[LETTERHEAD
OF LATERAL MEDIA, INC.]

    


    


    October 23, 2009

    


    By
Email

    


    Michael
Rose

    15207
Clydelle Avenue

    San Jose,
CA 95124

    


    Dear
Michael:

     

    As you know, we do not have sufficient
work in the near term to be
able to justify continuing your current employment.  It may take up to
three months to determine the viability of your
position.  Therefore, it is necessary to furlough you from your
active employment status effective immediately.

     

    Consistent
with California Labor Code Section 201, enclosed is a check in the amount of
your final wages, including salary and accrued commissions, and accrued, but
unused annual vacation leave.

     

    The
following terms and conditions will apply to your furlough:

     

    You will
be on furlough from Monday, October 26, 2009, through Friday, January 29,
2010.  Your furlough will be unpaid.

     

    If
business conditions change within Lateral Media during the term of your furlough
and regular, full-time work becomes available for you, we will notify
you.  Please make sure that I have a current telephone number and
e-mail address at which you can be reached.

     

    You may
be eligible for unemployment compensation during your furlough
period.  Please refer to the enclosed Employment Development
Department (EDD) brochure for additional information on unemployment
compensation.  The earliest you may apply is the first day you are on
furlough.  There is a one-week waiting period from the day you apply
before you are eligible for benefits.  No benefits are payable for the
waiting period.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Should you apply for
unemployment compensation, be sure to let the interviewer at EDD know that you
are on involuntary furlough for a specific period of time. This may reduce the
need to be "searching for work" in order to qualify for benefits.

     

    While you
are on furlough, you will continue to hold the stock options awarded to you, the
first third of which are scheduled to vest on the one year anniversary of your
first date of employment.  Any compensation you receive from
Lateral Media during your furlough will be eligible for vacation
accruals.

     

    In the
event that Lateral Media determines that it is unable to recall you to work at
any time on or before February 1, 2010, Lateral Media will convert your furlough
to a termination of employment.  In that event, Lateral Media will
commence on the next regular payroll following the termination of your
employment severance payments equal to six months of continued salary pursuant
to the terms of your employment agreement.  Any unvested stock options
will be forfeited.

     

    I regret
that is necessary to take this action and recognize the hardships employees have
when placed on furlough status.  Should you have any questions or
concerns, please do not hesitate to contact me at (310) 601-2500.

     

    


     

    
      	 	
              Very
      truly yours,

               

               

               

              /s/
      Charles Bentz