Document:

Exhibit 10.01

EXHIBIT 10.01

THE AMENDED AND RESTATED

NATIONAL BANK OF INDIANAPOLIS CORPORATION

2005 EQUITY INCENTIVE PLAN

ARTICLE I

SECTION 1

ESTABLISHMENT AND PURPOSE

1.1. Establishment of the Plan. The National Bank of Indianapolis
Corporation, an Indiana corporation (the “Company”), hereby establishes an equity-based incentive
compensation plan to be known as The National Bank of Indianapolis Corporation 2005 Equity
Incentive Plan (the “Plan”), set forth in this document. The Plan provides for the award of
Incentive Stock Options, Nonqualified Stock Options and Restricted Stock. The Plan and the grant
of Awards hereunder are conditioned on the Plan’s approval by the shareholders of the Company. The
Plan is adopted effective as of July 1, 2005; no Options or Restricted Stock may be awarded until
the Plan has been approved by a majority of the shares of common stock of the Company represented
at the shareholder’s meeting at which approval of the Plan is considered.

1.2. Purposes of the Plan. The Plan is designed to promote the interest of
the Company and its Subsidiaries by encouraging their officers and key employees, upon whose
judgment, initiative and industry the Company and its Subsidiaries are largely dependent for the
successful conduct and growth of their business, to continue their association with the Company and
its Subsidiaries by providing additional incentive and opportunity for unusual industry and
efficiency through stock ownership, and by increasing their proprietary interest in the Company and
their personal interest in its continued success and progress.

SECTION 2

DEFINITIONS

For purposes of the Plan, the following words and phrases have the following meanings unless a
different meaning is plainly required by the context:

2.1. “Award” means, individually or collectively, an award of Incentive Stock Options,
Nonqualified Stock Options or Restricted Stock.

2.2. “Award Agreement” means the written agreement which sets forth the terms and
provisions applicable to each Award.

 

 

 

2.3. “Board” or means the Board of Directors of the Company, unless the context
clearly requires otherwise, and to the extent that any powers and discretion vested in the Board of
Directors are delegated to any committee of the Board, the term “Board” shall also mean such
committee.

2.4. “Cause” means (i) the willful and continued failure of a Participant to perform
his required duties as an officer or key employee of the Company or any Subsidiary, (ii) action by
a Participant involving willful misfeasance or gross negligence, (iii) the requirement or direction
of a federal or state regulatory agency having jurisdiction over the Company or any Subsidiary to
terminate the employment of a Participant, (iv) conviction of a Participant of the commission of
any criminal offense involving dishonesty or breach of trust, or (v) any intentional breach by a
Participant of a material term, condition or covenant of any agreement of employment, termination
or severance or any other agreement between the Participant and the Company or any Subsidiary.

2.5. “Change in Control” means: (i) any merger, consolidation or similar transaction
which involves the Company or any Subsidiary and in which persons who are the shareholders of the
Company immediately prior to such transaction own, immediately after such transaction, shares of
the surviving or combined entity which possess voting rights equal to or less than 50 percent of
the voting rights of all shareholders of such entity, determined on a fully diluted basis; (ii) any
sale, lease, exchange, transfer or other disposition of all or any substantial part of the assets
of the Company or any Subsidiary; (iii) any tender, exchange, sale or other disposition (other than
dispositions of the stock of the Company or any Subsidiary in connection with bankruptcy,
insolvency, foreclosure, receivership or other similar transactions) or purchases (other than
purchases by the Company or any Company-sponsored employee benefit plan, or purchases by members of
the Board of the Company or any Subsidiary) of more than 25 percent of the common stock of the
Company or any Subsidiary; (iv) during any period of two consecutive years, individuals who at the
date of the adoption of the Plan constitute the Board of the Company cease for any reason to
constitute at least a majority thereof, unless the election of each director at the beginning of
such period has been approved by directors representing at least a majority of the directors then
in office who were directors on the date of the adoption of the Plan; or (v) a majority of the
Board or a majority of the shareholders of the Company approve, adopt, agree to recommend, or
accept any agreement, contract, offer or other arrangement providing for, or any series of
transactions resulting in, any of the transactions described above. Notwithstanding the foregoing,
a Change in Control of the Company shall not occur as a result of the issuance of stock by the
Company in connection with any private placement offering of its stock or any public offering of
its stock.

2.6. “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder will include such section, guidance issued by
the Internal Revenue Service or the Treasury Department with respect to such section, any valid
regulation promulgated under such section, and any comparable provision of any future law,
legislation or regulation amending, supplementing or superseding such section or regulation.

 

2

 

2.7. “Committee” means the Compensation Committee of the Board who has been designated
from time to time by the Board pursuant to Section 3.1 to administer the Plan; and who is serving
on the date that the Plan is approved by the shareholders of the Company or thereafter.

2.8. “Company” means The National Bank of Indianapolis Corporation, an Indiana
corporation and any successor thereto.

2.9. “Company Stock” means the common voting stock of the Company.

2.10. “Director” means any individual who is a member of the Board of Directors of the
Company.

2.11. “Effective Date” means July 1, 2005.

2.12. “Exercise Price” means the price at which a share of common stock of the Company
may be purchased by a Participant pursuant to the exercise of an Option.

2.13. “Fair Market Value” means the mean between the reported closing bid and asked
prices for the shares of Company Stock as quoted by the North American Securities Dealers Automated
Quotation System (“NASDAQ”). If the common stock of the Company is not quoted by NASDAQ, Fair
Market Value shall be determined by the Committee based upon quotations of the entities which make
a market in Company stock and such other factors as the Committee shall deem appropriate. If the
common stock of the Company is not quoted by entities which make a market in the Company’s stock,
the Fair Market Value shall be determined by the Committee in good faith based upon a valuation of
the Company Stock conducted by a qualified appraiser and such other factors as the Committee deems
appropriate.

2.14. “Grant Date” means, with respect to any Award granted under the Plan, the date
on which the Award was granted by the Committee, regardless if the Award Agreement to which the
Award relates is executed subsequent to such date.

2.15. “Incentive Stock Option” or “ISO” means an Option to purchase shares of Company
Stock that is intended to meet the requirements of Code Section 422.

2.16. “Non-employee Director” means any individual who is a member of the Board of
Directors and who is not an employee of the Company.

2.17. “Nonqualified Stock Option” or “NSO” means an Option granted under the Plan to
purchase shares of Company Stock that is not an Incentive Stock Option.

2.18. “Option” means an Incentive Stock Option and/or a Nonqualified Stock Option.

2.19. “Optionee” means a Participant who has be granted an Option pursuant to an Award
Agreement.

 

3

 

2.20. “Option Period” means the period during which an Option will be exercisable in
accordance with the applicable Award Agreement and Section 6.

2.21. “Participant” means an officer or key employee to whom an Award has been
granted.

2.22. “Period of Restriction” means the period during which the transfer of shares of
Restricted Stock is subject to restrictions and, therefore, are subject to a substantial risk of
forfeiture. As provided in Section 7, such restrictions may be based on the passage of time or the
occurrence of such other events as may be determined by the Committee in its sole discretion.

2.23. “Plan” means The National Bank of Indianapolis Corporation 2005 Equity Incentive
Plan, as set forth in this instrument and as hereafter amended from time to time.

2.24. “Restricted Stock” means an Award granted to a Participant pursuant to
Section 7.

2.25. “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any future
rule or regulation amending, supplementing or superseding such rule.

2.26. “Subsidiary” means any banking institution or other corporation more than 50
percent of whose total combined voting stock of all classes is held by the Company or by another
corporation qualifying as a Subsidiary within this definition.

2.27. “Total and Permanent Disability” shall have the meaning ascribed to such term
under The National Bank of Indianapolis Corporation Long-term Disability Plan, as amended from time
to time.

SECTION 3

ADMINISTRATION

3.1. The Committee. The Plan shall be administered by a Committee of not less
than three Directors of the Company who shall be designated from time to time by the Board of
Directors. No Director who is also an officer or key employee of the Company or any of its
Subsidiaries shall be eligible to serve as a member of the Committee. No member of the Committee
shall be eligible, at any time when he is such a member, to receive an Award under the Plan. The
decision of a majority of the members of the Committee shall constitute a decision of the
Committee. It is intended that the Committee be comprised solely of Directors who both are (a)
“Non-employee Directors” under Rule 16b-3, and (b) “outside directors” as described in Treasury
Regulation Section 1.162-27(e)(3). Failure of the Committee to be so comprised will not result in
the cancellation, termination, expiration or lapse of any Award. Until and unless this Section is
amended to provide otherwise, all references in the Plan to the Committee are to the Compensation
Committee of the Board.

 

4

 

3.2. Authority of the Committee.

(a) Except as limited by law or by the Articles of Incorporation or By-Laws of the Company,
and subject to the provisions of the Plan, the Committee will have full power and discretion to:
(i) select officers and key employees to receive Awards; (ii) determine the sizes and types of
Awards; (iii) determine the terms and conditions of Awards in a manner consistent with the Plan;
(iv) construe and interpret the Plan, all Award Agreements and any other agreements or instruments
entered into under the Plan; (v) establish, amend or waive rules and regulations for the Plan’s
administration; and (vi) amend the terms and conditions of any outstanding Award and applicable
Award Agreement to the extent such terms and conditions are within the discretion of the Committee
as provided in the Plan. Further, the Committee will make all other determinations which may be
necessary or advisable for the administration of the Plan. Each Award will be evidenced by a
written Award Agreement between the Company and the Participant and will contain terms and
conditions established by the Committee consistent with the provisions of the Plan. Any notice or
document required to be given to or filed with the Committee will be properly given or filed if
hand delivered (and a delivery receipt is received) or mailed by certified mail, return receipt
requested, postage paid, to the Committee at 107 North Pennsylvania Street, Indianapolis, Indiana
46204.

(b) The Committee is authorized, subject to the provisions of the Plan, to adopt, amend and
rescind such rules and regulations as it may deem appropriate for the administration of the Plan
and to make determinations and interpretations which it deems consistent with the Plan’s
provisions. The Committee’s determinations and interpretations in this regard shall be final and
conclusive.

(c) The Committee shall also determine, in its sole discretion, with respect to each officer
or key employee, whether Options shall be ISO’s or NSO’s, or any combination thereof; and, whether
any employee will be given discretion to determine whether any Options awarded to him will be ISO’s
or NSO’s or any combination thereof.

SECTION 4

ELIGIBILITY

4.1. Eligibility. Officers and key employees of the Company or of any of its
Subsidiaries, as selected by the Committee, are eligible to receive Awards. Members of the
Committee are not eligible to receive Awards while serving as members of the Committee. An officer
or key employee will become a Participant as of the date specified by the Committee. A Participant
can be removed as an active Participant by the Committee effective as of any date; provided,
however, that no such removal will adversely affect any Award previously granted to the
Participant.

4.2. No Contract of Employment. Neither the Plan nor any Award executed
hereunder will constitute a contract of employment. Participation in the Plan does not give any
officer or key employee the right to be retained in the employ of the Company or any Subsidiary and
does not limit in any way the right of the Company or a Subsidiary
to change the duties or responsibilities of any employee or to terminate the employment of any
employee.

 

5

 

SECTION 5

SHARES SUBJECT TO THE PLAN

5.1. Number of Shares. Awards of Options and Restricted Stock will be made in
shares Company Stock which can be unissued shares or reacquired shares (including shares purchased
in the open market), or a combination thereof, as the Committee may from time to time determine in
its sole discretion. Subject to the provisions of Section 5.5, the maximum number of shares to be
delivered upon exercise of all Options and Restricted Stock awarded under the Plan will not exceed
Seven Hundred Thirty-Three Thousand (733,000) shares. Shares covered by an Option that remain
unpurchased upon expiration or termination of the Option and shares of Restricted Stock which are
forfeited can be made the subject of further Awards.

5.2. Restrictions on Shares. Shares issued upon exercise of an Award will be
subject to the terms and conditions specified herein and to such other terms, conditions and
restrictions as the Committee in its sole discretion may determine and provide in the Award
Agreement. The Company may cause any certificate for shares to be delivered hereunder to be
properly marked with a legend or other notation which reflects the limitations on transfer of such
shares as provided in the Plan, the applicable Award Agreement or as the Committee may otherwise
require in its sole discretion. Participants, or any other persons entitled to benefits under the
Plan, must furnish to the Committee such documents, evidence, data or other information as the
Committee considers necessary or desirable for the purpose of administering the Plan. The benefits
under the Plan for each Participant, and each other person who is entitled to benefits hereunder,
are to be provided on the condition that he furnish full, true and complete data, evidence or other
information, and that he promptly signs any document reasonably related to the administration of
the Plan requested by the Committee. No fractional shares will be issued under the Plan; rather,
fractional shares will be aggregated and then rounded to the next lower whole share.

5.3. Shareholder Rights. Except with respect to Restricted Stock as provided
in Section 7 and dividend rights as provided in Section 5.4, no person will have any rights of a
shareholder (including, but not limited to, voting rights) with respect to shares subject to an
Award until, after proper exercise or vesting of the Award or other action as may be required by
the Committee in its sole discretion, such shares have been recorded on the Company’s official
shareholder records (or the records of its transfer agents or registrars) as having been issued and
transferred to the Participant. Upon exercise of the Award or any portion thereof, the Company
will have a reasonable period in which to issue and transfer the shares to the Participant, and the
Participant will not be treated as a shareholder for any purpose whatsoever prior to such issuance
and transfer. No payment or adjustment will be made for rights for which the record date is prior
to the date such shares are recorded as issued and transferred in the Company’s official
shareholder records (or the records of its transfer agents or registrars), except as otherwise provided
herein or in an Award Agreement.

 

6

 

5.4. Dividends and Voting Rights. Upon the issuance of shares of Restricted
Stock, subject to the requirements of Section 7.3 concerning restrictions on the transferability of
Restricted Stock and the requirement that a Participant remain an employee of the Company or its
Subsidiaries, the Participant will be entitled to: (i) receive all dividends payable and paid with
respect to Restricted Stock awarded and issued to the him; and (ii) exercise all voting rights
associated with such Restricted Stock. Provided, however, upon the transfer or other disposition
of any shares of Restricted Stock in violation of subsection 7.3.1 or upon the forfeiture of any
shares of Restricted Stock in accordance with subsections 7.3.2 or 7.3.3, the Participant will not
be entitled to receive any dividends declared or exercise any voting rights on or after the date
such shares of Restricted Stock were transferred or forfeited.

5.5. Changes in Stock.

(a) Subject to the provisions of subsection 5.5(b), in the event of any change in the
Company’s shares through stock dividends, split-ups, recapitalizations, reclassifications,
conversions or otherwise, or in the event that other stock shall be converted into or substituted
for Company shares as the result of any merger, consolidation, reorganization or similar
transaction which results in a Change in Control of the Company, then the Committee may make
appropriate adjustment or substitution in the aggregate number, price and kind of shares available
under the Plan and in the number, price and kind of shares covered under any Options or Restricted
Stock awarded or to be awarded under the Plan. The Committee’s determination in this respect will
be final and conclusive. Provided, however, that the Company shall not, and shall not permit its
Subsidiaries to, recommend, facilitate or agree or consent to a transaction or series of
transactions which would result in a Change in Control of the Company unless and until the person
or persons or entity or entities acquiring or succeeding to the assets or capital stock of the
Company or any of its Subsidiaries as a result of such transaction or transactions agrees to be
bound by the terms of the Plan insofar as it pertains to Options or Restricted Stock theretofore
awarded but which are unexercised or unvested and agrees to assume and perform the obligations of
the Company hereunder. Notwithstanding the foregoing provisions of this subsection, no adjustment
shall be made which would operate to reduce the Option price of any Option below the Fair Market
Value of Company Stock (determined at the time the Option was granted) which is subject to the
Option.

 

7

 

(b) In the event of a Change in Control of the Company pursuant to which another person or
entity acquires control of the Company (such other person or entity being the “Successor”), shares
subject to the Plan and to each outstanding Option and award of Restricted Stock, will,
automatically by virtue of such Change in Control of the Company, be converted into and replaced by
shares of common stock, or such other class of securities having rights and preferences no less
favorable than common voting stock of the Successor, and the number of shares subject to the Option
or award of Restricted Stock, and the purchase price per share upon exercise of the Option or
Restricted Stock,
if any, will be correspondingly adjusted, so that, by virtue of such Change in Control of the
Company, each Participant shall have the right:

(i) In the case of an Option, to purchase that number of shares of common stock of the
Successor which have a Fair Market Value equal, as of the date of such Change in Control of the
Company, to the Fair Market Value, as of the date of such Change in Control, of the shares of
Company Stock subject to his Option, and for a purchase price per share which, when multiplied by
the number of shares of common stock of the Successor subject to the Option, equals the aggregate
Exercise Price at which the Participant could have acquired all of the shares of Company Stock
theretofore optioned to the Participant.

(ii) In the case of Restricted Stock, each Participant will have that number of shares of
Restricted Stock of the Successor which have a Fair Market Value equal, as of the date of such
Change in Control of the Company, to the Fair Market Value, as of the date of such Change in
Control of the Company, of the shares of Restricted Stock of the Company theretofore awarded to
him.

SECTION 6

STOCK OPTIONS

6.1. Grant of Options. Subject to the terms and provisions of the Plan and
Section 5.1, the Committee, at any time and from time to time, may grant Options to any officer or
key employee in such amounts as the Committee determines in its sole discretion. The Committee may
grant ISO’s, NSO’s or any combination thereof; provided, however, Non-employee Directors may not be
granted ISO’s.

6.2. Option Award Agreement. Each Option will be evidenced by an Award
Agreement that specifies the Exercise Price, the number of shares to which the Option pertains, the
Option Period, any conditions on the exercise of the Option and such other terms and conditions as
the Committee determines in its sole discretion. The Award Agreement will also specify whether the
Option is intended to be an ISO or an NSO. All grants of Options intended to constitute ISO’s will
be made in accordance, and all Award Agreements pursuant to which ISO’s are granted will comply,
with the requirements of Code Section 422.

6.3. Exercise Price. The Exercise Price for each Option will be determined by
the Committee; provided, however, except for adjustments provided for in Section 5.5, under no
circumstances will the Exercise Price of any Option be reduced or any Option be cancelled and
reissued without the approval of the shareholders of the Company. In the case of each Option, the
Exercise Price will be not less than 100 percent of the Fair Market Value of the shares to which
the Option relates determined as of the Grant Date; provided, however, that, in the case of an ISO,
if, on the Grant Date, the Participant (together with persons whose stock ownership is attributed
to the Participant pursuant to Code Section 424(d)) owns securities possessing more than ten
percent of the total combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the Exercise Price of the ISO’s will be not less than 110 percent of the Fair Market Value of
the stock on the Grant Date.

 

8

 

6.4. Option Periods. Subject to the terms and provisions of Sections 8 and
10, the Option Period with respect to each Option will commence and expire at such times as the
Committee provides in the Award Agreement; provided, however, that:

(a) Options will not be exercisable later than the tenth anniversary of their respective Grant
Dates;

(b) ISO’s granted to an employee who possesses more than ten percent of the total combined
voting power of all classes of stock of the Company, taking into account the attribution rules of
Code Section 422(d), will not be exercisable later than the fifth anniversary of their Grant
Date(s); and

(c) Subject to the limits of this Section, the Committee may, in its sole discretion, after an
Option is granted, extend the maximum term of the Option.

6.5. Special Calendar Year Limitation on Shares Subject to ISO’s. The
aggregate Fair Market Value (determined at the time of the grant of the ISO’s) of the shares with
respect to which ISO’s are exercisable for the first time by an eligible employee during any
calendar year (under all plans providing for the grant of ISO’s of the Company or any of its
Subsidiaries) will not exceed One Hundred Thousand Dollars ($100,000.00).

6.6. Sequence of Exercising Incentive Stock Options. Any ISO granted to an
employee pursuant to the Plan will be exercisable even if there are outstanding previously granted
but unexercised ISO’s with respect to such employee.

6.7. Payment for Stock. Full payment for shares purchased on the exercise of
an Option will be made at the time of exercising the Option in whole or in part. Such payment may
be made either (a) in cash, or (b) in the sole discretion of the Committee, by delivering whole
shares already owned by the Participant for more than six months and having a total Fair Market
Value on the date of such delivery equal to the total Exercise Price (the “Delivered Stock”) or a
combination of cash and Delivered Stock. Delivered Stock will be valued by the Committee at its
Fair Market Value determined as of the date of the exercise of the Option in accordance with the
provisions of Section 6.3. No shares will be issued until full payment for them has been made, and
a Participant who holds an Option will have none of the rights of a shareholder with respect to
such shares until such shares are issued to him. Upon payment of the full Exercise Price, the
Company will issue a certificate or certificates to the Participant holding the Option evidencing
ownership of the shares purchased pursuant to the exercise of the Option which contain(s) such
terms, conditions and provisions as may be required and as are consistent with the terms,
conditions and provisions of the Plan and the applicable Award Agreement.

 

9

 

6.8. Nontransferability. No Option can be transferred, except by the
Participant’s will or the laws of descent and distribution. During the Participant’s lifetime, his
Option will be exercisable (to the extent exercisable) only by him. The Option and any rights and
privileges pertaining thereto will not be transferred, assigned, pledged or hypothecated by him in
any way, whether by operation of law or otherwise and will not be subject to execution, attachment
or similar process. Any attempt to transfer, assign, pledge or hypothecate any Option will be void
and of no effect.

6.9. Early Termination of Options.

6.9.1. Termination of Employment. All rights to exercise an Option
will terminate 30 days after the Optionee’s employment terminates, unless such termination
is for Cause or is on account of the Total and Permanent Disability or death (but not later
than the date the Option expires pursuant to its terms). Transfer of employment from the
Company to a Subsidiary, or vice versa, or from one Subsidiary to another, will not be
deemed a termination of employment. The Committee has the authority to determine in each
case whether a leave of absence on military or government service will be deemed a
termination of employment.

6.9.2. For Cause Termination. If an Optionee’s employment is
terminated for Cause, no previously unexercised Option, whether or not “vested,” may be
exercised. Rather, all unexercised Options will terminate effective on the date the
Optionee receives notice of his termination for Cause.

