchange Act filings otherwise publicly available on the Company’s website. If the Shelf Registration Statement, as amended or supplemented from time to time, ceases to be effective for any reason at any time during the Effective Period (other than because all Registrable Securities registered thereunder shall have been sold pursuant thereto or shall have otherwise ceased to be Registrable Securities), the Company shall use its reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof.

(c) Each Holder of Registrable Securities agrees that if such Holder wishes to sell Registrable Securities pursuant to the Shelf Registration Statement and related Prospectus, it will do so only in accordance with Section 5. From and after the date the Shelf Registration Statement is declared or becomes effective, the Company shall, as promptly as is practicable, or if the use of the Prospectus has been suspended by the Company under Section 5(b) hereof, within fifteen (15) days after the expiration of the period during which the use of the Prospectus is suspended:

(i) if required by applicable law, file with the Commission a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that the Holder is named as a selling security holder in the Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company shall file a post-effective amendment to the Shelf Registration Statement, use its reasonable best efforts to cause such post-effective amendment to be declared or to otherwise become effective under the Securities Act as promptly as is practicable. Notwithstanding the foregoing, the Company shall not be required to file more than one post-effective amendment to the Shelf Registration Statement or supplement to the related Prospectus during any thirty (30) day period;

(ii) provide such Holder copies of any documents filed pursuant to Section 2(c)(i); and

(iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(c)(i).

(d) Upon the occurrence of any Default Event (as defined below), as partial relief for the damages suffered therefrom by the Holders (which remedy shall not be exclusive of any other remedies which are available at law or in equity; and provided that the Holders shall be entitled to pursue an action of specific performance of the Company’s obligations under Section 2(a) above and any such actions at law, in equity, for specific performance or otherwise shall not require the Holder to post a bond), the Company shall pay to each Holder, as liquidated damages and not as a penalty (it being agreed that would not be feasible to ascertain the extent of such damages with precision), such amounts and at such times as shall be determined pursuant to this Section 2(d). For such purposes, each of the following shall constitute a “ Default Event ”:

(i) if the Shelf Registration Statement is not filed with the Commission on or prior to the Filing Date (it being understood that if the Company files the Shelf Registration Statement without affording Holders the opportunity to review and comment on the same as required by Section 5(a)(ii), the Company shall not be deemed to have satisfied this Section 2(d)(i)), then commencing on the day after the Filing Date (the “ Filing Default Date ”), the Company shall pay to each Holder of Registrable Securities, an amount in cash equal to one thirtieth of one percent of the Aggregate Purchase Price paid by such Holder for each day from the Filing Default Date until such date that the Shelf Registration Statement is filed, payable at the end of each 30-day period after the Filing Default Date; or

(ii) if the Shelf Registration Statement is not declared effective and does not otherwise become effective within 180 days following the Filing Date, then commencing on the 181 ^st day after the Filing Date, (the “ Effectiveness Default Date ”) the Company shall pay to each Holder of Registrable Securities, an amount in cash equal to one thirtieth of one percent of the Aggregate Purchase Price paid by such Holder for each day from the Effectiveness Default Date until such date that the Shelf Registration Statement is declared effective, payable at the end of each 30-day period after the Effectiveness Default Date; or

(iii) if the Company has failed to perform their obligations set forth in Sections 2(c) and 5(a) hereof within the time periods required therein, then commencing on the first day after the date by which the Company was required to perform such obligations (the “ Performance Default Date ”), the Company shall pay to each Holder of Registrable Securities, an amount in cash equal to one thirtieth of one percent of the Aggregate Purchase Price paid by such Holder for each day from the Performance Default Date until such date that the obligations set forth in Sections 2(c) and 5(a) are performed, payable at the end of each 30-day period after the Performance Default Date;

(iv) if at any time during the Effective Period, the Shelf Registration Statement ceases to be effective (other than pursuant to Section 5(b) hereof) (the “ Maintenance Default Date ”), then the Company shall pay to each Holder of Registrable Securities for each day after the Shelf Registration Statement ceases to be effective until the date upon which the Shelf Registration Statement is again declared effective, an amount in cash equal to one thirtieth of one percent of the Aggregate Purchase Price paid by such Holder with respect to any Registrable Securities not previously sold or transferred by the Holder pursuant to the Shelf Registration Statement as of the time it ceased to be effective, payable at the end of each 30-day period after the Maintenance Default Date; or

