Document:

Exhibit  EX-10.1

FOCUS MEDIA HOLDING LIMITED

2006 EMPLOYEE SHARE OPTION PLAN

1. Purposes of the Plan.

The purposes of this Employee Share Option Plan are to attract and retain the best available
personnel, to provide additional incentive to Employees, Directors and Consultants and to promote
the success of the Company’s business.

2. Definitions.

As used herein, the following definitions shall apply:

2.1 “Administrator” means the Board or any of the Committees appointed to administer the Plan.

2.2 “Applicable Laws” means the legal requirements relating to the administration of share
incentive plans, if any, under applicable provisions of the U.S. federal securities laws, the U.S.
state corporate and securities laws, the Code, the rules of any applicable stock exchange or
national market system, and the laws and rules of any jurisdiction outside the U.S. applicable to
Options, SARs or Restricted Shares granted to residents therein.

2.3 “Board” means the Board of Directors of the Company.

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

2.5 “Committee” means any committee appointed by the Board to administer the Plan, and
initially the Compensation Committee of the Company, provided that the Committee shall consist of
not fewer than two (2) members of the Board, and shall, following the Registration Date and, solely
to the extent required to comply with Applicable Laws, be composed of “non-employee” directors
within the meaning of Rule 16b-3 as promulgated under the Exchange Act and “outside directors”
within the meaning of the Code. To the extent the Plan is administered by the Board, the term
“Committee” shall refer to the Board.

2.6 “Company” means Focus Media Holding Limited, a company incorporated under the laws of the
Cayman Islands.

2.7 “Consultant” means any person (other than an Employee or a Director) who is engaged by the
Company or any Related Entity to render consulting or advisory services to the Company or such
Related Entity or any other selective persons the Administrator determines provides, directly or
indirectly, bona fide value to the Company or any Related Entity. The term “Consultant” shall
include any company, trust, special purpose vehicle or other legal entity owned by such person.

2.8 “Continuous Service” means that the provision of services to the Company or a Related
Entity in any capacity of Employee, Director or Consultant, is not interrupted or terminated.
Continuous Service shall not be considered interrupted in the case of (i) any approved leave of
absence, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of
Employee, Director or Consultant, or (iii) any change in status as long as the individual remains
in the service of the Company or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Option Agreement). An approved leave of absence
shall include sick leave, maternity leave, or any other authorized personal leave. For purposes of
Incentive Share Options, no such leave may exceed ninety (90) days, unless re-employment upon
expiration of such leave is guaranteed by statute or contract.

2.9 “Corporate Transaction” means any of the following transactions to which the Company is a
party:

(i) a merger or consolidation or reorganization in which the Company is not the surviving
entity; or

(ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Company (including the share capital of the Company’s Subsidiaries).

2.10 “Director” means a member of the Board or the board of directors of any Related Entity.

2.11 “Disability” means that an Optionee is permanently unable to carry out the
responsibilities and functions of the position held by the Optionee by reason of any medically
determinable physical or mental impairment as determined by the Administrator. An Optionee will
not be considered to have incurred a Disability unless he or she furnishes proof of such impairment
sufficient to satisfy the Administrator in its discretion.

2.12 “Effective Date” means the date on which a Grant of Options and/or SARs and/or Restricted
Shares shall take effect in accordance with Option Agreement.

2.13 “Employee” means any person, including an Officer or Director, who is an employee of the
Company or any Related Entity. The term “Employee” shall include any company, trust, special
purpose vehicle or other legal entity owned by such employee. The payment of an independent
director’s fee by the Company or a Related Entity shall not be sufficient to constitute
“employment” of such person by the Company.

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

2.15 “Fair Market Value” means, as of any date, the value of Ordinary Shares as follows:

(a) Where there exists a public market for the Ordinary Shares, the Fair Market Value shall be
(i) the closing price for a Share for the last market trading day prior to the time of the
determination (or, if no closing price was reported on that date, on the last trading date on which
a closing price was reported) on the stock exchange determined by the Administrator to be the
primary market for the Ordinary Shares or the Nasdaq National Market, whichever is applicable, or
(ii) if the Ordinary Shares are not traded on any such exchange or national market system, the
average of the closing bid and asked prices of a Share on the Nasdaq Small Cap Market for the day
prior to the time of the determination (or, if no such prices were reported on that date, on the
last date on which such prices were reported), in each case, as reported in The Wall Street Journal
or such other source as the Administrator deems reliable; or

(b) In the absence of an established market for the Ordinary Shares of the type described in
(a), above, the Fair Market Value thereof shall be determined by the Administrator in good faith by
reference to (i) the valuation price made by an independent appraiser appointed by the
Administrator; (ii) the placing price of the latest private placement of the Shares and (iii) the
development of the Company’s business operations since such latest private placement.

2.16 “Grant” means the number of Options and/or SARs and/or Restricted Shares and/or
Restricted Share Units granted to an Optionee at any time in accordance with Section 6 hereof.

2.17 “Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing the Optionee’s household (other than a tenant or employee), a trust in which
these persons (or the Optionee) have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the Optionee) control the management of assets, and any other
entity in which these persons (or the Optionee) own more than fifty percent (50%) of the voting
interests.

2.18 “Incentive Share Option” means an Option intended to qualify as an incentive share option
within the meaning of Section 422 of the Code.

2.19 “Liquidation Event” means a complete dissolution or liquidation of the Company.

2.20 “Non-Statutory Share Option” means an Option not intended to qualify as an Incentive
Share Option within the meaning of Section 422 of the Code.

2.21 “Officer” means a person who is an officer of the Company or a Related Entity within the
meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder or,
to the extent applicable, other Applicable Laws.

2.22 “Old Plans” means the Employee Share Option Schemes of the Company adopted in 2003 and
2005.

2.23 “Option” means an option to purchase Shares pursuant to an Option Agreement granted under
the Plan, as amended.

2.24 “Optionee” means an Employee, Director or Consultant (including any company, trust,
special purpose vehicle or other legal entity owned by such Employee, Director or Consultant) who
receives a Grant under the Plan.

2.25 “Option Agreement” means the written agreement evidencing the grant of an option and/or
SARs and/or Restricted Shares executed by the Company and the Optionee, including any amendments
thereto.

2.26 “Option Period” means the period commencing on the Effective Date of a Grant and ending
no later than on the day prior to the tenth anniversary of such Effective Date.

2.27 “Ordinary Share” means a share of US$0.00005 nominal or par value, of the Company, or, if
applicable, the number or fraction of American Depositary Receipt representing an Ordinary Share.

2.28 “Parent” means a “parent corporation”, whether now or hereafter existing, as defined in
Section 424(e) of the Code or, to the extent applicable, other Applicable Laws.

2.29 “Plan” means this 2006 Employee Share Option Plan of Focus Media Holding Limited, as
Amended and Restated as set forth herein and as may be amended from time to time.