6.9.3. Total and Permanent Disability or Death of Optionee. If an
Optionee’s employment terminates due to Total and Permanent Disability or death, his
Option(s) will terminate one year after termination of his employment due to his Total and
Permanent Disability or death (but not later than the date the Option expires pursuant to
its terms); provided, however, that an ISO cannot be exercised as an ISO more than three
months after the Optionee’s termination of employment due to death. The exercise of an
Award that was granted as an ISO which exercise occurs more than three months after the
Optionee’s termination of employment due to death will be treated as the exercise of an
NSO. During such period, subject to the limitations of the Option Grant, the Optionee, his
guardian, attorney-in-fact or personal representative, as the case may be, may exercise the
Option in full.

6.9.4. Change in Control or Death or Disability of Optionee. In the
event of a Change in Control of the Company or upon the death or Total and Permanent
Disability of the Optionee, the Options covered by such agreement may be exercised in full
without regard to any restrictions on the exercise or vesting of such Options contained in
the Award Agreement.

6.9.5. Extension of Option Period. Notwithstanding the foregoing
provisions of this Section, if an Optionee’s employment terminates for any reason other
than for Cause or death on or after attaining age 62, the Committee may, in its sole
discretion, by means of a written amendment to the Award Agreement,
provide that any unvested Option will (i) not be forfeited upon termination of
employment, and (ii) become fully vested and exercisable during the Option Period specified
in the Award Agreement; provided, however, that the Committee will provide in any such
amendment that (A) the portion of the Option which was not vested on the date the
Participant terminated employment will be immediately forfeited, and (B) any shares of
Company Stock which were acquired after the Participant terminated employment must be
returned to the Company, upon a finding by the Committee, as determined in its sole
discretion, that the Optionee has violated any provision of the amended Award Agreement,
including without limitation any non-competition, non-solicitation or non-disclosure
provision thereof.

 

10

 

SECTION 7

RESTRICTED STOCK

7.1. Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant shares of Restricted Stock to any
officer or key employee in such amounts as the Committee determines in its sole discretion.
Subject to the limitations of Section 5.1, the Committee will determine the number of shares of
Restricted Stock to be granted to each Participant in its sole discretion.

7.2. Restricted Stock Award Agreement. Each Award of Restricted Stock will be
evidenced by an Award Agreement that specifies the Period of Restriction, the number of shares
granted and such other terms and conditions as the Committee determines in its sole discretion.
Unless the Committee determines otherwise in its sole discretion, shares of Restricted Stock will
be held by the Company, and will not be delivered to any Participant until the end of the
applicable Period of Restriction.

7.3. Vesting and Transfer of Restricted Stock.

7.3.1. Restrictions on Transferability. Except as provided in this
subsection, no shares of Restricted Stock awarded under the Plan may be sold, assigned,
transferred, pledged or hypothecated by the Participant in any way, whether by operation of
law or otherwise and shall not be subject to execution, attachment or similar process.
Each certificate evidencing shares of Restricted Stock awarded under the Plan shall bear a
legend which sets forth such restrictions; and, any attempted sale, assignment, transfer,
pledge, hypothecation, execution, attachment or similar disposition will be null and void
and of no effect.

7.3.2. Lapse of Restrictions and Vesting. The restrictions on shares
of Restricted Stock contained in subsection 7.3.1 will lapse and such shares will become
fully vested, nonforfeitable and transferable upon the earliest to occur of (i) the date(s)
prescribed by the Committee in the Award Agreement; (ii) the Participant’s death; or (iii)
the Participant’s Total and Permanent Disability. The specific terms and conditions
regarding the lapse of restriction and the vesting of
 shares of Restricted Stock will be contained in the Award Agreement. In no event will
a Participant have any right under the Plan or in an Award Agreement to affect the time at
which the Restricted Stock awarded to him becomes vested.

 

11

 

7.3.3. Forfeiture of Shares on Termination of Employment. If a
Participant’s employment with the Company or any Subsidiary is terminated for any reason
other than for Cause or on account of the Total and Permanent Disability or death, prior to
the time the shares of Restricted Stock become vested, as provided in subsection 7.3.2, all
of the unvested shares of Restricted Stock will be forfeited and shall thereupon revert to
the Company. Such forfeiture will be effective on the date of the Participant’s
termination of employment. Transfer of employment from the Company to a Subsidiary, or
vice versa, or from one Subsidiary to another, will not be deemed termination of
employment. The Committee has the authority to determine in each case whether a leave of
absence on military or government service is deemed a termination of employment.

Notwithstanding the foregoing provisions of this Section, if a Participant’s
employment terminates for any reason other than Cause or death on or after attaining age
62, the Committee may, in its sole discretion, by means of a written amendment to the Award
Agreement, provide that (i) the unvested shares of Restricted Stock will not be forfeited
upon termination of employment, and (ii) the restrictions on shares of Restricted Stock
contained in subsection 7.3.1 will lapse and such shares will become fully vested,
nonforfeitable and transferable upon the earliest to occur of: (x) the date(s) prescribed
by the Committee in the amendment to the Award Agreement, (y) the Participant’s death, or
(z) the Participant’s Total and Permanent Disability; provided, however, that the Committee
will provide in any such amendment that (A) shares of Restricted Stock that were not vested
on the date the Participant terminated employment will be immediately forfeited; and (B)
 shares of Restricted Stock which became vested after the Participant terminated employment
must be returned to the Company, upon a finding by the Committee, as determined in its sole
discretion, that the Participant has violated any provision of the amended Award Agreement,
including without limitation any non-competition, non-solicitation or non-disclosure
provision thereof.

7.3.4. Forfeiture on Termination For Cause. If a Participant’s
employment is terminated for Cause prior to the time the shares of Restricted Stock become
vested, as provided in subsection 7.3.2, all of the unvested shares will be forfeited and
thereupon revert to the Company. Such forfeiture will be effective on the date the
Participant receives notice of his termination for Cause.

7.3.5. Change in Control of Company. In the event of a Change in
Control of the Company (i) the restrictions on the transfer of all shares of Restricted
Stock provided in subsection 7.3.1, will immediately lapse, and (ii) all of the shares of
Restricted Stock subject to forfeiture under subsection 7.3.1 will immediately become fully
vested and nonforfeitable.

7.4. Return of Restricted Stock to Company. On the date set forth in the
applicable Award Agreement, the Restricted Stock for which restrictions have not lapsed by the last
day of the Period of Restriction will revert to the Company and thereafter will be available for
the grant of new Awards.

 

12

 

SECTION 8

AMENDMENT, TERMINATION AND DURATION

8.1. Amendment, Suspension or Termination. The Board may, at any time, without
the approval of the shareholders of the Company (except as otherwise required by applicable law,
rule or regulations, including without limitation any shareholder approval of the safe harbor rule
promulgated under the Securities Exchange Act of 1934) alter, amend, modify, suspend or discontinue
the Plan, but may not, without the consent of the affected Participant or without the approval of
the shareholders of the Company, make any alteration which would: (i) increase the aggregate number
of shares subject to an Award, except as provided in Sections 5.5; (ii) decrease the Exercise
Price, except as provided in Section 5.5; (iii) permit any member of the Committee to be eligible
for an Award; (iv) withdraw administration of the Plan from the Committee or Board; (v) extend the
term of the Plan, (vi) change the manner of determining the Exercise Price; (vii) change the class
of individuals eligible for Awards; or (viii) without the consent of the affected Participant,
alter or impair any Award.

8.2. Duration of the Plan and Shareholder Approval. The Plan will be
effective on the Effective Date and, subject to Section 8.1 (regarding the Board’s right to
supplement, amend, alter or discontinue the Plan), will remain in effect thereafter until
terminated by the Board; provided, however, that no Award can be exercised until the Plan has been
approved by the holders of at least a majority of the outstanding shares at a meeting at which
approval of the Plan is considered; and, provided further, no ISO can be granted after the tenth
anniversary of the Effective Date.

SECTION 9

TAX WITHHOLDING

9.1. Withholding Requirements. The Company has the power and the right, prior
to the delivery of any Company Stock on the exercise of an Option or the vesting of Restricted
Stock, to deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy all federal, state and local income and employment taxes required by
applicable law to be withheld with respect to exercise or vesting of such Award. In no event will
any amount withheld be in an amount that would require the Company to incur accounting charges.

9.2. Withholding Arrangements. The Committee, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a Participant to
satisfy a tax withholding obligation, in whole or in part, by (a) electing to have the Company
withhold otherwise deliverable shares (except in the case of exercises of
ISO’s), or (b) delivering to the Company shares then owned by the Participant having a Fair
Market Value equal to the amount required to be withheld; provided, however, that any shares
delivered to the Company must satisfy the ownership requirements for Delivered Stock specified in
Section 6.7. The amount of the withholding requirement will be deemed to include any amount that
the Committee agrees may be withheld at the time any such election is made, not to exceed, in the
case of income tax withholding, the amount determined, based upon minimum statutory requirements,
by using the maximum federal, state or local marginal income tax rates applicable to the
Participant with respect to the Award on the date the amount of income tax to be withheld is
determined. The Fair Market Value of the shares to be withheld or delivered will be determined as
of the date that the taxes are required to be withheld.

 

13

 

SECTION 10

LEGAL CONSTRUCTION

10.1. Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also includes the feminine, the plural includes the singular, and the
singular includes the plural.

10.2. Severability. In the event any provision of the Plan is held illegal or
invalid for any reason, the illegality or invalidity will not affect the remaining parts of the
Plan, and the Plan will be construed and enforced as if the illegal or invalid provision had never
been included herein.

10.3. Requirements of Law. The grant of Awards and the issuance of shares
under the Plan will be subject to all applicable statutes, laws, rules and regulations and to such
approvals and requirements as may be required from time to time by any governmental authorities or
any securities exchange or market on which the shares are then listed or traded.

10.4. Governing Law. The Plan and all Award Agreements will be construed in
accordance with and governed by the laws of the State of Indiana without giving effect to any
choice or conflict of law provisions, principles or rules (whether of the State of Indiana or any
other jurisdiction) that would cause the application of any laws of any jurisdiction other than the
State of Indiana. The Plan and all Award Agreements are intended to comply, and will be construed
by the Board and Committee in a manner which complies, with the applicable provisions of Code
Section 409A. To the extent there is any conflict between a provision of the Plan or an Award
Agreement and a provision of Code Section 409A, the applicable provision of Code Section 409A will
control.

10.5. Headings. The descriptive headings and sections of the Plan are
provided herein for convenience of reference only and will not serve as a basis for interpretation
or construction of the Plan.

 

14

 

10.6. Mistake of Fact. Any mistake of fact or misstatement of facts will be
corrected when it becomes known by a proper adjustment to an Award or Award Agreement.

10.7. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying thereon considers
pertinent and reliable, and signed, made or presented by the proper party or parties.

SECTION 11

MISCELLANEOUS

11.1. No Effect on Employment or Service. Neither the Plan nor the grant of
any Award or the execution of any Award Agreement will confer upon any Participant any right to
continued employment by the Company, or will interfere with or limit in any way the right of the
Company to terminate any employee’s employment or service at any time, with or without Cause.
Employment with the Company and its Subsidiaries is on an at-will basis only, unless otherwise
provided by a written employment or severance agreement, if any, between the employee and the
Company or an Subsidiary, as the case may be. If there is any conflict between the provisions of
the Plan or any Award Agreement executed and delivered hereunder and an employment or severance
agreement between an employee and the Company, the provisions of such employment or severance
agreement will control, including, but not limited to, the vesting and forfeiture of any Awards.

11.2. Participation. No officer or key employee will have the right to be
selected to receive an Award under the Plan or, having been selected, to be selected to receive a
future Award. Participation in the Plan will not give any Participant any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued under the terms of the
Plan.

11.3. Liability and Indemnification. No member of the Board, the Committee or
any officer or employee of the Company or any Subsidiary will be personally liable for any action,
failure to act, decision or determination made in good faith in connection with the Plan. By
participating in the Plan, each Participant agrees to release and hold harmless the Company and its
Subsidiaries (and their respective directors, officers and employees) and the Committee from and
against any tax liability, including, but not limited to, interest and penalties, incurred by the
Participant in connection with his receipt of Awards under the Plan and the deferral, payment and
exercise thereof. Each person who is or was a member of the Committee, or of the Board, will be
indemnified and held harmless by the Company against and from (a) any loss, cost, liability or
expense (including, but not limited to, attorneys’ fees) that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action, suit or proceeding to which
he may be a party or in which he may be involved by reason of any action taken or failure to act
under the Plan or any Award Agreement; and (b) any and all amounts paid by him in settlement
thereof, with the Company’s prior written approval, or
paid by him in satisfaction of any judgment in any such claim, action, suit or proceeding
against him; provided, however, that he will give the Company an opportunity, at the Company’s
expense, to handle and defend such claim, action, suit or proceeding before he undertakes to handle
and defend the same on his own behalf. The foregoing right of indemnification is exclusive of any
other rights of indemnification to which such persons may be entitled under the Company’s Articles
of Incorporation or By-Laws, by contract, as a matter of law or otherwise, or under any power that
the Company may have to indemnify them or hold them harmless.

 

15

 

11.4. Successors. All obligations of the Company under the Plan, with respect
to Awards granted hereunder, are binding on any successor to the Company, whether or not the
existence of such successor is the result of a Change in Control of the Company.

The Company will not, and will not permit its Subsidiaries to, recommend, facilitate or agree
or consent to a transaction or series of transactions which would result in a Change in Control of
the Company unless and until the person or persons or entity or entities acquiring control of the
Company as a result of such Change in Control agree(s) to be bound by the terms of the Plan insofar
as it pertains to Awards theretofore granted and agrees to assume and perform the obligations of
the Company and its Successor (as defined in Section 5.5) hereunder.

11.5. Use of Proceeds. The proceeds received by the Company from the sale of
stock pursuant to the Plan will be used for general corporate purposes.

11.6. Nontransferability of Awards. Except as provided in subsections 11.6.1
and 11.6.2, no Award can be sold, transferred, assigned, margined, encumbered, bequeathed, gifted,
alienated, hypothecated, pledged or otherwise disposed of, whether by operation of law, whether
voluntarily or involuntarily or otherwise, other than by will or by the laws of descent and
distribution. In addition, no Award will be subject to execution, attachment or similar process.
Any attempted or purported transfer of an Award in contravention of the Plan or an Award Agreement
will be null and void ab initio and of no force or effect whatsoever. All rights with respect to
an Award will be exercisable only by the Participant during his lifetime.

11.6.1. Limited Transfers of Nonqualified Stock Options.
Notwithstanding the foregoing, the Committee may, in its sole discretion, permit the
transfer of NSO’s by a Participant to: (a) the Participant’s spouse, any children or lineal
descendants of the Participant or the Participant’s spouse, or the spouse(s) of any such
children or lineal descendants (“Immediate Family Members”), (b) a trust or trusts for the
exclusive benefit of Immediate Family Members, or (c) a partnership or limited liability
company in which the Participant and/or the Immediate Family Members are the only equity
owners, (collectively, “Eligible Transferees”); provided, however, in the event the
Committee permits the transferability of NSO’s granted to the Participant, the Committee
may subsequently, in its sole discretion, amend, modify, revoke or restrict, without the
prior consent, authorization or agreement of the Eligible Transferee, the ability of the
Participant to transfer NSO’s that have not been
already transferred to an Eligible Transferee. An NSO that is transferred to an
Immediate Family Member will not be transferable by such Immediate Family Member, except
for any transfer by such Immediate Family Member’s will or by the laws of descent and
distribution upon the death of such Immediate Family Member. ISO’s granted under the Plan
are not transferable pursuant to this Section.

 

16

 

11.6.2. Exercise by Eligible Transferees. In the event that the
Committee, in its sole discretion, permits the transfer of NSO’s by a Participant to an
Eligible Transferee under Section 11.6.1, the NSO’s transferred to the Eligible Transferee
must be exercised by such Eligible Transferee; and, in the event of the death of such
Eligible Transferee, by such Eligible Transferee’s executor or administrator only in the
same manner, to the same extent and under the same circumstances (including, but not
limited to, the time period within which the Options must be exercised) as the Participant
could have exercised such Options. The Participant, or in the event of his death, the
Participant’s estate, will remain liable for all federal, state, local and other taxes
applicable upon the exercise of a Nonqualified Stock Option by an Eligible Transferee.

11.7. No Rights as Shareholder. Except to the limited extent provided in
Section 5.4, no Participant (or any Beneficiary) will have any of the rights or privileges of a
shareholder of the Company with respect to any shares issuable pursuant to an Award (or the
exercise thereof), unless and until certificates representing such shares have been recorded on the
Company’s official shareholder records (or the records of its transfer agents or registrars) as
having been issued and transferred to the Participant (or his or her Beneficiary).

11.8. Investment Representations. Unless the shares subject to an Award are
registered under the Securities Act of 1933, each Participant in the Award Agreement between the
Company and the Participant shall agree for himself and his legal representatives that any and all
shares purchased upon the exercise of an Option or acquired upon the award of Restricted Stock
shall be acquired for investment and not with a view to, or for sale in connection with, any
distribution thereof.

11.9. Funding. Benefits payable under the Plan to any person will be paid by
the Company from its general assets. Shares to be issued hereunder will be issued directly by the
Company from its authorized but unissued shares or acquired by the Company on the open market, or a
combination thereof. Neither the Company nor any of its Subsidiaries will be required to segregate
on its books or otherwise establish any funding procedure for any amount to be used for the payment
of benefits under the Plan. The Company (or any of its Subsidiaries) may, however, in its sole
discretion, set funds aside in investments to meet any anticipated obligations under the Plan. Any
such action or set-aside will not be deemed to create a trust of any kind between the Company and
any of its Subsidiaries and any Participant or other person entitled to benefits under the Plan or
to constitute the funding of any Plan benefits. Consequently, any person entitled to a payment
under the Plan will have no rights greater than the rights of any other unsecured general creditor
of the Company or its Subsidiaries.

 

17EX-4.22

Exhibit 4.22

 

AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

among

VISIONCHINA MEDIA INC.

VISION BEST LIMITED

DIGITAL VALUE HOLDINGS LIMITED

DIGITAL MEDIA GROUP COMPANY LIMITED

and

THE SHAREHOLDER REPRESENTATIVE

Dated as of November 16, 2009

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I THE MERGER
	 	 	2	 
	 
	Section 1.1. Shareholder Approvals
	 	 	2	 
	Section 1.2. The Merger
	 	 	2	 
	Section 1.3. The Closing
	 	 	3	 
	Section 1.4. Effective Time
	 	 	3	 
	Section 1.5. Effect of the Merger
	 	 	3	 
	Section 1.6. Articles of Association
	 	 	3	 
	Section 1.7. Directors and Officers
	 	 	3	 
	Section 1.8. Consideration
	 	 	4	 
	Section 1.9. Escrows
	 	 	6	 
	Section 1.10. Repayment of Shareholder Loans; Deduction of Applicable Taxes
	 	 	7	 
	Section 1.11. Appointment of Shareholder Representative
	 	 	8	 
	Section 1.12. Treasury Shares
	 	 	8	 
	Section 1.13. Options, Warrants and Other Rights
	 	 	8	 
	 
	 	 	 	 
	ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE Company
	 	 	8	 
	 
	Section 2.1. Due Organization, Good Standing and Power
	 	 	8	 
	Section 2.2. Authorization, Enforceability
	 	 	9	 
	Section 2.3. Capitalization; Ownership; Valid Issuance
	 	 	9	 
	Section 2.4. Group Companies
	 	 	9	 
	Section 2.5. Corporate Records
	 	 	10	 
	Section 2.6. Financial Statements
	 	 	11	 
	Section 2.7. No Approvals or Conflicts
	 	 	12	 
	Section 2.8. Licenses
	 	 	12	 
	Section 2.9. Litigation
	 	 	12	 
	Section 2.10. Absence of Certain Changes
	 	 	13	 
	Section 2.11. Tax Matters
	 	 	13	 
	Section 2.12. Officers, Employees and Labor
	 	 	14	 
	Section 2.13. Share Option and Other Plans
	 	 	15	 
	Section 2.14. Intellectual Property
	 	 	16	 
	Section 2.15. Contracts
	 	 	17	 
	Section 2.16. Related Party Transactions
	 	 	18	 
	Section 2.17. Prior Acquisitions
	 	 	18	 
	Section 2.18. Structure Agreements
	 	 	18	 
	Section 2.19. Compliance with Laws
	 	 	19	 
	Section 2.20. Environmental Matters
	 	 	20	 
	Section 2.21. Insurance
	 	 	21	 
	Section 2.22. Personal Property Assets
	 	 	21	 
	Section 2.23. Real Property
	 	 	21	 
	Section 2.24. No State Assets
	 	 	22	 
	Section 2.25. Brokers
	 	 	22	 

i

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF VISIONCHINA,
VISION BEST AND DIGITAL VALUE
	 	 	22	 
	 
	Section 3.1. Organization and Qualification
	 	 	22	 
	Section 3.2. Authority; Enforceability
	 	 	22	 
	Section 3.3. Share Consideration
	 	 	23	 
	Section 3.4. No Conflict; Required Filings and Consents
	 	 	23	 
	Section 3.5. Litigation
	 	 	23	 
	Section 3.6. Brokers
	 	 	24	 
	Section 3.7. SEC Reports
	 	 	24	 
	Section 3.8. Absence of Certain Changes
	 	 	24	 
	 
	 	 	 	 
	ARTICLE IV COVENANTS AND AGREEMENTS
	 	 	24	 
	 
	Section 4.1. Conduct of Business Prior to Closing
	 	 	24	 
	Section 4.2. Filings and Consents
	 	 	27	 
	Section 4.3. Tax Matters; Cooperation; Preparation of Returns
	 	 	27	 
	Section 4.4. Shareholder Agreement
	 	 	28	 
	Section 4.5. Non-Violation
	 	 	29	 
	Section 4.6. Confidentiality; Publicity
	 	 	29	 
	Section 4.7. Further Actions
	 	 	29	 
	Section 4.8. Shareholder Representative
	 	 	30	 
	Section 4.9. Escrow Agreement
	 	 	31	 
	Section 4.10. Registration Rights Agreement
	 	 	31	 
	Section 4.11. Exclusive Dealing
	 	 	32	 
	Section 4.12. Takeover Statutes
	 	 	32	 
	Section 4.13. Plan of Merger Notice
	 	 	33	 
	Section 4.14. Reviewed Financial Statements
	 	 	33	 
	 
	 	 	 	 
	ARTICLE V CONDITIONS PRECEDENT
	 	 	33	 
	 
	Section 5.1. Conditions to Obligations of Each Party
	 	 	33	 
	Section 5.2. Additional Conditions to Obligations of VisionChina,
Vision Best and Digital Value
	 	 	33	 
	Section 5.3. Additional Conditions to Obligations of the Company
	 	 	35	 
	 
	 	 	 	 
	ARTICLE VI TERMINATION
	 	 	35	 
	 
	Section 6.1. Termination
	 	 	35	 
	Section 6.2. Effect of Termination
	 	 	37	 
	 
	 	 	 	 
	ARTICLE VII escrow and INDEMNIFICATION
	 	 	37	 
	 
	Section 7.1. Survival
	 	 	37	 
	Section 7.2. Indemnification
	 	 	37	 
	Section 7.3. Limitations on Indemnification
	 	 	38	 
	Section 7.4. Escrow Fund
	 	 	39	 
	Section 7.5. Direct Claims; Resolution of Conflicts
	 	 	40	 
	Section 7.6. Third-Party Claims
	 	 	41	 
	Section 7.7. Form of Payment; Valuation
	 	 	42	 
	Section 7.8. Indemnification as Exclusive Remedy
	 	 	43	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE VIII GENERAL PROVISIONS
	 	 	43	 
	 
	Section 8.1. Notices
	 	 	43	 
	Section 8.2. Disclosure Schedules
	 	 	45	 
	Section 8.3. Certain Definitions
	 	 	45	 
	Section 8.4. Interpretation
	 	 	51	 
	Section 8.5. Severability
	 	 	51	 
	Section 8.6. Entire Agreement
	 	 	51	 
	Section 8.7. No Assignment
	 	 	51	 
	Section 8.8. Parties in Interest
	 	 	52	 
	Section 8.9. Fees and Expenses
	 	 	52	 
	Section 8.10. Amendments
	 	 	52	 
	Section 8.11. Waivers; Remedies Cumulative
	 	 	52	 
	Section 8.12. Specific Performance
	 	 	52	 
	Section 8.13. Governing Law; Enforcement
	 	 	52	 
	Section 8.14. Counterparts
	 	 	53	 

iii

 

AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

          This AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this “Agreement”), is made and
entered into as of November 16, 2009, among VisionChina Media Inc., a company organized under the
laws of the Cayman Islands (“VisionChina”), Vision Best Limited, a company organized under
the laws of the British Virgin Islands (the “BVI”) and an indirect wholly-owned subsidiary
of VisionChina (“Vision Best”), Digital Value Holdings Limited, a company organized under
the laws of the BVI and an direct wholly-owned subsidiary of Vision Best (“Digital Value”),
Digital Media Group Company Limited, a company organized under the laws of the BVI (the
“Company”), and Shareholder Representative Services LLC, a Colorado limited liability
company (the “Shareholder Representative”), solely in its capacity as the Shareholder
Representative, and amends and restated that prior Agreement and Plan of Merger, dated as of
October 15, 2009, among VisionChina, Vision Best, Digital Value and the Company (the “Prior
Agreement”). The Prior Agreement is hereby superseded in its entirety. Unless otherwise
expressly indicated herein, references to “the date of this Agreement,” “the date hereof” and terms
of similar import shall refer to the date of the Prior Agreement.