(v) if the Company’s Shares are suspended, delisted or fail to be quoted on any Trading Market while the Registrable Securities are still held by the Holder (provided that such suspension, delisting or failure to be quoted which did not directly arise out of or result from any action or inaction of the Company shall not be deemed to be a suspension or delisting for purposes of this Section 2(d)(v)) (the “ Trading Market Default Date ”), the Company shall pay to each Holder of Registrable Securities, an amount in cash equal to one thirtieth of one percent of the Aggregate Purchase Price paid by such Holder for each day from the Trading Market Default Date until such date that the Shares are again listed or quoted on a Trading Market or on which the suspension ends (as the case may be), payable at the end of each 30-day period after the Trading Market Default Date.

(vi) if the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 5(b) hereof, then commencing on the day the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period (and again on the first day of any subsequent Deferral Period during such period) (the “ Deferral Default Date ”), the Company shall pay to each Holder of Registrable Securities, an amount in cash equal to one thirtieth of one percent of the Aggregate Purchase Price paid by such Holder for each day until such date of the termination of the Deferral Period that caused the limit on the aggregate duration of the Deferral Periods in a period set forth in Section 5(b) to be exceeded, payable at the end of each 30-day period following such Deferral Default Date;

provided, however , that the payment obligations of the Company shall not be payable under more than one clause above for any given period of time. If any payment under this Section 2(d) is not received by the Holders when such payment is due, then in addition to any other remedies that may be available to the Holders, interest at the rate of 1% per 30-day period (prorated for periods less than 30 days) shall accrue on the outstanding balance of the delinquent payment until such delinquent payment is paid in full; provided , further that the total amount of partial liquidated damages payable by the Company pursuant to this Section 2(d) shall be capped at 12% of the Aggregate Purchase Price paid by Holders under the Purchase Agreement. The Company’s payment obligations on the Registrable Securities shall cease to accrue (1) upon the filing of the Shelf Registration Statement (in the case of clause (i) above), (2) upon the effectiveness of the Shelf Registration Statement (in the case of clause (ii) above), (3) upon the performance by the Company of its obligations set forth in Sections 2(c) and 5(a) hereof within the time periods required therein (in the case of clause (iii) above), (4) upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (iv) above), (5) upon the date which the Shares are again listed or quoted on a Trading Market or on which the suspension ends (as the case may be) (6) upon the termination of the Deferral Period that caused the limit on the aggregate duration of Deferral Periods in a period set forth in Section 5(b) to be exceeded (in the case of clause (vi) above), or (7) upon the termination of certain transfer restrictions on the Registrable Securities as a result of the application of Rule 144(k) or any successor provision. The foregoing clauses shall in no way limit the effect of any subsequent Default Event requiring the payment by the Company.

The Company shall notify the Holders promptly upon the happening of each and every Default Event. Any Holder may seek any available remedy for the enforcement of this Agreement, including for the enforcement of the Company’s payment obligation under this Section 2(d).

(e) Subject to Section 5(d) and notwithstanding the foregoing, the Holders acknowledge that the staff of the Commission (the “ Staff ”) has recently given enhanced scrutiny to registration statements attempting to register the resale of shares and warrant shares obtained by purchasers in private placements and that such Staff reviews have resulted in registrants being denied the use of Rule 415 under the Securities Act. Accordingly, notwithstanding anything herein to the contrary, the Holders agree that the Company shall not be obligated to pay any amount of liquidated damages under this Section 2(d) in the event that (i) the Company has failed to perform its obligations as set forth in Sections 2(c) and 5(a) hereof within the time periods required therein, or (ii) the Shelf Registration Statement is not declared effective on or prior to the Effectiveness Default Date, in each case, as a result, in whole or in part, of (A) the failure of any Holder to provide information relating to the Holder and its proposed method of sale or any other information concerning the Holder that is required by the Commission to be included in the Shelf Registration Statement, or (B) any delays resulting from questions or issues raised by the Commission or any other regulatory agency, market or exchange concerning any Holder (or the affiliates of any Holder) regarding the eligibility of the Company or the Holders to rely on Rule 415 or relating to a determination by the Commission that either the Company or the Holders are ineligible to rely on Rule 415 under the Securities Act with respect to the registration of any of the Registrable Securities for resale by the Holders on a continuous or delayed basis, or (C) the failure to register all of the Registrable Securities required to be registered hereunder as a result of questions or issues relating to the eligibility of the Company or the Holders to rely on Rule 415. If two or more Shelf Registrations are required to be filed pursuant to Section 5(d) hereof, any additional Shelf Registration Statement filed as a result of issues relating to the eligibility of the Company or the Holders to rely on Rule 415 after the Company has met its initial obligation under Section 2(a) hereof shall not be subject to the partial liquidated damages provisions of Section 2(d).