2.30 “Registration Date” means the first to occur of (a) the closing of the first sale to the
general public of (i) the Ordinary Shares or (ii) the same class of securities of a successor
corporation (or its Parent) issued pursuant to a Corporate Transaction in exchange for or in
substitution of the Ordinary Shares, pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act or an equivalent
thereof in a jurisdiction outside the U.S.; and (b) in the event of a Corporate Transaction, the
date of the consummation of the Corporate Transaction if the same class of securities of the
successor corporation (or its Parent) issuable in such Corporate Transaction shall have been sold
to the general public pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act or an equivalent thereof in a
jurisdiction outside the U.S., on or prior to the date of consummation of such Corporate
Transaction.

2.31 “Related Entity” means any Parent, Subsidiary and any other corporation, partnership,
limited liability company or other business entity in which the Company, its Parent or a Subsidiary
holds a substantial ownership interest, directly or indirectly.

2.32 “Securities Act” means the U.S. Securities Act of 1933, as amended.

2.33 “SAR” means a stock appreciation right entitling the Grantee to Shares or cash
compensation, as established by the Administrator, measured by appreciation in the value of
Ordinary Shares.

2.34 “Shares” mean Ordinary Shares of the Company.

2.35 “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as
defined in Section 424(f) of the Code or, to the extent applicable, other Applicable Laws.

3. Shares Subject to the Plan.

3.1 Subject to the provisions of Section 10.1 below and to any amendment of the Plan, the
maximum amount of Shares with respect to which Grants may be made under this Plan when aggregated
with any other Shares issued or capable of being issued on the exercise of all other Grants
previously granted under the Old Plans for 2003 and 2005 shall not exceed twenty percent (20%) and
five percent (5%) of the issued share capital of the Company, respectively, from time to time.
Moreover, subject to any amendment of this Plan by the Board or the Committee pursuant to Section
12 below, in the three years following the date of enactment of this Plan, Grants of Options
(including Incentive Stock Options) issued under this Plan shall not exceed in the aggregate three
and six tenth percent (3.6%) of the issued share capital of the Company, outstanding from time to
time. In addition, the maximum aggregate number of Shares which may be issued pursuant to all
Grants (including Incentive Stock Options) shall be increased by any Shares that are represented by
awards under the Company’s Old Share Option Plan that are forfeited, expire or are cancelled
without delivery of the Shares or which result in forfeiture of the Shares back to the Company on
or after the adoption of this Plan. The Shares to be issued pursuant to Grants must be authorized,
but unissued.

3.2 Any Shares covered by a Grant (or portion of a Grant) which is forfeited or cancelled,
expires or is settled in cash or otherwise, shall be deemed not to have been issued for purposes of
determining the maximum aggregate number of Shares which may be issued under the Plan. If any
unissued Shares are retained by the Company upon exercise of a Grant in order to satisfy the
exercise price for such Grant or any withholding taxes due with respect to such Grant, such
retained Shares subject to such Grant shall become available for future issuance under the Plan
(unless the Plan has terminated). Shares that actually have been issued under the Plan pursuant to
a Grant shall not be returned to the Plan and shall not become available for future issuance under
the Plan.

4. Administration of the Plan.

4.1 Plan Administrator. The Committee shall administer the Plan in accordance with its terms.

4.2 Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan
(including any other powers given to the Administrator hereunder), and except as otherwise provided
by the Board, the Administrator shall have the authority, in its discretion:

(a) to determine the eligibility of Grants, the classes of bands and the range of number of
Shares covered in each Band, to authorize and determine the number of shares of each Grant;

(b) to approve forms of Option Agreements for use under the Plan;

(c) to determine to grant Options with or without SARs;

(d) to determine that the Options granted shall be either Incentive Share Options or
Non-Statutory Share Options or a combination thereof;

(e) to determine the exercise price applicable to the Share covered by each Option;

(f) to determine the Option Period applicable thereto;

(g) to establish additional terms, conditions, rules or procedures to accommodate the rules or
laws of applicable foreign jurisdictions and to afford Optionees favourable treatment under such
rules or laws; provided, however, that no Grant shall be granted under any such
additional terms, conditions, rules or procedures with terms or conditions which are inconsistent
with the provisions of the Plan;

(h) to amend the terms of any outstanding Grant granted under the Plan;

(i) to construe and interpret the terms of the Plan and Grants, including without limitation,
any notice of Grant or Option Agreement, granted pursuant to the Plan; and

(j) to take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

5. Eligibility.

Incentive Share Options may be granted only to Employees of the Company, a Parent or a
Subsidiary. Grants other than Incentive Share Options may be granted to Employees, Directors and
Consultants. An Employee, Director or Consultant who has been granted a Grant may, if otherwise
eligible, be granted additional Grants. Grants may be granted to such Employees, Directors or
Consultants who are residing in foreign jurisdictions as the Administrator may determine from time
to time.

6. Type of Grants; Terms and Conditions of Grants.

Grants under the Plan may consist of one or more of the following: Options, SARs, or
Restricted Shares (which may be granted as Restricted Share units). Awards of Restricted Shares
may provide the Optionee with dividends or dividend equivalents and voting rights prior to vesting.
Each Grant shall be designated in the Option Agreement.

6.1 Options.

(a) Option Designation. In the case of an Option, the Option shall be designated as
either an Incentive Share Option or a Non-Statutory Share Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of Shares subject to Options
designated as Incentive Share Options which become exercisable for the first time by an Optionee
during any calendar year (under all plans of the Company or any of its Parent or Subsidiary)
exceeds US$100,000, such excess Options, to the extent of the Shares covered thereby in excess of
the foregoing limitation, shall be treated as Non-Statutory Share Options. For this purpose,
Incentive Share Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares shall be determined as of the grant date of the relevant
Option.

(b) Option Exercise Price. The exercise price of an Option shall be the Fair Market
Value per Share on the date of grant.

(c) Consideration. In addition to any other types of consideration the Administrator
may determine, the Administrator is authorized to accept as consideration for Shares issued under
the Plan the following: (i) cash or check in U.S. dollars (in connection therewith the
Administrator may require the Optionee to provide evidence that the funds were taken out of any
relevant non-U.S. jurisdiction in accordance with applicable foreign exchange control laws and
regulations); (ii) cancellation of indebtedness owed by the Company to the Optionee; (iii)
promissory note; (iv) Shares previously acquired by the Optionee valued at the Fair Market Value at
the time of the exercise; (v) withholding from delivery to the Optionee that number of whole Shares
having a Fair Market Value at the time of the exercise equal to the exercise price payable to the
Company upon exercise of the Option; or (vi) any combination of the foregoing methods of payment.

(d) Easy-Sale Exercise.