          WHEREAS, the boards of directors of Digital Value and the Company have both approved the
merger (the “Merger”) of Digital Value with and into the Company (each of Digital Value and
the Company hereinafter sometimes referred to as the “Constituent Companies”), upon the
terms and subject to the conditions set forth herein and in accordance with the BVI Business
Companies Act, 2004, as amended (the “Act”), which Merger will result in, among other
things, the Company being the surviving corporation;

          WHEREAS, the parties hereto have considered a written plan of merger in the form attached
hereto as Appendix A specifying certain details of the Merger as required under Section
170(2) of the Act (the “Plan of Merger”), and the articles of merger in the form attached
hereto as Appendix B specifying certain details of the Merger as required under Section 171
of the Act (the “Articles of Merger”);

          WHEREAS, it is proposed that upon the completion of the Merger, the existing memorandum and
articles of association of the Company shall be amended and restated by their deletion in their
entirety and the substitution in their place of the amended and restated memorandum and articles of
association in the form attached hereto as Appendix C (the “Amended and Restated
M&A”); and

          WHEREAS, the boards of directors of Digital Value and the Company have each (i) approved and
declared the Plan of Merger advisable upon the terms and subject to the conditions set forth in
this Agreement and (ii) recommended the authorization of the Plan of Merger by resolutions of the
shareholders of Digital Value and the Company, as applicable.

          NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:

 

 

ARTICLE I

THE MERGER

          Section 1.1. Shareholder Approvals. Each of the parties undertakes and agrees as
follows:

          (a) The Company shall cause and procure that on or before the Closing Date:

     (i) the Merger, the Plan of Merger, the Articles of Merger and the adoption of
the Amended and Restated M&A shall be authorized by a resolution or written consent
of members of the Company, duly passed in accordance with the Articles of
Association of the Company and the Act;

     (ii) the members of the Company shall pass a resolution that, at the Effective
Time (as defined below), the existing memorandum and articles of association of the
Company, as the Surviving Corporation, shall be amended and restated by their
deletion in their entirety and the substitution in their place of the Amended and
Restated M&A; and

     (iii) the holders of the Preference Shares of the Company shall pass a
Preference Shareholders Resolution (as defined in the Articles of Association of the
Company) to approve the Merger, the Plan of Merger, the Articles of Merger and the
adoption of the Amended and Restated M&A, in accordance with Article 57 of the
Articles of Association of the Company. The approvals of the members of the Company
required pursuant to this Section 1.1(a) are referred to herein collectively, as the
“Requisite Shareholder Approvals.”

          (b) Digital Value and VisionChina shall cause and procure that on or prior to the date of this
Agreement, the Plan of Merger shall be authorized by a resolution of members of every class of
shares of Digital Value, duly passed in accordance with the Articles of Association of Digital
Value and the Act (and for the purposes thereof a copy of the Plan of Merger shall be given to each
such member, whether or not entitled to vote on or consent to the Plan of Merger, together with
notice of any meeting of such members to be held).

          (c) Following approval of the Plan of Merger, the Articles of Merger and the Amended and
Restated M&A by the members of each Constituent Company, the Articles of Merger shall be executed
by each Constituent Company.

          (d) Within 20 days immediately following the date on which the vote of members of the Company
authorizing the Plan of Merger is taken, or the date on which written consent of members of the
Company without a meeting is obtained, the Company shall give written notice of such authorization
or consent to each member who has given written objection to the Plan of Merger prior to the
relevant meeting or who did not consent in writing to the Plan of Merger (as the case may be).

          Section 1.2. The Merger. At the Effective Time and by operation of law under the
Act, (a) Digital Value shall be merged with and into the Company, (b) the separate corporate

2

 

existence of Digital Value shall cease, and (c) the Company shall, as the surviving
corporation in the Merger, continue its existence under the laws of the BVI. The Company, as the
surviving corporation after the Merger, is hereinafter sometimes referred to as the “Surviving
Corporation”. The English name of the Surviving Corporation shall be “Digital Media Group
Company Limited”.

          Section 1.3. The Closing. Unless this Agreement shall have been terminated and the
transactions contemplated by this Agreement abandoned pursuant to the provisions of Article VI, and
subject to the provisions of Article V, the closing of the Merger (the “Closing”) will take
place on the second Business Day after all the conditions set forth in Article V shall have been
satisfied (or waived in accordance therewith) (or at such other date as mutually agreed by the
parties hereto (the “Closing Date”)). The Closing shall take place at the offices of
Simpson Thacher & Bartlett LLP, ICBC Tower, 35th Floor, 3 Garden Road, Central, Hong
Kong or such other place as mutually agreed by the parties hereto.

          Section 1.4. Effective Time. As soon as practicable on or following the Closing
Date, the parties shall cause the Articles of Merger executed by each of the Constituent Companies
pursuant to Section 1.1(c), together with the resolution of the members of each of the constituent
companies to adopt the Amended and Restated M&A, to be filed with the Registrar of Corporate
Affairs of the BVI. The Merger shall be effective (the “Effective Time”) on the date and
at the time set forth in the Articles of Merger, which shall be January 2, 2010. The certificate
of merger issued by the Registrar of Corporate Affairs of the BVI shall be conclusive evidence that
the Merger has become effective.

          Section 1.5. Effect of the Merger. Without limiting the foregoing, from and after
the Effective Time:

          (a) the Surviving Corporation shall have all rights, privileges, immunities, powers, objects
and purposes of each of the Constituent Companies in so far as is consistent with the Amended and
Restated M&A;

          (b) all assets of every description, including choses in action and the business of each of
the Constituent Companies, shall immediately vest in the Surviving Corporation; and

          (c) the Surviving Corporation shall be liable for all claims, debts, liabilities and
obligations of each of the Constituent Companies.

          Section 1.6. Articles of Association. Following the Effective Time, the Amended and
Restated M&A shall be the memorandum and articles of association of the Surviving Corporation until
thereafter changed or amended in accordance with the provisions thereof and the Act.

          Section 1.7. Directors and Officers. On or before the Closing Date, the Company
shall deliver to VisionChina in respect of each of the directors and officers of the Company
immediately prior to the Effective Time either (i) such director’s or officer’s written
resignation, or (ii) a resolution of members of the Company removing such director or officer in
accordance with the articles of association of the Company, in each case effective as of the

3

 

Effective Time. The directors and officers of Digital Value as of the Effective Time shall be
appointed as the directors and officers of the Surviving Corporation until the earlier of their
resignation or removal or otherwise ceasing to be a director until their respective successors are
duly elected and qualified.

          Section 1.8. Consideration. In accordance with the provisions set out in the Plan
of Merger, the Merger shall be effected as follows:

          (a) Immediately prior to the Effective Time, the issued share capital of Digital Value
consists of one (1) ordinary share with a par value of US$1.00 per share (the “Digital Value
Shares”);

          (b) At the Effective Time, each Digital Value Share will be converted automatically into one
(1) validly issued, fully paid and non-assessable ordinary share in the Surviving Corporation; and

          (c) At the Effective Time, each Company Share will be cancelled and converted automatically
into the right to receive the Merger Consideration. The holders of the Company Shares (the
“DMG Shareholders”) shall cease to have any rights with respect to the original Company
Shares, except the right to receive, subject to the terms and conditions set forth in this
Agreement, including, without limitation, Article VII, the applicable Merger Consideration to be
paid in exchange for such Company Shares.

          (d) The “Merger Consideration” shall in the aggregate equal, and in no event shall
exceed, US$160,000,000 (based on the Initial Conversion Price), to be paid as follows:

     (i) VisionChina and/or Vision Best shall pay, or cause to be paid, to the DMG
Shareholders who are entitled to receive any Merger Consideration (the
“Participating DMG Shareholders”) an aggregate amount equal to
US$100,000,000 which shall consist of US$40,000,000 payable in cash (the
“Initial Cash Consideration”) and 8,476,013 ordinary shares of VisionChina
(the “Initial Share Consideration” and, together with the Initial Cash
Consideration, the “Initial Consideration”). Subject to Section
1.9, the Initial Cash Consideration and the Initial Share Consideration shall be
paid, issued and delivered at the Effective Time to the Participating DMG
Shareholders in accordance with the terms hereof. The Initial Share Consideration
represents the quotient of US$60,000,000 divided by US$7.0788, representing the
average of the closing sales prices for one of VisionChina’s American Depositary
Shares (“ADSs”), with one ADS representing one ordinary share of
VisionChina, as reported on the Nasdaq Global Market for the 30 consecutive trading
days ending on (and including) October 13, 2009 (the “Initial Conversion
Price”). The Initial Consideration shall be allocated among the Participating
DMG Shareholders in accordance with Schedule 1.8, which shall reflect the
liquidation preference provisions of the articles of association of the Company (the
“Closing Allocation Schedule”). The Company shall deliver the Closing
Allocation Schedule to VisionChina and Vision Best no later than two (2) Business
Days prior to the Closing Date.

4

 

     (ii) On the first anniversary of the Closing (the “First Deferred Payment
Date”), subject to Section 1.9, VisionChina or Vision Best shall pay, or
cause to be paid, to the Participating DMG Shareholders an aggregate amount equal to
US$30,000,000 which shall consist of US$20,000,000 payable in cash (the “First
Deferred Cash Consideration”) and US$10,000,000 payable, at the election of the
Participating DMG Shareholders as a group (no later than one week prior to the First
Deferred Payment Date), in cash (the “First Additional Deferred Cash
Consideration”) or in ordinary shares of VisionChina (the “First Deferred
Share Consideration”). The “First Deferred Consideration” refers to, in
the aggregate, the First Deferred Cash Consideration and the First Additional
Deferred Cash Consideration or the First Deferred Share Consideration, as the case
may be. In the event that the Participating DMG Shareholders elect to receive the
First Deferred Share Consideration, the number of ordinary shares of VisionChina
representing the First Deferred Share Consideration shall be equal to the quotient
of US$10,000,000 divided by the higher of (A) 125% of the Initial Conversion Price
and (B) 80% of the average of the closing sales prices for one ADS as reported on
the Nasdaq Global Market for the twenty (20) consecutive trading days ending (and
including) two trading days prior to the First Deferred Payment Date. The First
Deferred Consideration shall be allocated among the Participating DMG Shareholders
in accordance with the Closing Allocation Schedule.

     (iii) On the second anniversary of the Closing (the “Second Deferred
Payment Date”), VisionChina and Vision Best shall pay, or cause to be paid, to
the Participating DMG Shareholders an aggregate amount equal to US$30,000,000 which
shall consist of US$20,000,000 payable in cash (the “Second Deferred Cash
Consideration”) and US$10,000,000 payable, at the election of the Participating
DMG Shareholders as a group (no later than one week prior to the Second Deferred
Payment Date), in cash (the “Second Additional Deferred Cash Consideration”)
or in ordinary shares of VisionChina (the “Second Deferred Share
Consideration”). The “Second Deferred Consideration” refers to, in the
aggregate, the Second Deferred Cash Consideration and the Second Additional Deferred
Cash Consideration or the Second Deferred Share Consideration, as the case may be.
In the event that the Participating DMG Shareholders elect to receive the Second
Deferred Share Consideration, the number of ordinary shares of VisionChina
representing the Second Deferred Share Consideration shall be equal to the quotient
of US$10,000,000 divided by the higher of (A) 150% of the Initial Conversion Price
and (B) 80% of the average of the closing sales prices for one ADS as reported on
the Nasdaq Global Market for the twenty (20) consecutive trading days ending (and
including) one day prior to the Second Deferred Payment Date. The Second Deferred
Consideration shall be allocated among the Participating DMG Shareholders in
accordance with the Closing Allocation Schedule.

     (iv) In the event that VisionChina is acquired by another entity (whether
through merger, share purchase or otherwise) (a “VisionChina Acquisition”)
prior to the Second Deferred Payment Date, then the requirement

5

 

for VisionChina to pay the First Deferred Consideration and the Second Deferred
Consideration to the Participating DMG Shareholders shall accelerate and each of the
First Deferred Consideration and the Second Deferred Consideration shall be due and
payable in full no later than one (1) Business Day prior to the closing of a
VisionChina Acquisition (the “Acquisition Closing Date”). In the event of a
VisionChina Acquisition, the First Deferred Share Consideration and the Second
Deferred Share Consideration shall be payable in accordance with Sections
1.8(d)(ii) and 1.8(d)(iii) above, except that the Acquisition Closing
Date shall be substituted for (X) the First Deferred Payment Date and the Second
Deferred Payment Date for purposes of calculating the price in clause (B) of
Sections 1.8(d)(ii) and 1.8(d)(iii) if the VisionChina
Acquisition is closed prior to the First Deferred Payment Date, and (Y) the Second
Deferred Payment Date for purposes of calculating the price in clause (B) of Section
1.8(d)(iii) if the VisionChina Acquisition is closed after the First
Deferred Payment Date but prior to the Second Deferred Payment Date.

          (e) The Initial Cash Consideration, First Deferred Cash Consideration, any First Additional
Deferred Cash Consideration, Second Deferred Cash Consideration and any Second Additional Deferred
Cash Consideration are referred to herein as the “Cash Consideration”. The Initial Share
Consideration, any First Deferred Share Consideration and any Second Deferred Share Consideration
are referred to herein as the “Share Consideration”. The First Deferred Consideration and
the Second Deferred Consideration are referred to herein as the “Remaining Consideration”.

          Section 1.9. Escrows; Expense Fund.

          (a) On the later of (i) November 17, 2009 and (ii) the Closing Date, VisionChina, Vision Best,
the Shareholder Representative and JPMorgan Chase Bank N.A., as escrow agent (the “Escrow
Agent”), will execute an Escrow Agreement in form and substance mutually agreeable to the
parties and consistent with the provisions of this Section 1.9 and Article VII (the
“Escrow Agreement”).

          (b) On the later of (i) November 17, 2009 and (ii) the Closing Date, Vision Best will deposit
or cause to be deposited, on behalf of the Participating DMG Shareholders, in escrow with the
Escrow Agent in accordance with the Escrow Agreement US$29,350,000 of Initial Cash Consideration
and 7,628,412 shares of the Initial Share Consideration (such amount, the “Effective Time
Escrow Amount”). The Effective Time Escrow Amount shall be held in escrow pursuant to the
Escrow Agreement until released pursuant to Section 7.4(a). The parties hereto acknowledge
and agree that Vision Best initially will be the record and beneficial owner of the Initial Share
Consideration. At such time that the Initial Share Consideration is released pursuant to
Section 7.4, Vision Best shall cause the Escrow Agent to transfer the record and beneficial
ownership of the Initial Share Consideration to the Participating DMG Shareholders in accordance
with the Closing Allocation Schedule.

          (c) On the later of (i) November 17, 2009 and (ii) the Closing Date, Vision Best will deposit
or cause to be deposited, on behalf of the Participating DMG Shareholders, in escrow with the
Escrow Agent in accordance with the Escrow Agreement an aggregate amount

6

 

of US$4,000,000 of the Initial Cash Consideration and 847,601 shares of the Initial Share
Consideration (such amount, the “Indemnity Escrow Amount”, and the amounts on deposit in
such escrow from time to time, the “Indemnity Escrow Fund”). The Indemnity Escrow Fund
shall be held in escrow pursuant to the Escrow Agreement until released in accordance with Section
7.4. If on the Escrow Release Date there are pending and unsatisfied or unresolved claims for
indemnification duly made by the Indemnified Persons hereunder in excess of the remaining balance
in the Indemnity Escrow Fund, Vision Best shall deposit, or caused to be deposited, into the
Indemnity Escrow Fund, on behalf of the Participating DMG Shareholders the lesser of (i) such
excess amount or (ii) US$6,000,000, funded from the First Deferred Cash Consideration.

          (d) On the later of (i) November 17, 2009 and (ii) the Closing, Date, Vision Best will deposit
or cause to be deposited, on behalf of the Participating DMG Shareholders, with the Shareholder
Representative an aggregate amount of US$250,000 (such amount, the “Expense Fund Amount”),
which shall be held in a segregated account (the “Expense Fund”). The Expense Fund Amount
shall be funded out of the Initial Cash Consideration. The Expense Fund shall be used by the
Shareholder Representative to pay any reimbursable third party fees and expenses that may arise
following the Closing in connection with the Shareholder Representative’s performance of its duties
under this Agreement and the Escrow Agreement and to secure in part the indemnification obligations
of the Participating DMG Shareholders to the Shareholder Representative pursuant to Section
4.8(d) hereof. The Expense Fund shall be held and applied pursuant to the provisions of a
separate agreement between the Shareholder Representative and the Participating DMG Shareholders
(the “SRS Agreement”). Upon the final release of the Expense Fund in accordance with the
terms of the SRS Agreement, any remaining amounts in the Expense Fund shall be distributed by the
Shareholder Representative to the Participating DMG Shareholders in accordance with their
respective pro rata interests in the Expense Fund.

          (e) On the later of (i) the Closing Date and (ii) November 17, 2009, Vision Best will deposit
or cause to be deposited, on behalf of the Participating DMG Shareholders, in escrow with the
Escrow Agent an aggregate amount of US$6,400,000 (such amount, the “Consent Escrow Amount”,
and the amounts on deposit in such escrow from time to time, the “Consent Escrow Fund”).
The Consent Escrow Fund shall be held in escrow pursuant to the Escrow Agreement until released in
accordance with Section 7.4 hereof. Vision Best shall fund, or cause to be funded, the Consent
Escrow Fund, on behalf of the Participating DMG Shareholders, from the Initial Cash Consideration.

          Section 1.10. Repayment of Shareholder Loans; Deduction of Applicable Taxes.

          (a) Notwithstanding anything to the contrary contained herein, Vision Best shall deduct from
the Initial Cash Consideration amounts necessary to pay off (including outstanding principal,
accrued interest and penalties) any loans between any and all DMG Shareholders or any of their
respective Affiliates and any Group Company, and shall forthwith pay off such loans.

          (b) Notwithstanding anything to the contrary contained herein, Vision Best shall deduct or
withhold any Tax from the Initial Consideration or the Remaining Consideration

7

 

if it reasonably determines that such deduction or withholding is required under applicable
Law. Any amounts deducted or withheld hereunder shall be treated as if paid to the recipient of
the consideration from which such amounts are withheld. Vision Best shall provide notice to the
Shareholder Representative prior to making any required withholding and agrees to discuss in good
faith with the Shareholder Representative and its advisors the basis for the required withholding
and further agrees to provide reasonable assistance in claiming exemption from such deductions or
withholdings.

          Section 1.11. Appointment of Shareholder Representative. Prior to the Closing Date,
the Company shall take all actions necessary to engage Shareholder Representative Services LLC to
serve as the Shareholder Representative pursuant to this Agreement.

          Section 1.12. Treasury Shares. Each share of capital of the Company owned by the
Company or any other Group Company, if any, immediately prior to the Effective Time, shall be
canceled and extinguished without any conversion thereof and no payment or distribution shall be
made with respect thereto.