(f) A Shelf Registration Statement pursuant to this Section 2 will not be deemed to have become effective unless it has been declared effective by the SEC or is automatically effective upon filing with the SEC as provided by Rule 462 under the Securities Act.

Incidental Registration.

(a) If at any time from and after the date hereof, the Company proposes to register any of its securities under the Securities Act (other than (A) any registration of public sales or distributions solely by and for the account of the Company of securities issued pursuant to any employee benefit or similar plan or any dividend reinvestment plan, or (B) pursuant to Section 2 or 4 hereof), either in connection with a primary offering for cash for the account of the Company or a secondary offering, the Company will, each time it intends to effect such a registration, give written notice to all Holders at least ten (10) but no more than thirty (30) business days prior to the expected initial filing of a Registration Statement with the Commission pertaining thereto, informing such Holders of its intent to file such Registration Statement, the expected filing date, and of the Holders’ rights to request the registration of the Registrable Securities held by such Holder (the “ Company Notice ”). Upon the written request of any Holder made within ten (10) business days after any such Company Notice is given (which request shall specify the Registrable Securities intended to be disposed of by such Holder or its transferees and, unless the applicable registration is intended to effect a primary offering of Shares for cash for the account of the Company, the intended method of distribution thereof), the Company will use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by such Holders to the extent required to permit the disposition (in accordance with the intended methods of distribution thereof or, in the case of a registration which is intended to effect a primary offering for cash for the account of the Company, in accordance with the Company’s intended method of distribution) of the Registrable Securities so requested to be registered, including, if necessary, by filing with the Commission a post-effective amendment or a supplement to the Incidental Registration Statement or the related Prospectus or any document incorporated therein by reference or by filing any other required document or otherwise supplementing or amending the Incidental Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Incidental Registration Statement or by the Securities Act, any state securities or blue sky laws, or any rules and regulations thereunder.

The registration rights granted pursuant to the provisions of this Section 3(a) shall be unlimited and in addition to the registration rights granted pursuant to the other provisions of this Agreement.

(b) Amount of Inclusion . The Company shall be required to include in the Incidental Registration the percentage of the Registrable Securities held by the Holders in such registration as will equal the fraction, (x) the numerator of which shall be the number of all the Registrable Securities and (y) the denominator of which shall be the number of shares of the outstanding capital stock of the Company on a fully-diluted basis, in each case, immediately prior to the effectiveness of such registration statement. The number of Registrable Securities to be included in the Incidental Registration shall be allocated pro rata among the Holders thereof requesting inclusion in such Incidental Registration on the basis of the number of securities requested to be included by all such Holders.

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 written request of the demand to the Company (which request shall specify 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 10 days of the receipt thereof, give written notice of such request to all Holders and shall, use their reasonable best efforts to file as soon as practicable, and in any event within 90 days of the receipt of such request, a registration statement under the Securities Act covering all Registrable Securities (each, a “ Demand Registration Statement ) which the Holders request to be registered within 20 days of the mailing of such notice by the Company, provided , however , in no event shall the Company be obligated to effect a Demand Registration unless the Holders propose to sell Registrable Securities at an aggregate price to the public of at least US$5,000,000 (calculated based on the Market Price of the Company’s Shares on the date of filing of the Demand Registration with respect to such Registrable Securities); provided , further , that the Company shall not be obligated to effect more than three Demand Registrations (except that two or more registration statements filed in response to one demand shall be counted as one Demand Registration).

(b) If the Demand Registration is underwritten and the managing underwriters advise the Company in writing that in their opinion 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 securityholders of the Company, third as to the Holders (who are not Initiating Holders and who requested to participate in such registration pursuant to Section 4(a) hereof) as a group, if any, pro rata within each group based on the number of Registrable Securities owned by each such Holder, and fourth as to the Initiating Holders as a group, pro rata within each group based on the number of Registrable Securities owned by each Initiating Holder. A registration shall not be considered to be a Demand Registration under Section 4, 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 Holders, (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 180 days of the request for Demand Registration by an Initiating Holder pursuant to Section 4(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.

