UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

(Amendment No. 2)

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED
PURSUANT TO § 240.13d-2(a)

Under the Securities Exchange Act of 1934
(Amendment No. 2)*

You On Demand Holdings, Inc.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

0001180421

(CUSIP Number)

Xuesong Song

Chairman and Chief Executive Officer

C Media Limited

CN11 Legend Town

No.1 Balizhuangdongli, Chaoyang District,

Beijing, China 100025

Copy to:

William N. Haddad

Reed Smith LLP

599 Lexington Ave.

New York, New York 10022

(212) 549-0379

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

January 31, 2014

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

* The calculation is based on 15,794,763 shares of common stock of the Issuer outstanding as of January 31, 2014, which figure is based on information provided by the Issuer, plus 8,209,522 shares issuable upon conversion of the Series E Preferred Stock and 933,333 shares issuable upon conversion of the Series A Preferred Stock.

This Amendment No. 2 to Schedule 13D (this “Amendment No. 2”) amends and supplements Items 3, 4, 5, 6 and 7 of that certain Schedule 13D filed with the Securities and Exchange Commission (the “Commission”) on July 19, 2013, as amended by that certain Amendment No. 1 filed with the Commission on November 20, 2013 (together, the “Schedule 13D”), which relates to the common stock (the “Common Stock”), par value $0.001 per share, of YOU On Demand Holdings, Inc., a Nevada corporation (the “Issuer”). Unless otherwise indicated, capitalized terms used but not defined in this Amendment No. 2 have the meanings ascribed to such terms in the Schedule 13D.

Item 3 of the Schedule 13D is hereby amended by inserting the following sentence at the end of the section:

Pursuant to that certain Series E Preferred Stock Purchase Agreement dated January 31, 2014 (the “Purchase Agreement”) among the Issuer, C Media Limited (“C Media”), and certain other purchasers (collectively, the “Investors”), (i) C Media exchanged 2,285,714 shares of Series D 4% Convertible Preferred Stock, par value $0.001 (the “Series D Preferred Stock”) with the Issuer for an equal number of shares of Series E Convertible Preferred Stock, par value $0.001 (the “Series E Preferred Stock”), (ii) C Media was issued 1,142,857 shares of Series E Preferred Stock, upon the conversion of certain convertible note issued to C Media in $2,000,000 principal amount (the “Note”), (iii) C Media purchased additional shares of Series E Preferred Stock for an aggregate purchase price of $10,000,000 at a price of $1.75 per share, and (iv) C Media entered into the Exchange Agreement dated January 31, 2014 (the “Exchange Agreement”), whereby Mr. Shane McMahon exchanged 7,000,000 shares of Series A Preferred Stock, par value $0.001(the “Series A Preferred Stock”), for 933,333 shares of Series E Preferred Stock from C Media. The source of funds for the $10,000,000 consisted of working capital of C Media.

Item 4 of the Schedule 13D is hereby amended by inserting the following sentence at the end of the section: 

C Media invested in the Series E Preferred Stock and exchanged certain shares of Series E Preferred Stock for shares of Series A Preferred Stock as a strategic investment in the Issuer.

Item 5 of the Schedule 13D is hereby replaced in its entirety with the following:

(a)-(b) C Media beneficially owns an aggregate of 9,142,855 shares of Common Stock, which includes (i) 8,209,522 shares of Series E Preferred Stock which are convertible into 8,209,522 shares of Common Stock and (ii) 7,000,000 shares of Series A Preferred Stock which are convertible into 933,333 shares of Common Stock.

The aggregate amount reported as beneficially owned by C Media assumes conversion of the 8,209,522 shares of Series E Preferred Stock and 7,000,000 shares of Series A Preferred Stock. Shares of Series E Preferred Stock are convertible at any time, at the holder's election, into shares of Common Stock on a one-to-one basis, subject to adjustment as provided for in the Certificate of Designation of the Series E Preferred Stock. Each share of Series A Preferred Stock is convertible, at any time at the option of the holder, into shares of Common Stock on a ten-to-one basis (and thereafter adjusted to reflect the Issuer’s February 9, 2012 1-for-75 reverse stock split). Holders of Series A Preferred Stock vote with the holders of Common Stock on all matters and are entitled to ten (10) votes for each one (1) share of Common Stock that is issuable upon conversion of a share of Series A Preferred Stock. Therefore since these 7,000,000 shares of Series A Preferred Stock are convertible into 933,333 shares of Common Stock, C Media is entitled to 9,333,330 votes as result of his ownership of this Series A Preferred Stock. The number of shares of Common Stock of the Issuer outstanding is 15,794,763, as of January 31, 2014, as provided by the Issuer. C Media has sole voting power of 9,142,855 shares, as described above, and sole dispositive power of 9,142,855 shares that would be issued upon conversion of the Series E Preferred Stock and Series A Preferred Stock.