          Section 1.13. Options, Warrants and Other Rights. All options, warrants and other
rights exercisable, convertible or exchangeable into ordinary or preference shares of the Company
that are outstanding immediately prior to the Effective Time shall not be assumed, substituted with
an equivalent option or right or terminated in exchange for cash, securities and/or other property
in connection with the Merger and shall be canceled and extinguished at the Effective Time for no
consideration.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          Except as qualified or excepted in the corresponding section of any disclosure schedules
attached hereto by the Company, the Company represents and warrants to VisionChina, Digital Value
and Vision Best that the statements contained in this Article II are true and correct as of
the date hereof and as of the Closing Date (except to the extent such representations and
warranties are specifically made as of a particular date, in which case such representations and
warranties shall be true and correct as of such date).

          Section 2.1. Due Organization, Good Standing and Power.

          (a) The Company is a company duly organized, validly existing and in good standing under the
laws of the British Virgin Islands. The Company (i) has the requisite power and authority
(corporate and other) to own, lease and operate its assets and to conduct the Business and (ii) is
duly qualified as a foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except in the case of clause (ii) for such failure as
would not reasonably be expected to have a Company Material Adverse Effect.

          (b) The Company is a holding company and does not and has not had any business activities
other than its direct or indirect ownership of the other Group Companies (as

8

 

defined below). The Company has no Liabilities or obligations and is not party to any
Contract, other than (i) this Agreement, the Ancillary Documents to which it is a party and such
Contracts as are described in Schedule 2.1(b), and (ii) any Liabilities or obligations
relating solely to the transactions contemplated by this Agreement, by the Ancillary Documents or
the Contracts described in Schedule 2.1(b).

          Section 2.2. Authorization, Enforceability. The Company has all requisite power
(corporate and other) and authority to enter into this Agreement and the Ancillary Documents to
which it is a party and to consummate the transactions contemplated hereby and thereby. Subject to
obtaining the Requisite Shareholder Approvals in accordance with the terms of this Agreement, the
execution and delivery of this Agreement and the Ancillary Documents to which the Company is a
party and the consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate or other action (including any required approvals by its
board of directors) on the part of the Company. Each of this Agreement and the Ancillary Documents
to which the Company is a party has been duly executed and delivered by the Company and, assuming
due authorization, execution and delivery by the other party/parties thereto, constitutes a valid
and binding agreement of the Company, enforceable against it in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar Laws relating to or affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or at Law).

          Section 2.3. Capitalization; Ownership; Valid Issuance.

          (a) Schedule 2.3 hereto sets forth all of the Company Shares and all options and
warrants and other rights exercisable, convertible or exchangeable into ordinary or preference
shares of the Company, representing 100% of the Company’s share capital on a fully-diluted and
as-converted basis (the “Company Securities”). All of the Company Shares (i) were duly
authorized for issuance and validly issued, (ii) are fully paid and non-assessable, (iii) were
issued in compliance with applicable Law and (iv) were not issued in violation of, or subject to,
any pre-emptive, subscription or other similar rights of any other Person.

          (b) Except for the Company Securities, there are no share appreciation rights, share-based
performance units, “phantom” share rights or other Contracts or obligations of similar character
(contingent or otherwise) pursuant to which any Person is or may be entitled to receive any payment
or other value based on the revenues, earnings, financial performance, share value or other
attribute of any Group Company or any of their businesses or assets or calculated in accordance
therewith.

          (c) The Closing Allocation Schedule will accurately reflect the liquidation preferences set
forth in the articles of association of the Company.

          Section 2.4. Group Companies.

          (a) Schedule 2.4 sets forth for each of the Group Companies (other than the Company)
(i) its jurisdiction of incorporation, formation or organization, as applicable, and (ii) the
number of authorized, issued and outstanding shares of each class of its capital stock or other

9

 

authorized, issued and outstanding equity interests, as applicable, the names of the holders
thereof, and the number of shares or percentage interests, as applicable, held by each such holder,
in each case representing 100% of such Group Company’s equity capital. Each of the Group Companies
(other than the Company) is duly incorporated or formed, as applicable, validly existing and, in
good standing under the Laws of its jurisdiction of incorporation or formation, as applicable, has
the requisite corporate or similar power and authority (corporate and other) to own, lease and
operate its assets and to carry on its business now being conducted by it, and is duly qualified as
a foreign corporation for the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or conducts any business so as to
require such qualification, except for such failure as would not reasonably be expected to have a
Company Material Adverse Effect. All the issued and outstanding shares of capital stock or other
equity interests of such Group Companies are owned of record, free and clear of any Encumbrances.
All of such issued and outstanding shares of capital stock or other equity interests of the Group
Companies (other than the Company) (i) were duly authorized for issuance and validly issued, (ii)
are fully paid and non-assessable, (iii) were issued in compliance with applicable Law and (iv)
were not issued in violation of, or subject to, any pre-emptive, subscription or other similar
rights of any other Person. Except as set forth on Schedule 2.4, there is no existing
option, warrant, call, right, commitment, Contract or other agreement of any character to which any
Group Company (including the Company) is a party requiring, and there are no securities of any such
Group Company outstanding which upon conversion or exchange would require, the issuance, sale or
transfer or repurchase or redemption or otherwise acquisition of any additional shares of capital
stock, issued or unissued, or other equity securities of such Group Company or other securities
convertible into, exchangeable for or evidencing the right to subscribe for or purchase shares of
capital stock or other equity securities of such Group Company or relating to dividends or voting
rights. Except as set forth on Schedule 2.4, none of the Group Companies (including the
Company) is a party to any voting trust, other voting agreement or Contract with respect to any of
the Company Securities or to any agreement relating to the Encumbrance, issuance, sale, redemption,
transfer or other disposition of the capital stock of any of the Group Companies.

          (b) No shares of capital stock or other equity or ownership interests of any Group Company
have been issued in violation of any rights, agreements, arrangements or commitments under the
certificate of incorporation or bylaws or comparable organizational documents of any Group Company
or any Contract to which the Group Company is a party or by which the Group Company is bound.

          (c) Except for the Group Companies set forth on Schedule 2.4, the Company does not,
directly or indirectly, own, have a right to acquire or have any interest in any capital stock or
other equity interest in any Person. Except as set forth on Schedule 2.4, each other Group
Company does not, directly or indirectly, own, have a right to acquire or have any interest in any
capital stock or other equity interest in any Person.

          Section 2.5. Corporate Records. The Company has made available to VisionChina true,
correct and complete copies of the certificates of incorporation, by-laws or comparable
organizational documents and business licenses of each Group Company. Such certificates of
incorporation, by-laws, or comparable organizational documents and business licenses are in full
force and effect. None of the Group Companies is in violation of any of the

10

 

provisions of its certificate of incorporation, bylaws or comparable organizational documents.
The transfer books and minute books of each Group Company that have been made available for
inspection by VisionChina prior to the date hereof are true and complete in all material respects.

          Section 2.6. Financial Statements.

          (a) Attached hereto as Schedule 2.6 are copies of the (i) audited consolidated balance
sheets of the Company and the Group Companies as at December 31, 2006, 2007 and 2008, and the
related audited consolidated statements of income, changes in shareholders’ equity and cash flows
for the fiscal years then ended, together with the notes and schedules thereto and the report
thereon of the External Auditor of the Company (the “Audited Financial Statements”) and
(ii) unaudited consolidated balance sheet of the Company and the Group Companies as at August 31,
2009, and the related year-to-date unaudited consolidated statements of income, changes in
shareholders’ equity and cash flows (the “Management Accounts” and, together with the
Audited Financial Statements, the “Financial Statements”). The Audited Financial
Statements (A) have been prepared in all material respects in accordance with GAAP and (B) fairly
present in all material respects the financial condition, the results of operations, changes in
shareholders’ equity and cash flows of the Company and the Group Companies as at the dates of and
for the periods referred to in the Audited Financial Statements. Except as set forth in
Schedule 2.6, the Management Accounts in all material respects (x) have been properly
extracted from the accounting records, (y) were prepared in a manner consistent with prior
unaudited interim financial statements and (z) were prepared in accordance with GAAP, subject to
normal recurring year-end adjustments and the absence of notes, which will not be material in
amount or significance in the aggregate. Except as set forth in Schedule 2.6, the books of
account and financial records of each Group Company are true and correct in all material respects
and have been prepared and are maintained in accordance with sound accounting practice. None of
the Group Companies has made any material changes in its accounting methods or practices since the
Balance Sheet Date.

          (b) Since the Balance Sheet Date, there has been no change, event, circumstance or effect the
occurrence of which has had or would reasonably be expected to have a Company Material Adverse
Effect.

          (c) The Company 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 authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and appropriate actions are
taken with respect to any differences; and (v) each of the Group Companies has made and kept books,
records and accounts which, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of assets of such entity and provide a sufficient basis for the preparation of
financial statements in accordance with GAAP.

          (d) The Group Companies have no liabilities of any kind whatsoever (whether absolute, accrued,
contingent or otherwise, and whether due or to become due) that would be required to be reflected
in, or disclosed in the notes to, financial statements prepared in

11

 

accordance with GAAP, other than liabilities and obligations (i) reflected or reserved against
the Balance Sheet or disclosed in the notes thereto or (ii) disclosed on Schedule 2.6.

          (e) As of the Closing Date, the aggregate cash balances of the Company will exceed the
aggregate amount of all Indebtedness of the Company on a consolidated basis.

          (f) None of the Group Companies is engaged in any trading activities involving commodity
contracts or other trading contracts which are not currently traded on a securities or commodities
exchange and for which the market value cannot be determined.

          Section 2.7. No Approvals or Conflicts. Except as set forth in Schedule
2.7, the execution, delivery and performance by the Company of this Agreement and the Ancillary
Documents to which it is a party and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not (i) violate, conflict with or result in a
breach by any of the organizational documents of any of the Group Companies, (ii) in any material
respect, violate, conflict with or result in a breach of, or constitute a default by any of the
Group Companies (or create an event which, with notice or lapse of time or both, would constitute a
default) or give rise to any right of termination, cancellation or acceleration under, or result in
the creation of any Encumbrance upon any of the properties of the Group Companies under, any
Contract to which the Group Companies or any of their respective properties may be bound or
affected, (iii) in any material respect, violate or result in a breach of any Governmental Order or
Law applicable to any of the Group Companies or any of their respective properties or (iv) require
any material order, consent, approval or authorization of, or notice to, or declaration, filing,
application, qualification or registration by any of the Group Companies with any Governmental
Authority. No Governmental Authorizations are required to be made or obtained by any Group Company
in connection with the execution, delivery and performance of this Agreement or the Ancillary
Documents or the consummation of the transactions contemplated hereby and thereby.

          Section 2.8. Licenses. Each of the Group Companies has obtained all material
licenses, franchises, concessions, consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with, all Governmental Authorities
necessary to own, lease, license and use its properties, assets and conduct its business in the
manner and such licenses, consents, authorizations, approvals, orders, certificates or permits
contain no materially burdensome restrictions or conditions. To the Knowledge of the Company, no
regulatory body is considering modifying, suspending or revoking any such licenses, consents,
authorizations, approvals, orders, certificates or permits and each of the Group Companies is in
material compliance with the provisions of all such licenses, consents, authorizations, approvals,
orders, certificates or permits.

          Section 2.9. Litigation. There are no Actions pending or threatened between any
Related Party and any Group Company. There are no Actions pending or threatened which questions or
challenges (i) the validity of this Agreement or any Ancillary Document, (ii) any action taken or
to be taken by any Group Company pursuant to this Agreement or any Ancillary Document or in
connection with the transactions contemplated herein or (iii) the adequacy of the Merger
Consideration (including in respect of appraisal rights, if any, available to any dissenting
shareholders of the Company in connection with the Merger). There are no other material

12

 

Actions pending or, to the Knowledge of the Company, threatened against any of the Group
Companies.

          Section 2.10. Absence of Certain Changes. Except as contemplated by this Agreement
or any of the Ancillary Documents or as set forth on Schedule 2.10, since the Balance Sheet
Date through the date of this Agreement, the business of the Group Companies has been conducted in
the ordinary course consistent with past practice in all material respects and there has not
occurred any action, event or failure to act that, if it had occurred after the date hereof, would
have required the consent of VisionChina under Section 4.1(a)(ii) or 4.1(a)(viii).

          Section 2.11. Tax Matters.

          (a) (i) All Tax Returns required to be filed by or on behalf of any Group Company have been
filed in a timely manner (within any applicable extension periods) and were and are true, correct
and complete in all material respects, (ii) all Taxes payable by or with respect to the Group
Companies (whether or not shown on any Tax Return) have been timely paid in full, (iii) the Group
Companies have adequate reserves in the August 31, 2009 unaudited consolidated balance sheet of the
Group Companies for all accrued but unpaid Taxes for periods ending on or before such date and have
not incurred any material Taxes from such date other than in the ordinary course of business, (iv)
no unresolved claims have been asserted in writing by a Taxing Authority with respect to any Taxes
of any of the Group Companies and (v) since the date of the most recent Audited Financial
Statements, the Company and its Subsidiaries have not generated any taxable income from
extraordinary gains or losses outside the ordinary course of business consistent with past custom
and practice;

          (b) Each of the Group Companies is and has been in compliance with all applicable Laws
relating to the withholding of Taxes and has duly and timely withheld and paid over to the
appropriate Taxing Authorities all amounts required to be so withheld and paid over;

          (c) The Company has made available, or caused to be made available, to VisionChina complete
copies of (i) all Tax Returns of the Group Companies relating to the taxable periods ended after
January 1, 2004, (ii) the portions of any written audit report issued by a Taxing Authority within
the last five (5) years relating to any adjustments of any Group Company and (iii) all applications
to qualify for Tax exemptions, Tax holidays or reduced Tax rates.

          (d) (i) No submissions made to any Taxing Authority in connection with obtaining Tax
exemptions, Tax holidays or reduced Tax rates contained any material misstatement or omission that
would have affected the granting of such Tax exemptions, Tax holidays or reduced Tax rates and (ii)
no suspension, revocation, expiration or cancellation of any Tax exemptions, Tax holidays or
reduced Tax rates are pending or threatened (for which any Group Company has Knowledge or has
received written notice thereof);

          (e) No written claim has been made by any Taxing Authority in any jurisdiction where a Group
Company does not file Tax Returns that it is or may be subject to Tax by that jurisdiction. No
extensions or waivers of statutes of limitations with respect to any Tax Returns have been given by
or requested from any Group Company. No Group Company has

13

 

received written notice that it is subject to any audits or investigations, either in progress
or proposed by any Taxing Authority;

          (f) All deficiencies asserted or assessments made against any Group Company as a result of any
examinations by any Taxing Authority, for which any Group Company has received written notice
thereof, have been fully paid in accordance with their stipulated due date;

          (g) No Group Company is a party to any tax indemnity, tax allocation or tax sharing or similar
agreement or arrangement (whether or not written) pursuant to which it could have any obligation to
make any payments after the Closing;

          (h) Other than in respect of Taxes not yet due and payable, there are no Encumbrances for
Taxes upon the assets of any Group Company;

          (i) Each of the Group Companies has collected all sales, use, and similar Taxes required to be
collected, and has remitted on a timely basis such amounts to the appropriate Taxing Authorities;

          (j) No withholding or similar Taxes will be imposed on VisionChina, its Affiliates or any
Group Company by the PRC as a result of the transactions contemplated by this Agreement and the
Ancillary Documents;

          (k) No Group Company has or will have any liability for Taxes (including liability with
respect to Taxes imposed on any other Person) as a result of the transfer of equity interests in
Beijing Eastlong Advertising Co., Ltd. held by Men Qijun; and

          (l) No Group Company has any liability for the Taxes of any Person (other than such Group
Company).

          Section 2.12. Officers, Employees and Labor.

          (a) Each of the Group Companies has complied in all material aspects with all applicable Laws
relating to the employment of labor, including provisions thereof relating to wages, hours, social
welfare, equal opportunity and collective bargaining. There is no organized labor strike, dispute,
slowdown or claim pending, or to the Knowledge of the Company threatened, against or affecting any
of the Group Companies. None of the Group Companies has any Contract with any labor union.

          (b) Schedule 2.12(b) sets forth a list of all officers of the Group Companies and all
other employees and consultants whose current annual salary or rate of compensation (including
bonuses, commissions and inventive compensation) is in excess of RMB1,000,000 (or equivalent in a
different currency), together with their current job titles or relationship to the Group Companies.

          (c) None of the officers, employees or consultants of the Group Companies is obligated under
any Contract to which any Group Company is a party, or subject to any Governmental Order to which
any Group Company is subject, that would interfere with the use

14

 

of his or her best efforts to promote the interests of the Group Companies, that would
conflict with the Business as currently conducted or that would prevent such officers, employees or
consultants from assigning to a Group Company inventions conceived or reduced to practice or
copyrights for materials developed in connection with services rendered to the Group Company.

          (d) Except as set forth on Schedule 2.11(d), none of the execution, delivery and
performance of any of this Agreement and the Ancillary Documents will (either alone or upon the
occurrence of any additional or subsequent event) constitute an event under any benefit plan or
individual agreement to which the Company is a party that will or may result in any payment
(whether of severance pay or otherwise), acceleration, vesting or increase in material benefits
with respect to any employee, former employee, consultant, agent or director of the Group
Companies.

          (e) Except as required by applicable Laws, none of the Group Companies has any obligation to
provide retirement, death or disability benefits to any of the present or past employees of the
Group Companies, or to any other person.

          (f) To the Knowledge of the Company (i) no material labor dispute, work stoppage, slow down,
strike or other conflict with the employees of any of the Group Companies exists or is threatened
or contemplated, (ii) none of the Group Companies is engaged in any unfair labor practice in
violation of applicable Laws or contracts with the Group Companies, (iii) there is no unfair labor
practice complaint pending or threatened against any of the Group Companies before any competent
Governmental Authorities, and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending or threatened, and (iv) there has been no violation of
any laws, regulations, rules, orders, decrees, guidelines, judicial interpretations, notices or
other legislation of the British Virgin Islands, the PRC, Hong Kong, the United States or any other
jurisdiction applicable to any of the Group Companies relating to discrimination in the hiring of
employees, social welfare benefits, equal opportunity, collective bargaining, promotion or pay of
employees, applicable wage or hour laws, the payment or withholding of payroll or similar taxes for
employees, or any other applicable law or regulation concerning the employees of the Group
Companies, except, in the case of (iv) above, where any such violation would not reasonably be
expected to have a Company Material Adverse Effect;

          Section 2.13. Share Option and Other Plans. Except as set forth on Schedule
2.13, none of the Group Companies has any pension, profit sharing, stock option, employee stock
purchase or other plan providing for incentives or other compensation to employees (aside from any
salary payable in thereto in the ordinary course), or any other employee benefit plan. The Company
has made available to VisionChina true, correct and complete copies of all documents, summary plan
descriptions, insurance Contracts, third party administration Contracts and all other documentation
of the Group Companies created to embody all benefit plans, plus descriptions of any benefit plans
that have not been reduced to writing. Except for required contributions or benefit accruals for
the current plan year, no material liability has been or is expected to be incurred by any of the
Group Companies under or pursuant to any applicable Law relating to benefit plans and, to the
Knowledge of the Company, no event, transaction or condition has occurred or exists that could
result in any such liability to any of the Group Companies. Each of the benefit plans listed on
Schedule 2.13 is and has at all

15

 

times been in
compliance in all material respects with all applicable provisions of applicable Law. As of
the Closing, there will be no outstanding options, warrants and similar rights of the Company.

          Section 2.14. Intellectual Property.

          (a) Except as set forth on Schedule 2.14, the Group Companies exclusively own or have
a valid right to use any and all material Intellectual Property used in the Business. Intellectual
Property owned or validly used by each Group Company includes all of the material software and
Intellectual Property necessary to enable such Group Company to conduct its business in the manner
in which such business is currently being conducted.

          (b) None of the Group Companies has taken any action or failed to take any action that could
reasonably be expected to result in the abandonment, cancellation, forfeiture, relinquishment,
invalidation or unenforceability of any of the registered Intellectual Property owned by the Group
Companies and material to the Business (including the failure to pay any filing, examination,
issuance, post registration and maintenance fees, annuities and the like and the failure to
disclose any known material prior art in connection with the prosecution of patent applications).
Each Group Company has taken all reasonable steps in accordance with standard industry practices to
protect its rights in its Intellectual Property (including ensuring that inventions conceived or
reduced to practice or copyrights for materials developed by an officer, employee or consultant of
any Group Company in connection with services rendered to the Group Company have been assigned to a
Group Company and that any such future inventions and copyrights shall be assigned to a Group
Company) and at all times has maintained the confidentiality of all information that constitutes or
constituted a trade secret of each Group Company.

          (c) All material licenses licensed to any Group Company by a third party licensor are in full
force and effect, and none of the Group Companies is in default under any of such licenses, and no
Person who is a party to any of such licenses has exercised any termination rights with respect
thereto.

          (d) (i) No Group Company is a party to any pending legal proceedings which involve a claim of
infringement, unauthorized use, or violation of any intellectual property right by any Person
against such Group Company or challenging the ownership, use, validity or enforceability of, any
material Intellectual Property owned by or exclusively licensed to such Group Company, and (ii) no
Group Company has received any notice or claim challenging a Group Company ownership of any of the
Intellectual Property owned (in whole or in part), nor to the Knowledge of the Company is there a
reasonable basis for any claim that a Group Company does not so own any of such Intellectual
Property. All of each Group Company’s rights in and to material registered Intellectual Property
owned by such Group Company are validly prosecuted and enforceable. No Intellectual Property owned
by, or to the Knowledge of the Company, licensed to the Group Companies is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting the use or licensing
thereof by the Group Companies.

16

 

          (e) To the Knowledge of the Company, no Person is infringing, violating, misusing or
misappropriating any material Intellectual Property owned by any Group Company, and no written
claims have been made against any Person by any Group Company.

          (f) The consummation of the transactions contemplated hereby and thereby will not result in
the loss or impairment of VisionChina’s or Vision Best’s right to own or use any of the material
Intellectual Property owned by any Group Company.

          Section 2.15. Contracts.