(c) If any Demand Registration is underwritten, the selection of investment banker(s) and manager(s) and the other decisions regarding the underwriting arrangements for the offering will be made by the Initiating Holders holding a majority of the Registrable Securities and be reasonably acceptable to the Company

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

Registration Procedures.

The following provisions shall apply to the Relevant Registration Statement filed pursuant to Sections 2, 3 and 4, as the case may be:

(a) the Company shall:

(i) prepare and file with the Commission a registration statement on any form which may be utilized by the Company and which shall permit the disposition of the Registrable Securities in accordance with the intended method or methods thereof, as specified in writing by the Holders of the Registrable Securities, and use their reasonable best efforts to cause such registration statement to become effective in accordance with Section 2(a), 3(a) or 4(a) above, as the case may be;

(ii) before filing any Relevant Registration Statement or Prospectus or any amendments or supplements thereto with the Commission, furnish to the Investors copies of all such documents proposed to be filed and use reasonable best efforts to reflect in each such document when so filed with the Commission such comments as the Investors reasonably shall propose within three (3) Business Days of the delivery of such copies to the Investors;

(iii) use their reasonable best efforts to prepare and file with the Commission such amendments and post-effective amendments to the Relevant Registration Statement and file with the Commission any other required document as may be necessary to keep such Relevant Registration Statement continuously effective until the expiration of the Effective Period; cause the related Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act applicable to it with respect to the disposition of all Registrable Securities covered by such Relevant Registration Statement during the Effective Period in accordance with the intended methods of disposition by the sellers thereof set forth in such Relevant Registration Statement as so amended or such Prospectus as so supplemented;

(iv) promptly notify the Holders of Registrable Securities (A) when such Relevant Registration Statement or the Prospectus included therein or any amendment or supplement to the Prospectus or post-effective amendment has been filed with the Commission, and, with respect to such Relevant Registration Statement or any post-effective amendment, when the same has become effective, (B) of any request, following the effectiveness of the Relevant Registration Statement, by the Commission or any other Federal or state governmental authority for amendments or supplements to the Relevant Registration Statement or related Prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Relevant Registration Statement or the initiation or written threat of any proceedings for that purpose, including the receipt by the Company of any notice of objection of the Commission to the use of a Relevant Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act, (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose, (E) of the occurrence of (but not the nature of or details concerning) any event or the existence of any fact (a “ Material Event ”) as a result of which any Relevant Registration Statement shall 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 not misleading, or any Prospectus shall 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 the light of the circumstances under which they were made, not misleading ( provided, however , that no notice by the Company shall be required pursuant to this clause (E) in the event that the Company either promptly files a prospectus supplement to update the Prospectus or a Form 8-K or other appropriate Exchange Act report that is incorporated by reference into the Relevant Registration Statement, which, in either case, contains the requisite information with respect to such Material Event that results in such Relevant Registration Statement no longer containing any untrue statement of material fact or omitting to state a material fact necessary to make the statements contained therein not misleading), (F) of the determination by the Company that a post-effective amendment to the Relevant Registration Statement will be filed with the Commission, which notice may, at the discretion of the Company (or as required pursuant to Section 5(b)), state that it constitutes a Deferral Notice, in which event the provisions of Section 5(b) shall apply or (G) at any time when a Prospectus is required to be delivered under the Securities Act, that the Relevant Registration Statement, Prospectus, Prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the rules and regulations of the Commission thereunder;

(v) prior to any public offering of the Registrable Securities pursuant to the Relevant Registration Statement, use their reasonable best efforts to register or qualify, or cooperate with the Holders of Registrable Securities included therein and their respective counsel in connection with the registration or qualification of, such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions as any such Holders reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Registrable Securities covered by the Relevant Registration Statement; prior to any public offering of the Registrable Securities pursuant to the Relevant Registration Statement, use its reasonable best efforts to keep each such registration or qualification (or exemption therefrom) effective during the Effective Period in connection with such Holder’s offer and sale of Registrable Securities pursuant to such registration or qualification (or exemption therefrom) and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities in the manner set forth in the Relevant Registration Statement and the related Prospectus; provided that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject;