(c) None.

(d) To the knowledge of the Reporting Persons, and except as otherwise described in this Schedule 13D, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, Shares disclosed herein.

(e) Not applicable.

Item 6 of the Schedule 13D is hereby amended by replacing the paragraph titled “Series E Purchase Agreement” with the following:

Series E Purchase Agreement

Pursuant to the Purchase Agreement (as defined in Item 3), the Issuer issued to the Investors an aggregate of 14,285,714 shares of Series E Preferred Stock, for $1.75 per share, or a total purchase price of $25 million (the “Series E Financing”). Among the 14,285,714 shares of Series E Preferred Stock issued to the Investors, (i) 1,142,857 shares were issued upon the conversion of the Note, (ii) 10,857,143 shares were issued for an aggregate purchase price of $19 million, and (iii) 2,285,714 shares were issued upon the conversion of 2,285,714 shares of Series D Preferred Stock held by C Media, which constitute all of the issued and outstanding shares of Series D Preferred Stock, into the Series E Preferred Stock.

Exchange Agreement

In addition, upon consummation of the Series E Financing, pursuant to the Exchange Agreement, Mr. Shane McMahon, the Issuer’s Chairman and the holder of all of the Issuer’s issued and outstanding shares of Series A Preferred Stock exchanged with C Media all 7,000,000 shares of Series A Preferred Stock held by him for 933,333 shares of Series E Preferred Stock issued to C Media pursuant to the Purchase Agreement.

Item 6 of the Schedule 13D is hereby amended by inserting the following after the paragraph titled “Series E Purchase Agreement”:

Voting Agreement

In connection with the closing of the Series E Financing, Shane McMahon, Weicheng Liu and each of the Investors entered into a Voting Agreement dated as of January 31, 2014 (the “Voting Agreement”) pursuant to which, among other things, the parties thereto agreed, during the term of the Voting Agreement, which is three years from the date of such voting agreement, to vote all of the voting securities of the Issuer owned by them as well as securities acquired by them in the future in favor of the election to, and of maintaining, the board of directors, consisting of seven (7) members designated in the following manner: (i) two directors designated by Mr. McMahon, at least one of which will be an independent director, who are initially Mr. McMahon and James Cassano; (ii) two directors designated by Mr. Liu, at least one of which will be an independent director, who are initially Liu and Clifford Higgerson; and (iii) three directors designated by C Media, at least two of which will be independent directors, who are initially Xuesong Song, Jin Shi and Arthur Wong. In addition, each of the parties agreed that nothing in the Voting Agreement will (a) limit or affect any actions or omissions taken by any party in his capacity as a director or officer of the Issuer, and no such actions or omissions will be deemed a breach of this agreement or (b) will be construed to prohibit, limit or restrict any party from exercising such party’s fiduciary duties as an officer or director of the Issuer or any of its subsidiaries or their respective stockholders.

Item 7 of the Schedule 13D is hereby amended by the addition of the following at the end thereof: 

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Execution Version

VOTING AGREEMENT

This VOTING AGREEMENT, dated as of January 31, 2014 (this “Agreement”), is made by and among C Media Limited (“C Media”), the parties named on the signature pages hereto under the heading “Other Purchasers” (the “Other Purchasers”), Shane McMahon (“McMahon”) and Weicheng Liu (“Liu”, and collectively with C Media, the Other Purchasers and McMahon, the “Stockholders”).

WHEREAS, each of the Stockholders currently either owns or has voting power over such shares of voting securities of YOU On Demand Holdings, Inc., a Nevada corporation (the “Corporation”), as set forth on Schedule I to this Agreement; and

WHEREAS, as of the date hereof, the board of directors of the Corporation (the “Board of Directors”) is comprised of the individuals as set forth on Schedule II to this Agreement.

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

1.           Definitions.

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

“Independent Director” means a director of the Corporation who is independent as defined in applicable SEC and NASDAQ rules and regulations, and who constitutes an “Independent Director” as defined in NASDAQ Marketplace Rule 5605.

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

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

“Shares” means (1) the presently issued and outstanding shares of common stock and preferred stock of the Corporation, (2) any additional shares of common stock and preferred stock hereafter issued and outstanding, (3) any shares of capital stock of the Corporation into which such shares may be converted or for which they may be exchanged and (4) any option, warrant or other security of the Corporation entitling the holder thereof to purchase such common stock or preferred stock, or securities convertible into or exchangeable or exercisable for such common stock or preferred stock.