(i) Exercise/Sale. An Option Agreement may, but need not, provide that, if Shares are
publicly traded, all or part of the exercise price of an Option and any withholding taxes may be
paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a
securities broker approved by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company.

(ii) Exercise/Pledge. An Option Agreement may, but need not, provide that, if Shares
are publicly traded, all or part of the exercise price of an Option and any withholding taxes may
be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge
Shares to a securities broker or lender approved by the Company, as security for a loan, and to
deliver all or part of the loan proceeds to the Company.

6.2 SARs.

(a) Grant. SARs may be granted in tandem with an Option, in addition to an Option, or
may be freestanding and unrelated to an Option. SARs granted in tandem or in addition to an Option
may be granted either at the same time as the Option or at a later time. SARs shall vest and
become exercisable at a rate determined by the Administrator, and shall remain exercisable for such
period as specified by the Administrator. A SAR shall entitle the Optionee to receive from the
Company an amount equal to the excess of the Fair Market Value of a Share on the exercise of the
SAR over the Fair Market Value of a Share on the date of grant or, in the case of an SAR granted in
tandem with an Option, the per Share exercise price applicable to such Option.

(b) Settlement. The Administrator shall determine in its sole discretion whether the
SAR shall be settled in cash, Shares or a combination of cash and Shares. In no event may any
Optionee receive grants of SARs with respect to more than three percent (3%) of the issued share
capital of the Company in any calendar year.

6.3 Restricted Shares.

(a) Grant. Restricted Shares may be granted in the form of Shares or share units
having a value equal to an identical number of Shares. The employment conditions and the length of
the period for vesting of Restricted Shares shall be established by the Administrator at time of
grant. In the event that a share certificate is issued in respect of Restricted Shares, such
certificate shall be registered in the name of the Optionee but shall be held by the Company until
the end of the restricted period. During the restricted period, Restricted Shares may not be sold,
assigned, transferred or otherwise disposed of, or pledged or hypothecated as collateral for a loan
or as security for the performance of any obligation or for any other purpose as the Administrator
shall determine.

(b) Settlement. The Administrator shall determine in its sole discretion whether
Restricted Shares granted in the form of share units shall be paid in cash, Shares, or a
combination of cash and Shares.

6.4 Conditions of Grant; Vesting and Repurchase Right. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each Grant including, but
not limited to, the Grant vesting schedule, repurchase provisions, rights of first refusal,
forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of
the Grant, payment contingencies, and satisfaction of any performance criteria, provided,
however, unless specifically provided otherwise in the relevant Option Agreement, a total
of one-third (1/3rd) of the Grant shall vest at the 1st anniversary following
the issuance of such Grant and, subsequently, a total of one-thirty-sixth (1/36th) of
the Grant shall vest at the end of each month of the 2nd and 3rd years for so
long as the Optionee provides Continuous Service to the Company, such that the entire Grant shall
be fully vested three (3) years from the date of the Grant.

6.5 Acquisitions and Other Transactions. The Administrator may issue Grants under the Plan in
settlement, assumption or substitution for, outstanding Grants or obligations to grant future
Grants in connection with the Company or a Related Entity acquiring another entity, an interest in
another entity or an additional interest in a Related Entity whether by merger, share purchase,
asset purchase or other form of transaction.

6.6 Deferral of Grant Payment. The Administrator may establish one or more programs under the
Plan to permit selected Optionees the opportunity to elect to defer receipt of consideration upon
exercise of a Grant, satisfaction of performance criteria, or other event that absent the election
would entitle the Optionee to payment or receipt of Shares or other consideration under a Grant.
The Administrator may establish the election procedures, the timing of such elections, the
mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares
or other consideration so deferred, and such other terms, conditions, rules and procedures that the
Administrator deems advisable for the administration of any such deferral program.

6.7 Award Exchange Programs. The Administrator may establish one or more programs under the
Plan to permit selected Optionees to exchange a Grant under the Plan for one or more other types of
Grants under the Plan on such terms and conditions as determined by the Administrator from time to
time.

6.8 Separate Programs. The Administrator may establish one or more separate programs under
the Plan for the purpose of issuing particular forms of Grants to one or more classes of Optionees
on such terms and conditions as determined by the Administrator from time to time.

6.9 Early Exercise. The Option Agreement may, but need not, include a provision whereby the
Optionee may elect, at any time while being an Employee, Director or Consultant, to exercise any
part or all of the Grant prior to full vesting of the Grant. Any unvested Shares received pursuant
to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity
or to any other restriction the Administrator determines to be appropriate.

6.10 Option Period. The Option Period shall be the term stated in the Option Agreement up to
ten (10) years from the Effective Date of Grant thereof or such shorter term as may be provided in
the Option Agreement.

6.11 Transferability of Grants. No Grant may be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee;
provided, however, during the lifetime of the Optionee, SARs may be transferred by
gift to members of the Optionee’s Immediate Family to the extent and manner determined by the
Administrator.

6.12 Time of Grants. The date of grant of a Grant shall for all purposes be the date on which
the Administrator makes the determination to grant such Grant, or such other date as is determined
by the Administrator. Notice of the grant determination shall be given to each Employee, Director
or Consultant to whom a Grant is so granted within a reasonable time after the date of such grant.
Unless otherwise determined by the Administrator, Grants will be made twice a year.

6.13 Buyout Provisions. The Administrator may at any time offer to buy out for a payment in
cash or Shares or other consideration, any Grant previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee at the time such
offer is made.

7. Withholding.

The Company shall have the right to deduct from any payment to be made pursuant to the Plan
the amount of any taxes required by law to be withheld therefrom, or to require an Optionee to pay
to the Company such amount required to be withheld prior to the issuance or delivery of any Shares
or the payment of cash under the Plan. The Administrator may, in its discretion, permit an
Optionee to elect to satisfy such withholding obligation by having the Company retain the number of
Shares whose Fair Market Value equals the amount required to be withheld. Any fraction of a Share
required to satisfy such obligation shall be disregarded and the amount due shall instead be paid
in cash by the Optionee.

8. Exercise of Grant.

8.1 Procedure for Exercise; Rights as a Shareholder.

(a) Any Grant granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator under the terms of the Plan and specified in the Option
Agreement provided always that any calculation of any period for vesting as aforesaid shall (i) be
suspended during any period beginning when the Optionee ceases Continuous Service until such
Optionee resumes Continuous Service, (ii) be suspended during the period of suspension referred to
in Section 8.2 below, and (iii) cease upon death of the Optionee and upon the lapse of the Option
for whatsoever reason and in such event of such cessation any vesting which has not taken place
shall automatically cease and lapse, and provided further that the Company shall not be liable in
any way nor shall the Optionee at any time have any rights (whatsoever) against the Company in
relation to such suspension, cessation of and/or lapse of vesting as aforesaid.