          (a) Except as set forth on Schedule 2.15(a) or in the Structure Agreements, none of
the Group Companies is bound by (i) any Contract which contains restrictions with respect to
payment of dividends or any other distribution in respect of its capital stock, partnership
interests or membership interests, (ii) any Contract requiring the applicable Group Company to make
future capital expenditures in excess of RMB1,000,000 (either individually or in the aggregate),
(iii) any Contract relating to Indebtedness of the Group Companies in excess of RMB1,000,000
(individually or in the aggregate), (iv) any loan or advance by a Group Company to, or investment
by a Group Company in, any Person, in each case, which involves an amount in excess of RMB1,000,000
(individually or in the aggregate), or any agreement, contract or commitment relating to the making
of any such loan, advance or investment, (v) any Contract with a Group Company, or any management,
service, consulting or any other similar type of Contract requiring payment of fees in excess of
RMB1,000,000 per year (individually or in the aggregate), (vi) any Contract limiting in any
material respect the ability of any Group Company or any of its Affiliates to engage in any line of
business or to compete with any Person, (vii) any material warranty, guaranty or similar
undertaking with respect to contractual performance extended by any Group Company other than in the
ordinary course of business, (viii) any Contract requiring any payment to or by any Group Company
having a value in excess of RMB1,000,000 that cannot be terminated by the relevant Group Company
without liability upon less than ninety (90) days notice, (ix) any collective bargaining agreement
with any labor union or other representative of employees, (x) any Contract that governs any joint
venture, partnership or other cooperative arrangement or any other relationship involving a sharing
of profits, (xi) any Contract that would result in the merger with or into or consolidation into
another Person, (xii) any Contract for the sale of any of the assets of any Group Company or for
the grant to any Person of any preferential rights to purchase any of its assets for an amount in
excess of RMB1,000,000 (individually or in the aggregate), (xiii) any Contract that requires a
consent to or otherwise contains a provision relating to a “change of control”, or that would
prohibit or delay the consummation of the transactions contemplated by this Agreement or the
Ancillary Documents, (xiv) any advertising rights Contract or (xv) any material amendment,
modification or supplement in respect of any of the foregoing (each of (i)-(xv), a “Material
Contract”).

          (b) True and complete copies (or, if oral, written summaries) of each of the Material
Contracts have been made available to VisionChina.

          (c) Except as set forth on Schedule 2.15(c), each Material Contract is in full force
and effect, and is a valid and binding agreement of the relevant Group Company and to the Knowledge
of the Company, of each of the other parties thereto, enforceable against such Group Company in
accordance with its terms, subject to the effects of bankruptcy, insolvency,

17

 

fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in equity or at Law)
and an implied covenant of good faith and fair dealing. Except as set forth on Schedule
2.15(c), no condition exists or event has occurred that (whether with or
without notice or lapse of time or both) would constitute a default by (x) any of the Group
Companies under any Material Contract or (y) to the Knowledge of the Company, any other party to
any Material Contract. Each Material Contract will be in full force and remain legal, valid and
enforceable after the Merger.

          Section 2.16. Related Party Transactions. Except as otherwise set forth in
Schedule 2.16 or in the Structure Agreements, (i) none of the Group Companies is indebted,
either directly or indirectly, to any Related Party in any amount whatsoever, other than for
payment of salary for services rendered and reasonable expenses, (ii) no Related Party is indebted
to any of the Group Companies or has any direct or indirect ownership interest (other than as a
result of any ownership interest held in the Company) in any of the Group Companies, (iii) no
Related Party has any direct or indirect ownership interest, or contractual relationship, with any
Person with which any of Group Companies has a business relationship or any Person which, directly
or indirectly, competes with any of the Group Companies, (iv) no Related Party is, directly or
indirectly, a party to or otherwise an interested party with respect to any Contract with any Group
Company and (v) there are no transactions, contingent or otherwise, or other Contracts between any
Group Company and any Related Party.

          Section 2.17. Prior Acquisitions. The Company has made available to VisionChina the
Contracts and instruments entered into by the Group Companies in connection with all companies,
entities and businesses acquired by the Group Companies in the last five (5) years involving the
payment by the Group Companies of more than US$1,000,000 (in stock and/or cash) (the “Previous
Acquisition Agreements”). No payments are or will be required to be made by the Group
Companies under the terms of the Previous Acquisition Agreements or any other acquisitions made by
the Group Companies without regard to when such acquisitions were made.

          Section 2.18. Structure Agreements.

          (a) Schedule 2.18 sets forth all of the Structure Agreements, which constitute all of
the Contracts and instruments which enable the Company to control and consolidate with its
financial statements each Group Company and its Affiliates in respect of which at least a majority
of the equity is not directly held but is controlled by the Company. Each of the Group Companies
has the legal right, power and authority (corporate and other) to enter into and perform its
obligations under each of the Structure Agreements to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance of, and has
authorized, executed and delivered, each of the Structure Agreements to which it is a party; and
each of the Structure Agreements to which each of the Group Companies, as applicable, is a party
constitutes a valid and legally binding obligation of each of them enforceable in accordance with
its terms, subject, as to enforceability, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles.

18

 

          (b) Each of the Structure Agreements has been executed and delivered by the parties named
therein; and each of the Structure Agreements constitutes a valid and legally binding obligation of
the parties named therein enforceable in accordance with its terms, subject
as to enforceability to bankruptcy, insolvency, reorganization and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity principles.

          (c) Each of the Structure Agreements is in proper legal form under the laws and regulations of
the PRC for the enforcement thereof against each of the parties thereto in the PRC without further
action by any of them; and to ensure the legality, validity, enforceability or admissibility in
evidence of each of the Structure Agreements in the PRC, it is not necessary that any such document
be filed or recorded with any Court or other authority in the PRC or that any stamp or similar tax
be paid on or in respect of any of the Structure Agreements.

          (d) The execution and delivery by each party named in each of the Structure Agreements, and
the performance by such party of its obligations under such agreement and the consummation by it of
the transactions contemplated therein will not: (A) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or
by which he is bound or to which any of the properties or assets of his is bound or subject; or (B)
result in any violation of or penalty under any Laws;

          (e) All consents, approvals, authorizations, orders, registrations and qualifications required
in connection with the Structure Agreements have been made or unconditionally obtained in writing,
and no such consent, approval, authorization, order, registration or qualification has been
withdrawn or is subject to any condition precedent which has not been fulfilled or performed.

          Section 2.19. Compliance with Laws.

          (a) Each of the Group Companies is, and at all times since January 1, 2006 has been, in
compliance in all material respects with applicable Laws.

          (b) No event has occurred or circumstance exists that (with or without notice or lapse of
time) may constitute or result in a material violation by any of the Group Companies of, or a
material failure on the part thereof to comply with, any applicable Law. None of the Group
Companies has received any notice or other written communication from any Governmental Authority
regarding (A) any actual, alleged, possible, or potential material violation of, or failure to
comply with, any applicable Law, or (B) any actual, alleged, or potential obligation on the part of
any Group Company to undertake, or to bear all or any portion of the cost of, any remedial action
of any nature.

          (c) None of the Group Companies or, to the Knowledge of the Company, any director, officer,
agent, employee, or any other Person associated with or acting for or on behalf of the foregoing,
has offered, paid, promised to pay, or authorized the payment of any money, or offered, given a
promise to give, or authorized the giving of anything of value, to any Government Official, to any
political party or official thereof or to any candidate for political office (or to any Person
where such Group Company, director, officer, agent, employee or other

19

 

Person knew or was aware of a
high probability that all or a portion of such money or thing of value would be offered, given or
promised, directly or indirectly, to any Government Official, political party, party official, or
candidate for political office) for the purposes of:

     (i) influencing any act or decision of such Government Official, political
party, party official, or candidate in his or its official capacity, (y) inducing
such Government Official, political party, party official or candidate to do or omit
to do any act in violation of the lawful duty of such Government Official, political
party, party official or candidate, or (z) securing any improper advantage, or

     (ii) inducing such Government Official, political party, party official, or
candidate to use his or its influence with any Government Authority to affect or
influence any act or decision of such Government Authority, in order to assist such
Group Company in obtaining or retaining business for or with, or directing business
to any Group Company.

          (d) None of the Group Companies or, to the Knowledge of the Company, any of the respective
officers, employees, directors, representatives, or agents of the foregoing has, within the past
five years, (i) taken any action in furtherance of any boycott not sanctioned by the United States;
(ii) engaged in transactions with any Governmental Authority, agent, representative or resident of,
or any entity based or resident in, any of the following countries: North Korea, Iraq, Syria, Cuba,
Iran, Myanmar or Sudan; or (iii) otherwise engaged in transactions with any entity or person that
is the target of U.S. economic sanctions, as designated by the U.S. Treasury Department Office of
Foreign Assets Control on its list of Specially Designated Nationals and Blocked Persons; or (iv)
received unlicensed donations or engaged in financial transactions with respect to which any of the
Group Companies knows or has reasonable cause to believe that the financial transaction poses a
risk of furthering terrorist attacks anywhere in the world.

          (e) To the Knowledge of the Company, none of the beneficial owners of any interest in any
Group Company is a Government Official, official of any political party or candidate for political
office.

          Section 2.20. Environmental Matters.

          (a) Each of the Group Companies is in material compliance with all Environmental Laws.

          (b) None of the Group Companies has received any Environmental Claim or notice of any
threatened Environmental Claim.

          (c) None of the Group Companies has entered into, has agreed to, or is subject to, any decree
or order or other similar requirement of any Governmental Authority under any Environmental Laws.

          (d) None of the Group Companies has Released Hazardous Materials into the environment in
violation of Environmental Laws or in a manner that would reasonably be

20

 

expected to result in
material liability under Environmental Laws, and to the Knowledge of the Company, no other Person
has Released Hazardous Materials into the environment at any property currently owned or operated
by any of the Group Companies in violation of
Environmental Laws or in a manner that would reasonably be expected to result in material
liability under Environmental Laws.

          Section 2.21. Insurance. All insurance policies held in the names of the Group
Companies covering the assets, employees and operations of the Group Companies are in full force
and effect, all premiums due thereon have been paid and, where applicable, the Group Companies have
complied in all material respects with the provisions of such policies and have not received any
notice from any of its insurance brokers or carriers that such broker or carrier will not be
willing or able to renew their existing coverage.

          Section 2.22. Personal Property Assets.

          (a) Each of the Group Companies has good title to, or holds by valid and existing lease or
license, all the material tangible personal property assets reflected as assets of the Company on
or acquired after the Balance Sheet Date, free and clear of all Encumbrances except for Permitted
Encumbrances.

          (b) The Group Companies own, or have valid leasehold interests in, all material tangible
personal property assets necessary for the conduct of the Business as currently conducted and all
such assets are in reasonably good maintenance, operating condition and repair, normal wear and
tear excepted, other than machinery and equipment under repair or out of service in the ordinary
course of business.

          Section 2.23. Real Property.

          (a) Leased Properties. Schedule 2.23 lists all real property leased or
subleased by any of the Group Companies. The Company has made available to VisionChina correct and
complete copies of the leases and subleases covering the properties listed on Schedule
2.23. With respect to each lease and sublease and except as otherwise specified on
Schedule 2.23:

     (i) such lease or sublease is in full force and effect;

     (ii) (A) no party to the lease or sublease is in material default and (B) none
of the Group Companies has received a notice of default with respect to such lease
or sublease;

     (iii) no such lease or sublease has been mortgaged, deeded in trust or
encumbered by the Group Companies.

          (b) Land Use Rights. None of the Group Companies owns or has legal or equitable title
or other right or interest in any real property other than the land use rights (the “Land Use
Rights”) held by the Group Companies as set forth in Schedule 2.23. True and complete
copies of the certificates evidencing the Land Use Rights have been delivered to VisionChina or its
agents or professional advisers and any land grant premium required under

21

 

applicable Law in
connection with securing such Land Use Rights has been fully paid. None of the land with respect to
which the Land Use Rights relate constitutes arable land that has been
converted to other uses. The particulars of the Land Use Rights as set out in Schedule
2.23 are true and complete in all material respects.

          Section 2.24. No State Assets. None of the assets of the Group Companies constitute
state-owned assets and, inasmuch, are not required to undergo any form of valuation under
applicable Law in the PRC governing the transfer of state-owned assets prior to the consummation of
the transactions contemplated herein or in any of the Ancillary Documents.

          Section 2.25. Brokers. Except as set forth in Schedule 2.25, no finder,
broker, agent, financial advisor or other intermediary has acted on behalf of the Group Companies
or any of their respective Affiliates in connection with the negotiation or consummation of this
Agreement or the Ancillary Documents, or any of the transactions contemplated hereby or thereby.
All such negotiations or the consummation of this Agreement or the Ancillary Documents or any of
the transactions contemplated hereby or thereby will not, except as set forth in Schedule
2.25, give rise to any valid claim against any Group Company or VisionChina or its Affiliates
for any brokerage or finder’s commission, fee or similar compensation.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF VISIONCHINA, VISION BEST AND

DIGITAL VALUE

          Except as qualified or excepted in the corresponding section of any disclosure schedules
attached hereto or as set forth in any forms, reports and documents filed or furnished by
VisionChina with the Commission under the Exchange Act filed prior to the date of this Agreement or
prior to the Closing, as the case may be (collectively, the “VisionChina SEC Documents”),
VisionChina, Vision Best and Digital Value represent and warrant to the Company that the statements
contained in this Article III are true and correct as of the date hereof and as of the
Closing Date (except to the extent such representations and warranties are specifically made as of
a particular date, in which case such representations and warranties shall be true and correct as
of such date).

          Section 3.1. Organization and Qualification. Each of VisionChina, Vision Best and
Digital Value is a company duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation. Each of VisionChina, Vision Best and Digital Value (i) has
the requisite power and authority (corporate and other) to own, lease and operate its assets and to
conduct the business now being conducted by it and (ii) is duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to require such qualification,
except in the case of clause (ii) for such failure as would not reasonably be expected to have a
VisionChina Material Adverse Effect.

          Section 3.2. Authority; Enforceability. Each of VisionChina, Vision Best and
Digital Value has the corporate power and authority to execute and deliver this Agreement and

22

 

the
Ancillary Documents to which it is a party and perform its obligations hereunder and thereunder.
The execution and delivery of this Agreement and the Ancillary Documents to
which it is a party by each of VisionChina, Vision Best and Digital Value and the performance
by each of them of its obligations hereunder and thereunder have been duly authorized by all
necessary corporate or other action on the part of each such party. Each of this Agreement and the
Ancillary Documents to which it is a party has been duly executed and delivered by each of
VisionChina, Vision Best and Digital Value and, assuming due authorization, execution and delivery
by the other party/parties thereto, constitutes a valid and binding agreement of each of
VisionChina, Vision Best and Digital Value, enforceable against each of them in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar Laws relating to or affecting creditors’ rights generally and general
equitable principles (whether considered in a proceeding in equity or at Law) and subject to the
effect of public policy on the enforceability of the indemnification provisions set forth in the
Registration Rights Agreement

          Section 3.3. Share Consideration. The ordinary shares of VisionChina to be issued
as the Initial Share Consideration and any Remaining Share Consideration will be duly authorized
for issuance prior to the Closing Date and the applicable dates on which the Remaining Share
Consideration is due to be issued, as the case may be, will be validly issued and fully paid and
non-assessable and free from any Encumbrance (other than as provided in this Agreement, the
Ancillary Documents and applicable securities laws).

          Section 3.4. No Conflict; Required Filings and Consents. Except as set forth in
Schedule 3.4, the execution, delivery and performance by each of VisionChina, Vision Best
and Digital Value of this Agreement and the Ancillary Documents to which they are parties and the
consummation by each of VisionChina, Vision Best and Digital Value of the transactions contemplated
hereby and thereby do not and will not (i) violate, conflict with or result in a breach by any of
its organizational documents, (ii) in any material respect, violate, conflict with or result in a
breach of, or constitute a default by it (or create an event which, with notice or lapse of time or
both, would constitute a default) or give rise to any right of termination, cancellation or
acceleration under, or result in the creation of any Encumbrance upon any of the properties of
VisionChina or any of its Subsidiaries) under, any Contract to which it or any of its respective
properties may be bound or affected, (iii) in any material respect, violate or result in a breach
of any Governmental Order or Law applicable to it or any of its respective properties or (iv)
require any material order, consent, approval or authorization of, or notice to, or declaration,
filing, application, qualification or registration by it with any Governmental Authority. No
Governmental Authorizations are required to be made or obtained by any of VisionChina, Vision Best
or Digital Value in connection with the execution, delivery and performance of this Agreement or
the Ancillary Documents or the consummation of the transactions contemplated hereby and
thereby.

          Section 3.5. Litigation. Other than as disclosed in the Vision SEC Documents, there
are no Actions pending or, to the Knowledge of VisionChina, threatened against VisionChina, Vision
Best or Digital Value that, if adversely determined against VisionChina, Vision Best or Digital
Value, would have a VisionChina Material Adverse Effect.

23

 

          Section 3.6. Brokers. No finder, broker, agent, financial advisor or other
intermediary has acted on behalf of VisionChina, Vision Best or Digital Value or any of their
respective Affiliates in connection with the negotiation or consummation of this Agreement or
the Ancillary Documents, or any of the transactions contemplated hereby or thereby. All such
negotiations or the consummation of this Agreement or the Ancillary Documents or any of the
transactions contemplated hereby or thereby will not give rise to any valid claim against any DMG
Shareholder or its Affiliates for any brokerage or finder’s commission, fee or similar
compensation.

          Section 3.7. SEC Reports. VisionChina has timely filed or furnished all forms,
reports and documents required to be filed or furnished by it with the Commission since November 1,
2007. As of their respective dates, such forms, reports and documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations thereunder, and none of such forms, reports and documents contained any
untrue statement of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.

          Section 3.8. Absence of Certain Changes. Except as contemplated by this Agreement
or any of the Ancillary Agreements, since December 31, 2008 (the date of the financial statements
included in VisionChina’s most recent Form 20-F filing) through the date of this Agreement, the
business of VisionChina and its Subsidiaries taken as a whole has been conducted in the ordinary
course consistent with past practice in all material respects and there has not been any state of
facts, circumstance, change, event, condition, occurrence, enforcement or effect that has had a
VisionChina Material Adverse Effect.

ARTICLE IV

COVENANTS AND AGREEMENTS

          Section 4.1. Conduct of Business Prior to Closing.

          (a) During the period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, the Company shall, and shall cause the other
Group Companies to (i) conduct the Business in all material respects in the ordinary course of
business consistent with commercially reasonable practice (including maintaining a sufficient level
of working capital to satisfy the needs of its daily operations), and (ii) use its commercially
reasonable efforts to maintain satisfactory relationships with customers and others having material
business relationships with them, except with the prior written consent of VisionChina or as
specifically contemplated by this Agreement (such exceptions, the “Conduct of Business
Exceptions”). Without limiting the generality of the foregoing, except for the Conduct of
Business Exceptions, the Company shall not, and shall not permit any other Group Company to,
directly or indirectly, do any of the following:

     (i) purchase, sell or issue any of its capital stock or other equity interests
or grant or make any option, subscription, warrant, call, commitment or

24

 

agreement of
any character in respect of their capital stock or other equity interests;

     (ii) declare, set aside, issue or pay any dividends or other distribution, in
cash or in kind, in respect of its shares of capital stock or repurchase, redeem or
acquire any of its outstanding shares of capital stock or other securities or other
ownership interests;

     (iii) conduct any split, recombination or reclassification or issuance of its
capital stock or similar ownership interests;

     (iv) acquire, lease, license, assign, sell, transfer or dispose of, or create,
incur or permit to exist any Encumbrance on any property, rights, businesses or
assets (including Intellectual Property) except (A) in the ordinary course of
business consistent with past practice involving amounts not exceeding RMB1,000,000
in the aggregate with other Group Companies and (B) capital expenditures permitted
by clause (vi) below;

     (v) (A) enter into any proposed transaction or series of related transactions
involving a change of control, merger, consolidation, recapitalization,
reorganization or other business combination, or liquidation, dissolution or winding
up, or (B) establish, enter into or terminate any joint venture, partnership or any
non-wholly owned subsidiary;

     (vi) make capital expenditures except in the ordinary course of business
consistent with past practice not in excess of RMB1,000,000 in the aggregate with
other Group Companies;

     (vii) incur, assume or guarantee any Indebtedness or make any payments or
disbursements to any creditors other than in the ordinary course of business
consistent with past practice not in excess of RMB1,000,000 in the aggregate with
other Group Companies;

     (viii) except for the matters set forth in Schedule 4.1(a)(viii),
engage in any transactions (including transfers of assets) with, enter into any
Contract with, waive any right or claims against, make any payments to or on behalf
of, or assume, incur, waive or settle Liabilities for the benefit of, any DMG
Shareholder or any other Related Party (together with the matters, actions and
occurrences set forth in clause (ii) above, “Leakage”);

     (ix) incur any Encumbrance on any material assets;

     (x) increase the compensation of directors or employees of the Group Companies
other than as required by any agreement in effect as of the date hereof or as
required by Law; provided, that the Company shall be allowed to make a one-time cash
bonus payment to certain of the Company’s officers and employees in an aggregate
amount not to exceed RMB10,000,000;

25

 

     (xi) make any material change in the accounting methods or practices (other
than such changes that have been required by Law or GAAP);

     (xii) amend, supplement, waive, modify, terminate, annul, cancel, allow to
lapse, assign, convey, encumber or otherwise transfer its rights and interests in or
under any material provisions of any Material Contract (including any advertising
rights Contract);

     (xiii) enter into any Contract that restricts any Group Company or its
Affiliates from engaging in any line of business in any geographic area or competing
with any Person that materially impairs the operation of the business of the Group
Companies, individually or taken as a whole;

     (xiv) grant any waiver or release under any confidentiality or similar
agreement;

     (xv) change any method of Tax accounting, make or change any Tax election, file
any amended Tax Return, settle or compromise any material Tax liability, agree to an
extension or waiver of the statute of limitations with respect to the assessment or
determination of Taxes, enter into any closing agreement with respect to any Tax or
surrender any right to claim a Tax refund;

     (xvi) other than (A) as required by any agreement in effect as of the date
hereof or (B) as required by Law, enter into, adopt or amend any employment
agreement or employee benefit plan with or for the benefit of any of its employees
or grant any severance, termination or change of control pay to any director or
employee;

     (xvii) enter into any collective bargaining agreements;

     (xviii) purchase, cancel or terminate any insurance policy naming any of the
Group Companies as a beneficiary or a loss payee;

     (xix) cancel, waive or settle any Action in excess of RMB1,000,000 in the
aggregate with other Group Companies, or agree to any non-monetary relief, or
commence or enter into any waiver, release, assignment, compromise or settlement of,
or take any material action with respect to, any pending or threatened Action which
is material or which relates to the transactions contemplated hereby

     (xx) amend any of its organizational documents; or

     (xxi) agree or commit to do any of the foregoing.