2.           Representations of Each of the Stockholders.

Each Stockholder hereby represents and warrants to the other Stockholders that:

(a)           (i) such Stockholder owns beneficially (as such term is defined in Rule 13d-3 under the Exchange Act) all of the Shares ascribed to such Shareholder on Schedule I hereto, (ii) such stockholder does not beneficially own any voting securities of the Corporation other than as set forth on Schedule I hereto, and (iii) except pursuant hereto or as set forth on Schedule I hereto, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which such Stockholder is a party relating to the voting of any of such Shares and there are no voting trusts or voting agreements with respect to such Shares.

(b)           Such Stockholder has the corporate power and authority or the legal capacity, as applicable, to enter into, execute and deliver this Agreement and to perform fully such Stockholder’s obligations hereunder, and this Agreement has been duly and validly executed and delivered by such Stockholder and constitutes the legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, and equitable principles.

(c)           None of the execution and delivery of this Agreement by such Stockholder, the consummation by such Stockholder of the transactions contemplated hereby or compliance by such Stockholder with any of the provisions hereof will conflict with or result in a breach, or constitute a default (with or without notice of lapse of time or both) under any provision of, any trust agreement, loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement, instrument or Requirement of Law applicable to such Stockholder or to such Stockholder’s property or assets.

(d)           No consent, approval or authorization of, or designation, declaration or filing with, any Governmental Authority or other Person on the part of such Stockholder is required in connection with the valid execution and delivery of this Agreement.

3.           Directors.

(a)           Election.  From the date hereof until termination of this Agreement in accordance with Section 6 hereof, at any annual or special meeting of stockholders at which the stockholders of the Corporation will have the right to, or will vote for, or consent to, setting the size of the Board of Directors or electing the members of the Board of Directors, the Stockholders shall vote all Shares then owned by them (including, Shares hereafter acquired by them) in favor of the

election to, and of maintaining, the Board of Directors, consisting of seven (7) members designated in the following manner:

(i) two (2) directors shall be designated by McMahon (the “McMahon Designees”), at least one of which shall be an Independent Director, who are initially McMahon and James Cassano; and

(ii) two (2) directors shall be designated by Liu (the “Liu Designees”), at least one of which shall be an Independent Director, who are initially Liu and Cliff Higgerson; and

(iii) three (3) directors shall be designated by C Media (the “C Media Designees”), at least two of which shall be Independent Directors, who are initially Xuesong Song, Jin Shi and Wong Lap Tat Arthur.

(b)           Vacancies.  Any vacancy in the office of a director designated pursuant to subsection (a) of this Section may be filled by and only by the affirmative vote or written consent of that person or persons which has the power to designate that director pursuant to subsection (a).

4.           No Voting Trusts or Other Arrangement.

Each Stockholder agrees that during the term of this Agreement such Stockholder will not, and will not permit any entity under such Stockholder’s control to, deposit any of such Stockholder’s Shares in a voting trust, grant any proxies with respect to such Shares or subject any of such Shares to any arrangement with respect to the voting of such Shares other than agreements entered into with the other Stockholders.

5.           Additional Shares.

Each Stockholder agrees that all shares of voting securities of the Corporation that such Stockholder purchases, acquires the right to vote or otherwise acquires beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of after the execution of this Agreement shall be subject to the terms of this Agreement and shall constitute Shares for all purposes of this Agreement.

6.           Termination.

The rights and obligations of each Stockholder under this Agreement shall terminate on the third (3rd) anniversary of the date hereof.

7.           No Agreement as Director or Officer.

Each Stockholder hereby agrees that nothing in this Agreement (a) will limit or affect any actions or omissions taken by any Stockholder in his capacity as a director or officer of the Corporation, and no such actions or omissions shall be deemed a breach of this Agreement or (b) will be construed to prohibit, limit or restrict any Stockholder from exercising such Stockholder’s fiduciary duties as an officer or director of the Corporation or any of its subsidiaries or their respective stockholders.

8.           Specific Performance.

Each party hereto acknowledges that it will be impossible to measure in money the damage to the other party if a party hereto fails to comply with any of the obligations imposed by this Agreement, that every such obligation is material and that, in the event of any such failure, the other party will not have an adequate remedy at law or damages. Accordingly, each party hereto agrees that injunctive relief or other equitable remedy, in addition to remedies at law or damages, is the appropriate remedy for any such failure and will not oppose the seeking of such relief on the basis that the other party has an adequate remedy at law. Each party hereto agrees that it will not seek, and agrees to waive any requirement for, the securing or posting of a bond in connection with the other party’s seeking or obtaining such equitable relief.

