Exhibit 10.4

 
Confidential

CALL OPTION AGREEMENT

AMONG

GUOJUN WANG、MING MA、SHUANGDA WANG
CAIQIN WANG、YANJIE LIU、DEJUAN ZHOU
YI TAN、JINGRU DU、ZHENG WANG

DALIAN VASTITUDE MEDIA GROUP CO.,LTD.
DALIAN GUO-HENG MANAGEMENT AND CONSULTATION CO., LTD.
AND
THE COMPANIES LISTED IN APPENDIX I

November 6, 2009
 
 

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CALL OPTION AGREEMENT

This CALL OPTION AGREEMENT (this "AGREEMENT") is entered into in Dalian of the
People's Republic of China (the "PRC") as of NOVEMBER 6, 2009 by and among the
following Parties:

(1)            GUOJUN WANG
ADDRESS: Room 1-21-4 Building No.8, Changqing Street Zhongshan District Dalian
City Liaoning
IDENTITY CARD NUMBER: 210204196402120092
 
(2)             ZHENG WANG
 ADDRESS: No. 4-3-7, Sanyuan Road, Xigang District, Dalian City, Liaoning
 IDENTITY CARD NUMBER: 210203197904175294
 
(3)            YI TAN
 ADDRESS: No. 15-1-4-1, Fuguo Road, Shahekou District, Dalian City, Liaoning
 IDENTITY CARD NUMBER: 210211196510042160
 
(4)            YANJIE LIU
 ADDRESS: No. 3-5-1, No. 4 Hongye Plaza, Zhongshan District, Dalian
City,  Liaoning
 IDENTITY CARD NUMBER: 210705196108148629
 
(5)            SHUANGDA WANG
 ADDRESS: No. 35, Jianye Road, Dalian City, Liaoning
 IDENTITY CARD NUMBER: 210203540829401
 
(6)            MING MA
 ADDRESS: Room 4-1-2, No.62 Chunhe Road, Zhongshan District, Dalian
City,  Liaoning
 IDENTITY CARD NUMBER: 210204196602145809
 
(7)            JINGRU DU
 ADDRESS: No. 2-1, No. 12 Zhongjiaxiang, Zhongshan District, Dalian
City,  Liaoning
 IDENTITY CARD NUMBER: 210204196406030035
 
(8)            DEJUAN ZHOU
 ADDRESS: No.73, Chengren Road, Dalian City, Liaoning
 IDENTITY CARD NUMBER: 210204550412102
 
(9)           CAIQIN WANG
ADDRESS: No. 2-4, No. 69 Wansui Road, Shahekou District, Dalian City,
Liaoning   
IDENTITY CARD NUMBER: 210204196207150042
 
(10)         DALIAN V-MEDIA GROUP CO.,LTD. (hereinafter "V-MEDIA)
REGISTERED ADDRESS: No.68 Building, Renmin Road Zhongshan District Dalian City,
Liaoning
LEGAL REPRESENTATIVE: MING MA
 

 
 

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(11)     DALIAN GUO-HENG MANAGEMENT & CONSULTATING CO.,LTD.( hereinafter
"GUO-HENG")
REGISTERED ADDRESS: Villa No.20, ShaBao Village ChangXingDao Street Office
Dalian city, Dalian City, Liaoning
LEGAL REPRESENTATIVE:  JINGRU DU
 
(12)    THE COMPANIES LISTED IN APPENDIX I
 
(Guojun Wang, Zheng Wang, Yi Tan, Yanjie Liu, Shuangda Wang, Ming Ma, Jingru Du,
Dejuan Zhou and Caiqin Wang hereinafter shall be individually referred to as a
"PERSONAL SHAREHOLDER" and collectively, the "PERSONAL SHAREHOLDERS". The
Personal Shareholders and V-Media hereinafter individually referred to as a
"SHAREHOLDER" and collectively, the "SHAREHOLDERS". The Shareholders, Guo-Heng
and the companies listed in Appendix I hereinafter shall be individually
referred to as a "PARTY" and collectively referred to as the "PARTIES".)

WHEREAS
(1)           Caiqin Wang and V-Media are the enrolled shareholders of the
Dalian Vastitude Engineering & Design Co., Ltd listed in Appendix I，legally
holding majority of the equity of the Dalian Vastitude Engineering &Design Co.,
Ltd as of the execution date of this Agreement.

 (2)           V-Media is the enrolled shareholder of the companies listed in
Appendix I ，Appendix I attached hereto, legally holding all or the majority
equity of such companies  as of the execution date of this Agreement.

(3)            Guojun Wang, Ming Ma, Shuangda Wang, Caiqin Wang, Yanjie Liu,
Dejuan Zhou, Yi Tan, Jingru Du and Zheng Wang are the enrolled shareholders of
V-Media, legally holding all the equity in V-Media, of which Guojun Wang holding
51.75% interest,  Ming Ma  holding 24.5%,  Shuangda wang holding 3%, Caiqin
Wangholding 2.75%, Yanjie Liu holding 5%, Dejuan Zhou holding 5%, Yi Tan
holding3%, Jingru Duholding 2%, Zheng Wang holding 3%.