(b) A Grant shall be deemed to be exercised when written notice of such exercise has been
given to the Company, as in a form required under the applicable Option Agreement, in accordance
with the terms of the Grant by the person entitled to exercise the Grant and full payment for the
Shares is made with respect to which the Grant is exercised. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the share certificate evidencing such Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to Shares subject to a Grant,
notwithstanding the exercise of an Option or other Grant. The Company shall issue (or cause to be
issued) such share certificate as soon as practicable following the exercise of the Grant. No
adjustment will be made for a dividend or other right for which the record date is prior to the
date the share certificate is issued, except as provided in the Option Agreement or Section 10,
below.

8.2 Misconduct. If an Optionee is found guilty of serious misconduct or has been convicted of
any criminal offence involving his integrity or honesty, any Option of his then subsisting shall
automatically lapse and become of no further effect on the date such verdict is given by the
relevant court of law, body or authority, and if any investigation is being carried out on the
Optionee in respect of any of the matters referred to above or if his office or duties as an
Employee or Consultant is/are suspended in connection therewith, then his right to exercise the
Option shall automatically be suspended for such period as the Board may in its discretion
determine.

8.3 Death or Disability of Optionee.

(a) If an Optionee’s Continuous Service is terminated due to death or Disability more than
three (3) months after such Optionee commenced service for the Company, the portion of the Grant
that would have vested at the 1st anniversary of such Optionee’s Continuous Service
shall automatically vest and be exercisable in accordance with and subject to paragraph (c) below.

(b) If an Optionee’s Continuous Service is terminated due to death or Disability any time
following any anniversary of such Optionee’s Continous Service, the portion of the Grant that would
have vested between such anniversary and the subsequent anniversary (and which have not already
vested) of such Optionee’s Continuous Service shall automatically vest and be exercisable in
accordance with and subject to paragraph (c) below.

(c) If an Optionee’s Continuous Service is terminated due to death or Disability, the Option
or SAR may be exercised at any time within twelve (12) months following the date of death or
termination of employment due to Disability, in the case of death, by the Optionee’s estate or by a
person who acquired the right to exercise the Option or SAR by bequest or inheritance, or, in the
case of Disability, by the Optionee, but in any case (i) only to the extent the Optionee was
entitled to exercise the Option or SAR at the date of his or her termination of Continuous Service
by death or Disability or (ii) to such further extent as set forth in paragraphs (a) and (b) above;
provided, however, that no Option or SAR shall be exercisable after the expiration
of the term set forth in the Option Agreement. To the extent that such Optionee was not entitled
to exercise such Option or SAR at the date of his or her termination of employment by death or
Disability as augmented by the provisions of paragraphs (a) and (b) above or if such Option or SAR
is not exercised (to the extent it could be exercised) within the time specified herein, the Option
or SAR shall terminate.

8.4 Extension of Time to Exercise. Notwithstanding anything to the contrary in this Section
8, the Administrator may at any time and from time to time prior to the termination of a
Non-Statutory Share Option, with the consent of the Optionee, extend the period of time during
which the Optionee may exercise his or her Non-Statutory Share Option following the date the
Optionee’s ceases Continuous Services; provided, however, that (a) the maximum
period of time during which a Non-Statutory Share Option shall be exercisable following such
termination date shall not exceed an aggregate of six (6) months, (b) the Non-Statutory Share
Option shall not become exercisable after the expiration of the term of such Option as set forth in
the Option Agreement as a result of such extension, and (c) notwithstanding any extension of time
during which the Non-Statutory Share Option may be exercised, such Option, unless otherwise amended
by the Administrator, shall only be exercisable to the extent to which the Optionee was entitled to
exercise it on the date the Optionee ceased Continuous Services. To the extent that such Optionee
was not entitled to exercise the Option at the date of such termination, or if such Optionee does
not exercise an Option which the Optionee was entitled to exercise within the time specified
herein, the Option shall terminate.

8.5 No compensation. Upon the lapse of an Option for whatsoever reason, under no circumstances
whatsoever shall an Optionee or any person whomsoever be entitled to any compensation for or in
respect of any consequential diminution or extinction of any rights or benefits (actual or
prospective) under and/or in relation to such Option subsisting prior to such lapse or otherwise in
anyway in connection with the Plan or such Option, including without limitation, where such lapse
is by reason of termination of the Optionee’s office or employment by the Company or any Subsidiary
which is a breach of the contract of employment or otherwise, and/or whether the Optionee has any
rights against the Company or any Subsidiary for and/or in relation to such termination.

9. Conditions Upon Issuance of Shares.

9.1 No Violation of Law. Shares shall not be issued pursuant to a Grant or the exercise of a
Grant unless the exercise of such Grant and the issuance and delivery of such Shares pursuant
thereto shall comply with all Applicable Laws, and the Administrator may further subject any
issuance of Shares to the approval of counsel for the Company with respect to such compliance.

9.2 Execution of Documents. As a condition to the exercise of a Grant, the Administrator may
require the person exercising such Grant to execute an investment representation statement
acceptable to the Company or a share purchase agreement acceptable to the Company, each in forms
approved by the Administrator from time to time, in addition to any other instrument the
Administrator deems necessary or advisable.

10. Adjustments Upon Changes in Capitalization or Corporate Transaction.

10.1 Adjustments upon Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding Grant, and the number
of Shares which have been authorized for issuance under the Plan but as to which no Grants have yet
been granted or which have been returned to the Plan, the exercise or purchase price of each such
outstanding Grant, as well as any other terms that the Administrator determines require adjustment
shall be proportionately adjusted for (a) any increase or decrease in the number of issued Shares
resulting from a share split, reverse share split, share dividend, combination or reclassification
of the Shares, or similar transaction affecting the Shares, (b) any other increase or decrease in
the number of issued Shares effected without receipt of consideration by the Company, or (c) as the
Administrator may determine in its discretion, any other transaction with respect to Shares to
which Section 424(a) of the Code applies or a similar transaction; provided,
however, that conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” Such adjustment shall be made by the
Administrator and its determination shall be final, binding and conclusive. Except as the
Administrator determines, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason hereof shall be
made with respect to, the number or price of Shares subject to a Grant.

10.2 Corporate Transaction. In the event of a proposed Corporate Transaction, subject to the
actual consummation of the proposed transaction, each outstanding Grant shall automatically become
fully vested and exercisable, unless the Grant is assumed or substituted with an equivalent option
or right by the successor corporation or the Parent or Subsidiary thereof. If the successor
corporation refuses to assume or substitute for the Grant, the Administrator shall notify the
Optionee that the Grant shall be fully vested and exercisable with respect to all of the Shares
underlying the Grant (including Shares as to which it would not otherwise be vested or exercisable)
for a period of fifteen (15) days from the date of such notice. If the Grant thus becomes fully
vested and exercisable but is not exercised during this fifteen (15) day period, it shall terminate
immediately prior to the effective time of such Corporate Transaction. For the purposes of this
Section 10.2, the Grant shall be considered assumed or substituted with an equivalent option or
right if, in connection with the Corporate Transaction, the Grant is replaced with a comparable
option or right with respect to shares of the successor corporation or Parent or Subsidiary thereof
or is replaced with a cash incentive program of the successor corporation or Parent or Subsidiary
thereof which preserves the compensation element of such Grant existing at the time of the
Corporate Transaction and provides for subsequent payout in accordance with the same vesting
schedule applicable to such Grant. The determination of Grant comparability above shall be made by
the Administrator and its determination shall be final, binding and conclusive.