9.           Entire Agreement.

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

10.           Notices.

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

Mr. Shane McMahon

YOU On Demand Holdings, Inc.

27 Union Square West, Suite 502

New York, New York 10003

Facsimile: (212) 206-9112

with a copy to:

Pillsbury Winthrop Shaw Pittman LLP

2550 Hanover Street

Palo Alto, CA 94304-1114

Attention: Thomas M. Shoesmith

Telecopy: (650) 233-4545

and

K&L Gates LLP

599 Lexington Avenue

New York, NY 10022

Attention: Jack Vaughan

Facsimile: (212) 536-3901

Mr. Weicheng Liu

YOU On Demand Holdings, Inc.

27 Union Square West, Suite 502

New York, New York 10003

Facsimile: (212) 206-9112

with a copy to:

Pillsbury Winthrop Shaw Pittman LLP

2550 Hanover Street

Palo Alto, CA 94304-1114

Attention: Thomas M. Shoesmith

Telecopy: (650) 233-4545

C Media Limited

CN11 Legend Town,

No. 1 Balizhuangdongli, Chaoyang District

Beijing, China 100025

Facsimile: 86 10 8586 2775

with a copy to:

Reed Smith LLP

599 Lexington Ave.

New York, New York 10022

Attn: William N. Haddad

Facsimile: (212) 521-5400

Purchaser Representative

C Media Limited

CN11 Legend Town,

No. 1 Balizhuangdongli, Chaoyang District

Beijing, China 100025

Facsimile: 86 10 8586 2775

with a copy to:

Reed Smith LLP

599 Lexington Ave.

New York, New York 10022

Attn: William N. Haddad

Facsimile: (212) 521-5400

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

11.           Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the Requirements of Law of the State of New York without giving effect to the principles of conflict of laws.  Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States of America, in each case located in the County of New York, for any action or proceeding arising out of or relating to this Agreement (and agrees not to commence any action or proceeding relating thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to its respective address set forth in this Agreement, or such other address as may be given by one or more parties to the other parties in accordance with the notice provisions of Section 10 hereof, shall be effective service of process for any action, suit or proceeding brought against it in any such court.  Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the courts of the State of New York or the United States of America, in each case located in the County of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Action brought in any such court has been brought in an inconvenient forum. Each of the parties irrevocably and unconditionally waives, to the fullest extent permitted by applicable Requirements of Law, any and all rights to trial by jury in connection with any action, suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

12.           Severability.

(a)           If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held to violate the requirements of NASDAQ, the NYSE or any national securities exchange or automated quotation system on which the shares of common stock of the Corporation is listed or admitted to trading, then the parties hereto shall make such amendments or modifications necessary to comply with such rules and maintain the purpose and intent of this Agreement.

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

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

14.           Further Assurances.  Each party hereto shall execute and deliver such additional documents as may be necessary or desirable to effect the transactions contemplated by this Agreement.

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

16.           Assignment.  None of the parties to this Agreement may assign any of its rights or obligations under this Agreement without the prior written consent of the other parties hereto. Any assignment contrary to the provisions of this Section 16 shall be null and void.

[SIGNATURE PAGES FOLLOW]

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

[Signature Page to Board Voting Agreement]

[Signature Page to Board Voting Agreement]

[Signature Page to Board Voting Agreement]

[Signature Page to Board Voting Agreement]

EXCHANGE AGREEMENT

This Exchange Agreement (this “Agreement”) is dated as of January 31, 2014, by and among C Media Limited (“C Media”), Shane McMahon (“McMahon”) and YOU On Demand Holdings, Inc. (the “Company”).

BACKGROUND

WHEREAS, McMahon is the owner of 7,000,000 shares of the Company’s Series A Preferred Stock, par value $0.001 per share (the “McMahon Series A Shares”), issued to him pursuant to that certain Securities Purchase Agreement, dated May 18, 2010, as amended as of July 9, 2010, between the Company and McMahon;

WHEREAS, the Company intends to raise $19,000,000 through the issuance and sale of shares of Series E Preferred Stock of the Company, par value $.001 per share (the “Series E Shares”), to C Media and certain other purchasers (the “Other Purchasers”, and together with C Media, the “Purchasers”) pursuant to a Series E Preferred Stock Purchase Agreement, by and among the Company and the Purchasers (the “Series E SPA,” and the transactions contemplated thereby, collectively, the “Series E Financing”);