 (4)           The Shareholders intend to transfer to Guo-Heng, and Guo-Heng is
willing to accept, all their respective equity interest in the Target Companies
(as defined below), to the extent not violating PRC Law.

 (5)           In order to conduct the above equity transfer, the Shareholders
agree to jointly grant Guo-Heng an irrevocable call option for equity transfer
(hereinafter the "CALL OPTION"), under which and to the extent permitted by PRC
Law, the Shareholders shall on demand of Guo-Heng transfer the Option Equity (as
defined below) to Guo-Heng and/or any other entity or individual designated by
it in accordance with the provisions contained herein.

 (6)           V-Media intends to transfer to Guo-Heng all of its assets and
liabilities to the extent not violating PRC Law. In order to conduct the above
asset transfer, V-Media agrees to grant Guo-Heng an irrevocable call option for
assets (hereinafter the

 
 

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"ASSET CALL OPTION"), under which and to the extent as permitted by PRC Law,
V-Media shall on demand of Guo-Heng transfer the assets and liabilities to
Guo-Heng and/or any other entity or individual designated by it in accordance
with the provisions contained herein.

THEREFORE, the Parties hereby have reached the following agreement upon mutual
consultations:

ARTICLE 1  - DEFINITION
 
 
1.1           Except as otherwise construed in the context, the following terms
in this Agreement shall be interpreted to have the following meanings:

"PRC LAW" shall mean the then valid laws, administrative regulations,
administrative rules, local regulations, judicial interpretations and other
binding regulatory documents of the People's Republic of China.

"OPTION EQUITY" shall mean, in respect of each of the Shareholders, all of the
equity interest held thereby in the Target Company Registered Capital (as
defined below).

"TARGET COMPANY" shall mean, to Guojun Wang, Ming Ma, Shuangda Wang, Caiqin
Wang, Yanjie Liu, Dejuan Zhou, Yi Tan, Jingru Du and Zheng Wang, V-Media; to
Caixia Wang, V-Media，Dalian Vastitude Engineering & Design Co., Ltd; and to
V-Media, any and all of the companies listed in Appendix I.

"TARGET COMPANY REGISTERED CAPITAL" shall mean the registered capital of V-Media
as of the execution date of this Agreement, i.e., RMB20, 000,000, and the
registered capital of each Target Company as listed in Appendix I, which shall
include any expanded registered capital as the result of any capital increase
within the term of this Agreement.

"TRANSFERRED EQUITY" shall mean the equity of Target Company which Guo-Heng has
the right to require the Shareholders to transfer to it or its designated entity
or individual when Guo-Heng exercises its Call Option (hereinafter the "EXERCISE
OF OPTION") in accordance with Article 3.2herein, the amount of which may be all
or part of the Option Equity and the details of which shall be determined by
Guo-Heng at its sole discretion in accordance with the then valid PRC Law and
from its commercial consideration.

 

 
 

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"TRANSFER PRICE" shall mean all the consideration that Guo-Heng or its
designated entity or individual is required to pay to the Shareholders in order
to obtain the Transferred Equity upon each Exercise of Option. In spite of any
provision herein, in case of Guo-Heng exercising the call option in its sole
discretion upon the occurrence of the situation in which such call option
exercise become feasible under the relevant laws in PRC, any additional
consideration paid other than the $1.00 which may be required under the laws of
China to effect such purchase to comply with such legal formalities shall be
either cancelled or returned to the company immediately with no additional
compensation to the owners. The shareholders hereby acknowledge the purpose of
such provisions and hereby agrees and authorizes the company to take any and all
actions to effect such transaction and agrees irrevocably to execute any and all
documents and instruments and authorize Guo-Heng and its designated entity or
individual to sign on his or her behalf and hereby gives the Guo-Heng and its
designated entity or individual a proxy to execute and deliver such documents
and instruments to effect the purpose of this provision and hereby waives any
defense or claim of causes of action to challenge or defeat this provision.If
there exists any regulatory provision with respect to Transfer Price under the
then PRC Law, Guo-Heng or its designated entity or individual shall be entitled
to determine the lowest price permitted by PRC Law as the Transfer Price.
 
"BUSINESS PERMITS" shall mean any approvals, permits, filings, registrations
etc. which V-Media is required to have for legally and validly operating its
advertisement designing, producing, agency, publishing and all such other
businesses, including but not limited to the Business License of the Coperate
Legal Person, the Tax Registration Certificate, the Permit for Operating
Advertising Businesses and such other relevant licenses and permits as required
by the then PRC Law.

"TARGET COMPANY ASSETS" shall mean, in respect of any Target Company, all the
tangible and intangible assets which such Target Company owns or has the right
to use during the term of this Agreement, including but not limited to any
immoveable and moveable assets, and such intellectual property rights as
trademarks, copyrights, patents, proprietary know-how, domain names and software
use rights.

"THE EXCLUSIVE SERVICE AGREEMENT" shall mean the Exclusive Service Agreement
entered into among each Target Company l dated NOVEMBER 6, 2009.

"MATERIAL AGREEMENT" shall mean an agreement to which any Target Company is a
party and which has a material impact on the businesses or assets of the Target
Company, including but not limited to the Exclusive Service Agreement among the
Target Company and Guo-Heng, and other agreements regarding the Target Company's
advertising business.