10.3 Liquidation Event. In the event of a proposed Liquidation Event, the Administrator shall
notify each Optionee of the proposed event at least twenty (20) days prior to the proposed
effective date of the Liquidation Event. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Grant until ten (10) days prior to the proposed
effective date for the Liquidation Event with respect to all Shares underlying the Grant (including
Shares as to which it would not otherwise be vested or exercisable), subject to the actual
completion of the Liquidation Event at the time and in the manner contemplated. In addition, the
Administrator may provide that any Company repurchase option applicable to any Shares issued upon
grant or an exercise of a Grant shall lapse as to all Shares, subject to the actual completion of
the Liquidation Event at the time and in the manner contemplated. Any unexercised Grant shall
terminate immediately prior to effective time of the Liquidation Event.

11. Effective Date and Term of Plan.

The Plan, and any amendments to the Plan, shall become effective upon its adoption by the
Board. It shall continue in effect until the end of 2008 unless sooner terminated. Subject to
Applicable Laws, Grants may be granted under the Plan upon its becoming effective.

Upon the effectiveness of this Plan, no additional grants of Options shall be made under the
Old Plans. Options previously issued and outstanding pursuant to the Old Plans shall continue to
be governed under the rules of the Old Plans.

12. Amendment, Suspension or Termination of the Plan.

The Board may at any time amend, suspend or terminate the Plan. No Grant may be granted
during any suspension of the Plan or after termination of the Plan. Any amendment, suspension or
termination of the Plan (including termination of the Plan pursuant to this Section 12) shall not
affect Grants already granted, and such Grants shall remain in full force and effect as if the Plan
had not been amended, suspended or terminated, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and
the Company.

13. Availability of Shares; No Issuance in Violation of Law.

13.1 Availability of Shares. The Company, during the term of the Plan, will at all times keep
available such number of unissued Shares as shall be sufficient to satisfy the requirements of the
Plan.

13.2 No Issuance in Violation of Law. The inability of the Company to obtain authority from
any regulatory body having jurisdiction under Applicable Law, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.

14. No Effect on Terms of Employment/Consulting Relationship.

The Plan shall not confer upon any Optionee any right with respect to the Optionee’s
Continuous Service, nor shall it interfere in any way with his or her right or the Company’s or a
Related Entity’s right to terminate the Optionee’s Continuous Service at any time, with or without
cause.

15. No Effect on Retirement and Other Benefit Plans.

Except as specifically required by law or provided in a retirement or other benefit plan of
the Company or a Related Entity, Grants shall not be deemed compensation for purposes of computing
benefits or contributions under any retirement plan of the Company or a Related Entity, and shall
not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently
instituted under which the availability or amount of benefits is related to level of compensation.
The Plan is not a “Retirement Plan” or “Welfare Plan” under the U.S. Employee Retirement Income
Security Act of 1974, as amended.

16. Liability of the Company; Consents.

16.1 Qualification as Incentive Share Option. Neither the Company nor any Related Entity
shall be liable to any Optionee or to any other person if it is determined that an Option intended
to be an Incentive Share Option granted hereunder does not qualify as incentive share options
within the meaning of Section 422 or the Code.

16.2 Consents. Optionee shall be responsible for obtaining any governmental or other official
consent that may be required by any country or jurisdiction in order to permit the grant or
exercise of any Grant. Neither the Company nor any Related Entity shall be responsible for any
failure by an Optionee to obtain such consent or for any tax or other liability to which an
Optionee may become subject to as a result of his or her participation in the Plan.Joint Venture Agreement

    
      

    

    Nutech
      Digital, Inc.

    3841
      Hayvenhurst Drive

    Encino,
      CA 91436

    

    As
      of
      January 15, 2007

    

    Mr.
      Troy
      Carter 

    9100
      Wilshire Blvd.

    Suite
      520E

    Beverly
      Hills, CA 90212

    

    Re:
      Nu-Tech
      Digital, Inc. - Joint Venture with

    The
      Co-Op, LLC

    

    Dear
      Mr.
      Carter:

    

    This
      letter expresses our understanding with respect to your entering into a joint
      venture with NuTech Digital, Inc., a California corporation (the “Company”) and
      the Company’s Agreement to create a new division to be run by you and/or your
      corporate designee (currently to be known as the “The Co-Op, LLC division”,
“CMG” and/or the “CMG Division”) which will operate as a separate division of
      the Company.

    

    1.
      You,
      Troy Carter and/or your corporate designee (“Carter”), will become a director of
      the Company, with the title of Chairman/CEO of the CMG Division and will operate
      the CMG Division as a separate division of the Company (i.e. CMG shall not
      be
      operated as a separate legal entity). CMG will be responsible for operating
      its
      business consistent with applicable legal requirements, sound business practices
      and the overall policies of the Company. Although CMG will be operated as a
      separate division for which separate financials will be maintained, the revenues
      and earnings of the CMG Division shall be reported as part of the revenues
      and
      earnings of the Company.

    

    2.
      In
      order to enable the Company to successfully go forward with the CMG Division,
      Carter will provide content to the CMG Division which is owned by, licensed
      to
      or otherwise controlled by Carter, to be used or developed for use in business
      to be conducted by the CMG Division. 

    

    3.
      Carter
      will enter into a non-exclusive consulting agreement with the Company (the
      “Consultant Agreement”) on commercially reasonable terms to be determined by the
      parties, wherein Carter shall (i) be the Chief Executive Officer of the CMG
      Division and (ii) agree to devote time and attention to the Company and the
      CMG
      Division thereby utilizing his skill, labor and attention to advance the general
      best interests of the Company and the CMG Division. Carter
      shall dedicate that amount of time necessary to maximize Company's business
      within the CMG Division, commensurate with similar executives involved in
      similar situations. Carter
      has all requisite power and authority to execute this agreement, to consummate
      this transaction and to carry out and perform Carter’s obligations under this
      agreement. 