WHEREAS, on the date the Series E Financing is consummated (the “Series E Closing”), the Company will issue to C Media 933,333 Series E Shares (the “Series E Exchange Shares”) with the rights and preferences set forth in the Certificate of Designation of Series E Convertible Preferred Stock of the Company (the “Series E COD”);

WHEREAS, in order to induce C Media to consummate the Series E Financing, McMahon and C Media have agreed that, immediately following the Series E Closing, McMahon will exchange with C Media all of the McMahon Series A Shares for the Series E Exchange Shares in accordance with the terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties hereto hereby agree as follows:

1.   All capitalized terms not otherwise defined herein shall have the meanings given to them in the Series E SPA.

2.   McMahon, C Media and the Company hereby acknowledge and agree that all of the rights and obligations of any of them set forth in this Agreement are entirely contingent upon the occurrence of a Series E Closing in accordance with the terms of the Series D Preferred Stock Purchase Agreement, by and between the Company and C Media, dated as of July 5, 2013, as amended as of November 4, 2013 (the “Series D SPA”), and that, if there is no Series E Closing, this Agreement shall terminate in accordance with Section 8 hereof.

3.   McMahon and C Media hereby agree that, assuming the Series E Closing occurs, simultaneously with the Series E Closing, that certain Amended and Restated Voting Agreement, dated as of July 18, 2013, between McMahon and C Media shall be terminated, without further legal force or effect.

4.   McMahon, C Media and the Company hereby agree that immediately following the Series E Closing:

(a)   McMahon shall deliver to C Media stock certificate no. A-001, representing the McMahon Series A Shares, duly endorsed for transfer, or an executed Affidavit of Lost Certificate, and McMahon and the Company shall take any and all such further actions as may be required for all of McMahon’s rights with respect to the McMahon Series A Shares to be transferred in full to C Media; and

(b)   C Media shall deliver to McMahon stock certificate no. E-002, representing the Series E Exchange Shares, duly endorsed for transfer, and C Media and the Company, as applicable, shall take any and all such further actions as may be required for McMahon to become the owner of the Series E Exchange Shares.

5.   McMahon hereby represents and warrants the following to C Media with regard to the McMahon Series A Shares to be exchanged with C Media pursuant to Section 4(a) hereof:

(a)   McMahon has the power and authority to execute, deliver and perform his obligations under this Agreement, including with respect to the McMahon Series A Shares, and this Agreement is a legal, valid and binding obligation, enforceable against McMahon.

(b)   McMahon owns, of record and beneficially, and has valid title to and sole voting power with respect to, all of the McMahon Series A Shares, free and clear of any and all liens or encumbrances.

(c)   The McMahon Series A Shares are all of the shares of Series A Preferred Stock of the Company, par value $0.001 per share, owned by McMahon, free and clear of any liens or encumbrances.

6.   C Media hereby represents and warrants the following to C Media with regard to the McMahon Series A Shares to be exchanged with C Media pursuant to Section 4(b) hereof

(a)   C Media has the power and authority to execute, deliver and perform its obligations under this Agreement, including with respect to the Series E Exchange Shares, and this Agreement is a legal, valid and binding obligation, enforceable against C Media.

(b)   C Media owns, of record and beneficially, and has valid title to and sole voting power with respect to, all of the Series E Exchange Shares, free and clear of any liens or encumbrances.

7.   Each party to this Agreement hereby represents, warrants and covenants as follows with respect to itself or himself, as applicable:

(a)   This Agreement constitutes legal, valid and binding obligations of such party and is enforceable against such party in accordance with its terms.

(b)   The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of such party except as expressly set forth herein.

(c)   Such party agrees to execute and deliver promptly any and all such further reasonable documents, instruments and certificates, and to undertake all such further acts, as may be necessary, desirable or appropriate to effectuate the terms of this Agreement.

8.   This Agreement shall terminate upon the earlier of (a) mutual written agreement by each of the parties hereto, (b) the date, if any, when C Media delivers written notice to the Company of its intention not to consummate the Series E Financing, (c) the Second Revised E Outside Date, as that term is defined in the Series D SPA and (d) the date that all of the transactions contemplated hereby are consummated in full.

9.   This Agreement constitutes the entire understanding of the parties hereto relating to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written.

10.   No amendment to this Agreement shall be effective unless in writing and signed by each of the parties hereto.

11.   This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall be governed by and construed in accordance with the laws of the State of New York.

12.   This Agreement may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement.  Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.

[Signature Page Follows]

IN WITNESS WHEREOF, this Agreement has been duly executed by each of the parties hereto as of the day and year first written above.

[Signature Page to Exchange Agreement]

[Signature Page to Exchange Agreement]

[Signature Page to Exchange Agreement]