          (b) If the Company desires to take an action that would be prohibited pursuant to Section
4.1(a) hereof without written consent of VisionChina, prior to taking such action the Company may
request such written consent by sending an e-mail to the following individuals or to such other
individual VisionChina may have furnished to the Company in writing, who

26

 

VisionChina shall cause to
respond to such request for written consent within two (2) Business Days:

Scott Chen

Email: scott.chen@visionchina.cn

cc: Chris Lin (clin@stblaw.com)

          (c) During the period commencing on the date hereof and ending on the Closing Date, the
Company will cause the Group Companies to afford VisionChina, Vision Best and Digital Value and
their counsel, accountants and other authorized representatives, during normal business hours, upon
reasonable advance notice, access to the officers, directors, employees, accountants and other
advisors and agents, properties, books, records and contracts of the Group Companies, provided that
such access does not interfere with normal business operations.

          Section 4.2. Filings and Consents.

          The Company shall, and shall cause the other Group Companies to, and VisionChina shall, use
their respective commercially reasonable efforts to obtain and to cooperate in obtaining any
Governmental Authorization or third party consent required in connection with the execution,
delivery or performance of this Agreement and the Ancillary Documents, including any filings
pursuant to (i) any applicable competition regulation, (ii) the Securities Act and Exchange Act,
and (iii) any other applicable filings or consents. The Company and VisionChina shall pay all
filing fees required to be paid in connection with their respective filings.

          Section 4.3. Tax Matters; Cooperation; Preparation of Returns.

          (a) The Participating DMG Shareholders shall pay (solely through a claim by the Indemnified
Persons against the Escrow Fund pursuant to, and subject to the applicable limitations set forth in
Article VII) all transfer, documentary, sales, use, registration and other such transfer
Taxes and related fees (including any penalties, interest and additions to Tax) incurred in
connection with this Agreement and the Ancillary Documents and the transactions contemplated hereby
and thereby.

          (b) VisionChina or Vision Best shall prepare and file, or cause to be prepared and filed, all
Tax Returns for the Group Companies that are filed after the Closing Date. The Tax Returns for the
Group Companies with respect to any taxable period ending on or prior to the Closing Date or for
any taxable period that begins before the Closing Date and ends after the Closing Date shall be
prepared in a manner consistent with prior practices and methods used by the Group Companies
(except to the extent counsel for VisionChina or Vision Best determines that such practice or
methods are not in accordance with applicable Law). In the event that the Taxes reflected on such
Tax Returns are Taxes for which the Participating DMG Shareholders are liable pursuant to, and
subject to the applicable limitations set forth in Article VII, VisionChina or Vision Best,
as the case may be, shall provide such Tax Returns to the Shareholder Representative for review and
comment at least ninety (90) days prior to the due date for filing such Tax Returns, and shall not
file any such Tax Returns without the consent of

27

 

the Shareholder Representative, which consent
shall not be unreasonably withheld, conditioned or delayed.

          (c) The Shareholder Representative shall have the right to control at its own expense any Tax
audit, contest, inquiry or administrative or Court proceeding regarding Tax matters for which the
Participating DMG Shareholders are solely liable pursuant to, and subject to the applicable
limitations set forth in Article VII; provided, that if the Participating DMG Shareholders
and VisionChina (or its Affiliates) may each bear a portion of the liability or if such audit or
claim could reasonably be expected to have a material adverse effect on VisionChina or Vision Best,
then VisionChina, Vision Best, the Company and the Shareholder Representative shall jointly control
such audit or proceeding (and share costs and expenses accordingly) and there shall be no
settlement without the consent of the other party. If a claim or inquiry is made by any Taxing
Authority which could form the basis for a claim of indemnification pursuant to this Agreement,
VisionChina or Vision Best shall promptly give notice to the Shareholder Representative in writing
of such claim or inquiry.

          (d) After the Closing Date, VisionChina, Vision Best and the Company, as and to the extent
reasonably requested by the Shareholder Representative, and the Shareholder Representative, as and
to the extent reasonably requested by VisionChina, Vision Best and the Company, shall cooperate
fully in connection with any Tax audit, contest, inquiry or administrative or Court proceeding
regarding Tax matters. Such cooperation shall include the retention of records and information and
making employees or representatives available on a mutually convenient basis.

          Section 4.4. Shareholder Agreement. The Company shall use reasonable efforts to
cause all Participating DMG Shareholders to enter into a shareholder agreement with the Company on
or prior to the Closing Date substantially in the form of Exhibit A hereto (the “Shareholder
Agreement”).

28

 

          Section 4.5. Non-Violation. Prior to the earlier of the termination of this
Agreement or the Effective Time, without the prior written consent of VisionChina, Vision Best and
Digital Value, the Company shall not, and shall cause the other Group Companies not to, take any
action that would result in any of the covenants contained in this Agreement and in the Ancillary
Documents becoming incapable of performance. The Company will promptly advise VisionChina, Vision
Best and Digital Value of any action or event of which the Company becomes aware that would have
the effect of making the conditions set forth in Section 5.2(b) or Section 5.2(c)
being incapable of satisfaction. Without limiting the generality of the foregoing, the Company
shall immediately notify VisionChina, Vision Best and Digital Value in the event that any DMG
Shareholder initiates or threatens an Action that questions or challenges (i) the validity of this
Agreement or any Ancillary Document, (ii) any action taken or to be taken by any Group Company or
the Shareholder Representative pursuant to this Agreement or in connection with the transactions
contemplated herein or (iii) the adequacy of the Merger Consideration (including in respect of
appraisal rights, if any, available to any dissenting shareholders of the Company in connection
with the Merger).

          Section 4.6. Confidentiality; Publicity.

          (a) Each party acknowledges that the Company and VisionChina have previously executed the
Confidentiality Agreement and that they are each bound by, and shall abide by, the provisions of
the Confidentiality Agreement; provided, that from the date hereof,
the Company agrees that notwithstanding anything to the contrary contained herein or in the
Confidentiality Agreement, VisionChina and its Representatives shall be free to approach, contact,
discuss or enter into agreements or arrangements with any potential debt financing sources for the
purpose of consummating the transactions contemplated by the Merger Agreement subject to the terms
and conditions of the Confidentiality Agreement.

          (b) The Company and VisionChina will consult with each other and will mutually agree upon any
publication or press release of any nature with respect to this Agreement or the transactions
contemplated hereby and shall not issue any such publication or press release prior to such
consultation and agreement except as may be required by applicable Law or by obligations pursuant
to any listing agreement with any securities exchange or any securities exchange regulation, in
which case the party proposing to issue such publication or press release shall make reasonable
efforts to consult in good faith with the other party or parties before issuing any such
publication or press release and shall provide a copy thereof to the other party or parties prior
to such issuance. Notwithstanding anything herein to the contrary, following the Effective Time,
the Shareholder Representative shall be permitted to publicly announce that it has been engaged to
serve as the Shareholder Representative in connection with the Merger as long as such announcement
does not disclose any of the terms of the Merger or the other transactions contemplated herein.

          Section 4.7. Further Actions. Each of the parties hereto shall use commercially
reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done
all things necessary, proper or advisable under applicable Law, and execute and deliver such
documents and other papers, as may be required to consummate the Merger and the other transactions
contemplated by this Agreement and by the Ancillary Documents. Without limiting the generality of
the foregoing, from the date hereof to the earlier of the termination of this

29

 

Agreement or the
Closing Date, the Company shall cooperate with VisionChina, Vision Best and Digital Value and shall
use their reasonable efforts to assist, and cause the Group Companies and their respective
management and employees to provide reasonable cooperation to, VisionChina, Vision Best and Digital
Value in order to prepare and facilitate, to the extent permitted by applicable Law, the funding
under any acquisition financing to the extent available and sought by VisionChina, Vision Best and
Digital Value.

          Section 4.8. Shareholder Representative.

          (a) Immediately upon receipt of the Requisite Shareholder Approvals, each Participating DMG
Shareholder shall be deemed to have irrevocably appointed, authorized and directed Shareholder
Representative Services LLC to act as the Shareholder Representative, as such Participating DMG
Shareholder’s agent, representative and attorney-in-fact. The Shareholder Representative shall, on
behalf of the Participating DMG Shareholders (i) give and receive notices and communications, (ii)
review, negotiate, agree to and settle claims and disputes relating to indemnified amounts, (iii)
object to such deliveries, agree to, negotiate, enter into settlements and compromises of, and
demand arbitration and comply with orders of Governmental Authorities and awards of arbitrators
with respect to such claims, (iv) execute and deliver payment and other instructions to the Escrow
Agent pursuant to the terms hereof and the Escrow Agreement, (v) hold, apply and administer the
Expense Fund, (vi) take all actions necessary or appropriate in the judgment of the Shareholder
Representative for the
accomplishment of the foregoing and (vii) perform other functions specified in this Agreement.
Any notices delivered to the Shareholder Representative pursuant to this Agreement shall be deemed
delivered to the Participating DMG Shareholders. A decision, act, consent or instruction of the
Shareholder Representative shall constitute a decision of all Participating DMG Shareholders and
shall be final, binding and conclusive upon each such Participating DMG Shareholder, and the Escrow
Agent and VisionChina and their respective Affiliates may rely upon any decision, act, consent or
instruction of the Shareholder Representative as being the decision, act, consent or instruction of
each and every such Participating DMG Shareholder. The Escrow Agent, VisionChina and their
respective Affiliates are hereby relieved from any liability to any Person for any acts done by
them in accordance with such decision, act, consent or instruction of the Shareholder
Representative. Notwithstanding anything to the contrary set forth herein, the Shareholder
Representative shall have no authority to enter into any settlement agreement or other instrument
that includes any admission of guilt or wrongdoing by any Participating DMG Shareholder without the
prior written consent of such Participating DMG Shareholder. In connection with the foregoing
appointment of Shareholder Representative Services LLC as the Shareholder Representative, each
Participating DMG Shareholder hereby agrees to receive correspondence, in electronic form or
otherwise, from the Shareholder Representative.

          (b) The Shareholder Representative, individually, may resign at any time, and may be removed
for any reason or no reason by the vote or written consent of Participating DMG Shareholders
representing a majority interest in the Escrow Fund (the “Majority Holders”); provided,
however, that no such resignation or removal shall be effective until a new Shareholder
Representative, who shall be reasonably able to perform the duties of the Shareholder
Representative hereunder and reasonably satisfactory to VisionChina (which determination of
satisfaction shall not be unreasonably withheld or delayed), has been appointed and such new

30

 

Shareholder Representative agrees in writing delivered to VisionChina to be bound by the terms of
this Agreement and the Escrow Agreement that relate to the Shareholder Representative. Subject to
compliance with the foregoing proviso, in the event of resignation or removal of the Shareholder
Representative, a new Shareholder Representative shall be appointed by the vote or written consent
of the Majority Holders. Notice of such vote or a copy of the written consent appointing a new
Shareholder Representative shall be sent to VisionChina and, after the Effective Time, to the
Surviving Corporation, such appointment to be effective (subject to compliance with the proviso in
the first sentence of this Section 4.8(b)) upon the later of the date indicated in such
consent or the date such consent is received by VisionChina and, after the Effective Time, the
Surviving Corporation. Notwithstanding the foregoing, the Shareholder Representative may resign 30
days after giving notice to the Majority Holders, but only insofar as a replacement has been
selected by the Majority Holders in accordance with the foregoing.

          (c) The approval of this Agreement by the Requisite Shareholder Approvals shall also be deemed
to constitute approval of and agreement to the provisions hereof binding upon the Participating DMG
Shareholders, including, without limitation, Article VII hereof.

          (d) In performing the functions specified in this Agreement and the Escrow Agreement, the
Shareholder Representative shall not be liable to any Participating DMG Shareholder in the absence
of gross negligence or willful misconduct on the part of the Shareholder Representative. Each
Participating DMG Shareholder shall severally (based on each
such Participating DMG Shareholder’s respective allocation of the Merger Consideration), and
not jointly, indemnify and hold harmless the Shareholder Representative from and against any loss,
liability or expense incurred without gross negligence or willful misconduct on the part of the
Shareholder Representative and arising out of or in connection with the acceptance or
administration of its duties hereunder, including any out-of-pocket costs and expenses and legal
fees and other costs reasonably incurred by the Shareholder Representative. If not paid directly
to the Shareholder Representative out of the Expense Fund or otherwise by the Participating DMG
Shareholders, such losses, liabilities or expenses may be recovered by the Shareholder
Representative from the Escrow Amount otherwise distributable to the Participating DMG Shareholders
(and not distributed or distributable to any Indemnified Person or subject to a pending
indemnification claim of any Indemnified Person) following the Escrow Release Date pursuant to the
terms hereof and the Escrow Agreement at the time of distribution.

          Section 4.9. Escrow Agreement. The parties hereto shall use their respective
commercially reasonable efforts to cause the Escrow Agent to execute and deliver the Escrow
Agreement.

          Section 4.10. Registration Rights Agreement. The parties hereto shall, and shall
use commercially reasonable efforts to cause the Participating DMG Shareholders who have executed
and delivered a Shareholder Agreement to, enter into a registration rights agreement with
VisionChina on or prior to the Closing Date substantially in the form of Exhibit B hereto
(the “Registration Rights Agreement”). For the avoidance of doubt, VisionChina shall have
no obligation to enter into any registration rights agreement, including the Registration Rights
Agreement, with any Participating DMG Shareholder who has not executed and delivered a Shareholder
Agreement.

31

 

          Section 4.11. Exclusive Dealing.

          (a) The Company shall, and shall cause its Affiliates and their respective shareholders,
officers, directors, investment bankers, financial advisors, representatives, advisors and
attorneys (collectively, the “Representatives”), to immediately cease existing discussions
or negotiations, if any, with any Persons conducted heretofore relating to any Acquisition
Proposal. During the period from the date hereof until the earlier of the termination of this
Agreement and the Effective Time (the “Exclusivity Period”), the Company shall not, and
shall not permit its Representatives to, directly or indirectly, solicit, initiate, encourage or
entertain any inquiries or proposals from, discuss or negotiate with, or provide any information
to, any Person other than VisionChina and its Representatives relating to any Acquisition Proposal.
For purposes of this Section 4.11, “Acquisition Proposal” means any inquiry,
proposal or offer from any Person (other than VisionChina and its Affiliates) relating to any (i)
sale of the Company Shares, (ii) merger, consolidation, recapitalization, liquidation or other
direct or indirect business combination involving the Company or any other Group Company, (iii) any
acquisition of, share exchange or exchange offer with respect to, or other similar direct or
indirect transaction involving, the capital stock, or a change of control of the Company or any
other Group Company, including any single or multi-step transaction or series of related
transactions, or (iv) any direct or indirect acquisition, lease, license, purchase or other
disposition of any material business or assets of any Group Company.

          (b) Neither the board of directors of the Company nor any committee thereof shall (1) approve
or recommend, or propose to approve or recommend, any Acquisition Proposal other than the Merger,
(2) withdraw or modify or propose to withdraw or modify in a manner adverse to VisionChina, Vision
Best and Digital Value its approval or recommendation of the Merger, this Agreement or the
transactions contemplated hereby, (3) upon a request by VisionChina, Vision Best and Digital Value
to reaffirm its approval or recommendation of this Agreement or the Merger, fail to do so as soon
as practicable after such request is made or to reject any Acquisition Proposal other than the
Merger, (4) approve, enter, or permit or cause any Group Company to enter, into any letter of
intent, agreement in principle, acquisition agreement or other similar Contract or instrument
related to any Acquisition Proposal, or (5) resolve or announce its intention to do any of the
foregoing.

          (c) The Company shall promptly advise VisionChina orally and in writing upon the receipt of
any request for information with respect to any Acquisition Proposal, or any inquiry with respect
to or which could result in an Acquisition Proposal, the material terms and conditions of such
request, Acquisition Proposal or inquiry, and the identity of the Person making the same.

          Section 4.12. Takeover Statutes. If any takeover Law or other anti-takeover Law,
charter provision or Contract is or shall become applicable to the Merger or the other transactions
contemplated hereby, the Company shall grant such approvals and take such actions as are necessary
under such Laws and provisions so that the Merger or the other transactions contemplated hereby may
be consummated as promptly as practicable on the terms contemplated hereby and thereby without
adverse effect under, and otherwise act to eliminate or minimize the effects of, such Law,
provision or Contract.

32

 

Section 4.13. Plan of Merger Notice. As soon as practicable after, and in any event,
within 20 days immediately following, the date on which the vote of members the Company authorizing
the Plan of Merger is taken, or the date on which written consent of members without a meeting is
obtained, in accordance with Section 179 of the Act, the Company shall give written notice (the
“Plan of Merger Notice”) of the authorization or consent to each member who has given
written objection to the Plan of Merger prior to the relevant meeting or who did not consent in
writing to the Plan of Merger (as the case may be).

Section 4.14. Reviewed Financial Statements. The Company shall use commercially
reasonable efforts to cooperate with the External Auditor of the Company (i) to prepare true and
complete copies of the unaudited consolidated balance sheet of the Company and the Group Companies
as at August 31, 2009, and the related year-to-date unaudited consolidated statements of income,
changes in shareholders’ equity and cash flows, each prepared in accordance with GAAP and each as
reviewed by the External Auditor of the Company in accordance with SAS 100 (Interim Financial
Information) excepting any valuation analysis or other review of the Company’s Series C Preference
financings that may otherwise be required by SAS 100 (the “SAS 100 Financial Statement”)
and (ii) to cause to be delivered, to VisionChina, such SAS 100 financial statements on or prior to
December 31, 2009. In the event the SAS 100 Financial Statements have not been delivered to
VisionChina prior to the Escrow Release Date, VisionChina shall be entitled to retain US$2,000,000
in the Indemnity Escrow Fund until VisionChina’s receipt of the SAS 100 Financial Statements
whereupon such retained
amount shall be delivered promptly to the Participating DMG Shareholders in accordance with their
respective pro rata interests in the Indemnity Escrow Fund.

ARTICLE V

CONDITIONS PRECEDENT

          Section 5.1. Conditions to Obligations of Each Party. The respective obligations
each party to consummate the transactions contemplated in this Agreement are subject to the
satisfaction of the following conditions:

          (a) Laws and Orders. On the Closing Date, there shall not be in effect any Law or
Governmental Order that prevents the consummation of the transactions contemplated hereby on
substantially the same terms and conferring on VisionChina, Vision Best and Digital Value
substantially all the rights and benefits as contemplated herein, nor shall any Governmental Order
be pending, provided, however, that a party may not assert that this condition has not been
satisfied if its failure to fulfill their obligations pursuant to Section 4.7 shall have
been the cause of, or shall have resulted in, such Governmental Order.

          Section 5.2. Additional Conditions to Obligations of VisionChina, Vision Best and
Digital Value. The obligations of VisionChina, Vision Best and Digital Value to consummate the
transactions contemplated in this Agreement are also subject to the satisfaction or waiver (by
VisionChina, Vision Best and Digital Value) of the following conditions:

          (a) Requisite Shareholder Approvals. The Requisite Shareholder Approvals shall have
been obtained and shall be effective.

33

 

          (b) Representations and Warranties. The representations and warranties made by the
Company in this Agreement, disregarding all qualifications and exceptions as to materiality and
Company Material Adverse Effect, shall be true and correct as of the date hereof and as of the
Closing Date as though such representations and warranties were made at such date (except that any
representations and warranties that are made as of a specified date shall be true and correct as of
such specified date), with only such exceptions as would not in the aggregate reasonably be
expected to have a Company Material Adverse Effect; provided, that, the representations and
warranties contained in Sections 2.1, 2.2, 2.3(a) and
2.4(a) shall be true and correct in all respects, subject to all qualifications and
exceptions as to materiality and Company Material Adverse Effect therein, if any, as of the date
hereof and as of the Closing Date.

          (c) Covenant Compliance. The Company shall have performed and complied in all
material respects with all agreements and obligations required by this Agreement to be performed or
complied with by it prior to the Closing (except such agreements and obligations specified in
Sections 1.7, 4.4 (subject to 5.2(e)(iv) below), 4.9, 4.10 and 4.14 for which performance and
compliance shall not be conditioned to Closing).

          (d) Indebtedness. On the Closing Date, the Group Companies shall have no Indebtedness
in excess of RMB60,000,000.

          (e) Closing Deliveries. The Company shall have delivered, or caused to be delivered,
to VisionChina, Vision Best and Digital Value the following documents:

     (i) certified copies of resolutions and authorities of the board of directors
of the Company and the minutes of the shareholders meeting of the Company or action
by written consent, evidencing the Requisite Shareholder Approvals and authorizing
the execution and delivery of this Agreement and the Ancillary Documents, the Plan
of Merger and the Articles of Merger and the consummation of the Merger and the
other transactions contemplated hereby and thereby;

     (ii) a certificate, dated as of the Closing Date and executed by an executive
officer of the Company certifying to the fulfillment of the conditions specified in
Sections 5.2(a) to 5.2(d);

     (iii) duly executed directors resignation letters, in the form attached as
Exhibit D hereto, of each director of the Company other than Yoshimune Ishii
and Men Qijun;

     (iv) Shareholder Agreements duly executed by Oak and Gobi;

     (v) Escrow Agreement duly executed by the Shareholder Representative on behalf
of the Participating DMG Shareholders;

     (vi) written legal opinions of British Virgin Islands counsel, Hong Kong
counsel and PRC counsel to the Company or the other Group Companies, as the case may
be, dated and delivered as of the Closing Date, in form and substance attached
hereto as Exhibits E, F and G hereto, respectively.

