CANCELLATION AGREEMENT

CANCELLATION AGREEMENT

THIS AGREEMENT is made and entered into this 29 day of December, 2005, to be effective as of February 7, 2005 (the “Effective Date”), by and between China Marketing Media, Inc. (the “China Marketing”) (former name Derby, Inc. (the “Derby”)), a Nevada corporation, (“Derby”), Media Challenge Holdings Limited, A British Virgin Islands corporation (“Media”), and LI Yingsheng, DING Xiaofeng and REN Dongsheng. (collectively referred to as the “Shareholders”).

RECITALS

The parties executed an Agreement for Share Exchange dated February 7, 2005, pursuant to which Derby agreed to acquire 121,000 shares of Media from the Shareholders, representing all of Media’s issued and outstanding stock, in exchange for the issuance of 16,321,800 shares of Derby common stock.

The parties completed the exchange of shares pursuant to the Agreement for Share Exchange on June 6, 2005.

In conjunction with closing under the Agreement for Share Exchange, the officers and directors of Derby resigned and appointed new officers and directors designated by Media.

The parties have determined that it would be in their mutual best interests to rescind the share exchange transaction effective retroactively to February 7, 2005.  

NOW THEREFORE, in consideration of the foregoing, and in consideration of the mutual covenants and promises hereinafter set forth, it is agreed as follows:

1.

Cancellation of Share Exchange .  The share exchange transaction between the parties, completed pursuant to and in accordance with the terms of an Agreement for Share Exchange, dated February 7, 2005, is hereby rescinded and cancelled as of the Effective Date.

2.

Transfer or Reconveyance of Shares .  By execution of this Agreement, Derby hereby agrees to convey and transfer to the Shareholders 121,000 shares of stock of Media currently held by Derby, in exchange for the transfer and conveyance to Derby of a total 16,321,800 shares of Derby currently held by the Shareholders.  The transfer and conveyance of shares between the parties shall be made in accordance with the following schedule:

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3.

Cancellation of Derby Shares .  Upon conveyance to Derby of a total of 16,321,800 of its shares in accordance with the provisions of paragraph 2 hereof, such shares shall be cancelled and returned to the status of authorized but unissued shares.  Such cancellation of shares shall be retroactive to February 7, 2005..

4.

Resignation of Officers and Directors .  The persons appointed as officers and directors of Derby in conjunction with closing under the Agreement for Share Exchange shall resign as of the date of execution of this Agreement, with such resignations to be effective retroactively to February 7, 2005, and shall take such steps as may be necessary or appropriate to appoint the following persons as officers and directors of Derby effective as of February 7, 2005:

5.

Representations and Warranties of Media and the Shareholders .  By execution of this Agreement Media and the Shareholders represent and warrant as follows:

(i) From the date of closing under the Agreement of Share Exchange through the date of execution of this Agreement they have not i