1.2           The references to any PRC Law herein shall be deemed

(1)           to include the references to the amendments, changes, supplements
and reenactments of such law, irrespective of whether they take effect before or
after the formation of this Agreement; and

 
 

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(2)           to include the references to other decisions, notices or
regulations enacted in accordance therewith or effective as a result thereof.

1.3           Except as otherwise stated in the context herein, all references
to an Article, clause, item or paragraph shall refer to the relevant part of
this Agreement.

ARTICLE 2  -GRANT OF CALL OPTION

The Parties agree that the Shareholders exclusively grant Guo-Heng hereby
irrevocably and without any additional conditions with a Call Option, under
which Guo-Heng shall have the right to require the Shareholders to transfer the
Option Equity to Guo-Heng or its designated entity or individual in such method
as set out herein and as permitted by PRC Law. Guo-Heng also agrees to accept
such Call Option.

in case of Guo-Heng exercising the call option in its sole discretion upon the
occurrence of the situation in which such call option exercise become feasible
under the relevant laws in PRC, any additional consideration paid other than the
$1.00 which may be required under the laws of China to effect such purchase to
comply with such legal formalities shall be either cancelled or returned to the
company immediately with no additional compensation to the V-Media and
Shareholders. V-Media and Shareholders hereby acknowledge the purpose of such
provisions and hereby agrees and authorizes the company to take any and all
actions to effect such transaction and agrees irrevocably to execute any and all
documents and instruments and authorize the company's relevant officers to sign
on his or her behalf and hereby gives the company and any of its relevant
officers a proxy to execute and deliver such documents and instruments to effect
the purpose of this provision and hereby waives any defense or claim of causes
of action to challenge or defeat this provision.

ARTICLE 3  - METHOD OF EXERCISE OF OPTION
 
3.1           To the extent permitted by PRC Law, Guo-Heng shall have the sole
discretion to determine the specific time, method and times of its Exercise of
Option.

3.2           If the then PRC Law permits Guo-Heng and/or other entity or
individual designated by it to hold all the equity interest of Target Company,
then Guo-Heng shall have the right to elect to exercise all of its Call Option
at once, where Guo-Heng and/or other entity or individual designated by it shall
accept all the Option Equity from the Shareholders at once;
 if the then PRC Law permits Guo-Heng and/or other entity or individual
designated by it to hold only part of the equity in Target Company, Guo-Heng
shall have the right to determine the amount of the Transferred Equity within
the extent not exceeding the

 
 

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upper limit of shareholding ratio set out by the then PRC Law (hereinafter the
"SHAREHOLDING LIMIT"), where Guo-Heng and/or other entity or individual
designated by it shall accept such amount of the Transferred Equity from the
Shareholders. In the latter case, Guo-Heng shall have the right to exercise its
Call Option at multiple times in line with the gradual deregulation of PRC Law
on the permitted Shareholding Limit, with a view to ultimately acquiring all the
Option Equity.

3.3           At each Exercise of Option by Guo-Heng, each of the Shareholders
shall transfer their respective equity in the Target Company to Guo-Heng and/or
other entity or individual designated by it respectively in accordance with the
amount required in the Exercise Notice stipulated in Article 3.5.  Guo-Heng and
other entity or individual designated by it shall pay the Transfer Price to each
of the Shareholders who has transferred the Transferred Equity for the
Transferred Equity accepted in each Exercise of Option. Guo-Heng shall have the
right to elect to pay the purchase price by settlement of certain credits held
by it or its affiliates to the shareholders.

3.4           In each Exercise of Option, Guo-Heng may accept the Transferred
Equity by itself or designate any third party to accept all or part of the
Transferred Equity.

3.5           On deciding each Exercise of Option, Guo-Heng shall issue to the
Shareholders a notice for exercising the Call Option (hereinafter the "EXERCISE
NOTICE", the form of which is set out as Appendix II hereto). The Shareholders
shall, upon receipt of the Exercise Notice, forthwith transfer all the
Transferred Equity in accordance with the Exercise Notice to Guo-Heng and/or
other entity or individual designated by Guo-Heng in such method as described in
Article 3.3 herein.

3.6           The Shareholders hereby severally undertake and guarantee that
once Guo-Heng issues the Exercise Notice in respect to the specific Transferred
Equity of the Target Company held by it:

 (1)           it shall immediately hold or request to hold a shareholders'
meeting  of the Target Company and adopt a resolution through the  shareholders'
meeting, and take all other necessary actions to agree  to the transfer of all
the Call Option to Guo-Heng  and/or other entity or individual designated by it
at the Transfer  Price and waive the possible preemption;

 (2)           it shall immediately enter into an equity transfer agreement
with  Guo-Heng and/or other entity or individual designated  by it for transfer
of all the Transferred Equity to Guo-Heng and/or other entity or individual
designated by it at the  Transfer Price; and
 
(3)            it shall provide Guo-Heng with necessary support (including
providing and executing all the relevant legal documents, processing all the
procedures for government approvals and registrations and bearing all the
relevant obligations) in accordance with the requirements of Guo-Heng and of the
laws and regulations, in order that Guo-Heng and/or other entity or individual
designated by it may take all the Transferred Equity free from any legal defect.