(vi) use its reasonable best efforts to prevent the issuance of, and if issued, to obtain the withdrawal of any order suspending the effectiveness of the Relevant Registration Statement or, in the event of an objection of the Commission pursuant to Rule 401(g)(2), promptly file an amendment to such Relevant Registration Statement on the proper form, and to lift any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in each case at the earliest practicable date;

(vii) upon reasonable notice, for a reasonable period prior to the filing of the Relevant Registration Statement, and throughout the Effective Period, (i) make reasonably available for inspection by a representative of the Majority Holders of the Registrable Securities being sold (and their counsel) and any underwriter (and its counsel) participating in any disposition of the Registrable Securities pursuant to such Relevant Registration Statement, all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries and (ii) use reasonable best efforts to have their officers, directors, employees, accountants and counsel supply all relevant information reasonably requested by such representative for the Majority Holders of Registrable Securities or any such underwriter in connection with such Relevant Registration Statement;

(viii) if requested by or on behalf of the Majority Holders of the Registrable Securities being sold in an underwriting or the managing underwriters (if any) in connection with such Relevant Registration Statement, use their reasonable best efforts to cause (i) their counsel to deliver an opinion relating to the Relevant Registration Statement and the Registrable Securities in customary form, (ii) their officers to execute and deliver all customary documents and certificates requested by or on behalf of the Majority Holders of the Registrable Securities being sold or the managing underwriters (if any) and (iii) their independent registered public accounting firm to provide a letter confirming that they are an independent registered public accounting firm within the rules and regulations adopted by the Commission and the Public Accounting Oversight Board (United States) and as required by the Securities Act with, in the case of an amendment or supplement that includes audited financial information, such changes as may be necessary to reflect the amended or supplemented financial information.

(ix) if reasonably requested by any Holder, promptly incorporate in a prospectus supplement or post-effective amendment to the Relevant Registration Statement such information as such Holder shall, on the basis of a written opinion of nationally-recognized counsel experienced in such matters, determine to be required to be included therein by applicable law and make any required filings of such prospectus supplement or such post-effective amendment; provided , that the Company shall not be required to take any actions under this Section 5(a)(ix) that are not, in the reasonable opinion of counsel for the Company, in compliance with applicable law;

(x) promptly furnish to each Holder, upon their request and without charge, at least one (1) conformed copy of the Relevant Registration Statement and any amendments thereto, including financial statements but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits; provided, however , that the Company shall have no obligation to deliver to Holders a copy of any amendment consisting exclusively of an Exchange Act report or other Exchange Act filing otherwise publicly available on the Company’s website;

(xi) during the Effective Period, deliver to each Holder in connection with any sale of Registrable Securities pursuant to the Relevant Registration Statement, without charge, as many copies of the Prospectus relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement thereto as such Holder may reasonably request; and the Company hereby consents (except during such periods that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or each amendment or supplement thereto by each Holder in connection with any offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in the manner set forth therein; and

(xii) cooperate with the Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to the Relevant Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders thereof may request in writing at least two business days prior to sales of Registrable Securities pursuant to such Relevant Registration Statement.

(b) Upon (A) the issuance by the Commission of a stop order suspending the effectiveness of the Relevant Registration Statement or the initiation of proceedings with respect to the Relevant Registration Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the existence of any Material Event as a result of which the Relevant Registration Statement shall 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 not misleading, or any Prospectus shall 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 the light of the circumstances under which they were made, not misleading, or (C) the occurrence or existence of any corporate development that, in the good faith business judgment of the Board of Directors of the Company (each, a “ Valid Business Reason ”), makes it appropriate to suspend the availability of the Relevant Registration Statement and the related Prospectus, the Company will (i) in the case of clause (B) above, subject to the third sentence of this provision, as promptly as is practicable prepare and file a post-effective amendment to such Relevant Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such Relevant Registration Statement and Prospectus so that such Relevant Registration Statement does 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 not misleading, and such Prospectus does 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 the light of the circumstances under which they were made, not misleading, as thereafter delivered (or, to the extent permitted by law, made available) to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to the Relevant Registration Statement, subject to the third sentence of this provision, use reasonable best efforts to cause it to be declared effective or otherwise become effective as promptly as is practicable, and (ii) give notice to the Holders that the availability of the Relevant Registration Statement is suspended (a “ Deferral Notice ”). Upon receipt of any Deferral Notice, each Holder agrees not to sell any Registrable Securities pursuant to the Relevant Registration Statement until such Holder’s receipt of copies of the supplemented or amended Prospectus provided for in clause (i) above, or until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is practicable, (y) in the case of clause (B) above, as soon as, in the good faith business judgment of the Board of Directors, public disclosure of such Material Event would not be prejudicial to or contrary to the interests of the Company, but in no event more than 90 days from the date in which a Deferral Notice is required to be delivered to the Holders and (z) in the case of clause (C) above, as soon as, in the good faith business judgment of the Board of Directors, such suspension is no longer appropriate, but in no event more than 90 days from the date in which a Deferral Notice is required to be delivered to the Holders; provided that the period during which the availability of the Relevant Registration Statement and any Prospectus is suspended (the “ Deferral Period ”), without the Company incurring any payment obligation pursuant to Section 2(d), shall not exceed 120 days in the aggregate in any 12 month period.