     

    
 

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    4.
      The
      Company will issue to Carter, upon the execution of the Consultant Agreement,
      fifteen million (15,000,000) shares of the Company’s common stock (the “Carter
      Shares”) which shall constitute approximately 30 percent of the issued and
      outstanding shares of the Company’s common stock. Such shares shall be, to the
      greatest extent possible, unrestricted and unlegended; and those restricted
      shares shall be with the shortest possible time period prior to removal of
      the
      any restriction on sale (not to exceed one (1) year from date of signature
      herein). Carter shall have all customary anti-dilution rights with respect
      to
      maintaining his proportionate share of ownership of outstanding shares of the
      Company. Company
      shall grant Carter so-called “piggy-back registration rights”, to be include on
      Company’s future Registration Statement. 

    
 

    5.
      Compensation to Carter and other employees of the Company who provide services
      to the CMG Division shall be approved by the Company’s Board of Directors.
      Company shall continue to operate its business in normal fashion, as an active
      business and a “going concern” (i.e. not in name only and without inactive
      operations) and shall use its best efforts to reduce its existing debt from
      revenues generated by Company outside of the CMG division. Ten (10%) percent
      of
      the CMG Division’s gross
      revenues shall be paid to Company, however such payment shall be utilized
      exclusively by Company for costs associated with its Public Filings, press
      releases and/or annual meetings. This ten (10%) percent payment shall be capped
      at one third (33.33%) of the actual expenses associated with filings, press
      releases, and annual meetings.  

     

    6.
      The
      Board of Directors, after Carter joins the Company, will consist of four
      members, three of whom shall be chosen by Carter and one of whom shall be or
      be
      chosen by Lee Kasper (“Kasper”). Three members of the Board of Directors will
      resign subsequent to closing of this transaction, and at such time, the Company
      will appoint Carter and such two other individuals designated by Carter to
      become Board Members. All costs related to the addition of the Carter designees
      to the Company’s Board of Directors shall be divided between Carter and Company
      upon mutual agreement, including the cost of Directors’ and Officers’ Liability
      Insurance.

    

    7.
      The
      Board shall have agreed to appoint Kapser as the Company’s Chief Executive
      Officer with Carter being appointed as head of the CMG Division. Kasper will
      also enter into an employment agreement with the Company on commercially
      reasonable terms to be determined by the Board of Directors in place immediately
      following closing of this transaction. 

    

    8.
      The
      CMG
      Division will be responsible solely for any obligations assumed by the CMG
      Division and will indemnify Company from any claims or actions arising out
      of or
      in connection with any assumed obligations, other than those which were
      materially misrepresented by the Company. Company shall
      be
      fully responsible for, and shall pay any audit or other claims by, any licensor,
      other company or person,

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

     and
      otherwise fulfill any other obligations not expressly comprising the assumed
      obligations, including without limitation, monies owed in respect of accounting
      statements for and/or royalties payable for periods up to the closing date.
      Carter and Carter’s designees is/are not assuming, and shall not be responsible
      for, any indebtedness, liabilities or obligations of Company, whether fixed,
      contingent, or otherwise, except for the assumed obligations. 

     

    9.
      Retained Assets: For the avoidance of doubt, Carter shall retain any cash that
      Carter had on hand on the closing date, and shall retain any business interest
      not specifically delivered to Company at closing.

     

    10.
      Carter and the Company will enter into an indemnification agreement whereby
      Carter and the other Board members designated by Carter will be personally
      indemnified by the Company from any claims, suits, controversies or litigation
      commenced against the Company and/or its Board of Directors arising out of
      the
      Company’s actions, unrelated to the CMG Division, including but not limited to
      any and all claims, suits, controversies and/or debts which were incurred or
      were in existence prior to this transaction. Response, negotiation, payment
      and/or settlement of such claims, suits, controversies or litigation, together
      with payment for same, as well as attorney’s fees and court costs in connection
      therewith, shall be the sole responsibility of Company, outside of the CMG
      Division. 

    

    11.
      The
      Company shall purchase and maintain Errors and Omissions (“E&O”) insurance
      coverage in an amount suitable to sufficiently cover all pre-existing and future
      claims, suits, controversies and/or debts incurred by the Company prior to
      this
      transaction, and shall maintain such E&O coverage for the duration of
      Carter’s (and Carter’s designees’) involvement with Company. Company warrants
      and certifies that its By-Laws empower Company to purchase and maintain such
      E&O coverage, and that Company has the financial wherewithal to purchase and
      to maintain such E&O coverage. Carter and the Carter designees shall have
      the unfettered right to tender immediate resignation with no further
      responsibility for or to the Company should such E&O coverage lapse, or
      should such E&O coverage be denied by a reputable insurer, at any point in
      the future. All costs related to the premiums payable to bind such E&O
      coverage shall be divided between Carter and Company upon mutual
      agreement.

    

    12.
      Representations, warranties, covenants of Company.
      Company represents
      and warrants to Carter as follows: 

    

    a)
      Organization and Qualification:
      Company
      (a) is duly organized, validly existing and in good standing under the laws
      of
      the jurisdiction of its formation; (b) has all requisite power and authority,
      to
      own, lease and operate its properties and to carry on its business as it has
      been and is now being conducted, (c) is duly qualified or licensed to do
      business and in good standing in each jurisdiction in which the ownership or
      lease of its properties or the conduct of its business makes such qualification
      necessary other than in such jurisdictions where the failure to be so qualified
      (individually or in the aggregate) would not have a material adverse effect.
      

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    b)
      Authorization and Validity of Agreement:
      Company
      (a) has all requisite power and the full right and authority to execute this
      agreement, to carry out and perform its obligations under this agreement, and
      to
      consummate the transaction; (b) the execution, delivery and performance by
      Company of this agreement and
      the
      consummation of the transactions contemplated herein, have been or shall be
      duly
      and validly authorized by all necessary action on the part of Company and no
      other action on the part of Company or any other Person is necessary for the
      authorization, execution, delivery or performance by Company of this agreement
      and the consummation of the transactions hereunder; (c)
      this
      Agreement has been duly executed and delivered by Company and, assuming that
      this agreement is duly executed and delivered by Carter, this agreement
      constitutes the valid and binding obligation of Company enforceable in
      accordance with its terms except as limited by any future bankruptcy,
      receivership or similar proceeding; and
      (d)
      the parties executing this document on behalf of Company constitute all parties
      necessary to make the grants and perform all the obligations of Company
      hereunder.

    

    c)
      Financial Statements: Company shall provide
      Carter with all financial statements relating to the Company’s business and
      assets, including balance sheets, income and royalty statements and cash flow
      statements, as of September 30, 2006 (collectively, the “Financial Statements”).
      Company represents that the Financial Statements (a) have been prepared in
      conformity with GAAP, (b) conform to the books and records of Company in all
      material respects, and (c) fairly present the financial position of Company
      as
      of the dates indicated and the results of operations and cash flows for the
      respective periods indicated. Except to the extent reflected or reserved against
      in the Financial Statements, Company has, as of the date of the Financial
      Statements, no liability or obligation of any kind, whether accrued, absolute,
      contingent, unliquidated or otherwise and whether due or to become due
      (including any liability for breach of contract, breach of warranty, torts,
      infringements, claims or lawsuits) or, to the best of Company’s knowledge, any
      assets not reflected on the Financial Statements or otherwise included in any
      documents provided to Carter. Since the date of the Financial Statements,
      Company has not incurred any liability or obligation of any kind that alone
      or
      in the aggregate is material, except in the ordinary course of
      business. 