 
 

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3.7           At the meantime of this Agreement, the Shareholders shall
respectively enter into a power of attorney (hereinafter the "POWER OF
ATTORNEY", the form of which is set out as Appendix III hereto), authorizing in
writing any person designated by Guo-Heng to, on behalf of such Shareholder, to
enter into any and all of the legal documents in accordance with this Agreement
so as to ensure that Guo-Heng and/or other entity or individual designated by it
take all the Transferred Equity free from any legal defect. Such Power of
Attorney shall be delivered for custody by Guo-Heng and Guo-Heng may, at any
time if necessary, require the Shareholders to enter into multiple copies of the
Power of Attorney respectively and deliver the same to the relevant government
department.

ARTICLE 4 - ASSET CALL OPTION

V-Media and the Personal Shareholders hereby further undertake to grant Guo-Heng
irrevocably an option to purchase assets within the term of this Agreement: to
the extent not violating the mandatory requirements under PRC Law, V-Media will
transfer all of its assets and liabilities to Guo-Heng and/or other entity or
individual designated by it when required by Guo-Heng.

In case of the Guo-Heng exercising the Asset Call Option in its sole discretion
upon the occurrence of the situation in which such call option exercise become
feasible under the relevant laws in PRC, any additional consideration paid other
than the $1.00 which may be required under the laws of China to effect such
purchase to comply with such legal formalities shall be either cancelled or
returned to the company immediately with no additional compensation to the
V-Media and Shareholders. V-Media and Shareholders hereby acknowledge the
purpose of such provisions and hereby agrees and authorizes the company to take
any and all actions to effect such transaction and agrees irrevocably to execute
any and all documents and instruments and authorize the company's relevant
officers to sign on his or her behalf and hereby gives the company and any of
its relevant officers a proxy to execute and deliver such documents and
instruments to effect the purpose of this provision and hereby waives any
defense or claim of causes of action to challenge or defeat this provision.

ARTICLE 5  - REPRESENTATIONS AND WARRANTIES
 
5.1           Each of the Shareholders hereby severally represents and warrants
in respect to it self and the Target Company in which he holds equity as
follows:

 
 

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5.1.1         Each of the Personal Shareholders is a PRC citizen with full
capacity, with full and independent legal status and legal capacity to execute,
deliver and perform this Agreement, and may act independently as a litigant
party.

Each of the Personal Shareholders has full power and authorization to execute
and deliver this Agreement and all the other documents to be entered into by it
in relation to the transaction referred to herein, and it has the full power and
authorization to complete the transaction referred to herein.

5.1.2         This Agreement is executed and delivered by Personal Shareholders
legally and properly. This Agreement constitutes the legal and binding
obligations on Personal Shareholders and is enforceable on it in accordance with
its terms and conditions. The Personal Shareholders are the enrolled legal owner
of the Option Equity as of the effective date of this Agreement, and except the
rights created by this Agreement, the Shareholders' Voting Rights Proxy
Agreement entered into by Personal Shareholders, Guo-Heng and their respective
Target Company dated NOVEMBER 6, 2009 (the "PROXY AGREEMENT"), the Equity Pledge
Agreement entered into by it, Guo-Heng, the Target Company dated NOVEMBER 6,
2009 (the "EQUITY PLEDGE AGREEMENT"), there is no lien, pledge, claim and other
encumbrances and third party rights on the Option Equity. In accordance with
this Agreement, Guo-Heng and/or other entity or individual designated by it may,
after the Exercise of Option, obtain the proper title to the Transferred Equity
free from any lien, pledge, claim and other encumbrances and third party rights.

5.1.3 Target Company shall obtain complete Business Permits as necessary for its
operations upon this Agreement taking effect, and Target Company shall have
sufficient rights and qualifications to operate within PRC the businesses of
advertising and other business relating to its current business structure.
Target Company has conducted its business legally since its establishment and
has not incurred any cases which violate or may violate the regulations and
requirements set forth by the departments of commerce and industry,
tax, culture, news, quality technology supervision, labor and social security
and other governmental departments or any disputes in respect of breach of
contract.

5.2           V-Media hereby represents and warrants in respect to it self and
the Target Company in which it holds equity as follows:

5.2.1        V-Media is a limited liability company operation duly registered
and validly existing under PRC Law, with independent status as a legal person;
V-Media has full and independent legal status and legal capacity to execute,
deliver and perform this Agreement, and may act independently as a subject of
actions.

5.2.2         V-Media has full power and authorization to execute and deliver
this Agreement and all the other documents to be entered into by it in relation
to the transaction referred to herein, and it has the full power and
authorization to complete the transaction referred to herein.

 
 

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5.2.3         This Agreement is executed and delivered by V-Media legally and
properly. This Agreement constitutes legal and binding obligations on it.

5.2.4         V-Media is the enrolled legal shareholder of the Option Equity
when this Agreement comes into effect, except the rights created by this
Agreement, the Proxy Agreement, the Equity Pledge Agreement, there is no lien,
pledge, claim and other encumbrances and third party rights on the Option
Equity. In accordance with this Agreement, Guo-Heng and/or other entity or
individual designated by it may, upon the Exercise of Option, obtain the proper
title to the Transferred Equity free from any lien, pledge, claim and other
encumbrances and third party rights.