(c) Each Holder of Registrable Securities agrees that upon receipt of any Deferral Notice from the Company, such Holder shall forthwith discontinue (and cause any placement or sales agent or underwriters acting on their behalf to discontinue) the disposition of Registrable Securities pursuant to the registration statement applicable to such Registrable Securities until such Holder (i) shall have received copies of such amended or supplemented Prospectus and, if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in such Holder’s possession of the Prospectus covering such Registrable Securities at the time of receipt of such notice or (ii) shall have received notice from the Company that the disposition of Registrable Securities pursuant to the Relevant Registration may continue.

(d) In the event the Staff or the Commission seeks to characterize any offering pursuant to a Relevant 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 Staff or the Commission does not permit such Relevant Registration Statement to become effective and used for resales in a manner that does not constitute such an offering and with respect to the Shelf Registration Statement, 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 Relevant 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 securityholders of the Company (other than the Holders).

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 with respect to any Demand Registration pursuant to Section 4, Holders (who are not Initiating Holders and who requested to participate in such registration pursuant to Section 4(a) hereof) shall first be reduced as a group, on a pro rata basis based on the number of Registrable Securities owned by each such Holder before Initiating Holders are reduced; provided , further , that if the inclusion of shares by a particular Holder or a particular set of Holders results in the Staff or 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).

In addition, in the event that the Staff or the Commission requires any Holder seeking to sell securities under a Relevant 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 Relevant 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 Staff or 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 under Section 2, 3 or 4 hereof by registering the Registrable Securities in two or more Relevant Registration Statements, provided that the Company shall use its reasonable best efforts to file each subsequent Relevant Registration Statement no later than the earlier of (A) 60 days following the date on which the last of the Registrable Securities registered under the preceding Relevent Registration Statement were sold or (B) 6 months following the date on which the preceding Relevant Registration Statement was declared effective; provided , however that two or more registration statements filed in response to one demand shall be counted as one Demand Registration; provided , further , that the Company agrees to grant the special registration right under this Section 5(d) as many times as is necessary to permit the resale of all Registrable Securities.

(e) The Company shall comply with all applicable rules and regulations of the Commission and make generally available to its securityholders earning statements (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than (i) 40 days after the end of any 12-month period (or 60 days after the end of any 12-month period if such period is a fiscal year) if the Company is at such time an “accelerated filer” and (ii) 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) if the Company is not an “accelerated filer” commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of the Relevant Registration Statement, which statements shall cover said 12-month periods.

(f) The Company shall provide a CUSIP number for all Registrable Securities covered by the Relevant Registration Statement not later than the initial effective date of such Relevant Registration Statement and provide the Holders and the transfer agent for the Shares with printed certificates for the Registrable Securities that are in a form eligible for deposit with The Depository Trust Company.

(g) The Company shall use its reasonable best efforts to provide such information as is required for any filings required to be made with the National Association of Securities Dealers, Inc.

(h) Until the expiration of two years after the Closing Date, the Company will not, and will not permit any of its “affiliates” (as defined in Rule 144) to, resell any of the Registrable Securities that have been reacquired by any of them except pursuant to an effective registration statement under the Securities Act.

(i) The Company shall enter into such customary agreements and take all such other necessary, reasonable and lawful actions in connection therewith (including those requested by the Majority Holders of the Registrable Securities covered by the Relevant Registration Statement) in order to expedite or facilitate disposition of such Registrable Securities.