    

    d)
      Noncontravention:
      Company
      represents and warrants that the execution and delivery of this agreement does
      not, and the consummation of the transactions and compliance with the provisions
      of this agreement will not, conflict with, or result in any violation of or
      default (with or without notice or lapse of time, or both) under, or give rise
      to a right of termination, cancellation or acceleration of any obligation or
      the
      loss of a material benefit under, or result in the creation of any Lien or
      restriction upon any of the Company’s assets.

    

    e)
      Government Consents and Filings: No Person other than Lee Kasper is required
      by
      or with respect to Company in connection with the execution and delivery of
      this
      agreement by Company or the consummation by Company of the transaction; the
      transactions contemplated hereunder between Company and Carter will not diminish
      in any manner the exploitation or any other rights in the assets currently
      enjoyed by Company; and Company’s sale, assignment and transfer of rights to
      Carter under this agreement are not subject to the provisions of the Uniform
      Commercial Code relating to bulk transfers or to the provisions of any similar
      statute, if any, in effect in California. 

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

    f)
      Full
      Disclosure:
      The
      representations and warranties of Company in this Agreement and the statements
      contained in the schedules, certificates, due diligence materials (including
      written financial information) and other writings or information furnished
      and
      to be furnished by or on behalf of Company to Carter pursuant to this agreement,
      when considered as a whole and giving effect to any supplements or amendments
      thereof prior to the closing date, do not and will not contain any untrue
      statement of a material fact and do not and will not omit to state any material
      fact necessary to make the statements herein or therein not misleading, in
      light
      of the circumstances in which they were made. Company represents and warrants
      that all material information concerning the assets and the business of Company
      has been disclosed to Carter.

     

    g)
      Legal
      Proceedings:
      Other
      than those disclosed to Carter, there exist no other suits, actions or
      proceedings or investigations pending or, to the best knowledge of Company,
      threatened against, involving or affecting Company, and/or any of the Company’s
      assets; (ii) no judgment, decree, injunction, rule or order of any Governmental
      Entity applicable to Company; and (iii) no action, suit, proceeding or
      investigation pending or, to the best knowledge of Company, threatened against
      Company that seeks to restrain, enjoin or delay the consummation of the
      transactions between Company and Carter hereunder.

    

    h)
      Compliance
      with Applicable Laws:
      Company
      has in effect all material federal, state, local and foreign governmental
      approvals, authorizations, certificates, filings, franchises, licenses, notices,
      permits and rights (“Licenses”) necessary for Company to own, lease or operate
      its properties and assets and to carry on its business as now conducted in
      all
      material respects, and there has occurred no default under any of such Licenses.
      Company has no reason to believe any Governmental Entity is considering
      limiting, suspending or revoking any of Company’s Licenses. Company is in
      compliance with, has not violated, and has conducted its business so as to
      comply with, the terms of its Licenses and with all applicable statutes, laws,
      ordinances, rules, regulations, judgments, orders or decrees (including, without
      limitation, environmental laws and those relating to health and safety, hiring,
      promotion or pay of employees) of any Governmental Entity.

    

    i)
      Brokers:
      No
      agent, broker, investment banker, financial advisor or other person is or will
      be entitled, by reason of any agreement, act or statement by Company or any
      of
      Company’s affiliates to any financial advisory, broker’s, finder’s or similar
      fee or commission, to reimbursement of expenses or to indemnification or
      contribution in connection with the transaction between Company and Carter,
      and
      Company agrees to indemnify and hold Carter and his respective affiliates,
      harmless from and against any and all claims, liabilities or obligations in
      connection therewith

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    j)
      Tax
      Matters: Company
      hereby
      represents and warrants as follows:

    

    1)
      All
      federal, state, local and foreign tax returns required to be filed by or on
      behalf of, or in which is required to be reported the income, gains, losses,
      deductions, or credits of, Company under the Internal Revenue Code or any other
      applicable statute (“Returns”) have been or will be filed within the time
      prescribed by law (including extensions of time approved by the appropriate
      Governmental Entity). Such Returns accurately and completely set forth or will
      accurately and completely set forth in all material respects all liabilities
      for
      taxes
      and any
      other items (including, but not limited to, items of income, gain, loss,
      deduction and credit) required to be reflected or included in such
      Returns.

    

    2)
      Company has
      paid
      and/or will pay (or will cause to be paid), on a timely basis, all taxes that
      accrue or are due on or before the closing date.

    

    3)
      No
      deficiencies or assessments have been asserted in writing by the Internal
      Revenue Service or any other Governmental Entity with respect to the
      Returns. 

    

    4)
      There
      are
      no Liens for taxes (other than for current taxes not yet due and payable) on
      Company or on any of its assets.

    

    5)
      There
      are
      no unsatisfied actual or proposed adjustments or assessments for taxes against
      Company or, to the knowledge of Company, any basis for any such assessment
      or
      adjustment.

     

    6)
      There

     are
      no pending audits, actions, proceedings, disputes or claims with respect to
      any
      taxes payable by or asserted against Company and, to the knowledge of Company,
      there is no basis on which any claim for material taxes can be asserted against
      Company. Company has not received notice from any governmental entity of its
      intent to examine or audit any Returns of Company. No taxing authority has
      notified Company that it will investigate or make further inquiries with respect
      to any material liability of Company or any affiliate thereof for any tax that
      could reasonably be expected to result in the issuance by any taxing authority
      of a notice of deficiency or similar notice for taxes against
      Company.

    

    7)
      Except
      for the United States of America and the State of California, there are no
      other
      jurisdictions in which income or franchise tax returns and reports, and returns
      and reports relating to the payment of tax based upon the ownership or use
      of
      property therein or the derivation of income therefrom or measured by premiums
      or investments in tangible or intangible property, were, or were required to
      be,
      filed by Company or in which Company was required to be included and to which
      Company would have a material tax liability.

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    8)
      All
      taxes
      required to be withheld or collected by Company (including, but not limited
      to,
      taxes required to be withheld with respect to amounts paid or owing to
      any Representative
      or other Person) have been timely withheld or collected and, to the extent
      required, have been timely paid, remitted or deposited to or with the relevant
      Governmental Entity.