34

 

          Section 5.3. Additional Conditions to Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated in this Agreement are also subject to
the satisfaction or waiver (by the Company) of the following conditions:

          (a) Representations and Warranties. The representations and warranties made by
VisionChina, Vision Best and Digital Value in this Agreement, disregarding all qualifications and
exceptions as to materiality and VisionChina Material Adverse Effect, shall be true and correct as
of the date hereof and as of the Closing Date as though such representations and warranties were
made at such date (except that any representations and warranties that are made as of a specified
date shall be true and correct as of such specified date), with only such exceptions as would not
in the aggregate reasonably be expected to have a VisionChina Material Adverse Effect; provided,
that, the representations and warranties contained in Sections 3.1, 3.2 and
3.3 shall be true and correct in all respects, subject to all qualifications and exceptions
as to materiality and VisionChina Material Adverse Effect therein, if any, as of the date hereof
and as of the Closing Date.

          (b) Performance. Each of VisionChina, Vision Best and Digital Value shall have
performed and complied in all material respects with all agreements and obligations required by
this Agreement to be so performed or complied with by it prior to the Closing.

          (c) Closing Deliveries. VisionChina, Vision Best and Digital Value shall have
delivered to the Company the following documents:

     (i) certified copies of resolutions and authorities of the board of directors
of VisionChina, Vision Best and Digital Value and, if applicable, the minutes of the
shareholders meeting of VisionChina, Vision Best and Digital Value authorizing the
execution and delivery of this Agreement and the Ancillary Documents and the
consummation of the Merger and the other transactions contemplated hereby and
thereby;

     (ii) a certificate, dated as of the Closing Date and executed by an executive
officer of VisionChina, Vision Best and Digital Value, certifying to the fulfillment
of the conditions specified in Sections 5.3(a) and 5.3(b);

     (iii) Registration Rights Agreements duly executed by VisionChina in favor of
Oak, Gobi, and any other Participating DMG Shareholder that has executed and
delivered a Shareholder Agreement; and

     (iv) Escrow Agreement duly executed by VisionChina and Vision Best.

ARTICLE VI

TERMINATION

          Section 6.1. Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Effective Time:

35

 

          (a) By mutual written consent duly authorized by VisionChina, Digital Value, Vision Best and
the Company;

          (b) By any of VisionChina, Digital Value or Vision Best if the Closing shall not have been
consummated on or before December 31, 2009 (such date, the “End Date”), provided, that the
right to terminate the Agreement under this Section 6.1(b) shall not be available if the
failure of VisionChina, Digital Value or Vision Best to fulfill any obligation under this Agreement
has been the primary cause of the failure of the Closing to occur on or prior to the End Date and
such failure to perform constitutes a breach of this Agreement;

          (c) By the Company if (i) the Closing shall not have been consummated by the second Business
Day after all conditions set forth in Section 5.1 and Section 5.2 have been
satisfied or waived in accordance therewith or (ii) the escrow amounts described in Section
1.9 shall not have been placed into escrow in accordance with the terms thereof;

          (d) By any of VisionChina, Digital Value, Vision Best, the Company or the Shareholder
Representative, if a Court or Governmental Authority shall have issued an Order or taken any other
action, in each case which has become final and non-appealable and which restrains, enjoins or
otherwise prohibits the transactions contemplated hereby;

          (e) By VisionChina, Vision Best and Digital Value, if they are not in material breach of their
obligations under this Agreement, and if at any time that any of the representations and warranties
of the Company herein become untrue or inaccurate such that Section 5.2(a) would not be
satisfied (treating such time as if it were the Closing Date for purposes of this Section
6.1(e)) and such breach (if curable) has not been cured within 30 days after notice to the
Company; or

          (f) By the Company, if it is not in material breach of its obligations under this Agreement,
and if at any time that any of the representations and warranties of VisionChina, Vision Best or
Digital Value herein become untrue or inaccurate such that Section 5.3(a) would not be
satisfied (treating such time as if it were the Closing Date for purposes of this Section
6.1(f)) and such breach (if curable) has not been cured within 30 days after notice to
VisionChina, Vision Best and Digital Value.

36

 

          Section 6.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 6.1, this Agreement (other than this Section 6.2 and
Section 4.6 and Article VIII, which shall survive such termination) will forthwith
become void, and there will be no liability on the part of any party or any of their respective
officers, directors, shareholders or Affiliates and all rights and obligations of any party hereto
will cease, except that nothing herein will relieve any party from liability for any intentional or
knowing breach, prior to termination of this Agreement in accordance with its terms, of any
representation, warranty, covenant or agreement contained in this Agreement.

ARTICLE VII

ESCROW AND INDEMNIFICATION

          Section 7.1. Survival. The representations, warranties and covenants of the Company
contained herein or in the certificates delivered pursuant to Section 5.2(f)(ii) hereof
shall survive until the first anniversary of the Closing Date; provided, however, the
representations and warranties contained in Sections 2.1, 2.2, 2.3
and 2.4 shall survive the Closing indefinitely and the representations and warranties
contained in Section 2.11 shall survive until 90 days following the expiration of the
applicable statute of limitations (such representations and warrants described in this clause, the
“Fundamental Representations”). Notwithstanding the foregoing, all of the covenants or
other agreements of the Company contained in this Agreement that by their terms are to be performed
after the Closing shall survive the Closing in accordance with their terms, unless and to the
extent only that non-compliance with such covenants or agreements is waived in writing by
VisionChina. If written notice of a claim for indemnification has been given in accordance with
Section 7.2 at or prior to the expiration of the applicable representations or warranties
or covenants, then the relevant representations or warranties or covenants shall survive as to such
claim, until such claim has been finally resolved. The representations, warranties and covenants
of VisionChina shall survive until the Closing Date.

          Section 7.2. Indemnification.

          (a) Subject to the limitations set forth in this Article VII, the Participating DMG
Shareholders agree to indemnify and hold harmless, on a several and not joint basis in accordance
with their respective pro rata interests in the Merger Consideration, VisionChina, its Affiliates
and each of their respective officers, directors, agents, employees, successors and assigns
(hereinafter referred to individually as an “Indemnified Person” and collectively as
“Indemnified Persons”) from and against any and all amounts, payments, losses, damages,
claims, demands, actions or causes of action, Taxes, liabilities, costs and expenses, including
interest, penalties and reasonable legal fees, arising out of, resulting from or relating to any of
the following matters (collectively, “Losses”):

     (i) any inaccuracy in or breach of any of the representations and warranties of
the Company contained in this Agreement;

     (ii) any breach of, or failure to perform, any of the covenants, agreements or
other obligations of the Company contained in this Agreement;

37

 

     (iii) any Transaction Expenses of the Company;

     (iv) any Loss that VisionChina, Vision Best, Digital Value or, after the
Closing, the Group Companies may have with respect to any claim by any DMG
Shareholder or any of its Affiliates that questions or challenges (A) the validity
of this Agreement or any Ancillary Document, (B) any action taken or to be taken by
any Group Company, the Shareholder Representative or any DMG Shareholder or holder
of any other securities of the Company pursuant to this Agreement or in connection
with the transactions contemplated herein or (C) the adequacy of the Merger
Consideration (including in respect of appraisal rights, if any, available to any
dissenting shareholders of the Company in connection with the Merger), or with
respect to any option, warrant or similar right that remains unexercised and
outstanding at the Effective Time;

     (v) any Loss that VisionChina, Vision Best, Digital Value or, after the
Closing, the Group Companies may have with respect to any claim by Participating DMG
Shareholders in connection with Sections 1.9(d) (Expense Fund) and
4.08 (Shareholder Representative);

     (vi) any liability of the Participating DMG Shareholders or any recipient of
any Initial Consideration or any Remaining Consideration for Taxes as a result of
the transactions contemplated hereby; and

     (vii) any Loss that VisionChina may directly incur as a result of the Company’s
failure to deliver to VisionChina, on or before December 15, 2009, the written
consent of Shanghai Metro Television Co., Ltd. to the transfer of the equity
interest in Beijing Eastlong Advertising Co., Ltd. held by Men Qijun (the “Third
Party Consent”); provided, that neither VisionChina nor any of its Affiliates or
Representatives initiates settlement discussions with any third party
claiming rights in connection with the Third Party Consent that is the cause of
the Losses so incurred.

          (b) A claim for indemnification under any subsection of Section 7.2(a) must be made at
or prior to the date the applicable representations or warranties terminate as set forth in
Section 7.1 (the applicable “Indemnification Expiration Date”).

          Section 7.3. Limitations on Indemnification.

          (a) The Participating DMG Shareholders shall not be liable to the Indemnified Persons for any
Losses with respect to the matters set forth in Sections 7.2(a)(i) and 7.2(a)(ii)
for any Losses unless the aggregate amount of all Losses of the Indemnified Persons exceeds
US$1,000,000 (the “Threshold Amount”) at which time the Participating DMG Shareholders
shall be liable for the entire aggregate amount of Losses then existing and thereafter arising,
including the first US$1,000,000. The limitations set forth in this Section 7.3(a) shall
not apply to any Losses of the Indemnified Persons arising out of the breach by the Company of any
of the Fundamental Representations and the representations and warranties set forth in
Sections 2.10 (as they relate to Leakage), 2.11, the last sentence of
2.13, 2.16 and 2.25 or the Leakage

38

 

covenants contained in Section
4.1 and the Participating DMG Shareholders shall be liable for such Losses without regard to
the Threshold Amount (it being understood that such Losses shall not be considered in calculating
whether the Threshold Amount has been reached).

          (b) The maximum aggregate liability of each Participating DMG Shareholder for claims of the
Indemnified Persons pursuant to Section 7.2(a)(i) through (vi) shall be limited to
an amount equal to each Participating DMG Shareholder’s pro rata interest in the Indemnity Escrow
Amount and the maximum aggregate liability of all Participating DMG Shareholders for claims of the
Indemnified Persons pursuant to Section 7.2(a)(i) through (vi) shall be limited to
an amount equal to the Indemnity Escrow Amount, except in the case of fraud, for which the maximum
aggregate liability of the Participating DMG Shareholders shall be on a several and not joint basis
and shall not exceed their respective shares of the Merger Consideration actually received. For
the avoidance of doubt, from and after the Escrow Release Date, the maximum aggregate liability of
such Participating DMG Shareholder for claims of the Indemnified Persons pursuant to Section
7.2(a)(i) with respect to representations and warranties that have an Indemnification
Expiration Date subsequent to the Escrow Release Date shall be limited to the portion of the
Indemnity Escrow Amount, if any, released to such Participating DMG Shareholder.

          (c) The maximum aggregate liability of each Participating DMG Shareholder for claims of the
Indemnified Persons pursuant to Section 7.2(a)(vii) shall be limited to an amount equal to
such Participating DMG Shareholder’s pro rata interest in the Consent Escrow Amount.

          (d) For the purposes of calculating the amount of any Losses that are the subject matter of a
claim for indemnification hereunder (but not for determining whether a breach of a representation
or warranty has occurred or an inaccuracy of any representation or warranty exists), each
representation and warranty contained in this Agreement shall be read
without regard and without giving effect to any materiality qualifier, including “Material
Adverse Effect,” contained therein.

          (e) The amount of any Losses for which indemnification is provided to the Indemnified Persons
shall be net of any third party insurance proceeds actually received (in each case, net of any
costs of collection and increased premiums relating thereto, provided that the Indemnified Persons
use commercially reasonable efforts to obtain such proceeds).

          (f) No Participating DMG Shareholder shall be liable under any provision of Article
VII of this Agreement for any consequential, punitive or indirect Losses (other than
consequential, punitive or indirect Losses payable to a third party).

          Section 7.4. Escrow Fund.

          (a) At the Effective Time, VisionChina shall cause the Escrow Agent to distribute the
Effective Time Escrow Amount to the Participating DMG Shareholders in accordance with the Closing
Allocation Schedule.

          (b) On the first anniversary of the Closing Date (the “Escrow Release Date”),
VisionChina shall cause the Escrow Agent to distribute any amounts contained in the Indemnity

39

 

Escrow Fund at such time to the Participating DMG Shareholders in accordance with their respective
pro rata interests in the Indemnity Escrow Fund, less, amounts that would be reasonably necessary
to satisfy any then pending and unsatisfied or unresolved claims for indemnification duly made by
the Indemnified Persons hereunder and pursuant to the Escrow Agreement prior to the Escrow Release
Date.

          (c) Amounts not distributed under Section 7.4(a) due to unsatisfied or unresolved
claims after the Escrow Release Date shall remain in the Indemnity Escrow Fund until such claims
have been resolved. As soon as all such claims have been resolved, VisionChina shall cause the
Escrow Agent to distribute any amounts remaining in the Indemnity Escrow Fund to the Participating
DMG Shareholders in accordance with their respective pro rata interests in such remaining amounts.

          (d) If the Third Party Consent has been delivered by the Company to VisionChina before the
Effective Time, VisionChina shall cause the Escrow Agent to distribute as promptly as practicable
following the Effective Time any amounts contained in the Consent Escrow Fund to the Participating
DMG Shareholders in accordance with their respective pro rata interests in the Consent Escrow Fund.
If the Third Party Consent has not been delivered by the Company to VisionChina before the
Effective Time, on the earlier of the Escrow Release Date or the date the Third Party Consent is
delivered by the Company to VisionChina, VisionChina shall cause the Escrow Agent to promptly
deliver any amounts then remaining in the Consent Escrow Fund to the Participating DMG Shareholders
in accordance with their respective pro rata interests in the Consent Escrow Fund.

          Section 7.5. Direct Claims; Resolution of Conflicts.

          (a) An Indemnified Person may seek recovery for Losses pursuant to this Article VII by
delivering to the Shareholder Representative on behalf of the Participating DMG
Shareholders and to the Escrow Agent a Claim Notice (as defined below) in respect of such
claim. To be valid pursuant to this Section 7.5(a), a Claim Notice relating to Losses
under Section 7.2 must be delivered to the Shareholder Representative prior to the
applicable Indemnification Expiration Date; provided, however, that any claims by the Indemnified
Parties with respect to any such Loss made prior to the applicable Indemnification Expiration Date
shall continue indefinitely until such claim is resolved pursuant to the terms of this Article
VII. The date of such delivery of a Claim Notice is referred to herein as the “Claim
Date” of such Claim Notice (and the claims for indemnification contained therein). For the
purposes hereof, “Claim Notice” shall mean a written notice of an Indemnified Person: (A)
stating that an Indemnified Person has paid, sustained, incurred or accrued, or reasonably
anticipates in good faith that it will have to pay, sustain, incur or accrue Losses and (B)
specifying in reasonable detail, to the extent practical, the individual items of Losses included
in the amount so stated, the date each such item was paid, sustained, incurred, or accrued, or the
good faith basis for such anticipated liability, and the nature of the indemnification claim to
which such item is related. The Shareholder Representative may object to a claim for
indemnification set forth in
a Claim Notice by delivering to the Indemnified Person seeking
indemnification (and to the Escrow Agent) within thirty (30) days from the delivery by an
Indemnified Person of a Claim Notice (such date, the “Objection Deadline”), a written
statement of objection to the claim made in the Claim Notice (an “Objection Notice”), which
Objection Notice, in order to be effective, shall set forth in

40

 

reasonable detail the nature of the
objections to the claims in respect of which the objection is made; provided, however, subject to
VisionChina’s compliance with the proviso in Section 7.2(a)(vii), the Shareholder
Representative shall not be entitled to object to any Claim Notice submitted pursuant to
Section 7.2(a)(vii) for which reasonable evidence has been provided that the claimed Losses
have been incurred. If the Shareholder Representative does not object in writing by the Objection
Deadline, such failure to so object shall be an irrevocable acknowledgement by the Shareholder
Representative on behalf of the Participating DMG Shareholders that the Indemnified Person is
entitled to the full amount of the claims for Losses set forth in such Claim Notice (and such
entitlement shall be conclusively and irrefutably established), and the Shareholder Representative
shall take all necessary actions under this Agreement and the Escrow Agreement to effect payment in
respect thereof.

          (b) If the Shareholder Representative timely delivers an Objection Notice in accordance with
Section 7.5(a) hereof, the Shareholder Representative and the Indemnified Person shall
attempt in good faith for fifteen (15) days to resolve such dispute. If the Shareholder
Representative and the Indemnified Person reach an agreement with respect to such dispute, a
memorandum setting forth such agreement shall be prepared and signed by both parties (a
“Settlement Memorandum”) and shall be furnished to the Escrow Agent. The Escrow Agent
shall be entitled to rely on any such Settlement Memorandum and make distributions from the Escrow
Amount in accordance with the terms thereof.

          (c) If the Shareholder Representative and the Indemnified Person are unable to reach an
agreement with respect to such dispute after good faith negotiation during the aforementioned
fifteen (15) day period following delivery of an Objection Notice with respect to such claim, any
party to such dispute may institute legal proceedings with respect to the matter. Any final and
non-appealable decision, judgment or award rendered by a court of competent jurisdiction, as to the
validity and amount of any claim in such Claim Notice shall be final, binding and conclusive upon
the parties to this Plan of Merger and any other Indemnifying
Parties and Indemnified Parties. If reasonably possible, such final decision shall be written
and shall be supported by written findings of fact and conclusions which shall set forth the
decision, judgment or award awarded by such court.

          Section 7.6. Third-Party Claims.

          (a) Promptly after receipt (and in any event within 20 days) by an Indemnified Person of
notice of the commencement of any third party claim which such Indemnified Person reasonably
believes may result in a demand for indemnification against it, such Indemnified Person will, if a
claim is to be made against a Participating DMG Shareholder for indemnification hereunder, give
notice to the Shareholder Representative of the commencement of such claim, but the failure to
notify the Shareholder Representative will not relieve the Participating DMG Shareholder of any
liability that they may have to any Indemnified Person, except to the extent that the Participating
DMG Shareholders demonstrate that the defense of such action is prejudiced by the Indemnified
Person’s failure to give such notice.

          (b) If any third-party claim is brought against an Indemnified Person and it gives notice to
the Shareholder Representative of the commencement of such third-party claim, the Shareholder
Representative will be entitled to participate in such Action and, to the extent

41

 

that they wish
(unless the Shareholder Representative or Participating DMG Shareholder is also a party to such
Action and the Indemnified Person determines in good faith that joint representation would be
inappropriate due to a bona fide conflict of interest), to assume the defense of such Action with
counsel reasonably satisfactory to the Indemnified Person and, after notice from the Shareholder
Representative to the Indemnified Person of its election to assume the defense of such Action, the
Participating DMG Shareholders will not, as long as the Shareholder Representative reasonably
diligently conducts such defense, be liable to the Indemnified Person under this Section
7.6(b) for any fees of other counsel or any other expenses with respect to the defense of such
Action, in each case subsequently incurred by the Indemnified Person in connection with the defense
of such Action. If it is determined that joint representation is inappropriate due to a bona fide
conflict of interest, then the Participating DMG Shareholders shall pay all reasonable costs and
expenses of one separate counsel for the Indemnified Person. If the Shareholder Representative
assumes the defense of an Action, (i) no compromise or settlement of such claims may be effected by
the Shareholder Representative without the Indemnified Person’s consent (not to be unreasonably
withheld, conditioned or delayed). If notice is given to the Shareholder Representative of any
third party Action and the Shareholder Representative does not, within ten (10) days after the
Indemnified Person’s notice is given, give notice to the Indemnified Person of its election to
assume the defense of such Action, the Indemnified Person shall control the defense of such Action;
provided, however, the Participating DMG Shareholders shall not be bound by any determination of a
claim so defended or any compromise or settlement effected by the Indemnified Person without the
consent of the Shareholder Representative (which may not be unreasonably withheld, conditioned or
delayed).

          (c) Notwithstanding the foregoing, if any claim that questions or challenges the adequacy of
the Merger Consideration (including in respect of appraisal rights, if any, available to any
dissenting shareholders of the Company in connection with the Merger) is brought against an
Indemnified Person, VisionChina may by notice to the Shareholder Representative, assume the
exclusive right to defend, compromise, or settle such Action, but the
Participating DMG Shareholders will not be bound by any determination of a claim so defended
or any compromise or settlement effected by the Indemnified Person without the consent of the
Shareholder Representative (which may not be unreasonably withheld, conditioned or delayed). In
defending, compromising or settling such Action, the Indemnified Person shall be entitled to cause
the Escrow Agent to disburse to VisionChina or its designees up to US$2,000,000 of the Indemnity
Escrow Fund solely for the purpose of litigating (but not settling) such Action.

          (d) Notwithstanding the foregoing, if an Indemnified Person determines in good faith that
there is a reasonable probability that an Action may adversely affect it or its Affiliates other
than as a result of monetary damages for which it would be entitled to indemnification under this
Agreement, the Indemnified Person may, by notice to the Shareholder Representative, assume the
exclusive right to defend, compromise, or settle such Action, but the Participating DMG
Shareholders will not be bound by any determination of a claim so defended or any compromise or
settlement effected by the Indemnified Person without the consent of the Shareholder Representative
(which may not be unreasonably withheld, conditioned or delayed).

          Section 7.7. Form of Payment; Valuation. Claims for Losses shall be first satisfied
from the Escrow Cash and then, if the Escrow Cash is insufficient, from the Escrow Shares. Unless
a specific number of Escrow Shares is specified, the number of Escrow Shares to

42

 

be delivered to
VisionChina, Vision Best or their respective designees in satisfaction of such payment shall be
equal to the amount of such payment divided by the higher of (i) the Initial Conversion Price and
(ii) the average of the closing sales prices for one ADS as reported on the Nasdaq Global Market
for the 20 consecutive trading days ending (and including) one trading day prior to the date the
claim for Losses is satisfied.

          Section 7.8. Indemnification as Exclusive Remedy. The indemnification provisions
contained in this Article VII, subject to the limitations set forth herein, shall be the
exclusive post-Closing remedy available to any Indemnified Person in connection with any Losses
arising out of or resulting from this Agreement and the transactions contemplated hereby. Each
Indemnified Person shall take all reasonable steps to mitigate its Losses after becoming aware of
any event which could reasonably be expected to give rise to any Losses.

ARTICLE VIII

GENERAL PROVISIONS

          Section 8.1. Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally or sent by
nationally recognized overnight courier or by registered or certified mail, postage prepaid, return
receipt requested, or by electronic mail, with a copy thereof to be delivered or sent as provided
above or by facsimile or telecopier, as follows:

          (a) If to VisionChina, Digital Value or Vision Best or, following the Closing, to the Company:

VisionChina Media Inc.

1/F Block No.7 Champs Elysees

Nongyuan Road, Futian District

Shenzhen 518040

People’s Republic of China

Attn: Scott Chen

Email: scott.chen@visionchina.cn

Facsimile: +86 755 8298-1111

With a copy to:

Simpson Thacher & Bartlett LLP

ICBC Tower, 35th Floor

3 Garden Road

Hong Kong Special Administrative Region

People’s Republic of China

Attention: Chris Lin, Esq.