Holder’s Obligations.

(a) The Company may require each Holder of Registrable Securities as to which any registration pursuant to Section 2(a), 3(a) or 4(a), as the case may be, is being effected to furnish to the Company such information regarding such Holder and such Holder’s intended method of distribution of such Registrable Securities as the Company may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Securities Act. 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.

(b) Each Holder further agrees not to sell any Registrable Securities pursuant to the Relevant Registration Statement without delivering, or causing to be delivered, a Prospectus to the purchasers thereof and, following termination of the Effective 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 the Relevant Registration Statement and, in the absence of a response, the Company may assume that all of the Holder’s Registrable Securities were so sold.

Registration Expenses.

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 NASD 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 the State securities and Blue Sky laws referred to in Section 5(a)(v) hereof, 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 Relevant 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 Relevant 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 Relevant 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.

Indemnification.

(a) 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 8 and Section 9 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 or any “issuer information” (“ Issuer Information ”) filed or required to be filed pursuant to Rule 433(d) under the Securities Act or (ii) any 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, 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 8(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 5. 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 8(a) or contribute as provided in Section 8 hereof with respect to any loss, claim, damage, liability or action of each underwriter, if any, of Registrable Securities registered under the Relevant 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 in this paragraph (a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement.

(b) 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 8(b) and Section 9 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 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 Relevant 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.

(c) Promptly after receipt by an indemnified party under this Section 8 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 8(a) or 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 under this Section 8 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 under this Section 8. 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 under this Section 8 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 (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) 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, (3) 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 (4) 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 in Sections 8(a) and 8(b), 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 20 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.

(d) The provisions of this Section 8 and Section 9 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 in this Section 8 and Section 9, and shall survive the sale by a Holder of securities covered by the Relevant Registration Statement.

Contribution .

If the indemnification provided for in Section 8 is unavailable or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b), 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 and Warrants, 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 9 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 in this Section 9 shall be deemed to include, for purposes of this Section 9, 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 of this Section 9, 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 (within the meaning of Section 11(f) of the Securities Act) 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 9 are several and not joint.

10.

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 11 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.

11.

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 the Relevant 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 the Relevant 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 Purchase Agreement; and

(ii) If to the Holders, initially at its address set forth in the Purchase Agreement.

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

(c) Successors and Assigns . This Agreement shall be binding upon the parties hereto and their respective successors and assigns. Unless otherwise provided herein, the Holders may assign their rights hereunder to any of its affiliates, provided that such assignment shall be in compliance with the Securities Act.

(d) 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.

(e) Definition of Terms . For purposes of this Agreement, (a) the term “business day” means any day on which the New York Stock Exchange, Inc. is open for trading, (b) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act and (c) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act.

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

(g) Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York .

(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 (other than the recovery of damages for a breach by the Company of its obligations under Section 2 hereof for which the Company has paid pursuant to Section 5 hereof), 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 Inconsistent Agreements . Each of the Company represents, warrants and agrees that (i) 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, (ii) it has not previously entered into any agreement which remains in effect granting any registration rights with respect to any of its debt securities to any person, except registration rights granted under that certain Common Stock Purchase Agreement dated February 9, 2006 between the Company and Bloompoint Investments Limited (it being understand that such registration rights shall be waived in a separate agreement on or prior to the date hereof) and (iii) without limiting the generality of the foregoing, without the written consent of the Majority Holders of Registrable Securities, it shall not grant to any person the right to request the Company to register any debt securities of the Company under the Securities Act unless the rights so granted are not in conflict or inconsistent with the provisions of this Agreement.

(j) No Piggyback on Registrations . None of the Company or any of its respective security holders (other than the Holders of Registrable Securities in such capacity) shall have the right to include any securities of the Company in the Relevant Registration Statement other than 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.

(l) Survival . The respective indemnities, agreements, representations, warranties and each other provision set forth in this Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any Holder of Registrable Securities, any director, officer or partner of such Holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such Holder.

(m) Securities Held by the Company, etc. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Shares held by the Company or its affiliates (other than subsequent Holders of Shares if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Shares) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

[Signature Page(s) to Follow]

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

	NETWORK CN INC.

