EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“ Agreement ”) is made and entered into by and between ZST Digital Networks, Inc. (“ Company ”), a Delaware corporation, and John Chen (“ Employee ”), effective on the date indicated below.  (Company and Employee are sometimes referred to herein as “ party ” or collectively as the “ parties .”)

WHEREAS, the Company wishes to employ and the Employee has agreed to supply his service in the capacity of Chief Financial Officer with duties encompassing the operations of the Company and the Company’s subsidiaries, on the terms and conditions set out in this Agreement, which shall supersede and replace all prior written, oral, or implied agreements, if any, between Employee and the Company; provided, however, the Employee shall remain bound by any confidentiality, nondisclosure, and invention assignment agreement(s) previously executed in favor of the Company, to the extent such ancillary agreements exist;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and the continued employment of Employee by the Company under this Agreement, the parties agree as follows:

Company hereby employs Employee and Employee hereby accepts employment from Company, effective as of the pricing date of the Company’s public offering (the “ Offering ”) of shares of common stock, $0.0001 par value per share (“ Common Stock ”), on a registration statement on Form S-1 (File No. 333-160343) (the “ Effective Date ”).  Employee agrees to perform the services and to comply faithfully with his obligations of employment, under the terms and conditions specified in this Agreement, and pursuant to the policies and procedures of the Company that may be issued from time to time.

Section 2.1       Initial Term and Renewal .  The initial term of this Agreement shall be for a period of eighteen (18) months commencing on the Effective Date (the “ Initial Term ”), unless terminated earlier pursuant to the provisions of Article 5 of this Agreement.  This Agreement shall automatically renew for an additional one (1) year period of employment on the expiration date of the Initial Term (each, a “ Subsequent Term ”), and on each successive anniversary date thereafter (each such date, an “ Expiration Date ”), unless either party gives written notice to the other party at least ninety (90) days prior to any Expiration Date that the Agreement is not being renewed and shall terminate on that Expiration Date, unless terminated earlier pursuant to the provisions of Article 5 of this Agreement.  The Initial Term and each successive one year period thereafter during which Employee shall perform services pursuant to this Agreement shall be referred to herein as the “ Term .”

Section 3.1        Base Salary .   For all of the services to be rendered by Employee hereunder, Company shall pay to Employee an annual base salary of $150,000.00  (“ Salary ”), beginning on the Effective Date of this Agreement.  Any base Salary payable hereunder shall be paid in accordance with the Company’s regular payroll practices, as in effect from time to time, and shall be subject to standard payroll deductions and withholdings as required by applicable law.

Section 3.2         Adjustment to Salary .  Employee’s Salary may be changed from time to time by mutual agreement of the Employee and the Company.  Any such agreement shall be evidenced by a written amendment of this Agreement and signed by both parties.

Section 3.3         Signing Bonus .  Within five (5) business days of the Effective Date, Company shall pay to Employee a Signing Bonus that shall be calculated as follows:  $410.96 per day multiplied by the number of days between September 25, 2009 and the Effective Date.  The Signing Bonus shall be subject to standard deductions and withholdings as required by applicable law.

Section 3.4         Payment of Salary .  During the period of his employment with Company, Employee is authorized by Company to access Company’s United States bank accounts for the purpose of ensuring the timely payment of Employee’s Salary. The Company shall pay Employee’s salary on a quarterly basis in advance of each quarter (e.g., the Company’s first salary payment will pay Employee for work to be performed through December 31, 2009 for the fourth quarter of 2009, and the Company’s second salary payment on January 1, 2019 will pay Employee work to be performed through March 31, 2010, etc.).

Section 3.5          Stock Options .   On the Effective Date, subject to approval by the Company’s Board of Directors and stockholders, Employee shall be granted options (the “ Initial Options ”) to purchase Twenty-Five Thousand (25,000) shares of Common Stock of the Company with an exercise price equal to the price of the shares of Common Stock sold in the Offering.  The Initial Options will be immediately exercisable but, to the extent they are exercised, will be subject to a repurchase right of the Company which will lapse as follows: 50% of the Initial Options and shares will vest six (6) months after the Effective Date and the remaining 50% will vest twelve (12) months after the Effective Date.  At twelve (12) months from the Effective Date, Employee shall be granted additional options (the “ Subsequent Options ”) to purchase Twelve Thousand Five Hundred (12,500) shares of common stock of the Company that are not immediately exercisable and which shall vest six (6) months from the date of grant have an exercise price equal to the closing price of the Common Stock on the date of grant.  The Initial Options and Subsequent Options shall expire five (5) years after their respective grant dates provided, however, that Employee remains continuously employed by the Company during the applicable five year period.  In the event that the Employee is terminated without “Cause” pursuant to Section 5.3 below or the Employee terminates his employment for Good Reason pursuant to Section 5.1(ii) below, then all Initial Options or shares, as applicable, and Subsequent Options that are not vested shall immediately vest on the date of termination.  All options that are vested at the time of termination of employment must be exercised within thirty (30) days of termination of employment,   provided , however , that all options may be immediately cancelled by the Company if Employee terminates his employment pursuant to Section 5.1(i) below or if Employee’s employment is terminated for “Cause,” as defined in Section 5.2 below.

Section 3.6           Medical and Dental Benefits .  Company shall reimburse Employee for standard corporate-style healthcare insurance coverage.

Section 3.7           Company Paid Holidays .  Employee will be eligible for all Company paid holidays that are provided to employees of the Company.

Section 3.8           Paid Leave .   Employee shall be entitled to accrue ten (10) days of paid leave (vacation, sick, and personal) each year, with a total maximum accrual of ten (10) days.  Employee may only take a maximum of ten (10) consecutive work days for paid vacation.  In exercising paid leave, Employee shall take into consideration his duties and shall take leave at times mutually agreeable to Employee and the Company.

Section 3.9           Reimbursement of Expenses .  Employee shall be reimbursed for reasonable travel, hotel, entertainment, and other business related expenses.  Employee shall also be reimbursed up to $300 per month for home office expenses (e.g., telephone, postal drop, and internet connection expenses) properly and necessarily incurred by him in the discharge of his employment duties. All reimbursement of expenses are subject to the Company’s policies in effect at the time on pre-approval of certain business expenses and reimbursement procedures.  Employee shall produce satisfactory supporting vouchers, receipts, and other documentation in connection with such expenses before such reimbursement is made in accordance with applicable Company policy.

Section 4.1           Duties of Employee .  Employee agrees to serve as Chief Financial Officer, and will report to the Chief Executive Officer and the Company’s Board of Directors.  Employee shall perform the duties and functions and have the responsibilities commensurate with such position as may be assigned from time to time.  Employee’s duties as Chief Financial Officer shall encompass the operations of the Company and the Company’s subsidiaries.  E