5.2.5         Target Company shall obtain complete Business Permits as necessary
for its operations upon this Agreement taking effect, and Target Company shall
have sufficient rights and qualifications to operate within PRC the businesses
of advertising and other business relating to its current business structure.
Target Company has conducted its business legally since its establishment and
has not incurred any cases which violate or may violate the regulations and
requirements set forth by the departments of commerce and industry, tax,
culture, news, quality technology supervision, labor and social security and
other governmental departments or any disputes in respect of breach of contract.

The remaining shareholders of the Target Companies set out in Appendix I hereto
have given written approvals regarding the content of this Agreement and have
irrevocably undertaken, upon  the Exercise of Option by V-Media of Option
Equity  in accordance with this Agreement, to respectively waive
possible  rights of preemption and offer necessary assistance.

5.3           Guo-Heng hereby represents and warrants as follows:

5.3.1         Guo-Heng is a company with limited liability properly  registered
and legally existing under PRC Law, with an independent  status as a legal
person. Guo-Heng has full and independent legal status and legal capacity to
execute, deliver and  perform this Agreement and may act independently as a
subject of  actions.

5.3.2         Guo-Heng has full power and authorization to execute and deliver
this Agreement and all the other documents to be entered into by it in relation
to the transaction referred to herein, and it has the full power and
authorization to complete the transaction referred to herein.

 
 
 

 
 

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ARTICLE 6  - UNDERTAKINGS BY THE SHAREHOLDERS

 
6.1           The Shareholders hereby individually undertake within the term of
this Agreement that it must take all necessary measures to ensure that Target
Company is able to obtain all the Business Permits necessary for its business in
a timely manner and all the Business Permits remain in effect at any time.

6.2           The Shareholders hereby individually undertake within the term of
this Agreement that without the prior written consent by Guo-Heng,

6.2.1         no Shareholders shall transfer or otherwise dispose of any Option
Equity or create any encumbrance or other third party rights on any Option
Equity;

6.2.2         it shall not increase or decrease the Target Company Registered
Capital or cast affirmative vote regarding the aforesaid increase or decrease in
registered capital;

6.2.3         it shall not dispose of or cause the management of Target Company
to dispose of any of the Target Company Assets (except as occurs during the
arm's length operations);

6.2.4         it shall not terminate or cause the management of Target Company
to terminate any Material Agreements entered into by Target Company, or enter
into any other Material Agreements in conflict with the existing Material
Agreements;

6.2.5         it shall not individually or collectively cause each Target
Company to conduct any transactions that may substantively affect the asset,
liability, business operation, equity structure, equity of a third party and
other legal rights (except those occurring during the arm's length operations or
daily operation, or having been disclosed to and approved by Guo-Heng in
writing);
 
 
6.2.6         it shall not appoint or cancel or replace any executive directors
or members of board of directors (if any), supervisors or any other management
personnel of Target Company to be appointed or dismissed by the Shareholders;

6.2.7         it shall not announce the distribution of or in practice release
any distributable profit, dividend or share profit or cast affirmative votes
regarding the aforesaid distribution or release;

6.2.8         it shall ensure that Target Company shall validly exist and
prevent it from being terminated, liquidated or dissolved;

6.2.9         it shall not amend the Articles of Association of Target Company
or cast affirmative votes regarding such amendment;

6.2.10       it shall ensure that Target Company shall not lend or borrow any
money, or provide guarantee or engage in security activities in any other forms,
or bear any substantial obligations other than on the arm's length basis; and

 
 

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6.2.11       If it acquires any equity interest of a new advertising company
other than the Target Company within the term of this Agreement and such new
advertising company's business relies on the service provided by Guo-Heng and/or
Focus Media Digital, it shall grant Guo-Heng Transferred Option in respect to
the equity interest held by it in such advertising company subject to and upon
the same terms and conditions of this Agreement.

6.3           The Shareholders hereby individually undertake that it must make
all its efforts during the term of this Agreement to develop the business of
Target Company, and ensure that the operations of Target Company are legal and
in compliance with the regulations and that it shall not engage in any actions
or omissions which might harm the Target Company Assets or its credit standing
or affect the validity of the Business Permits of Target Company.

6.4           Without limiting the generality of Article 6.3 above, considering
the fact that each Shareholder of each Target Company sets aside all the equity
interest held thereby in each Target Company as security to secure the
performance by each Target Company of the obligations under the Exclusive
Service Agreement, the performance of such Shareholder of the obligations under
the Proxy Agreement, the Shareholder undertakes to, within the term of this
Agreement, make full and due performance of any and all of the obligations on
the part thereof under the Proxy Agreement, and to procure the full and due
performance of each Target Company of any and all of its obligations under the
Exclusive Service Agreement and warrants that no adverse impact on exercising
the rights under this Agreement by Guo-Heng will be incurred due to the breach
by the Shareholder of the Proxy Agreement or the breach of the Target Company of
the Exclusive Service Agreement.