	By:
		Name:
		Title:

	SCULPTOR FINANCE (MD) IRELAND LIMITED

	By:
	Name :
	Title:


	SCULPTOR FINANCE (AS) IRELAND LIMITED

	By:
	Name:
	Title:


	SCULPTOR FINANCE (SI) IRELAND LIMITED

	By:
	Name:
	Title:

	OZ ASIA MASTER FUND, LTD.

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


	By:
	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:
	Name:	Joel Frank
	Title:	CFO



	OZ GLOBAL SPECIAL INVESTMENTS MASTER FUND, L.P.


	By:	OZ Advisors LP, its General Partner
	By:	Och-Ziff Holding Corporation, its General Partner


	By:
	Name:	Joel Frank
	Title:	CFO

Exhibit 99.5

Network CN Inc. Completes $50 Million Financing Agreement

NEW YORK, November 26, 2007 (PR Newswire) -- Network CN Inc. (OTC Bulletin Board: NWCN), a Chinese media and travel network company headquartered in Hong Kong, today announced that it has entered into a Note and Warrant Purchase Agreement with affiliated investment funds of Och-Ziff Capital Management Group (“Och-Ziff”) to issue 3% senior secured convertible notes in the aggregate principal amount of up to US$50,000,000 and warrants to acquire an aggregate amount of 34,285,715 shares of common stock of the Company. The convertible notes and warrants are issuable in three tranches.

Details of the agreement are disclosed in Company filing on Form 8K dated November 26, 2007. The agreement specifies that the targets for fully diluted earnings per share, subject to certain exclusions, are $0.081, $0.453 and $0.699 for the fiscal years ending December 31, 2008, 2009 and 2010. Network CN will face certain penalty clauses if these targets are not met.

"We are pleased to receive this financing from Och-Ziff, which we believe will mark the start of a constructive and synergistic relationship," commented Godfrey Hui, Chief Executive Officer of Network CN. "This fresh money enhances our plans for aggressive expansion of our operations with significant financial support and market-wise counseling. It will accelerate our project at the new Beijing International Airport Terminal 3. We are confident of becoming the market leader of outdoor digital media network in China. Provided Network CN achieves its business plan, Och-Ziff is prepared to inject an additional $100 million with the exercise of the warrants. This financing deal, negotiated and concluded in about a month, is a strong vote of confidence on Network CN."

Please refer to Network CN’s website ( www.ncnincorporated.com ) for additional details.

About Och-Ziff Capital Management Group

Och-Ziff, founded by Daniel Och in 1994, is a leading institutional alternative asset management firm and one of the largest alternative asset managers in the world, with approximately $30.1 billion of assets under management for over 700 fund investors as of September 30, 2007.

About Network CN Inc.

Headquartered in Hong Kong, Network CN Inc.'s vision is to build a nationwide network in China that serves the needs of a variety of customers. The Company operates a Media Network, a Hotel Network and an e-Network. On the media side, Network CN is establishing a multi-media, multi-application advertising network in the key cities of China, focusing on outdoor advertising media. As of September 30, 2007, the Company had obtained rights to install and operate 653 roadside digital video panels, 6 mega-size digital video billboards and 24 rolling light boxes in the PRC. On the hospitality and hotel management side, Network CN is building a travel service platform to link up under one network, all the hotel properties under our management, whether owned by the Company or operated under lease or joint venture agreements. In addition, the Company is actively pursuing the development of an e-Network via the Internet.

This press release includes statements that may constitute "forward- looking" statements, usually containing the word "believe", "estimate", "project", "expect", "plan", "anticipate" or similar expressions. Forward- looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, risks related to financing overall and to the terms of the note and warrant purchase agreement specifically, risks attending the build-out of the Company’s media network, acceptance of the Company's products and services in the marketplace, competitive factors and changes in regulatory environments. These and other risks relating to Network CN Inc. business are set forth in the Company's Annual Report on Form 10-QSB filed with the Securities and Exchange Commission on November 9, 2007, and other reports filed from time to time with the Securities and Exchange Commission. By making these forward- looking statements, Network CN Inc. disclaims any obligation to update these statements for revisions or changes after the date of this release.

Source: Network CN Inc.

Company Contact:

Stanley Chu, General Manager

Network CN Inc.

Tel: 852-2833-2186

Investor Relations:

Sean Collins, Senior Partner

CCG Elite

Tel: 1-310-477-9800

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