Email: clin@stblaw.com

Facsimile: +1 (212) 455-2502

43

 

          (b) If to the Company, prior to the Closing:

Digital Media Group Company Limited

Room 1412, Shengshi Mansion

No. 511 Weihai Road

Shanghai 200041

People’s Republic of China

Attn: Thomas Tsao

Email: tom.tsao@dmgtv.com

Facsimile: +86 21 6253-6502

With a copy to:

Orrick, Herrington & Sutcliffe LLP

1000 Marsh Road

Menlo Park, CA 94025

Attention: David Lee, Esq.

                 
Mark W. Seneca, Esq.

Email: dlee@orrick.com

            mseneca@orrick.com

Facsimile: (650) 614-7401

          (c) If to the Shareholder Representative:

Shareholder Representative Services LLC

601 Montgomery Street, Suite 2020

San Francisco, CA 94111

Attention: Managing Director

Facsimile No.: (415) 962-4147

Telephone No.: (415) 367-9400

With a copy to:

Orrick, Herrington & Sutcliffe LLP

1000 Marsh Road

Menlo Park, CA 94025

Attention: David Lee, Esq. and Mark W. Seneca, Esq.

Email: dlee@orrick.com

            mseneca@orrick.com

Facsimile: (650) 614-7401

or to such other address as the party to whom notice is to be given may have furnished to the other
party in writing in accordance herewith. All such notices or communications shall be deemed to be
received (i) in the case of personal delivery, nationally recognized overnight courier or
registered or certified mail, on the date of such delivery and (ii) in the case of facsimile or
telecopier or electronic mail, upon confirmed receipt.

44

 

          Section 8.2. Disclosure Schedules. Any disclosure schedules of a party hereto shall
be divided into sections corresponding to the sections and subsections of this Agreement.
Disclosure of any fact or item in any section of a party’s disclosure schedule (unless expressly
referenced with specificity therein) shall not be deemed to be disclosed with respect to such other
section unless the applicability of such fact or item thereto is reasonably apparent upon its face.

          Section 8.3. Certain Definitions. For purposes of this Agreement, the term:

          (a) “Action” means any claim, action, suit, proceeding, arbitration, mediation or
other investigation as to which written notice has been provided to the applicable party.

          (b) “Affiliate” means any Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the first mentioned
Person, including, with respect to the Company, any corporation, partnership, limited liability
company or joint venture in which the Company (either alone, or through or together with any other
Subsidiary) has, directly or indirectly, an interest of 10% or more. For the avoidance of doubt,
for purposes of this Agreement, Affiliates of the Company include entities organized in the PRC
that are qualified as “variable interest entities” under GAAP.

          (c) “Ancillary Documents” means the Registration Rights Agreement, the Shareholder
Agreements and the Escrow Agreement and any other agreements, documents and instruments required to
be delivered by any party in connection with this Agreement or the transactions contemplated
hereby.

          (d) “Balance Sheet Date” means December 31, 2008.

          (e) “Business” means the business of the Group Companies, as currently operated or
proposed to be operated.

          (f) “Business Day” means any day other than a Saturday, Sunday or day on which banks
are permitted to close in Beijing, PRC, Hong Kong S.A.R., or New York City, U.S.A.

          (g) “Company Material Adverse Effect” means any change, event, circumstance or effect,
which individually or in the aggregate, has had a material adverse effect on (i) the business,
condition (financial or otherwise), assets, liabilities or results of operations of the Company and
the other members of the Group Companies taken as a whole, or (ii) the ability of the Company or
any Affiliate of the Company to timely perform its obligations under this Agreement or to
consummate the transactions contemplated by this Agreement; provided, however, that “Company
Material Adverse Effect” shall not include, alone or in combination, the effect of any change,
event, circumstance or effect caused by: (A) changes in general PRC economic conditions or general
economic conditions in any other state or country where the Business is conducted; (B) changes to
the economic conditions affecting the industries in which the Business is conducted; (C) any
natural disaster or any acts of terrorism, sabotage, military action or ware (whether or not
declared) or any escalation or worsening thereof; (D) changes related to or arising from the
execution, announcement or performance of, or compliance with, this Agreement or the consummation
of the Merger, including the impact thereof on relationships, contractual or otherwise,
governmental authorities, customers, cooperators,

45

 

suppliers, distributors or employees; (E) changes
in accounting requirements or principles or any change in applicable laws or policies or the
interpretation thereof, or any change of the attitude of the competent authorities; (F) the failure
to meet any projections or budgets; or (G) the matters listed on Schedule 2.6.

          (h) “Confidential Information” means all non-public, confidential and proprietary
information (irrespective of the manner in which such information is communicated, transmitted, or
stored) obtained by or on behalf of VisionChina or the Company from the Company or VisionChina, as
the case may be, or its or their respective Representatives, including but not limited to any and
all information obtained in connection with the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby and information relating to the provisions and
subject matter of, and negotiations leading to, this Agreement, other than information which (i)
was or becomes generally available to the public other than as a result of a breach of this
Agreement by VisionChina or the Company, as the case may be, (ii) was or becomes available to
VisionChina or the Company, as the case may be, on a non-confidential basis prior to disclosure by
the Company or VisionChina, as the case may be, or (iii) was or becomes available to VisionChina or
the Company, as the case may be, from a source other than the Company or VisionChina, as the case
may be, or any of its or their respective Representatives; provided, that such source is not known
by VisionChina or the Company, as the case may be, (i) to be bound by a confidentiality agreement
with the Company or VisionChina, as the case may be or (ii) to be prohibited from making such
disclosure by any other contractual, legal, or fiduciary obligation to the Company or VisionChina,
as the case may be.

          (i) “Confidentiality Agreement” means the Confidentiality Agreement, dated September
29, 2009, between the Company and VisionChina.

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

          (k) “Contract” means any contract, plan, undertaking, understanding, agreement,
license, sublicense, consent, lease, note, bond, indenture, permit, franchise, instrument, mortgage
or other binding commitment or obligation, whether written or oral.

          (l) “control” (including the terms “controlled by” and “under common
control with”) means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the ownership of shares,
as trustee or executor, by Contract or credit arrangement or otherwise.

          (m) “Court” means any court or arbitration tribunal of any domestic state, or any
foreign country, and any political subdivision or agency thereof.

          (n) “Employment Agreements” means, collectively, the Key Company Employee Employment
Agreements and the General Employment Agreements.

          (o) “Encumbrance” means any mortgage, pledge, security interest, attachment,
encumbrance, lien (statutory or otherwise), license, claim, option, conditional sale agreement,
right of first refusal, first offer, termination, participation or purchase or charge of any kind
(including any agreement to give any of the foregoing); provided, however, that the
term “Encumbrance” shall not include (i) statutory liens for Taxes, which are not yet due and

46

 

payable, (ii) statutory or common law liens to secure landlords, lessors or renters under leases or
rental agreements confined to the premises rented, (iii) deposits or pledges made in connection
with, or to secure payment of, workers’ compensation, unemployment insurance, old age pension or
other social security programs mandated under applicable Laws, (iv) statutory or common law liens
in favor of carriers, warehousemen, mechanics and materialmen, to secure claims for labor,
materials or supplies and other like liens, and (v) restrictions on transfer of securities imposed
by applicable state and federal securities Laws.

          (p) “Environmental Claim” means any written notice, claim, demand, action, suit,
complaint, or proceeding by any person alleging liability or potential liability (including
liability or potential liability for investigatory costs, cleanup costs, governmental response
costs, natural resource damages, fines or penalties) under any Environmental Laws.

          (q) “Environmental Laws” means all Laws in effect at the date of this Agreement
relating to protection of the environment.

          (r) “External Auditor” means Ernst & Young.

          (s) “GAAP” means generally accepted accounting principles and practices in United
States as in effect from time to time.

          (t) “Gobi” means Gobi Partners, Inc., Gobi Fund, Inc. and Gobi Fund II, L.P.

          (u) “Government Official” means any official, director, politician, employee or other
similar Persons acting in an official capacity for any Governmental Authority or any political
party or official thereof or to any candidate for political office.

          (v) “Governmental Authority” means any government or governmental or regulatory body
thereof, or political subdivision thereof, whether federal, state, municipal, local or foreign, or
any agency, instrumentality or authority thereof, or any court or arbitrator (public or private).

          (w) “Governmental Authorization” means (i) any approval, consent, exemption, waiver or
other authorization of, or filing or registration with, any Governmental Authority in connection
with the execution, delivery and performance of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby, whether or not a condition,
obligation or order is imposed upon or issued to the party seeking the relevant Governmental
Authorization, its Affiliates, or any Group Company, and (ii) expiration of any and all waiting
periods imposed by applicable Law in respect of such matter.

          (x) “Governmental Order” means any temporary, preliminary or permanent order, writ,
injunction, decree, stipulation, determination or award entered by or with any Governmental
Authority.

          (y) “Group Companies” means the Company, the Subsidiaries, the Affiliates of the
Company (other than the Subsidiaries) and any Person that is not a natural person and that is
controlled by a Group Company.

47

 

          (z) “Hazardous Materials” means all materials defined as “hazardous substances” or
“hazardous wastes,” toxic, pollutant, contaminant or words of similar meaning or effect, or any
other term of similar import under any Environmental Law, including petroleum, asbestos, and
polychlorinated biphenyls.

          (aa) “Indebtedness” means (i) all indebtedness (whether or not contingent) for
borrowed money, (ii) all obligations (contingent or otherwise) for the deferred purchase price of
assets, property or services (other than current trade payables incurred in the ordinary course of
business), (iii) all obligations evidenced by notes, bonds, debentures or other similar
instruments, (iv) all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property, (v) all obligations under capital leases, (vi) all
obligations, contingent or otherwise, as an account party under acceptance, letter of credit or
similar facilities, (vii) all obligations under any currency, interest rate or other hedge or
derivative agreement or any other hedging or derivative arrangement, (viii) all direct or indirect
guarantee, support or keep well obligations in respect of obligations of the kind referred to in
clauses (i) through (vii) above, and (ix) all obligations of the kind referred to in clauses (i)
through (viii) above secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Encumbrance on property (including, without
limitation, accounts and Contract rights) owned by the Company or its Subsidiaries, whether or not
the Company or any Subsidiary has assumed or become liable for the payment of such obligation.

          (bb) “Intellectual Property” means all PRC and foreign intellectual property,
including, without limitation, all (i) trademarks, service marks, trade names, brand names,
corporate names, URLs, Internet domain names, slogans, logos, trade dress and other source
indicators, together with all goodwill of any business symbolized thereby; (ii) patents,
inventions, discoveries, processes, designs, techniques, developments, technology, formulae,
know-how and show-how; (iii) copyrights and works of authorship in any media (including
Internet site content, Software, advertising and promotional materials) and (iv) trade secrets and
other confidential or proprietary information, current and potential customer, client and user
lists and data, analyses and research.

          (cc) “Knowledge” means (i) in the case of the Company, the actual knowledge after due
inquiry of Thomas Tsao, Terrence Tong, Jin Jiping or Li Wing Chung Nora and (ii) in the case of any
other Person, the actual knowledge after due inquiry of such Person if such Person is a natural
person, or otherwise, the directors or officers of such Person.

          (dd) “Law” means all laws, statutes, ordinances, directives, Regulations and similar
mandates of any Governmental Authority, including all Orders of Courts having the effect of law in
each such jurisdiction.

          (ee) “Liabilities” means all Indebtedness, obligations and other liabilities of a
Person (whether absolute, accrued, contingent, fixed or otherwise, or whether due or to become due
or asserted or unasserted).

          (ff) “Litigation” means any claim, suit, case, action, arbitration, cause of action,
complaint, allegation, criminal prosecution, investigation, demand letter, or proceeding,

48

 

whether
at law or at equity, before or by any Court or Governmental Authority, any arbitrator or other
tribunal.

          (gg) “Oak” means Oak Investment Partners XII, Limited Partnership.

          (hh) “Order” means any judgment, order, award, stipulation, decision, writ,
injunction, ruling or decree of, or any settlement under the jurisdiction of, any Court or
Governmental Authority.

          (ii) “Ordinary Shares” means the Ordinary Shares, par value US$0.01 per share of the
Company.

          (jj) “Person” means an individual, corporation, partnership, association, trust,
unincorporated organization, limited liability company, other entity or group.

          (kk) “Preference A Shares” means the Preference A Shares, par value US$0.01 per share,
of the Company.

          (ll) “Preference B Shares” means the Preference B Shares, par value US$0.01 per share,
of the Company.

          (mm) “Preference C Shares” means the Preference C Shares, par value US$0.01 per share,
of the Company.

          (nn) “Regulation” means any rule, regulation, policy, promulgation or interpretation
of any Governmental Authority having the effect of law.

          (oo) “Related Party” means an Affiliate of the Company, any DMG Shareholder or any
Affiliate of a DMG Shareholder, including any directors, officers and record or beneficial owners
of any of the foregoing and any immediate family members of such directors, officers or record or
beneficial owners.

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

          (qq) “Software” means any and all computer programs, software and applications and
related algorithms, models and methodologies, source code and object code, flow charts,
descriptions and documentation, databases and compilations, including any and all data and
collections of data, whether machine readable, on paper or otherwise and all documentation and
other works of authorship relating to any of the foregoing.

          (rr) “Structure Agreements” means, collectively, the Contracts and instruments, a list
of which is attached hereto as Schedule 2.18, which enable the Company to control and
consolidate with its financial statements each Group Company and its Affiliates in respect of which
at least a majority of the equity is not directly held but is controlled by the Company.

49

 

          (ss) “Subsidiary” or “Subsidiaries” of a Person means any corporation,
partnership, joint venture, limited liability company or other legal entity of which such Person
owns, directly or indirectly, greater than 50% of the shares or other equity interests the holder
of which is generally entitled to vote as a general partner or for the election of the board of
directors or other governing body of a corporation, partnership, joint venture, limited liability
company or other legal entity.

          (tt) “Systems” means servers, systems, websites, circuits, networks and other computer
and telecom assets and equipment.

          (uu) “Tax” or “Taxes” means any taxes of any kind, including but not limited to those
on or measured by or referred to as income, gross receipts, capital, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment, environmental, excise, severance,
stamp, occupation, premium, value added, property or windfall profits taxes, customs, duties or
similar fees, assessments or charges of the same or similar nature, together with any interest,
penalties or other additions to tax that may become payable in respect thereof, imposed by any
Taxing Authority in accordance with applicable Law.

          (vv) “Tax Return” means any return, report or statement required by applicable Law to
be filed by any Group Company with any Taxing Authority, showing Taxes or used to pay Taxes,
including any schedules or attachments thereto or amendment thereof, including, without limitation,
any information return, claim for refund, amended return and declaration of estimated Tax.

          (ww) “Taxing Authority” means, with respect to any Tax, the government entity or
political subdivision thereof that imposes such Tax and the agency (if any) charged with the
collection of such Tax for such entity or subdivision.

          (xx) “Transaction Expenses” means, (A) with respect to the Company, any and all third
party expenses (including the expenses of the Shareholder Representative in excess of the Expense
Fund Amount, and the expenses of financial advisors, attorneys, accountants and other advisors)
incurred by the Company or any other member of the Group Companies on or prior to Closing in
connection with the transactions contemplated by this Agreement and the Ancillary Documents, and,
(B) with respect to VisionChina, any and all third party expenses (including the expenses of
financial advisors, attorneys, accountants and other advisors) incurred by VisionChina and its
Affiliates on or prior to Closing in connection with the transactions contemplated by this
Agreement and the Ancillary Documents.

          (yy) “VisionChina Material Adverse Effect” means any change, event, circumstance or
effect, which individually or in the aggregate, has had a material adverse effect on (i) the
business, condition (financial or otherwise), assets, liabilities or results of operations of
VisionChina and its Subsidiaries (including, without limitation, Vision Best and Digital Value)
taken as a whole, or (ii) the ability of VisionChina or any Affiliate of VisionChina to timely
perform its obligations under this Agreement or to consummate the transactions contemplated by this
Agreement; provided, however, that “VisionChina Material Adverse Effect” shall not include, alone
or in combination, the effect of any change, event, circumstance or effect caused by: (A) changes
in general PRC economic conditions or general economic conditions in any

50

 

other state or country
where the business of VisionChina and its Subsidiaries as currently operated is conducted; (B)
changes to the economic conditions affecting the industries in which the business of VisionChina
and its Subsidiaries as currently operated is conducted; (C) any natural disaster or any acts of
terrorism, sabotage, military action or ware (whether or not declared) or any escalation or
worsening thereof; (D) changes related to or arising from the compliance with the terms of, or any
action take pursuant to, this Agreement or any failures to take any action which is prohibited by
this Agreement or such other changes or events to which the Company or the Participating DMG
Shareholders have expressly consented in writing pursuant to the terms of this Agreement; (E)
changes in accounting requirements or principles or any change in applicable laws or policies or
the interpretation thereof, or any change of the attitude of the competent authorities; (F) the
failure to meet any projections or budgets.

          Section 8.4. Interpretation. When a reference is made in this Agreement to
Sections, subsections, Schedules or Exhibits, such reference shall be to a Section, subsection,
Schedule or Exhibit to this Agreement unless otherwise indicated. The words “include,” “includes”
and “including” when used herein shall be deemed in each case to be followed by the words “without
limitation.” The word “herein” and similar references mean, except where a specific Section or
Article reference is expressly indicated, the entire Agreement rather than any specific Section or
Article. Except as otherwise specifically provided herein, the word “material,” when used in
reference to any party’s representations, warranties or covenants, shall mean material in relation
to such party. The table of contents and the headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

          Section 8.5. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions contemplated hereby is not affected
in any manner adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to
the extent possible.

          Section 8.6. Entire Agreement. This Agreement and the Ancillary Documents
(including all exhibits and schedules hereto and thereto) constitute the entire agreement and
supersede all prior agreements and undertakings (other than the Confidentiality Agreement), both
written and oral, among the parties, or any of them, with respect to the subject matter hereof and
thereof.

          Section 8.7. No Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by operation of law or otherwise by any party hereto
without the prior written consent of (i) VisionChina, Vision Best or Digital Value, in the case of
assignment by the Company or (ii) the Shareholder Representative, in the case of assignment by
VisionChina, Vision Best or Digital Value, provided, that VisionChina, Vision Best and Digital
Value may assign their rights, interests and obligations to any Affiliate;

51

 

provided further, that
VisionChina shall remain liable for the performance of all payment and other obligations hereunder.

          Section 8.8. Parties in Interest. Subject to Section 8.7, this Agreement
shall be binding upon and inure solely to the benefit of each party hereto and each of their
respective successors and assigns, and nothing in this Agreement, express or implied, is intended
to or shall confer upon any other Person, other than the Indemnified Persons and the Escrow Agent,
to the extent set forth in Article VII, any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.

          Section 8.9. Fees and Expenses. The Participating Shareholders shall bear their own
fees and expenses and the Transaction Expenses of the Company except for the fees and expenses of
Ernst & Young in connection with the review of the Management Accounts in accordance with SAS 100
(Interim Financial Reports) pursuant to Section 4.14 which shall be borne by VisionChina,
whether or not the transactions contemplated hereby and in the Ancillary Documents are consummated.
VisionChina shall bear its own Transaction Expenses, whether or not the transactions contemplated
hereby and the Ancillary Documents are consummated.

          Section 8.10. Amendments. This Agreement may not be amended, modified or
supplemented except upon the execution and delivery of a written agreement executed by VisionChina,
Vision Best, Digital Value, the Company and the Shareholder Representative.

          Section 8.11. Waivers; Remedies Cumulative. Any of the terms or conditions of this
Agreement which may be lawfully waived may be waived in writing at any time by VisionChina if
VisionChina, Vision Best or Digital Value are entitled to the benefits thereof or the Company and
the Shareholder Representative if the Company and the Participating DMG Shareholders are entitled
to the benefits thereof. Any waiver of any of the terms and conditions of this Agreement by
VisionChina, the Company or the Shareholder Representative shall be binding only if set forth in an
instrument in writing signed on behalf of such party. No failure or
delay on the part of any party hereto in the exercise of any right hereunder will impair such
right or be construed to be a waiver of, or acquiescence in, any breach of any representation,
warranty or agreement herein, nor will any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive to, and not exclusive of, any rights or
remedies otherwise available.

          Section 8.12. Specific Performance. The parties agree that irreparable damage would
occur in the event any provision of this Agreement is not performed in accordance with the terms
hereof or were otherwise breached. It is accordingly agreed that the parties shall be entitled to
injunctive relief to prevent breaches of this Agreement and to seek specific performance of the
terms hereof, in addition to any other remedy at law or equity.

          Section 8.13. Governing Law; Enforcement. This Agreement shall be governed by and
construed under the laws of the State of New York. Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in the State of New York for the
adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby and hereby irrevocably waives, and agrees not to assert in any such suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action

52

 

or proceeding is brought in an inconvenient forum or that the venue
of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law.

          Section 8.14. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall constitute one and
the same agreement

[Remainder of this page intentionally left blank]

53

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first written above by their respective officers thereunto duly authorized.

	 	 	 	 	 
	 	VISIONCHINA MEDIA INC.

 	 
	 	By:  	/s/ Limin Li
 	 
	 	 	Name:  	Limin Li 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 
	 	VISION BEST LIMITED

 	 
	 	By:  	/s/ Limin Li
 	 
	 	 	Name:  	Limin Li 	 
	 	 	Title:  	Director 	 
	 
	 	DIGITAL VALUE HOLDINGS LIMITED

 	 
	 	By:  	/s/ Limin Li
 	 
	 	 	Name:  	Limin Li 	 
	 	 	Title:  	Director 	 
	 
	 	DIGITAL MEDIA GROUP COMPANY LIMITED

 	 
	 	By:  	/s/ Thomas Gai Tei Tsao
 	 
	 	 	Name:  	Thomas Gai Tei Tsao 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	SHAREHOLDER REPRESENTATIVE SERVICES LLC, solely in
its capacity as Shareholder Representative

 	 
	 	By:  	/s/ Paul Koenig
 	 
	 	 	Name:  	Paul Koenig 	 
	 	 	Title:  	Manager

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]