6.5           V-Media undertakes that, before its Exercise of Option and acquire
all equity of V-Media, V-Media shall not do the following:

6.5.1         Sell, transfer, mortgage or dispose by other way any assets,
business, revenue or other legal rights of its own or any Target Company, or
permit creating any encumbrance or other third party's interest on such assets,
business, revenue or other legal rights (except as occurs during the arm's
length or operations or daily operation, or as is disclosed to Guo-Heng and
approved by Guo-Heng in writing);

6.5.2         conduct any transactions that may substantively affect the asset,
liability, business operation, equity structure, equity of a third party and
other legal rights (except those occurring during the arm's length operations or
daily operation, or having been disclosed to Guo-Heng and approved by Guo-Heng
in writing);

6.5.3         release any dividend or share profit to the Personal Shareholders
or cause the Target Company to do so in any form.

 
 

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ARTICLE 7  - CONFIDENTIALITY

7.1           Notwithstanding the termination of this Agreement, the
Shareholders shall be obligated to keep in confidence the following information
(hereinafter collectively the "CONFIDENTIAL INFORMATION"):(i)information on the
execution, performance and the contents of this Agreement;(ii)the commercial
secret, proprietary information and customer information in relation to Guo-Heng
known to or received by it as the result of execution and performance of this
Agreement; and(iii)the commercial secrets, proprietary information and customer
information in relation to Target Company known to or received by it as the
shareholder of Target Company.
The Shareholders may use such Confidential Information only for the purpose of
performing its obligations under this Agreement. o Shareholders shall disclose
the above Confidential Information to any third parties without the written
consent from Guo-Heng, or they shall bear the default liability and indemnify
the losses.

7.2           Upon termination of this Agreement, both Shareholders shall, upon
demand by Guo-Heng, return, destroy or otherwise dispose of all the documents,
materials or software containing the Confidential Information and suspend using
such Confidential Information.

7.3           Notwithstanding any other provisions herein, the validity of this
Article shall not be affected by the suspension or termination of this
Agreement.

ARTICLE 8  - TERM OF AGREEMENT

8.1           This Agreement shall take effect as of the date of formal
execution by the Parties. For each Shareholder, this Agreement shall terminate
in respect to such Shareholder when all the Option Equity of all the Target
Company held by him is legally transferred under the name of Guo-Heng and/or
other entity or individual designated by it in accordance with the provisions of
this Agreement.

8.2           After termination of this Agreement in respect to such Shareholder
according to Article 8.1 above, this Agreement continues to be fully valid in
respect to other Shareholders.

ARTICLE 9 – NOTICE

9.1           Any notice, request, demand and other correspondences made as
required by or in accordance with this Agreement shall be made in writing and
delivered to the relevant Party.

 
 

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9.2           The abovementioned notice or other correspondences shall be deemed
to have been delivered when it is transmitted if transmitted by facsimile or
telex; it shall be deemed to have been delivered when it is delivered if
delivered in person; it shall be deemed to have been delivered five (5) days
after posting the same if posted by mail.

ARTICLE 10  - LIABILITY FOR BREACH OF CONTRACT

10.1          The Parties agree and confirm that, if any party (hereinafter the
"DEFAULTING PARTY") breaches substantially any of the provisions herein or omits
substantially to perform any of the obligations hereunder, or fails
substantially to perform any of the obligations under this Agreement, such a
breach or omission shall constitute a default under this Agreement (hereinafter
a "DEFAULT"), then non-defaulting Party shall have the right to require the
Defaulting Party to rectify such Default or take remedial measures within a
reasonable period. If the Defaulting Party fails to rectify such Default or take
remedial measures within such reasonable period or within ten (10) days of
non-defaulting Party's notifying the Defaulting Party in writing and requiring
it to rectify the Default, then non-defaulting Party shall have the right at its
own discretion to select any of the following remedial measures:
(1)           to terminate this Agreement and require the Defaulting Party to
indemnify it for all the damage; or
(2)           mandatory performance of the obligations of the Defaulting Party
hereunder and require the Defaulting Party to indemnify it for all the damage.

10.2          Without limiting the generality of Article 10.1, any breach of the
Proxy Agreement, the Equity Pledge Agreement shall be deemed as having
constituted the breach by such Shareholder of this Agreement; and any breach by
Target Company of any provision in the Exclusive Service Agreement, if
attributable to the failure of any Shareholder to perform the obligations
thereof under Article 6.4 hereof, shall be deemed as having constituted the
breach by such Shareholder of this Agreement.

10.3          The Parties agree and confirm that in no circumstances shall the
Shareholders request the termination of this Agreement for any reason, except
otherwise stipulated by law or this Agreement.

10.4          Notwithstanding any other provisions herein, the validity of this
Article shall stand disregarding the suspension or termination of this
Agreement.

ARTICLE 11  - MISCELLANEOUS
 
11.1          This Agreement shall be prepared in the Chinese language in
sixteen (16) original copies, with each involved Party holding one (1) copy
hereof.

11.2         The formation, validity, execution, amendment, interpretation and
termination of this Agreement shall be subject to PRC Law.