    

    k)
      Company represents and warrants that (i) its copyright assets do not and will
      not infringe upon or otherwise violate, the intellectual property or other
      rights of any other person or entity; (ii) as of the date hereof there are
      no
      claims or suits pending, nor has there been notice provided or, to the best
      knowledge of Company, any claims threatened, alleging that Company or any of
      its
      activities, products or services, including copyright assets, infringe upon
      or
      constitute the unauthorized use of any other person’s intellectual property, or
      challenging Company’s ownership of, right to use, or the validity or
      enforceability or effectiveness of any license or agreement relating to the
      copyright assets; (iii) to the best knowledge of Company, none of the Copyright
      Assets is being infringed or violated; (iv) Carter shall have no obligation
      in
      excess of the Assumed Obligations; and (v) the consummation of this transaction
      will not result in the loss of any copyright assets or Carter’s ability to
      exploit same.

    

    l)
      No
      Material Adverse Change:
      There
      has been no material deterioration or material adverse change in Company’s
      financial performance or position or rights from September 30, 2006 to the
      date
      hereof, and Company has no reason to believe there shall hereafter be any
      material adverse change which might hamper Carter’s rights.

    

    m)
      Operation of Business:
      Company
      represents and warrants that since October 1, 2006, it has operated its business
      in the usual, regular and ordinary course in substantially the same manner
      as
      and heretofore conducted and in compliance in all material respects with all
      applicable laws and regulations and, to the extent consistent therewith, has
      used all commercially reasonable efforts to preserve Company’s relationships
      with others having business dealings with Company. Notwithstanding the
      foregoing, Company represents and warrants that all of Company’s agreements and
      transactions are and/or have been on terms and conditions resulting from or
      equivalent to arms-length negotiations between unrelated third
      parties.

    

    13.
      Carter shall be responsible for arranging financing, on such terms and
      conditions as approved by the Board of Directors, for any projects undertaken
      by
      the CMG Division.

    

    14.
      There
      shall be executed among the Company and Carter, a definitive agreement covering
      the proposed transaction (the “Definitive Agreement”) under the terms and
      conditions set forth in this letter and such further terms, provisions,
      agreements, covenants, representations and warranties satisfactory to all
      parties, including: 

    

    (i)
      general warranties as to the contracts, commitments, lease obligations, patents,
      trademarks, technology and debts of the Company and Carter; and 

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (ii)
      representations, indemnifications and covenants which shall survive the
      effective date of the transaction and which will, in the opinion of the parties,
      be customary for transactions of this nature in respect of the time, scope
      and
      subject matter and be adequate to protect their respective
      interests.

    

    (iii)
      provisions relating to the equal issuance of any additional shares of common
      stock, options and/or warrants to Carter and Kasper after the Carter Shares
      are
      issued, and to the respective parties’ anti-dilution rights in connection
      therewith.

    

    (iv)
      representations as to the By-Laws of Company, the status of the Company’s
      securities law filings (state and federal), and status of current claims, suits,
      controversies, and litigation involving the Company.

    

    15.
      As a
      condition of closing, neither the Company nor Carter shall be subject to
      material litigation which would cause the other party, in their sole discretion,
      to decide that the party subject to such litigation has a material contingent
      liability.

    

    16.
      Pending the execution of the Definitive Agreement, the Company shall give to
      Carter or his designated representatives, full access to their books of original
      entry, ledgers, bank statements, minute books, stockholder lists, contracts,
      patents, trademarks, litigation, securities filings, licenses, intellectual
      property rights, and all other documents maintained by it in connection with
      its
      business operations. The Company shall furnish Carter or his counsel, with
      copies of the Company’s Articles of Incorporation, By-laws, board minutes,
      shareholders minutes, stock ledgers and such other documents that Carter may
      reasonably request. Carter shall furnish the Company with such information
      and
      documents that Company may reasonably request relating to Carter’s abilities to
      develop and run the CMG Division.

    

    17.
      The
      Company and Carter shall consult with each other prior to any public
      announcement relating to the transaction set forth herein, and they shall
      mutually approve the timing, the content, and the dissemination of any public
      announcement, except to the extent those situations in which disclosures are
      required by applicable law prior to the availability of the party to be
      consulted.

     

       18.
      The
      Company and Carter shall maintain, in the strictest confidence, all of the
      information received from each other, and shall use such information only for
      the purposes contemplated by this letter and for no other purpose. If the
      transaction contemplated by this Agreement is not consummated for any reason,
      each party shall promptly return to the other party all documents and other
      information received from the other party, and shall not retain any copies
      or
      summaries thereof. This Section shall survive the termination of this
      letter.

    

    19.
      Severability: If any provision hereof is held invalid or unenforceable by a
      court of competent jurisdiction, such invalidity shall not affect the validity
      or operation of any other provision, and such invalid provision shall be deemed
      to be severed from the agreement.

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    20.
      Assignment: Neither party may assign its rights and obligations under this
      agreement to any other party without the prior express, written approval of
      the
      other party.

     

    21.
      Integration: This agreement constitutes the entire understanding of the parties,
      and revokes and supersedes all prior agreements between the parties and is
      intended as a final expression of their agreement. It shall not be modified
      or
      amended except by the definitive agreement referenced herein to be negotiated
      between the parties, which shall be in writing and signed by the parties hereto
      and specifically referring to this agreement. 

     

    22.
      Counterpart Signatures, Facsimile Signatures, Electronic Signatures:

    This
      agreement may be executed in counterparts, by facsimile, and/or electronically.
      All counterpart, facsimile or electronic signatures shall have equal validity
      and enforceability as a fully-signed original agreement.

    

    This
      letter outlines the major terms of the proposed transaction. It is understood
      that, on the basis of the foregoing understanding concerning major terms, the
      parties shall begin negotiations of the Definitive Agreement with the view
      to
      consummating the contemplated transaction. Although each party confirms its
      intention to proceed in good faith to conclude a mutually satisfactory
      Definitive Agreement, this letter shall not constitute a binding agreement
      to so
      proceed. Except as set forth herein, no obligation shall arise on the part
      of
      any party, unless the Definitive Agreement is duly executed and delivered,
      and
      the respective obligations of the parties shall be those, and only those,
      created by the Definitive Agreement.

    

    If
      this
      letter reflects your understanding, please execute the enclosed copy in the
      space provided below and return it to us.

    

    
 

    
      
                                                                                                                       
          
          
            	 	 	 
	 	
                    

                      Very
                        truly yours,

                    

                    NuTech
                      Digital, Inc.

                  
	 
 	 
 	 
 
	 	By:  	/s/ 
                    Lee Kasper
	 	
                    
Lee
                    Kasper, Chief Executive
	 	
                    Officer

                  

          

        
 

    

    

 

    

    Agreed
      to
      and accepted this    15    day

    of     January   
      2007

    
      	 
	 
	 
 
	/s/ Troy
              Carter
	
              
Troy
              Carter, individually and on behalf of his
              designee(s)

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