 
 

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11.3         Any disputes arising hereunder and in connection herewith shall be
settled through consultations among the Parties, and if the Parties cannot reach
an agreement regarding such disputes within thirty (30) days of their
occurrence, such disputes shall be submitted to China International Economic and
Trade Arbitration Commission Dalian Office for arbitration in Dalian in
accordance with the arbitration rules of such Commission, and the arbitration
award shall be final and binding on all Parties.

11.4         Any rights, powers and remedies empowered to any Party by any
provisions herein shall not preclude any other rights, powers and remedies
enjoyed by such Party in accordance with laws and other provisions under this
Agreement, and the exercise of its rights, powers and remedies by a Party shall
not preclude its exercise of its other rights, powers and remedies by such
Party.

11.5          Any failure or delay by a Party in exercising any of its rights,
powers and remedies hereunder or in accordance with laws (hereinafter the
"PARTY'S RIGHTS") shall not lead to a waiver of such rights, and the waiver of
any single or partial exercise of the Party's Rights shall not preclude such
Party from exercising such rights in any other way and exercising the remaining
part of the Party's Rights.

11.6          The titles of the Articles contained herein shall be for reference
only, and in no circumstances shall such titles be used in or affect the
interpretation of the provisions hereof.

11.7          Each provision contained herein shall be severable and independent
from each of other provisions, and if at any time any one or more articles
herein become invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions herein shall not be affected as a
result thereof.
 
11.8          Upon execution, this Agreement shall substitute any other legal
documents previously executed by the Parties on the same subject.
 
11.9         Any amendments or supplements to this Agreement shall be made in
writing and shall take effect only when properly signed by the Parties to this
Agreement. Notwithstanding the preceding sentence, considering that the rights
and obligations of each of the Shareholders hereunder are independent and
severable from each other,
in case the amendment or supplement to this Agreement is intended to have impact
upon one of the Shareholders, such amendment or supplement requires the approval
of such Shareholder only and it is not required to obtain the approval from the
other ones of the Shareholders (to the extent the amendment or supplement do not
have impact upon such other Shareholders).

 
 

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11.10       Without prior written consent by Guo-Heng, the Shareholders shall
not transfer to any third party any of its right and/or obligation under this
Agreement, Guo-Heng shall have the right to transfer to any third party
designated by it any of its right and/or obligation under this Agreement after
notice to the Shareholders.

11.11       This Agreement shall be binding on the legal successors of the
Parties.

Notwithstanding any provision to the contrary in this Agreement, in case of the
event stipulated under Article 6.2.10, the relevant Shareholder shall, upon
request by Guo-Heng, procure that such new advertising company should be
included as a Target Company defined hereunder and that the all the equity
interest held by such Shareholder in such new advertising company shall become
the Option Equity defined hereunder, by signing the acknowledgement letter in
substantially the form attached hereto as Appendix IV. Considering that the
rights and obligations of each of the Shareholders hereunder are independent and
severable from each other, the arrangement procuring that the equity interest in
such new advertising company becoming the Option Equity will have no impact on
the rights or obligations of the other Shareholders, the above arrangement
requires written confirmation of Guo-Heng and the relevant Shareholder only. The
other Shareholders hereto hereby grant irrevocable and unconditional waiver in
respect to such arrangement, and further acknowledge that the relevant
Shareholder should not be obligated to obtain approval from them when he or it
make the equity interest held by him or it Option Equity.

[The remainder of this page is left blank]

 
 

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(EXECUTION PAGE)

IN WITNESS HEREOF, the following Parties have caused this Call Option Agreement
to be executed as of the date and in the place first here above mentioned.

GUOJUN WANG

Signature by:  /s/ Guojun Wang

MING MA

Signature by:  /s/ Ming Ma

SHUANGDA WANG

Signature by:  /s/ Shuangda Wang

CAIQIN WANG

Signature by:  /s/ Caiqin Wang

YANJIE LIU

Signature by:  /s/ Yanjie Liu

 
 

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DEJUAN ZHOU

Signature by: /s/ Dejuan Zhou

YI TAN

Signature by: /s/ Yi Tan

JINGRU DU

Signature by: /s/ Jingru Du

JINGRU DU

Signature by: /s/ Jingru Du

ZHENG WANG

Signature by: /s/ Zheng Wang

DALIAN VASTITUDE MEDIA GROUP CO.,LTD. (Company chop)

Signed by:                      //signed//
Name:
Position:                      Authorized Representative

DALIAN GUO-HENG CO., LTD. (Company chop)

Signed by:                      //signed//
Name:
Position:                      Authorized Representative

SHENYANG VASTITUDE MEDIA CO., LTD   (Company chop)
 
Signed by:                      //signed//
Name:         
Position:                      Authorized Representative

TIANJIN VASTITUDE AD MEDIA CO.,LTD (Company chop)
 
Signed by:                      //signed//
Name:                          
Position:                      Authorized Representative

 
 

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DALIAN VASTITUDE ENGINEERING & DESIGN CO., LTD (Company chop)
 
Signed by:                      //signed//
Name:                           
Position:                      Authorized Representative

DALIAN VASTITUDE &MODERN TRANSIT MEDIA CO., LTD (Company chop)
 
Signed by:                      //signed//
Name:                          
Position:                      Authorized Representative

DALIAN VASTITUDE NETWORK TECHNOLOGY CO., LTD (Company chop)
 
Signed by:                      //signed//
Name:                          
Position:                      Authorized Representative

 
 

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APPENDIX I:

BASIC INFORMATION OF OTHER TARGET COMPANIES HELD BY V-MEDIA
 
 

COMPANY
NAME
 
REGISTERED
ADDRESS
 
REGISTERED CAPITAL
 
LEGAL REPRESENTATIVE
 
EQUITY
STRUCTURE
Shenyang Vastitude Media Co., Ltd
 
No.5B-2-1, No.136,Huigong Road, Shenhe District, Shenyang, Liaoning
 
RMB 3,000,000
 
Guojun Wang
 
Dalian Vastitude Media Group Co., Ltd.  100%
Tianjin Vastitude AD Media Co.,Ltd
 
 
No. 1-2-1217, Chengjijimao Centre, East-North Cross Corner of Xian Road and
Changsha Road, Heping District, Tianjing
 
RMB 1,000,000
 
Hongwen Liu
 
Dalian Vastitude Media Group Co., Ltd. 100%
Dalian Vastitude Engineering & Design Co., Ltd
 
 
No. 7, Floor 8, No.68 Renmin Road, Zhongshan District, Dalian City, Liaoning
 
RMB 3,000,000
 
Caiqin Wang
 
Dalian Vastitude Media Group Co., Ltd. 83.3%, Caiqin Wang 13.3%, Hongwei Sun
3.4%
Dalian Vastitude & Modern Transit Media Co., Ltd
 
 
No.401, Administrative Office, Huayuan Industrial Zone, Dalian, Liaoning
 
RMB 4,000,000
 
Guojun Wang
 
Dalian Vastitude Media Group Co., Ltd 70%, Dalian Modern Transit Media Co., Ltd
30%
Dalian Vastitude Network Technology Co., Ltd
 
No.1-3 Room, 22#, No.541 Huangpu Road, Dalian New Technology and Industry
Development Zone
 
RMB 1,000,000
 
Hong Zhu
 
Dalian Vastitude Media Group Co., Ltd 60%, Dalian Chengshu Technology Co.,Ltd
40%

 
 

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APPENDIX II:

FORMAT OF THE OPTION EXERCISE NOTICE

To:

As our company and you/your company and other relevant parties signed an Call
Option Agreement as of [date] (hereinafter the "OPTION AGREEMENT"), and reached
an agreement that you/your company shall transfer the equity you/your company
hold in [name of the Target Company] (hereinafter the "TARGET COMPANY") to our
company or any third parties designated by our company on demand of our company
to the extent as permitted by PRC Law and regulations. Therefore, our company
hereby gives this Notice to you/your as follows:
 
Our company hereby requires to exercise the Call Option under the Option
Agreement and [our company]/[name of company/individual] designated by our
company shall accept the equity you/your company hold accounting for ______% of
[name of the Target Company] Registered Capital (hereinafter the "PROPOSED
ACCEPTED EQUITY"). You/Your company is required to forthwith transfer all the
Proposed Accepted Equity to [our company]/[name of designated
company/individual] upon receipt of this Notice in accordance with the agreed
terms in the Option Agreement.
Best regards,

DALIAN GUO-HENG MANAGEMENT & CONSULTATION CO., LTD. (Chop)
 
 
 
 
 
 

 
 

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Authorized Representative:

Date:

 
 

APPENDIX III:

FORM OF THE POWER OF ATTORNEY

 
 
I/The company, __________________, hereby irrevocably entrust __________________
[with his/her identity card number of __________________], as the authorized
representative of me/the company, to sign the Equity Transfer Agreement and
other relevant legal documents between me and ______________ regarding the
Equity Transfer of [name of the Target Company]

Signature:

Date:

 
 

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APPENDIX IV:
ACKNOWLEDGEMENT LETTER

I[name] (ID Card number:______) This company (registered address ), as an
independent party, hereby agree to grant Dalian Guo-Heng Management and
Consultation Co., Ltd.(hereinafter the "GUO-HENG ") with an irrevocable equity
Call Option (hereinafter "CALL OPTION") in respect to [ ]% of the equity share
of [ ] (hereinafter the "NEW TARGET COMPANY") held by me/this company.
Once this Acknowledgement Letter is executed by me/this company, the New Target
Company and the newly increase equity share begin to be the "Target Company" and
"Option Equity" defined under the Call Option Agreement (hereinafter the "CALL
OPTION AGREEMENT") entered into between me/this company, Guo-Heng and other
relevant parties dated [      ];
and I/this company immediately make the same representations and warranties in
respect to the New Target Company and relevant equity Call Option as I/this
company made under the Call Option Agreement in respect to the defined Target
Company and Call Option.

 [NAME OF THE SHAREHOLDER/NAME OF THE COMPANY (Company chop)

Signature by:
Name:
 
 
 
 

 
 
 

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Position:                      Authorized Representative]

DALIAN GUO-HENG MANAGEMENT & CONSULTATION CO., LTD. (Company chop)

Signature by:
Name:
Position:                      Authorized Representative]
 
 
 
 
 
 
 
 
 

 

 
 

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